Common Law Spouses Get a Break from the Supreme Court of Canada

Canada’s highest Court has once again addressed the plight of unmarried spouses whose relationships end, as does their ability to hang on to a portion of the family’s property.

In Canada, common law spouses are not entitled to the protection of the various provincial laws that require married spouses to share their family property upon marriage breakdown. As a result, a hodge-podge of law has accumulated to address the issues of common law spousal rights and responsibilities based on principles of trust law.

A legal concept called “unjust enrichment” assists common law spouses to retain a share of the property owned by one or both of the couple during the relationship. If a spouse contributes money or labour, including child care or household services to the family unit, that spouse can seek a share of the family’s property or receive an amount of cash in lieu of property.

However, typically the contributing spouse, usually the wife, would prove her contributions and then receive compensation from the court as if she were an employee. In other words, if she did the childcare and household management for ten years, the court would figure out what that service was worth to her husband and award her accordingly.

This method of compensation resulted in very low damage awards, usually nowhere near the fifty/fifty division enjoyed by married spouses.

Last week’s decision from the Supreme Court of Canada rejects the characterization of a common law spouse as an unpaid employee and introduces the notion of the spouse as an integral part of the “joint family venture” and treats her as a “co-venturer”.

With this new analysis, the Court gives credence to the spouse’s contributions and sacrifices to the family enterprise as a whole and the spouses’ mutual collaboration to achieve common goals.

Presently, British Columbia is considering amendments to family property legislation to include common law spouses. This new law from the Supreme Court of Canada should serve to nudge the amendments along to completion.

Lawdiva aka Georgialee Lang


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