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Common Law Separations and Unjust Enrichment

  • Common Law vs. Marriage: Common law separations do not involve an equalization process, meaning each partner retains their own assets and debts.
  • Unjust Enrichment Test: Courts determine unjust enrichment by evaluating enrichment, deprivation, and the absence of a juristic reason.
  • Remedies: Remedies for unjust enrichment can include monetary awards or constructive trusts, depending on the specifics of the case.
A Broken Heart

Understanding Common Law Separations

When it comes to separations between common law couples, the law treats the separation much differently from that of married couples. Should a married couple divorce, the law imputes an equalization process wherein both spouses walk away from the marriage as financial equals. This is not the case with common law separations where each partner will walk away from the relationship with their own assets and debts (absent a cohabitation agreement). However, if one common-law partner made sacrifices that benefited the other partner without receiving any kind of compensation, they may have a case for unjust enrichment.

Example of Unjust Enrichment

For example, you and your common-law partner are living in a home owned by your partner, but you alone paid for significant renovations to that home. If you were to separate and your partner was permitted to keep the home (and therefore its market value), your partner may be considered unjustly enriched because you paid for the renovations to the home that increased its market value but you received no compensation for doing so.

Determining Unjust Enrichment

To determine whether unjust enrichment has occurred, the court will apply the test outlined in Garland v. Consumers' Gas Co. First, it must be established that the defendant was enriched. Second, it must be established that the plaintiff experienced a deprivation. Third, there must not be a juristic reason for the enrichment. This means that the enrichment cannot be the result of a contract, gift, etc. The defendant then has an opportunity to show that there is another reason why the plaintiff should not be compensated. If all three elements are found to have occurred and the defendant fails to present a reason against compensation, it will be decided that the defendant was unjustly enriched.

Remedies for Unjust Enrichment

If the court finds that your partner has been unjustly enriched, you may receive a monetary award or a constructive trust. A monetary award will be granted if the court deems that money can compensate you for the deprivation you experienced. If a monetary award is insufficient, then a constructive trust may be awarded instead. This may be the case if your partner lacks the means to compensate you financially or if there is a unique property in question wherein money could not compensate you accurately.

Seeking Legal Advice

If you’re experiencing an issue involving unjust enrichment, our skilled and experienced team can help. Please contact us to book a consultation.