Imagine a couple who have lived together for several years without being married. One partner pays most of the household expenses while the other focuses on building a business. The home is purchased in only one partner’s name. Over time, both contribute to the relationship in different ways, financially and otherwise. However, their relationship ends, one partner walks away with significant assets, while the other is left with very little.
In Quebec, this situation is more common than many people expect. Unlike married spouses, common law spouses do not benefit from automatic rights to property division or spousal support. As a result, individuals often turn to a legal remedy known as unjust enrichment. While unjust enrichment is frequently invoked in disputes between common law spouses, it is not limited to them and may also apply between married spouses in certain circumstances.
No Automatic Protection for Common Law Spouses
In Quebec, spouses who are not married or in a civil union are for the most part not subject to the same legal framework as married couples when they separate. This means there is no family patrimony, no automatic division of property, and ability to claim spousal support.
While recent developments such as the parental union regime have introduced certain protections for couples with children, many common law spouses remain unprotected in key respects. As a result, individuals may need to rely on the provisions of unjust enrichment.
What Is Unjust Enrichment?
Unjust enrichment is a legal remedy recognized at articles 1493 to 1496 of the Civil Code of Québec (C.c.Q.). Under article 1493 C.c.Q., a person who has been unjustly enriched at the expense of another must compensate that person. To succeed in a claim for unjust enrichment, four cumulative elements must be established:
- An enrichment : One party must have received a benefit. This includes but is not limited to, ownership of property, increased business value, accumulation of savings.
- A corresponding impoverishment: The other party must have suffered a loss, such as contributing money toward expenses or assets, performing unpaid labour, foregoing opportunities or income, etc.
- A connection between the two: The enrichment and impoverishment must be linked. In other words, one party’s gain must result from the other’s loss.
- Absence of justification and no other remedy: There must be no legal reason justifying the enrichment, and no other legal remedy available to address it.
Examples of Situations Where Unjust Enrichment May Arise
Unjust enrichment frequently arises in the context of common law relationships where contributions are not formally documented.
Property in One Partner’s Name: One of the most common scenarios involves a family home registered in only one partner’s name. For example, one partner makes mortgage payments or contributes to renovations. However, their name does not appear on the deed. At separation, the titled owner retains the property. The other partner must then prove their financial or material contributions in order to claim unjust enrichment.
Helping Build a Business: Another frequent situation involves one partner contributing to the other’s business without being paid. This may include, administrative work, customer service, operational support, financial contributions. If the business grows in value and the relationship ends, the contributing partner may need to rely on unjust enrichment to be compensated for their role in that growth.
Unequal Financial Contributions: In some relationships, one partner assumes a greater share of expenses, allowing the other to accumulate assets. For example, one partner pays rent, groceries, and daily expenses while the other saves money or invests. Over time, this imbalance can result in a significant difference in financial position at the time of separation.
Unjust Enrichment Is Not Spousal Support
Unjust enrichment is distinct from spousal support. While spousal support is based on factors such as need and the economic consequences of a relationship, unjust enrichment aims to correct a specific imbalance where one party has benefited at the expense of the other without justification. Common law spouses often assume they have rights similar to married spouses. In reality, they must typically rely on unjust enrichment to seek compensation.
The Challenge of Proving a Claim
While unjust enrichment can provide a remedy, it is often difficult to prove.
Courts require clear evidence of both enrichment and impoverishment. This may include bank statements, proof of payments toward a mortgage, invoices for renovations, records of financial transfers, evidence of unpaid work. Without proper documentation, claims can be challenging to establish. The court must be able to quantify the benefit received and the loss suffered.
What Can the Court Award?
When a claim for unjust enrichment is successful, the court will typically award monetary compensation rather than transferring ownership of property. The goal is not to divide assets equally, but to restore balance between the parties. The amount awarded will depend on the specific circumstances of the case, including the extent of the contributions, the value of the enrichment, and the available evidence. Each case is highly fact specific.
Why Planning Matters
Unjust enrichment is often a remedy of last resort. It exists because, there is no other legal framework protecting common law spouses. However, relying on it after a separation can be uncertain, costly, and difficult. Couples can take steps to avoid these issues by entering into a cohabitation agreement, documenting financial contributions, and seeking legal advice early.
