Unjust Enrichment

When an unmarried couple separates, there is no automatic division of property. Each party keeps what is in his or her own name. If this result is not satisfactory, it may be possible to make a claim for
unjust enrichment. I discuss this in detail on my common law web site.

It’s important to note, however, that the claim of unjust enrichment is not limited to unmarried couples, but is often used by married couples too. Although normally the provincial statutory scheme for property division yields fair results, in cases where it doesn’t, a claim for unjust enrichment may be possible.

One of the most common uses of a claim for unjust enrichment is where the matrimonial home is in one spouse’s name. In today’s markets, real estate prices increase quickly, while divorce settlements can take years. Under Ontario legislation, the spouse who owns the matrimonial home would get to keep any increase in value of the matrimonial home that occurred between the date of separation and the date of the divorce settlement. The non-titled spouse can make a claim for a share of this appreciation in value by bringing a claim for unjust enrichment.

A claim for unjust enrichment in this case would normally be fairly strong, because regardless of the roles each spouse played in the relationship, it is likely that there was a significant contribution, financial or otherwise, to the matrimonial home as matrimonial homes are usually an important part of a couple’s life.

Another case where a claim for unjust enrichment might be made is where there is a marriage contract. If a marriage contract results in a very lopsided division of property, a claim for unjust enrichment may be a way around this. I would argue that this is analogous to a common law situation. In other words, if a claim for unjust enrichment would succeed on a particular fact situation for a common law couple, it should succeed if the same fact situation arose for a married couple with a marriage contract, despite the Hartshorne decision.

As an example, say that a couple enters into a marriage contract that provides that the wife keeps the matrimonial home when they separate, and that all other property is divided according to title. During the long-term marriage, both parties work and there are no children. During the marriage, the husband pays for all of the household expenses, mortgage, house insurance and property taxes. The wife on the other hand saves all her money in an RRSP. At the end of the marriage, the only assets are the matrmionial home and the wife’s RRSP. Under the terms of the marriage contract, the wife would get everything. I think that the husband would have a good claim for unjust enrichment in this case.

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