Unjust enrichment is one of the most important doctrines in Canadian common law. In the family law context, it plays a critical role in resolving disputes where one partner has contributed to the success of the relationship or family unit financially or through labour, but does not have their name on property or formal legal rights to assets.
For many Canadians in common-law relationships, unjust enrichment claims arise when a relationship ends without clear legal agreements in place. Understanding how the law of unjust enrichment works and how to protect yourself from uncertainty if you’re in a common-law relationship is essential.
What Is Unjust Enrichment in Canadian Law?
At its core, unjust enrichment occurs when one person benefits unfairly at the expense of another. In the context of a romantic relationship, this often occurs when one partner earns less or leaves the workforce altogether to care for children or take care of the home, and later is left without assets or spousal support to account for that contribution in the event of a separation. It can also occur if one partner helps the other partner with their business, but is not provided with any of the fruits of that labour when the relationship ends.
The Purpose of Unjust Enrichment
The law of unjust enrichment aims to ensure that the contributions of each partner are fairly valued, and that one partner has not benefited at the other partner’s expense. It seeks to ensure fairness in relationships where financial, labour, or property contributions are not reflected in legal ownership of assets – whether that be a home, a business, or other property.
Why It Matters in Common Law
Married couples in Canada benefit from clear statutory property division rules. But common-law partners often do not. Without a cohabitation agreement, property division is not automatic for common-law couples in all provinces. Instead, if an agreement can’t be reached in the event of a break up, one partner may need to bring an unjust enrichment claim against the other to seek compensation or recognition of their share in property. This usually means a drawn out dispute in court and expensive bills from lawyers – not an outcome that most people hope for.
Check out our article on the legal context for common law relationships across Canada here.
The Legal Test for Unjust Enrichment in Canada
Canadian courts have established a three-part test to determine if unjust enrichment applies:
Enrichment of the Defendant
One party must have received a clear benefit. This could be financial (increased savings or property value) or non-financial (such as free labour, childcare, or home renovations).
Corresponding Deprivation of the Plaintiff
The other party must have suffered a corresponding loss. For example, if one partner paid household expenses so the other could pay off a mortgage, the paying partner experienced deprivation while the other was enriched.
Absence of Juristic Reason
Finally, there must be no legal justification (juristic reason) for the enrichment. If the enrichment can be explained by a valid contract, gift, or statutory rule, then unjust enrichment does not apply.
Examples of Unjust Enrichment Cases
Pettkus v. Becker (1980) – Landmark Case
This Supreme Court of Canada decision established unjust enrichment as a remedy for common-law partners. In this case, Ms. Becker contributed significant labour to her partner’s farm without being on title. The Court recognized her right to share in the value created, shaping Canadian family law for decades.
McBride v. Bacovsky, 2024 ABCA 61 (Alberta Court of Appeal)
In McBride v. Bacovsky, the Alberta Court of Appeal upheld a trial-decision recognizing an Adult Interdependent Partner’s unjust enrichment claim after a 10-year relationship without marriage. Ms. McBride had contributed to the domestic side (childcare, household responsibilities) and indirectly to her partner’s business ventures. The court found there was a joint family venture (a shared project of wealth accumulation) and that her contributions led to Mr. Bacovsky’s enrichment and her deprivation, with no juristic reason to deny her claim. The remedy awarded was roughly 20% of the value of the joint family venture (including business valuation), amounting to about CAD 1.78 million.
Lynk v Bennett Estate, 2024 NSSC 66 (Nova Scotia Supreme Court)
In Lynk v Bennett Estate, a common law partner (Ms. Lynk) brought an unjust enrichment claim against the late Mr. Bennett’s estate, after living together for about 15 years. While some property was held jointly (which passed by right of survivorship), there was additional “Back Parcel” land owned solely by Mr. Bennett and a vehicle in his name. The court found Ms. Lynk had made mortgage and tax payments for the Back Parcel, and contributed to maintenance and upkeep of the vehicle. Based on intertwined finances and her contributions, the court awarded her a 50% interest in the Back Parcel by constructive trust, and monetary restitution for her portion of the vehicle and its costs.
Remedies for Unjust Enrichment
When a court finds unjust enrichment, it can award remedies to restore fairness.
Monetary Compensation
Often, the court orders the enriched party (or their estate, as discussed in the Lynk case) to pay money to the disadvantaged party. This remedy is common when contributions are financial and easily valued.
Constructive Trusts
In some cases, courts impose a constructive trust. This means one partner gains an ownership interest in property, even if their name was never on the title. Constructive trusts are especially important in family law, where contributions to a home or business are difficult to quantify.
Common Situations Where Unjust Enrichment Applies
Common-Law Relationships
Unjust enrichment claims are especially common in common-law relationships, where partners share homes, finances, and responsibilities without marrying. In some provinces, common-law partners are subject to the same rules as married couples when it comes to property division, but in others, there is no entitlement to property division at all. If you’re living in a common-law relationship, it’s important to know the legal framework in your province. Check out our Learning Centre for province-specific details.
Cohabitation Without Formal Agreements
Couples who live together without signing a cohabitation or prenuptial agreement often face uncertainty if they separate. Without a written agreement, unjust enrichment may be the only legal pathway to address financial contributions and property rights. Addressing this by making an agreement at the beginning of your relationship is extremely affordable, especially compared to the tens of thousands of dollars in legal fees which can come with pursuing a claim of unjurt enrichment in court.
Defence Against Unjust Enrichment Claims
While unjust enrichment offers fairness, there are valid defences.
Juristic Reasons
If a benefit can be explained by a valid contract, gift, or legal obligation, there may be no unjust enrichment. For example, if one partner worked in the other’s business but was paid an appropriate salary and treated as an employee throughout, the benefit received by the business owner was not without reason.
Change of Position Defence
If the enriched party relied on the benefit and changed their position in a way that makes repayment unfair, they may be able to defend against the claim. This is more typically seen outside of the family law context.
Preventing Unjust Enrichment Through Legal Agreements
Litigation is costly, stressful, and uncertain. The best way to avoid unjust enrichment disputes is through clear legal agreements.
Importance of Cohabitation and Prenuptial Agreements
A cohabitation agreement or prenuptial agreement allows partners to define their rights and responsibilities upfront. Instead of leaving decisions to the courts, couples decide in advance how property, finances, and contributions will be handled during their relationship, and if they separate. When you have a clear agreement, there are less opportunities for disputes during a separation – meaning you can move forward onto your next chapter sooner, without spending thousands of dollars on legal fees.
Role of Jointly in Protecting Your Interests
At Jointly, we make it simple and affordable to create legally sound agreements online. With our tools, couples can avoid the stress of litigation and protect themselves from unjust enrichment claims in the event of a breakup.
Protect Yourself from Unjust Enrichment
Unjust enrichment cases are complex and emotionally draining. Without an agreement, you may have to fight in court to prove your contributions and claim what is fair.
With Jointly, you can create a cohabitation agreement or prenuptial agreement that removes uncertainty and protects your rights. Our platform is affordable, accessible, and designed to keep families out of court.
👉 Start building your agreement today with Jointly and take control of your financial future.
I founded Jointly because I want to empower more Canadians with the knowledge and tools to create relationship agreements that work for them, at a price they can afford. My big dream? That reaching more Canadians with Jointly ultimately keeps more families out of the court system when relationships breakdown, which can be slow, expensive and traumatic. (I may or may not have personal experience with this 😅)
When I'm not lawyering, I'm most likely hiking with my dogs, kayaking the coastal waters around North Vancouver, or hitting the sauna and cold plunge.
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