Category: Property

5 Ways to Ensure You Don’t End up with a “Moneypit”

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Over the past several years (since the beginning of the Covid pandemic in early 2020), real estate lawyers in New Brunswick have experienced a huge increase in real property transactions. Many of these transactions have involved purchasers from other provinces that sold their homes for significant returns on their investments and purchased properties in New Brunswick for cash. Often, purchasers have not even viewed the properties in person prior to completing the transaction. In some cases, people have viewed a property by videoconferencing technology with their real estate agent. In other cases, purchasers have not viewed the property at all and complete the transaction sight unseen.

Purchasing a home without completing the proper due diligence can lead to all kinds of problems. In the 1986 movie, “The Money Pit,” Tom Hanks and Shelley Long purchased a property that turned out to be far more than they bargained for. We might have laughed at this movie, but there’s nothing funny about paying top dollar for a property only to find out that there are significant issues hiding behind the walls that will cost you more time, money and headaches than you could have ever imagined! Here are 5 ways that you can avoid purchasing your own version of the money pit:

  1. Get a home inspection

A home inspection is one of the easiest ways to ensure peace of mind when purchasing a new home. For a reasonable fee, a property inspector will look through a home and provide you with a report about the issues that must be fixed and some of the issues that should be fixed. You may wish to negotiate with the vendors about the purchase price if they are unwilling to cover the costs of the required repairs. Here are some links to local property inspectors that our clients often use:

  1. Say no to “as is where is”

Many people have purchased properties on an “as is where is” basis over the past several years. This is okay if you are willing to be responsible for any repairs required or issues that arise. However, when you purchase a property on an “as is where is” basis, you are releasing the Vendors from responsibility for most defects. The doctrine of caveat emptor (“let the buyer beware”) typically applies to defects that are not visible. There are some small exceptions to this real in cases of fraud, for example, but we recommend saying no to “as is where is” purchases whenever possible.

  1. Visit the property in person (if possible)

We have seen many people over the past several years purchasing properties either sight unseen or only viewing the properties by video conferencing technology. We recommend visiting the property in person and using a checklist to review common property issues. Better yet, you can avoid many issues with a property if you combine a personal visit with an inspection in #1 above. Here is a link for a free home inspection checklist The Ultimate Home Inspection Checklist for Buyers (with Printable PDF) | REW

  1. Ask for (and review) a Property Disclosure Statement

You will typically receive a property disclosure statement when you are purchasing a property through a real estate agent. There is usually a box you check that states that you “require a property disclosure statement”. This statement has questions regarding defects of which the Vendor may be aware. The answers are typically “yes”, “no”, “n/a” format with an opportunity for the vendor to expand on certain answers. These forms have questions about the foundation, water leaking, roof repairs, electrical, etc. It is important to closely review this disclosure statement and to ask your lawyer and/or real estate agent any questions you may have. If you find latent defects to the property (defects that could not be discovered through ordinary due dilligence) that the vendor did not disclose, you may be able to make a claim against the vendor for misrepresentation and damages to assist you with repairs to the home.

  1. Prepare a list of questions to ask your lawyer at the time of closing

Finally, you should prepare a list of questions to discuss with your lawyer at the time of closing. Some important items that I always like to review with clients;

  • What does the map look like online? Does it match up with what you thought you were purchasing? Does it match the description in a historical deed?
  • Is there a subdivision plan that provides detailed dimensions for the land?
  • Are there any easements on the property? If so, what rights does the easement holder have? (i.e. can they merely walk over the property to get to another property? Is there a shared driveway? Is there an easement to cut wood on the property or access a well or spring?)
  • Do you plan on possibly operating a business out of the property? Have you checked to ensure the property is appropriately zoned, so that you can do what you want without getting flak from the municipality or neighbours?

As the saying goes: there are no stupid questions. I am always appreciative when clients who attend a meeting to sign closing documents are engaged and ask a lot of questions. I hope you find these suggestions helpful! As always, if you have further questions or wish to schedule a consult, please contact us at 506-325-3333.

 

 

 

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Climans v Latner ONCA – A New Definition of Spouse

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The Ontario Court of Appeal Redefines “Spouse”

A Commentary on Climans v Latner, 2020 ONCA 554

By Jonathan Martin

The law of spousal support in Canada has changed significantly over the past few decades. Once reserved for legally married individuals, spousal support obligations can now arise from a variety of different relationships, whether they produce children or not. In Climans v Latner, 2020 ONCA 554 [Latner], the Court of Appeal for Ontario endorsed the view that those in a long-term romantic relationship who do not cohabit or produce children may still be eligible for spousal support at the termination of the relationship.

FACTS

Lisa Climans and Michael Latner were in a romantic relationship for almost 14 years, starting in 2001. When they met, Lisa was a retired model and marketing employee for a construction company earning about $5,000 per month. Michael Latner was a multi-millionaire businessman. Throughout their relationship, the pair maintained separate homes in Toronto and never moved in together. They kept their finances apart and never owned any property together. Neither self-reported on their income taxes that they were living in a common-law relationship. They had no children together. Both had children from previous marriages.

Mr. Latner was very generous to Ms. Climans throughout their relationship, to the extent that Ms. Climans quit her job shortly after they started dating and never worked again the entire time they were together. They would stay together at Mr. Latner’s cottage in July and August of each year. They spent weekends in Florida in the winter and occasionally for March break. Mr. Latner proposed to Ms. Climans several times but never married, partly because Ms. Climans refused to sign any prenuptial agreements. In many of his letters, Mr. Latner referred to Ms. Climans as Mrs. Latner.

LEGISLATIVE CONTEXT

The Ontario the Family Law Act, RSO 1990 has two different definitions of spouse. For most of the Act, “spouse” means legally married. However, for spousal support, section 29 defines “spouse” as any two people who have cohabited for at least three years or were in a relationship of some permanence that produced a child. New Brunswick’s Family Services Act, SNB 1980, c F-2.2 does not use the term spouse for non-married individuals, but still provides that support must be paid if the parties live continuously together for at least three years or have a child together in a relationship of some permanence living together. Fathers in New Brunswick are also liable to pay support to the mother of their child, regardless of their relationship (over and above support for the child under the Guidelines), should there be need and ability to pay.

The issue in Latner had to do with the definition of “cohabit”, a term defined in the Ontario Family Law Act as meaning to “live together in a conjugal relationship, within or outside of marriage”. It could arguably be said to have the same meaning as the provision for support at section 112(3) of the New Brunswick Family Services Act, which provides support for those “who have lived together continuously… in a family relationship”.

“LIVING TOGETHER”

According to the legislation, two elements are needed in order to fall under the category of living continuously in a conjugal or family relationship. You need (1) to live together, and (2) be in a conjugal or family relationship. In most cases, whether parties are living together is easy to discover. What constitutes a “conjugal or family relationship” presents with more difficulty as you are essentially trying to reconstruct the essence of marriage itself. The courts have over time come to accept a list of criteria that indicate the existence of a conjugal relationship, while stressing that all of them need not be present. These include: sexual and personal behaviour, services, social activities, economic support, children, and the social perception of the couple” (M. v. H., [1999] 2 S.C.R. 3, at paras. 59-60).

On occasion, the courts have had to turn their attention to the question of what constitutes “living together”. It is generally a straight forward exercise, ruling out other explanations for sharing the same roof, such as being roommates or in a landlord/tenant relationship, etc. Sometimes, however, the parties don’t share the same roof. Although this would on the surface appear to bar a claim for spousal support, life is rarely quite that simple. In Campbell v. Szoke [2003] O. J. No. 3471 (Ont. S. C. J.) at para 52, Madam Justice Karakatsanis, now judge of the Supreme Court of Canada found that “the fact that parties maintain separate residences does not prevent the finding of cohabitation.  The court must look at all of the circumstances and consider the reasons for maintaining another residence, such as to facilitate access with one’s children.” This approach makes sense since it would be unreasonable to require that couples always live together. Married people will often live apart for a variety of reasons, including work, immigration barriers, or to care for family members. However, one would expect that the reason for not living together would have some element of necessity to it, as opposed to a mere decision by the parties not to live together. Campbell, however, found that parties who had chosen not to live together mainly because one of them did not want the legal consequences that come from that, had in fact been living together. Several lower court decisions had followed the approach in Campbell. Latner now provides an appellate decision endorsing this line of jurisprudence, which arguably dispenses with the first part of the legislative test altogether.  

The decision in Latner was not reached without some difficulty. The legislation is, after all, clear that the parties need to live together. The trial judge admitted that “there needs to be some element of living together under the same roof. The very definition of “cohabit” requires that the parties live together in a conjugal relationship.” The trial judge however found the necessary elements of living together in the various vacations and alternate weekends the parties spent under the same roof. It was not without some difficulty that the Court of Appeal justified this conclusion. A crucial question in determining how long support must be paid is how long the parties cohabited. The Court of Appeal overturned the lower court finding that the parties had “cohabited” during the entire length of their 14-year relationship, since the conclusion that they had cohabited at all was in essence a legal conclusion based on the entirety of their relationship, and not a discreet finding of fact. They had never in fact lived together. The Court of Appeal could therefore not support the trial decision that support should be payed indefinitely based on a 14-year cohabitation. Interestingly, it never provided its own finding of how long the parties cohabited. The Court of Appeal sidestepped this question and ordered that spousal support be payable for ten years. It would have been interesting if the Court had attempted to count or estimate the number of days the parties had actually spent under the same roof, and ordered support based on that time period alone.  Perhaps 4 or 5 years of support would have been ordered under that approach.

CONCLUSION

The decision in Latner provides an important precedent for the proposition that romantic couples need not physically live together or have children to claim for spousal support at the end of the relationship. If there is significant and ongoing financial support during the relationship, the parties present as a couple, and they spent any amount of time under the same roof, they could be found to have been “living together in a family relationship”. Given the amounts at issue, it is likely that one of the parties will seek leave to appeal to the Supreme Court of Canada. Stay tuned for future developments.

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Curious Case: Smiths v. Cataraqui Cemetery Company (aka – a Plot to get a Plot)

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Here’s a somewhat spooky curious case about three brothers who sued a cemetery for the right to be buried there.

Background:

In 1869, brothers Joseph and Darius Smith purchased the rights to 4 plots at the Cataraqui Cemetary for the sum of $100.00. The purpose of these plots was to be the final resting place for them as well as their family for years to come.

In general, when a person wishes for their remains to be buried or cremated at a cemetery or interred, they purchase the rights to be laid in a plot of land, and not the land itself. Essentially, the person is purchasing the right to be interred in a specific area of the cemetery.

Throughout the years following this purchase, only a handful of Smith family members were buried on this plot, as several members chose to be buried elsewhere. This left a large amount of unused space to be used by future heirs of the Smith family.

Details:

Fast forward almost two centuries to 2013, when three brothers, Allan, Carmon, and Marvin Smith, sued the Cataraqui Cemetery for denying their request to be buried in their ancestor’s plot.

According to the current manager, the cemetery had been under different management when it allowed family members to be buried there without proof of being heirs of Joseph and Darius Smith. He states that just because family members were buried there throughout the years does not mean he will allow others to do so as well without first proving their lineage.

The issue here is that since 1869, over 2000 living heirs existed that would have be equally as entitled to a spot in the plot, so to speak.

Outcome:

The Court’s decision on the matter came down to several points:

  • The Court  looked at the Funeral, Burial and Cremation Services Act (the Act), which came into effect in July of 2012, and replaced the old Cemeteries Act. The Act states that only the interment rights holder has the right to be buried and to decide who is buried in the plots in question. Therefore, the Smith brothers (current) had to prove that they had such a right.
  • The Court found on their deed that Darius and Joseph Smith intended the plots to be handed down to their heirs in a broad manner including anyone in the lineage of either brother. Considering the obvious fact that they bought the rights to 64 plots, what did the cemetery believe they intended on doing with them?
  • The fact that the cemetery had previously permitted over 20 burials of members of the Smith family without proof that they were interment rights holder was also a factor in the decision.
  • Finally, the Court applied the law of estoppel to find that the cemetery’s silence and its acts in permitting other Smith burials without formal proof of interment rights prevents it from now insisting that the applicants prove such rights.

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Are you a Landlord or a Tenant looking for information? Check out this site

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I attended a Continuing Legal Education session this week on Real Property Law and one of the presenters was the newly named “Chief Residential Tenancies Officer.” I must admit that I had no idea that the Office of the Rentalsman had been recently renamed as the Residential Tenancies Tribunal. The website for this tribunal has lots of information that can be helpful if you are  a tenant or a residential landlord. What is especially helpful are the various forms and resources, which include Form 6 –  Standard Form Residential Lease. I highly recommend that both landlords and tenants spend some time navigating this site and taking advantage of the many resources contained within the site. Here is a link to the site: https://www.snb.ca/RTT-TLL/E/RTT-TLL_E.asp

 

 

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Curious Case: The Squires, The Fitzpatricks and…. a Coyote Head?

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Here’s a curious case I wrote about years ago on a personal blog. It’s strange enough to warrant repeating here.

Background: For 20 years, 60-year-old Bill Squires and 75-year-old Anna Squires maintained a close relationship with their neighbor, Mary Fitzpatrick. In 2006, however, Ms. Fitzpatrick passed away and her son, David, became the Squires’ new neighbor.

Details: Friction between the Squires and David began shortly after Ms. Fitzpatrick’s funeral. The Squires had lent photos of Ms. Fitzpatrick to David for display at the funeral and, despite multiple polite requests, the Squires’ photos were never returned. The neighbors’ relationship continued to deteriorate and when the parties disagreed over the care of a strip of grass between their properties, the feud – which could have once been classified as a neighborly dispute – escalated to passive-aggressive outbursts and death threats.

Particularly disconcerting was the morning of November 12, 2007, when the Squires stepped out of the front door of their home to find a dead coyote on the hood of their car. The Squires reported that, when they walked out and saw the horrifying scene, David appeared to wait patiently nearby in his own vehicle. When they looked at David, he drove away slowly, while displaying a satisfied grin on his face.

Outcome: Reportedly, the “first strain” (over the Squires’ photographs of Ms. Fitzpatrick) was amplified due to David’s already-existing feud with his sister, Shelley, over their mother’s estate. When the severity of their situation with David escalated, however, the Squires pressed charges.

The Squires reported the coyote incident to the police and provided video and audio recordings that captured David threatening the Squires. In response, David turned himself in (although he denied having anything to do with the dead coyote) and he was arrested for harassment.

When police officials lost the Squires’ video and audio recordings, the Crown decided not to proceed to trial and the charge against David was withdrawn. The Squires sold their home and moved on with their lives; meanwhile, David filed a civil suit against the Squires and his sister, Shelley, for “malicious prosecution and conspiracy”. Ironically, it was after David had started the new action and the Squires made a counter-claim that the Court finally heard the Squires’ case.

David’s original claims were dismissed and Judge Stinson of the Ontario Superior Court found that David was responsible for leaving the dead coyote on the Squires’ car and that he intentionally aspired to inflict mental distress on the Squires. The judge ordered David to pay the Squires over $166,000 in damages, a lifetime ban of contact with the Squires, additional costs to cover the Squires’ extensive legal fees, and additional funds to cover Shelley’s costs.

Curious about the Case? Check it out for yourself:

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Curious Case of The Week: Warring Neighbours and a Manure Pile

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Background: In 2001, David and Joan Gallant bought a piece of property in Indian Mountain (Moncton area) from Lee and Shirley Murray. The property is located next-door to the Murrays themselves. The neighbors got along well until November, 2013.

Details: November, 2013 is when the Murrays reportedly dumped an enormous mountain of cow manure—so large, in fact, that at one point it could be spotted by Google Earth—directly beside (and partially on) the Gallants’ property, ending the friendly relationship between the neighbors. The Gallants claim to have asked, on multiple occasions, to have the Murrays remove the heavily odorous heap, only to have their requests ignored for nearly a year and to be met with additional passive-aggressive acts; for example, the couple also used a snow blower to blow snow and rocks onto the Gallants’ property on occasion and let their cattle loose to trample the Gallants’ lawn.

Outcome: In response to the unwelcomed gestures, the Gallants filed a lawsuit against the Murrays, claiming damages for having committed nuisance, trespass, and harassment. On January 19, 2017, Court of Queen’s Bench Justice, George Rideout, ruled in the Gallants’ favor, awarding $15,000 in damages, as well as ordering the Murrays to keep their animals off the Gallants’ property, to refrain from blowing snow, rocks, manure or anything else into their neighbors’ yard, and to keep manure piles 300 meters away from the Gallants’ home. The judge stated, “In my opinion, based on the evidence before the court, the manure was placed where it was for only one purpose, to make Mr. and Mrs. Gallant’s lives miserable.”

Now: The Murrays, unhappy with the verdict, have “vowed to appeal” the decision, but there is no sign of an official appeal to date.

Curious about the Case? See for yourself:

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5 tips for home buyers prior to closing!

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In the 1986 movie, the Money Pit, a young couple move into a home that is terribly dilapidated. While falling down stairways and leaking bathtubs in this movie are enjoyable for comedic value, no one enjoys these things when they happen to you!

A home is the single largest purchase most people will ever make. Therefore, it is important to take the time to investigate your purchase prior to closing and not be pressured by lawyers, real estate agents or family members. Also, you should be careful not to fall in love with a home (too much) prior to proper inspection. You may be excited about your new home, but if you choose to waive your inspection, miss defects, or close on an “as is where is basis,” disaster may follow. For example, in Anderson v. Lawrence, 2013 NBQB 21, Justice Morrison of the Court of Queen’s Bench of New Brunswick heard the home purchasers’ claim against the vendors’ for negligent and fraudulent misrepresentation. The purchasers suffered serious water damage in their basement and the ceilings in the main floor of the house caused by a leaky roof.

The purchasers had viewed the property prior to purchase and saw water in the basement and detected a musty smell, but were assured by the vendors and a real estate agent that the problems had been solved. There were also issues with the septic system. Finally, the purchasers received 17 acres of land rather than 34 acres, as the vendors represented.

The Court in Anderson, supra held that the vendors both negligently and fraudulently misrepresented the water leakage and the size of the land. As a result, the Court ordered the plaintiffs were entitled to $24,339.49 for costs of repairs and $13,070 for the value of the missing 17 acres of land in addition to interest and legal costs.

This case is a helpful lesson to purchasers of homes to be extremely critical before committing to a purchase. It’s easy to end up with your own version of a money pit! Here are some helpful tips to assist you with the purchase of your home:

1. Hire a licensed property inspector. The cost ranges from $200-$500, but will be worth every penny if your inspector finds issues that you may not be able to see with your own eyes;

2. Use checklists to evaluate the condition of the home. Here is a link to a helpful checklist that you may wish to use to evaluate the condition of the home. As stated in the checklist, it should not be relied upon nor be a replacement for a certified home inspection. We make no representations or warranties about the accuracy of the information either, but believe it is a helpful starting point;

3. Attend the inspection with your licensed inspector. Make sure you attend the home with your inspector and ask lots of questions;

4. Read the inspection report carefully and discuss with you inspector, legal counsel and real estate agent;

5. Research the inspector. Not all inspectors are created equally. Take the time to ask potential inspectors questions about  their experience, qualifications, costs, etc.

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7 Reasons You Should Make a Will (no matter how old you are)

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Sometimes the universe presents me with topics to write on. This was one of those weeks. Over the past week, I have spoken to 3 or 4 different people separately about the importance of doing a Last Will and Testament. During one conversation, a colleague and I pondered the reasons why so many people avoid doing their wills. My theory is people simply do not want to think about death and thinking about a will means they must think about death. It’s not a pleasant topic, I admit. But the fact of the matter is that we are all going to die! Yes, that is a little dramatic, but it is true. The old adage is that the only things that are certain in this life are: death and taxes. With that said, here are seven reasons why you should think about doing a will, no matter what your age:

7. Peace of mind: If you do your will now, you will be providing yourself with peace of mind, just by knowing that you have something written down in case you pass away. There are few things more tragic than seeing close family members upset after the loss of a loved one. Add to that the stresses of trying to figure out what documents are needed, funeral arrangements, what to do with property, etc. Having a will does not solve all of these problems, but it is the foundation for your total estate planning package and will alleviate some unnecessary stresses on your family.

6. Costs:  Similar to my comments in a previous article about why a Power of Attorney is important, doing a will now can save costs to you and your estate. If you pass away without a will, you are what’s called “intestate” and a statute called the Devolution of Estates Act (in New Brunswick) kicks in to guide the process your family must go through to have someone appointed to represent your estate (pay your bills, sell your property, gift certain properties to others). This process can be more costly in the long run than probating (proving) a will.

5. Guardianship for you children:  You could include a provision in your will to appoint a guardian or guardians for your children should something happen to you. Only you know your children and who you trust to watch over them the most. A will is an effective way of expressing your wishes for your children as well.

4. Protecting your business: Through the process of drafting a will, people often begin thinking about a succession planning for their business. This might include transitioning your business to a family member. Also, your lawyer and accountant can assist you in thinking about estate freezes and/or family trusts, which can maximize the tax potential of your transition.

3. Complexity:   People seem to build up the process of making a will in their minds into something greater than it really is. In most cases, making a will is not a complex process. You will have to attend your lawyer’s office one or two times (maybe more depending on complexity) and discuss your property, your family and your wishes. Then you will attend your lawyer’s office to sign your will. It is not that difficult, but I recently heard someone say that when she told her workmates that she was going to a lawyer’s office to make a will, one workmate asked: “oh, why, what is wrong with you?”

2. Family Fighting : We have all heard or experienced horror story scenarios with family members fighting over their parent’s properties. While a will cannot guarantee that your family will not be fighting over your property or money, it will certainly reduce the possibility of disagreements. It is more difficult for family members to contest your intentions when they are written clearly in “black and white” in your will.

1. Control: If you are like me, there are likely very few items that are important enough that they should be passed on to specific people. However, if something ever happens to me, I have some sentimental items that I would like certain people to have. It is difficult to ensure that your few important items are distributed as you wish without a will. A will is the best way to ensure that you maintain control over what little you have on this earth.

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Not all Title Insurance Policies are Created Equally: lender’s title policy vs. owner’s title policy

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You are buying your first home and you have signed so many documents your hand is getting sore. You likely have signed a mortgage, the mortgage covenants, discussed title to the property with your lawyer, arranged for fire insurance; maybe you talked about zoning requirements (depending on your plans for the property); arranged for your down payment on the home; Not to mention that you have been dealing with the logistics of moving—renting a van, picking up pizza and soft drinks to lure your friends in to helping you out; You have been so busy that you probably do not even remember the (likely very brief) conversation you had with your lawyer about title insurance. There can be serious consequences of not being aware of the difference between a Lender’s vs. and Owner’s title insurance policies. What is more concerning is the differences are not easily identified by title insurance companies and require a thorough reading by the counsel and the policy holder.

Here are some basic differences between the two types of title insurance policies:

1. Lender’s policy

A lender’s title insurance policy is usually required by your mortgage company when you purchase a home if you do not have a building location survey. Whereas a survey can  be thousands of dollars, a typical title insurance policy usually costs between $1-200 per policy. This makes title insurance an alluring option for home purchasers rather than spending thousands of dollars when you have already made the (likely) single biggest investment of your lifetime!

Here are some key facts about the lender’s policy:

  • Also known as “loan” policy
  • Lender requires lender’s policy before financing purchase;
  • Only covers the lender’s interests in the property;
  • Types of risks covered:
    • Fraud (signing wrong name on mortgage, etc.);
    • Legal fees in defence of title (ownership issues);
    • Issues regarding priority (other mortgages or judgements registered ahead of bank’s mortgage);
    • Gap coverage (if mortgage not registered on title for a period of time after closing);

2. Owner’s Policy

An owner’s title insurance policy can provide protection against the losses listed in the policy. Some examples could be:

  • someone else owns an interest in your title
  • existing liens against the title
  • violations of municipal zoning by-laws
  • encroachments onto an adjoining property (other than fences and boundary walls)
  • setback violations
  • realty tax arrears
  • outstanding municipal utility charges, provided such charges form a lien on title
  • existing work orders
  • lack of legal access to the property
  • unmarketability of the land due to adverse matters that would have been revealed by an up-to-date survey / RPR/ Building Location Certificate

3. Some helpful links

If the difference between the two types of title insurance policies is still not clear, here are some links that may assist you in further understanding the differences:

 

 

 

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You Can’t Always Get What You Want…and Other Sad Songs: Common Law Couples & Property Rights

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 Tough Questions

One of the topics that I discuss often with clients and prospective clients is property rights of common-law partners. There are many misconceptions and myths regarding this topic. For example, I often hear questions similar to the following:

– My partner and I have been together for two years; that means we are entitled to half of each other’s property, correct?

– My partner and I have been living together for 10 years. We purchased furniture together and most of our property was purchased after we started living together. We are each entitled to half of each other’s property, correct?

– My partner and I have been together for 6 months; is s/he entitled to half of my stuff?

The answer to many of these questions is “no, but….”. It’s understandable that these issues become confusing for the average person. The beginning of the confusion for most people starts with the Marital Property Act, SNB 2012, c.107, which defines “spouse” as a “married person”. Therefore, the division of property under the Marital Property Act (upon which the above questions are based) only applies to married people.

Kerr v. Baranow changes the landscape

In the now oft-cited case, Kerr v. Baranow, 2011 SCC 10, Justice Cromwell for the Supreme Court of Canada, noted at paragraph 1 that over a period of 30 years, courts have wrestled with property division for married couples, resulting in the various marital property acts enacted in the provinces in the late 1970s and 1980s. However, he notes that these acts only apply to married people. Regarding unmarried couples, Cromwell stated as follows:

For unmarried persons in domestic relationships in most common-law provinces, judge made law was and remains the only option. The main legal mechanisms available to parties and courts have been the resulting trust and an action in unjust enrichment. (Kerr, supra at para 1)

While common-law couples may not be able to turn to a provincial marital property statute for division of their property, the Supreme Court in Kerr, supra allows a division of property through unjust enrichment. If the claimant can prove the couple were engaged in a “joint family venture” and that he/she contributed to the joint family venture through work or funds contributed, then he/she may be able to use unjust enrichment to seek compensation for his/her contributions to the joint family venture.

Justice Cromwell notes at paragraph 31 in Kerr that “at the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit which justice does not permit one to retain.” In other words, where a provincial marital property statute is not an avenue to compensation, but unjust enrichment may be.

Test for unjust enrichment

For recovery of the funds/services provided, the test for unjust enrichment requires the claimant to prove the following:

  1. The defendant has been enriched by the plaintiff (through the plaintiff’s contribution to the joint family venture);
  2. The plaintiff has suffered a corresponding deprivation (loss) due to the defendant’s enrichment;
  3. There is no juristic reason why the claim for unjust enrichment must fail and for the defendant to retain the benefit conferred by the plaintiff. At this step of the analysis, the plaintiff must exclude specific legal categories, which would provide reason for why the action in unjust enrichment must fail (gifts, statutory obligations, etc.). Secondly, this part of the analysis requires consideration of the reasonable expectations of the parties and public policy considerations of why recovery should be denied.

Finally, the Court notes that the remedy for unjust enrichment could include either a monetary award or proprietary award (return of property) but favours a monetary award if possible.

You Can’t Always Get What you Want!…and Other Sad Songs

Since 2011, Kerr v. Baranow has been cited several times by New Brunswick courts in dealing with property rights for common-law couples (for example, see paragraph 19 in Wills v. Kennedy, 2015 NBCA 31 (CanLII) for a list of cases citing Kerr v. Baranow). However, in Rollie Thomson, Lovers in a Dangerous Time’: Loose Ends After Kerr v. Baranow (Paper presented by Rollie Thomson at Canadian Bar Association, Midwinter 2014, February, 2014, Moncton, NB), Professor Thomson notes that many questions arise about Kerr’s application to specific circumstances: How do we quantify contributions? Does a property remedy through unjust enrichment apply to pre-marriage cohabitation in actual marriages? Does the analysis in Kerr affect spousal support payments?

Courts in New Brunswick have notably applied the unjust enrichment remedy unequally in different cases, making outcomes less predictable. In Mike Landry, “Breaking up is hard to do: common law partner denied share of ex’s pension” Telegraph-Journal (29 September 2016), the author refers to the recent (September 8, 2016) New Brunswick Court of Appeal case of Noel v. Butler, 2016 NBCA 49, wherein the Court denied Noel’s request for a portion of Butler’s pension because of lack of evidence that Noel specifically “contributed in any meaningful way to Butler’s ability to work as a teacher and accumulate pension benefits.”

After reflecting on Kerr v. Baranow, the answer to the questions above could now be: “possibly, if you can prove unjust enrichment based on the facts.” But absent legislative changes to clarify this area of the law, common law couples will remain “lovers in a dangerous time” because “breaking up is hard to do” and “you can’t always get what you want.”

Should you have any specific questions regarding your property rights in a common-law relationship, feel free to contact us.

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