The “Forever Home” Divided: Lessons from a Long-Term Common-Law Split

A crumbling white heart, representing common-law separation.

Written on behalf of Shariff & Associates

The dissolution of long-term cohabitative relationships often leads to complex legal challenges, particularly when determining the equitable distribution of assets and establishing spousal support obligations. The recent Ontario Superior Court of Justice decision in Frank v. Martin offers important legal insights into property division and spousal support within a common-law relationship breakdown. It emphasizes the need to understand the complexities of resulting trusts, property rights, and spousal support entitlements following the dissolution of a long-term cohabitation.

The Foundation of a 26-Year Partnership

Cathy Frank and James Martin, both medical doctors, began their relationship in the late 1990s and cohabitated for approximately 26 years. While not formalized through marriage, their relationship was characterized by shared financial and personal lives. They jointly purchased a property, worked together, and planned their retirement together. However, this shared life ended in 2023, five years after their retirement, leading to a legal dispute over property and financial support.

The Property at the Heart of the Dispute

A central issue in the case was the jointly owned property, acquired in 2006. The property, intended to be their “forever home,” was purchased as joint tenants, a form of ownership that typically implies equal ownership and right of survivorship. The Respondent, Dr. Martin, argued that he was entitled to a resulting trust over the property, claiming his unequal financial contributions warranted a larger share or full ownership. He pointed to his larger down payment, payment of bridge financing, mortgage, taxes, and insurance. Dr. Frank, on the other hand, asserted her equal ownership rights and sought the sale of the property.

Resulting Trusts and the Importance of Intention in Common-Law Relationships

The concept of a resulting trust—a legal mechanism that can dictate ownership of property based on contributions—was a key aspect of this case. A resulting trust arises when it is presumed that the person who contributed to the purchase of a property did not intend to gift that contribution to the other party.

To determine whether a resulting trust should be imposed in Frank, the Court relied on established legal principles from cases like Pecore v. Pecore and Kerr v. Baranow. The Court emphasized that the intention of the parties at the time of the purchase was crucial. Despite Dr. Martin’s greater financial contributions, the Court found that the parties intended to share the property equally.

Intention and Conduct: Discerning the Parties’ Shared Understanding

Their long-term relationship, joint financial planning, and shared lifestyle demonstrated a mutual understanding of shared ownership. The Court highlighted that Dr. Martin’s higher financial contributions were not intended as a gift but rather reflected their established pattern of managing their finances, where he typically covered the “lion’s share” of expenses. The fact that the property was purchased as joint tenants, the mortgage was held jointly, and the parties engaged in joint financial planning all pointed towards an intention of equal ownership. The Court also considered Dr. Frank’s non-financial contributions, such as domestic services and involvement in property renovations, as valuable contributions to the relationship.

The Court rejected Dr. Martin’s argument that his contributions unjustly enriched Dr. Frank. It found that their chosen financial management style, with Dr. Martin paying a larger share of expenses, did not indicate an intention to create an unequal ownership of the property. The Court also noted that Dr. Martin did not assert a claim for an unequal share in the property, even when opportunities arose, such as refinancing, further supporting the idea of equal ownership.

The Right to Sell Jointly Owned Property

Another significant aspect of the case was Dr. Frank’s request to sell the property under the Partition Act. This act allows a joint tenant to seek the sale of a property. The Court emphasized a presumptive right to partition or sell jointly owned property, and the Court has limited discretion to deny a sale.

Dr. Martin opposed the sale, arguing that it would cause him hardship. However, the Court found this argument did not overcome the presumptive right to sell. The Court considered Dr. Martin’s financial resources and the significant equity in the property, concluding that he had the means to find alternative housing. The Court also highlighted that listing the property for sale on the open market was the most reliable way to determine its fair market value.

Spousal Support in Long-Term Common-Law Relationships

The case addressed the issue of spousal support in addition to property division. Dr. Frank sought interim spousal support, arguing that she was financially disadvantaged due to the breakdown of the relationship. The Court recognized that the parties were spouses within the meaning of the Family Law Act and that Dr. Frank had a prima facie right to spousal support on a non-compensatory basis.

The Court emphasized that the objective of spousal support after a long-term relationship is to provide the recipient with a reasonable standard of living, assessed in relation to the standard of living they enjoyed during the relationship. The Court considered the length of the relationship, the parties’ ages, Dr. Frank’s financial disadvantage, and Dr. Martin’s financial ability to pay.

Understanding Compensatory vs. Non-Compensatory Support

The Court distinguished between compensatory and non-compensatory spousal support.

Compensatory support addresses the economic disadvantages suffered by one party due to their role in the relationship, such as sacrificing career opportunities.

Non-compensatory support, on the other hand, recognizes the economic interdependence that develops in long-term relationships and aims to provide support based on need.

In this case, the Court found that Dr. Frank did not have a prima facie compensatory claim, as the relationship did not significantly impact her career and income. However, the court found that she had a prima facie right to non-compensatory support, given the length of the relationship and her current financial disadvantage.

Determining the Amount of Spousal Support

The Court considered various factors, including the length of cohabitation, the impact of responsibilities assumed during cohabitation on a spouse’s earning capacity, and any domestic services performed by the spouse, to determine the amount of spousal support. The court also considered the Spousal Support Advisory Guidelines, which provide guidance on determining spousal support amounts.

The Court rejected Dr. Martin’s argument that Dr. Frank should be self-sufficient, emphasizing that self-sufficiency is a relative concept and should be assessed in relation to the economic partnership the parties enjoyed during cohabitation. Given Dr. Martin’s financial resources and Dr. Frank’s financial needs, the Court ordered Dr. Martin to pay interim spousal support of $6,029.00 per month.

Key Takeaways for Common-Law Couples

Frank provides crucial insights for couples in common-law relationships, particularly those of long duration. It underscores the necessity of clearly defining property ownership and financial arrangements, even in the absence of a formal marriage.

  • Meticulous Record-Keeping of Financial Contributions: Couples should maintain detailed records of all financial contributions to shared assets, including real estate, investments, and joint bank accounts. This documentation can be indispensable in the event of a separation.
  • Articulation and Documentation of Intentions: Couples should engage in open discussions and document their intentions regarding property ownership and financial responsibilities. This can be achieved through cohabitation agreements or other written instruments.
  • Valuation of Non-Monetary Contributions: Couples should recognize and value non-financial contributions, as these contributions can significantly influence property rights and spousal support entitlements.
  • Transparent Financial Practices and Collaborative Planning: Couples should maintain financial transparency and engage in collaborative financial planning. Such practices can mitigate misunderstandings and disputes in the event of a separation.
  • Awareness of Spousal Support Entitlements: Couples should familiarize themselves with spousal support entitlements in their jurisdiction, including the distinction between compensatory and non-compensatory support.
  • Periodic Review of Agreements: Couples should periodically review and update their agreements to reflect evolving circumstances.

Complexities of a Long-Term Common-Law Relationship

Frank is a stark reminder of the legal complexities that can arise from the dissolution of a long-term common-law relationship. By understanding the principles of resulting trusts, property rights, and spousal support, couples can take proactive steps to protect their interests and navigate the challenges of separation.

Stouffville Family Lawyers Offering Experienced Legal Guidance for Common-Law Separations

Navigating the complexities of a long-term common-law relationship breakdown requires clear, experienced legal guidance. At Shariff & Associates, our dedicated family lawyers understand the nuances of property division and spousal support, ensuring you receive your fair share. While we advocate for collaborative solutions, we are also experienced litigators prepared to champion your interests in court. Contact us online or at 905-591-4545 to discuss your unique situation.