Property Implications for Common Law Spouses in the Aftermath of Nova Scotia (Attorney General) v. Walsh et al

Common law spouses do not have the same rights as married spouses. The Supreme Court of Canada recently proclaimed that different treatment for married and unmarried heterosexual couples is constitutional. In Walsh, the Court considered the Nova Scotia Matrimonial Property Act. That act excludes unmarried heterosexual cohabitants from its definition of “spouse”.

As a result, unmarried heterosexual cohabitants do not enjoy the same legislative property division regime that married heterosexual cohabitants enjoy namely, a presumed equal division.

The applicant, Ms. Walsh, claimed that the definition of spouse in s. 2(g) of the MPA was unconstitutional. It excluded common law spouses, and consequently failed to provide her with the presumption of equal division of matrimonial property.

Haliburton J. of the Supreme Court of Nova Scotia, reasoned that since married couples relinquish the right to deal with their property as sole owners upon marriage, imposing the regime created by the MPA on persons who chose not to marry would create uncertainty, injustice and impediments to property transactions. He concluded that although married and unmarried heterosexual couples were treated differently, the different treatment did not result in discrimination with the Charter of Rights and Freedoms.

At the Nova Scotia Court of Appeal, however, Flinn J.A. concluded that the differential treatment was discriminatory. It demeaned Ms. Walsh’s dignity. He held that the MPA perpetuated the view that unmarried spouses are less worthy of value as members of Canadian society. He declared s.2(g) MPA as having no force or effect. Flinn J.A. suspended the effect of the section for one year to allow the legislature the opportunity to revise the eligibility criteria of the MPA or to pass new legislation so as to satisfy the constitutional requirements of s.15(1) of the Charter.

Interestingly and before the Supreme Court of Canada heard the matter, the Nova Scotia legislature passed the Law Reform (2000) Act, which provided the legislative means for those in common law relationships to be bound by the same legal regime of economic partnership that binds married people, with the same rights and obligations. This would require an explicit and consensual act on the part of common law partners. Failing such an act, the governing principle provides that cohabiting persons maintain the right to deal with their property individually, as they see fit.

The Supreme Court of Canada considered the matter and reversed the decision of the Court of Appeal. The Supreme Court based its decision on the issue of choice. The Court identified the important difference between those who chose to marry and to accept the legal consequences of so doing, and those who chose not to or did not marry. Speaking for the majority of the Court, Bastarache J. stated:

“Where the legislation has the effect of dramatically altering the legal obligation of partners, as between themselves, choice must be paramount. The decision to marry or not is intensely personal and engages a complex interplay of social, political, religious, and financial considerations by the individual. While it remains true that unmarried spouses have suffered from historical disadvantage and stereotyping, it simultaneously cannot be ignored that many persons in circumstances similar to those of the parties, that is, opposite sex individuals in conjugal relationship of some permanence, have chosen to avoid the institution of marriage and the legal consequences that flow from it. … To ignore these differences among cohabiting couples presumes a commonality of intention and understanding that simply does not exist. This effectively nullifies the individual’s freedom to choose alternative family forms and to have that choice respected and legitimated by the state.”

The Court reasoned that since the MPA was concerned exclusively with the division of wealth accumulated by one of the parties either before or during the marriage, and not with support and maintenance issues that arise upon the breakdown of a marriage, the distinction between ‘married’ and ‘unmarried’ was not discriminatory.

Despite the strong dissent of L’Heureux Dubé J., the Court held that it would be wrong to impose on unmarried cohabiting heterosexual couples the same matrimonial property legislation provisions as those applied to married couples, since entry into marriage occurs differently than non-marriage and therefore, entails different legislative rights, duties and responsibilities.

The Supreme Court of Canada noted that other avenues and remedies exist for the equitable division of property in cases of common law couples. Remedial and constructive trust remedies are in place to prevent unjust enrichment. Common law partners may also resort to legislative provisions on maintenance, spousal and child support. Finally, and in Nova Scotia, they now have the option to register their domestic partnership jointly under the LRA, and thereby assume the same legal rights and responsibilities of married couples.

What does this mean for Ontario couples? A common law partner can continue to rely on the imprecise constructive and remedial trust doctrines to claim a share in property upon separation.

Contrary to situations of married couples who separate and unless there is an “opt in” option made available (i.e. the Nova Scotia LRA), there will be no presumption of equal contributions entitling a common law partner to share in the value of assets accumulated during the relationship. The onus remains on the common law partner to establish unjust enrichment.

Accordingly, and without a defined regime or the ability to “opt in” the breakdown of common law relationships could continue to lead to uncertainty and unpredictability for all concerned. At the very least, speak to a lawyer about a domestic contract if you are in a common law relationship.

[2002] S.C.J. No. 84 [hereinafter Walsh].
R.S.N.S. 1989, c. 275 [hereinafter MPA].
S.N.S. 2000, c.29 [hereinafter LRA].

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