Common Law -- Basics

Everyone always asks: what is common law in Alberta? The answer is not simple, but here is my attempt at simplification. Also, I have to add a warning that you really need to check with a lawyer about this. My list is only intended to alert you to issues. This stuff can date quickly - do not rely upon it without making sure it is current. And, the devil is in the details, sometimes one more piece of information about your situation would change the result. Do not try to use this to be your own lawyer.

Child support -- same as if married in Alberta with a minor exception for 18+ aged childen;
Custody -- priniciples are roughly the same, but the language, terminology and forms differ;

Spousal support -- not entirely the same. To succeed, at a minimum, there must be a child born to the relationship, or if there is no child, then the parties must have lived together for 3 years. If these critia are not met, your application will be rejected. So, for anyone cohabiting, you should consider getting a legal opinion if you have children or expect to live together for more than 3 years. Once these threshold are met, the tests for how much spousal support and for how long are somewhat similar to the laws which apply to people who are married.

Property -- Very different for common law people than married. This is somewhat difficult to explain briefly and on some points lawyers will differ. This is really not something to rely upon the internet for, so read with caution.

First, there is no statue or piece of law that governs the division of common law property in Alberta. So, the only way to know the law is to read a series of cases in which the law developed. Second, the cases usually address property in one parties' name. I will address property in joint names below.

Where property is in one parties' name (the 'owner'), the caselaw recommends that if the non-owner party can show that the owner acquired property or benefitted from an increase in value to existing property as a result of the actions of non-owner, and the non-owner suffered a detriment to enable that acquisition or increase, than the owner would be unjustly enriched if he/she walked away from the relationship without sharing something to the non-owner. In such a case, the law will impose a 'constructive trust' meaning that they will notionally construct the concept that the owner holds some of that increased value for the non-owner.

For example,

a.if an owner/common law partner has a house in poor repair worth $100,000 at the commencement of the relationship;
b. and if the non-owner spent time, money and labour improving the house during the relationship;
c. and the non-owner could have spent the time, money and labour elsewhere, thus creating a detriment to the non-owner;
d. and the non-owner's money and labour increased the value of the house, to say $150,000;
e. then the law finds that the owner will have been unjustly enriched unless the non-owner receives a share of the increase of $50,000.
f. the extent of the enrichment is usually calculated by excluding the starting value or $100,000 in the example
g. the parties must then determine what portion of the increase of $50,000 the partner should receive. If the relationship and contribution are minimal, the share is minimal. If the relationship and contribution is substantial, the share could be as much as 50%.

The legal test is usually stated as follows: The owner has been unjustly enriched by the non-owner if the non-owner has conferred a benefit to the owner, suffered a detriment and there is no reason in law why a remedy should not ensue.

An interesting question arises: does this apply to all assets of the relationship or is it an asset by asset analysis. For example, can a non-owner partner show that there has been a benefit provided and a detriment has been suffered in the acquisition of the owner's RRSP, or pension or other assets which the non-owner had little direct imput.

As stated above, I should comment on joint assets. There is a rebuttable presumption in law that when parties put assets in joint names, they intend to divide them jointly. It is a 'rebuttable' presumption, meaning that this will not always occur and it is open for debate in every case whether that presumption should apply. It is usually simple if parties acquire a joint asset with equal contributions and pay for it equally. It becomes tricky if the contributions are not equal. For example, if the parties contribute on a 90/10 ratio, do any profits get divided equally or on the same 90/10 ratio. This is open for discussion and there is no fixed answer.

There are some other features to this test. The takeaway is twofold: one that it is not the same for married people and common law people. And secondly, that this area of law is not codefied and therefore open to interpretation and confusion.

I would recommend speaking to a lawyer on this point before living with someone. Failure to do so is like driving down a road with no street signs -- you will not know when to stop, the speed limit or what to do when you meet up with another car at an intersection. Also, there are some strategies that can be put in place to maximize your position, should the relationship fail.

I also recommend speaking to a lawyer if the relationship fails. Again, there may be some useful strategies that you can implement to your benefit.