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Common Law Relationships: Bressette v. Henderson

The Honourable Madam Justice S. Griffin recently gave reasons for judgment in the case of Bressette v. Henderson addressing the important question:

Does the Family Law Act (the “FLA”) apply to common-law spouses whose relationship started and/or ended in the two years immediately prior to the FLA coming into force?

The reason that this question matters, in short, is that the application of the FLA to certain common-law relationships could result in a totally different division of property for spouses than would otherwise occur if the FLA did not apply (for example, one spouse might get half of all family assets if the FLA applied to their relationship but very little if the FLA did not apply).

Prior to the FLA coming into force, common-law couples in British Columbia were unable to apply for property division relief under the Family Relations Act (the “FRA”), the statute that provided for property division upon the breakdown of a marriage.

Instead, common-law couples were limited in the remedies they could seek for property division. As Madam Justice Griffin succinctly summarizes:

The common law has developed tools to assist unmarried partners in making claims to property held in teh name of the other partner after the relationship breakdown. These tools, under the usual description of unjust enrichment and constructive trust, are an attempt to achieve fairness in the division of property to which both parties had contributed directly or indirectly, but which, for whatever reason, ended up registered in one party’s name alone.

The tools that common-law spouses were limited to bring claims under, prior to the enactment of the FLA, often create issues in determining the proper remedy for property division and in determining what the appropriate proportionate share of assets should be for each spouse: essentially the results of application of unjust enrichment and constructive trust remedies to property division are difficult to predict.

The FLA provides more certainty for division of property upon the breakdown of a common-law relationship. Under the FLA generally the starting point for property division is an equal division of family property and family debt.

In order to bring a property division action under the FLA, a common-law spouse must start a proceeding for property division under the FLA no later than two years from the date of separation. Effectively, if you were in a common law relationship and separated earlier than two years before March 18, 2013 a claim for property division under the FLA will be barred by the passing of the limitation period.

There are transition provisions in the FLA that deal with some of the issues arising from the coming into force of the FLA, but they are unclear on the application of the FLA to the rights of common-law spouses who broke-up in the two years immediately before March 18, 2013.

Justice Griffin states:

A decision on the transition provisions will have significant implications on the rights of common-law spouses who separated within two years of the FLA coming into force. One can imagine all kinds of variations in circumstances: those whose relationships straddled the FLA, starting before but not ending until after the FLA came into force; those whose relationships ended and who obtained a decision in litigation over their property rights or who reached an agreement with the other unmarried spouse all before the coming into force of the FLA; and those whose relationships ended, but who remained in active litigation and had not resolved their property dispute before the coming into force of the FLA. There are arguments available for different treatments of these various circumstances.

Justice Griffin specifically did not make a determination in the application of the FLA to the Bressette and Henderson relationship stating:

Unfortunately, I do not feel that I have had the benefit of as full a legal argument as is necessary to resolve the issue of whether or not the property provisions of the FLA apply to these parties… I am concerned about deciding the issue of the applicability of the FLA in the absence of full legal arguments.

These issues will likely be determined before the courts in the coming months and years. While she does not make a decision in regard to the applicability of the FLA to common-law couples who separated between March 2011 and March 2013, Justice Griffin does make a comment on the issue (a comment I agree with): “Here, if the FLA was applicable to these parties, it would be “significantly unfair” to reach a different result than that based on the unjust enrichment remedy, given that the common-law remedy is based on fairness and the legitimate expectations of the parties. Here the parties never considered or expected that there would be a new statutory regime applicable to the relationship during the course of the relationship.”