Unjust Enrichment and Joint Family Ventures in Common Law Relationships 

Unjust Enrichment and Joint Family Ventures in Common Law Relationships

Amendments to the  Family Property Act in 2020 brought the property rights of adult interdependent partners (often referred to as common law partners) inline with those of married partners. In effect these amendments extended the property division rights available to married spouses going through a divorce to all adult interdependent relationships going through a dissolution.    

Regardless of the form of relationship, partners often contribute to joint family ventures during the course of their relationship.   A joint family venture arises where both parties to a relationship contribute to a business or other effort to accumulate wealth. The Court requires the presence of several elements to make a finding that there was a joint family venture:

1. Both parties contributed to the family venture in someway. This can be directly or indirectly. A party can be found to be contributing indirectly if their effort’s give their partner greater freedom to build up the venture, for example staying home to take care of children or the household can provide the other party time and freedom to build up the venture.
2. The more the parties’ finances are integrated, the stronger the claim that a joint family venture exits.
3. The courts will also consider if there was any expressed or implied intent that the venture in question is a bona fide joint family venture.
4. Consideration will also be given to whether there has been reliance on the relationship to a party’s detriment to prioritize the family.
5. There must be an overall causal connection between the party’s contribution and wealth accumulation.

These joint family ventures can become quite lucrative and valuable over time. When a marriage breaks down there is a clear process for division of property which will account for this and a process for both parties to the marriage to be compensated.   

However, for those in a common law relationship, prior to the changes made in 2020, the legal remedy available to common law and domestic partners was to pursue a cause of action for unjust enrichment. Making a claim for unjust enrichment allows a partner to make a claim on the joint family venture that they contributed to and are seeking a share of its value despite the venture being held by the other partner.

Generally, a claim for unjust enrichment can be made when one party claims that another party was unjustly enriched by something that they have an equitable claim towards.   The enriched party can be said to have received a benefit without properly compensating the other party.

Legally there are three elements that must be present for a claim of unjust enrichment to be successful and lead to compensation:

1. The defendant must be enriched in some way or receive a benefit in a particular situation;
2. The plaintiff or person claiming unjust enrichment must have been deprived of something as a result of the same situation.
3. There is no legally or public policy valid reason for one parties’ enrichment and the other party’s deprivation. In other words, the plaintiff has to show that it would be unjust for the defendant to keep the benefit at the plaintiff’s expense.   The defendant is open to give other reasons why it is fair to keep the benefit.

The Alberta courts dealt with the issue of unjust enrichment recently with respect to joint family ventures in the case of McBride v Bacovsky, 2024 ABCA 61, where the Alberta Court of Appeal upheld the earlier decision made by Justice Anderson. This case is an example of an adult interdependent partner’s successful unjust enrichment claim at trial, which was recently affirmed by the Court of Appeal.

In this case the parties were in a relationship that lasted 10 years from 1999 to 2009 and were never married, they began living together in 2000 when Ms. McBride became pregnant.   At trial Justice Anderson found this to be an adult interdependent relationship. 

When their relationship began, Mr. Bacovsky owned, through his company, a chartered bus service, National Motor Coach (“NMC”).  Ms. McBride assisted with some aspects of the company, including picking up the mail, emails, and typing.  During the marriage, Ms. McBride began a chauffeured limousine service company, Transprotection.  At the time of separation, Mr. Bacovsky was leaving the relationship with assets valued at approximately $10.6 million. 

At the time of trial unmarried partners not entitled to property division rights as under the Adult Interdependent Relationships Act, unmarried partners were not entitled to property division rights. This is based on the idea that unmarried partners can choose to get married, but if they choose not, they can maintain their property and interests during the relationship. 

Therefore, to claim an interest in the property, Ms. McBride claimed that there was unjust enrichment and that she should be compensated. 

During Ms. McBride’s maternity leave, she assisted with taking care of the children and a large project with NMC, the chartering of attendees for the G8 Summit. Her work involved hiring and organizing extra staff and drivers to facilitate the event. She also arranged for catering and set up a driver dispatch program. She was not paid for her contributions. The Court concluded that Mr. Bacovsky benefitted from Ms. McBride’s efforts during this time, to her detriment. 

After the G8 Summit, the Court also found that Ms. McBride was primarily responsible for caring for the home and children, despite having a nanny. Due to her efforts, Mr. Bacovsky benefited as his time was freed up to expand the business. 

Mr. Bacovsky then provided some start-up capital for Ms. McBride to start her own business, Transprotection. This was done to provide her with more flexibility as their nanny was leaving. The Court found that the relationship between Transprotection and NMC had benefited both companies. Ms. McBride continued to care for their young child, who also had special needs issues. As she was primarily responsible for their child and the household, this benefited Mr. Bacovsky. 

Justice Anderson found no legal reason to deny Ms. McBride’s unjust enrichment claim. The Court agreed with her claim of unjust enrichment as her financial circumstances were uncertain at the time, and she depended on Mr. Bacovsky.

Justice Anderson further held that there was a joint family venture. There was a mutual effort as Ms. McBride took on most of the child and household labour, which allowed Mr. Bacovsky to expand the business. The Court also found that Ms. McBride had contributed to the companies’ operations.

While the parties had separate bank accounts and property, and Ms. McBride was not involved in managing NMC, the Court found some level of economic integration. Mr. Bacovsky had purchased two vehicles for Ms. McBride during the relationship, she listed him as her common-law partner when filing her taxes, and he listed her as his common-law spouse for his health benefits. She also assisted with setting up Transprotection, which benefited the family unit. 

There was also evidence that both parties considered themselves a family unit. He accepted her contributions to the business and her domestic labour. They also set up Transprotection to expand and work with NMC, which showed that they were working as a family unit. 

Both parties prioritized the family. They moved in together once they found out she was pregnant. They also renovated their home together, and Mr. Bacovsky even paid for the divorce of her former spouse. Their families were integrated. They also set up Transprotection together for the family’s sake as a unit. 

Justice Anderson awarded Ms. McBride 20% of the value of the joint family venture (approximately $1.78 million), as she left the relationship with the value of Transprotection, and NMC was also a well-established company before separation. 

This decision was upheld by the Alberta Court of Appeal who held that there were no errors in Justice Anderson’s finding that there was a joint family venture and that unjust enrichment had occurred.   The court further held that no errors were made in the valuation of the venture’s wealth or in the size of the award granted to Ms. McBride.

If you are part of a Joint Family Venture or believe that you were part of during the course of a common law separation and would like to discuss your options, the experienced lawyers at The Calgary Legal Team can help.