Friday, April 06, 2007

Claims by a Common-law Spouse to Inherited Property on Breakdown of the Relationship

When a common-law relationship breaks down in British Columbia, one common-law spouse may have a claim against the other common-law spouse on the basis of unjust enrichment. To succeed the spouse making the claim must prove three things. She must show that she contributed money, other assets, or services to the other common-law spouse. She must show that the other common-law spouse benefited. Finally, she must show that there is no principled reason to allow the other common-law spouse to keep the benefit without compensating her.

Sometimes the courts will award money (a monetary award), and other times, the courts will award an interest in specific property (a constructive trust) to the contributing common-law spouse.

Can a common-law spouse make an unjust enrichment claim in respect of property the other inherited?

The British Columbia Court of Appeal considered this issue in Hughes v. Miller, 2007 BCCA 116.

Bambii Hughes and Bryan Miller lived in a common-law relationship for twelve years. The trial judge found that during some of those years, Ms. Hughes contributed the larger proportion of their modest living expenses. She also provided care and assistance to Mr. Miller.

Mr. Miller had inherited an interest in some land from his father. During the common-law relationship, Mr. Miller inherited a further interest in the land, and some money from his aunt’s estate. When the parties separated, the land was worth about $ 1.75 million.

The trial judge found that Mr. Miller had been unjustly enriched by Ms. Hughes contributions during their relationship, but did not consider it appropriate to award Ms. Hughes an interest in the land. The trial judge took into consideration the fact that Mr. Miller inherited the land, and Ms. Hughes did not contribute to the acquisition of the land. The trial judge ordered Mr. Miller to pay Ms. Hughes $75,000.

The Court of Appeal agreed with the trial judge’s analysis, but increased the award to $100,000. From the time the Mr. Miller inherited his aunt’s interest in the land to the couple’s separation, the land increased in value by about $300,000. Mr. Justice Hall, in the Court of Appeal, considered it appropriate to award Ms. Hughes of one-third of the increase in value.

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