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When separated or divorced parents find new partners and establish a long-term relationship, a blended family is formed. Oftentimes, the finances of such a relationship can be complicated due to obligations from previous relationships or court orders. A recent decision from the Ontario Superior Court of Justice shows how important an honest approach to family finances is. In this case, in which Gelman & AssociatesPaul D. Slan and Annie Yektaeian represented the respondent, the court asked whether the respondent had benefitted from unjust enrichment stemming from finances related to the home she shared with the applicant.

Applicant argues unjust enrichment

The applicant and respondent began dating in 2006. Each of them had two children from a previous relationship. Things moved quickly and they were soon engaged. At the time of the marriage, the applicant was a part-owner of a restaurant franchise and lived with his parents. The respondent worked in Toronto, and owned a home she recently purchased in Scarborough.

After getting engaged, the parties decided to purchase a home together. It was only at this time  that the respondent became aware of the applicant’s finances.

When they applied for a mortgage for a home in Newmarket, the respondent learned the applicant was denied even as a joint mortgagor. She also learned that despite his promise to contribute equally to the down payment of a home, he had no money, claiming the government had taken everything he had.

It turned out that the applicant was in debt to the tune of close to $450,000, including credit card and tax debt.

Despite this, the respondent agreed to purchase a home at a lower budget than originally planned.  She contributed the down-payment for the home. The applicant, who was not able to open his own chequing account, convinced her to open one in her name which he could use. He deposited money into this account, and she drew money from it each month to cover his portion of household expenses.

The relationship breaks down

The applicant’s financial secrecy contributed to ups and downs in the relationship, which came to an end in 2016. It was at this time that the applicant sought interest in the home.

The applicant told the court that he intended to contribute $60,000 to the purchase of the home, but complications in his business prevented him from doing so. He told the court he had been up front with the respondent about his financial situation, and that most of his debt was the result of misunderstandings.

Despite his lack of contributions to the down payment of the home, the applicant claimed that his monthly contributions created a resulting trust (which would mean he has an interest in the home) as well as unjust enrichment of the respondent.

The court was quick to deny that a resulting trust had been established, focusing solely on the entire down payment being made by the respondent.

The court found that while the applicant may have contributed to living expenses, there was no evidence that he ever took steps to go on the mortgage, pay down its balance, or purchase an interest in the property. Ultimately the court found “There was no evidence that he took any steps to benefit her directly or indirectly but for the payment of half the home expenses.”

In addition to being a significant asset, the matrimonial home is usually associated with deep emotional ties.  At Gelman & Associates, our family lawyers will provide compassionate, forward-thinking guidance to our clients while aggressively pursuing their legal interests. Call us at (416) 736-0200 or 1-844-736-0200 or contact us online.

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