II. THE ENGLISH CONSTRUCTIVE TRUST

In English law, the family home has special significance in cohabitational disputes. Home ownership is important in England. It conveys social status and often provides a very valuable investment. Especially in Greater London, the rise of house prices over the last decades has been striking,Footnote ²² a development that might have increased the willingness of former cohabitants to litigate.

English courts distinguish between cases of sole and joint registration of the family home:

1. (1) If only one partner of the (married or merely cohabiting) couple,Footnote ²³ is the registered proprietor of title to the family home, the question is whether the other partner has a beneficial interest under a trust. If the acquisition of such a beneficial interest is established, the size of this interest needs to be determined (quantification).Footnote ²⁴

2. (2) If both partners are registered as proprietors, the question is whether (acquisition) and if so to what extent (quantification) the terms of any trust of the family home are at variance with the legal title, eg, if the parties share equally or according to their contributions made to the purchase price.

The first family home cases addressed the first question. The starting point of the development of the trust of the family home was the presumed intention resulting trust.Footnote ²⁵ If a person contributed to the purchase price of another person's property, it was presumed that a trust in favour of the contributing party came into existence unless evidence showed that the contributing party had intended a gift.Footnote ²⁶ The family constructive trust developed after decisions such as Pettitt v Pettitt Footnote ²⁷ and Gissing v Gissing.Footnote ²⁸ The case law then distinguished between situations where a partner made direct contributions to the purchase price and was awarded an interest under a resulting trust, and those where a constructive trusts was imposed. A constructive trust,Footnote ²⁹ the courts held, was based on the common intention of the parties and detrimental reliance based on the existence of a trust, demonstrated by indirect contributions to the purchase price or renovation work.Footnote ³⁰ Home-making and caring for children alone, however, was not enough.Footnote ³¹ Whether the intention required of the parties needed to be expressed, inferred or even imputed in the light of the subsequent development of the relationship was clear neither in the case law nor the academic literature. In 1991, in Lloyds Bank v Rosset,Footnote ³² the House of Lords attempted to clarify the issue. Lord Bridge said that proof was required that the parties had, however unclearly, reached an ‘agreement, arrangement or understanding’ that the property was to be shared beneficially.Footnote ³³ Absent an agreement, the only conduct of the parties which could be adjudged to show a common intention to share beneficially was direct contributions to the purchase price or payments of mortgage instalments.Footnote ³⁴

The second question,Footnote ³⁵ how to quantify the shares of a jointly registered couple, was addressed by the House of Lords in the decision of Stack v Dowden Footnote ³⁶ in 2007. The question was whether the party who had made a greater contribution to the purchase price of the house could claim a beneficial interest which exceeded the equal sharing of the beneficial interest indicated by joint registration.Footnote ³⁷ The House of Lords, by a majority, held that where the couple was registered jointly it would be only in exceptionalFootnote ³⁸ situations that an interest under a trust would be different from the parties' legal interests. The law had ‘moved on’ from the traditional resulting trust in family home cases.Footnote ³⁹ Nevertheless, Ms Dowden, who had undoubtedly made greater contributions to the purchase price, received a 65 per cent share. This decision was apparently based on a common intention of the parties. When explaining that many factors other than financial factors might be relevant when divining the parties' true intentions, Baroness Hale remarked that ‘in law, context is everything, and the domestic context is very different from the commercial world’.Footnote ⁴⁰ She went on to say that ‘the search is to ascertain the parties' shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it’.Footnote ⁴¹ Only Lord Neuberger, dissenting, disagreed with the idea of imputing an intention.Footnote ⁴² Thus, the question whether and what kind of agreement the parties had reached with respect to their property is of decisive importance for the court. This approach will be described as ‘autonomy-oriented’.

The academic response to Stack was mixed.Footnote ⁴³ The decision was criticizedFootnote ⁴⁴ by Swadling as abandoning established trust lawFootnote ⁴⁵ in favour of imprecise, fictitious agreements.Footnote ⁴⁶ Sir Terence Etherton,Footnote ⁴⁷ now a Lord Justice of the Court of Appeal, regretted the lack of a principled approach, in contrast to cases in the commercial context such as Yeoman's Row Management v Cobbe.Footnote ⁴⁸ Hopkins remarked that the decision had introduced a context specific, policy orientated approach.Footnote ⁴⁹ McFarlane suggested that it would be preferable to apply the doctrine of proprietary estoppelFootnote ⁵⁰ rather than use fictitious agreements.Footnote ⁵¹ Harding argued that Stack could be defended from a communitarian perspective. In focusing on the parties' intentions rather than developing a quasi-statutory scheme, which should be left to the legislator, the court observed its proper role in a democratic society.Footnote ⁵² Judged from a liberal rather than communitarian perspective, however, Harding argued that the decision was nevertheless flawed because it failed to provide claims in unjust enrichment to distribute the transferred wealth properly. All these commentators discussed the role the court places on the parties' agreements, arguing that an autonomy-oriented approach focusing on the consent of the parties requires there to be an agreement between the parties on the sharing of their property. This, however, was strongly doubted by many commentators. Pawlowski, for example, argued that the House of Lords should develop a quasi-statutory scheme that focused on the special requirements of family relationships rather than property law rules.Footnote ⁵³

The lower courts acted cautiouslyFootnote ⁵⁴ and gave permission to appeal in Jones v Kernott. Clarification, especially of the question whether Stack allowed the imputation of intention to share, was keenly awaited.Footnote ⁵⁵ Gardner and Davidson claimed that if Stack's common intention could be invented for the parties, then the Supreme Court should expressly say so, and they suggested a new approach:Footnote ⁵⁶ the court should differentiate between those couples who lived in a materially communal relationship and other couples who kept their money separate. The former couples should be essentially treated as if they were married.Footnote ⁵⁷

In Jones v Kernott,Footnote ⁵⁸ the couple had been registered as joint proprietors of the title when the property was purchased. Later, however, they separated and Mr Kernott acquired another property while Ms Jones paid off the mortgage on the first property so that effectively she had contributed 90 per cent of the purchase price. Fifteen years after their separation, the question of how their respective shares should be quantified reached the courts. The Court of Appeal decided Mr Kernott held a 50 per cent beneficial interest because the couple had intended to share the house in equal shares at the time of registration and had not changed their intentions later, despite their separation.

The Supreme Court allowed Ms Jones' appeal, upholding the decision of the trial judge and took the opportunity to revisit and clarify Stack. Baroness Hale and Lord Walker explicitly abandoned the presumed intention resulting trust for houses and flats registered in the joint names of a couple.Footnote ⁵⁹ In such cases, there was a presumption that the parties intended to share the interest in land equallyFootnote ⁶⁰ both at law and in equity, irrespective of the contributions each made to the purchase price. This ‘presumption of equal sharing’, however, could be rebutted by evidence of a contrary intentionFootnote ⁶¹ expressed or inferred.Footnote ⁶² However, to justify such a rebuttal, the facts had to be very unusual as parties in an intimate relationship did not normally intend to demand compensation for their contributions, which were also very difficult to keep track of. In Jones, the majority—Lady Hale, Lord Walker and Lord Collins—held that such an intention could be inferred from the actions of Ms Jones and Mr Kernott. The ‘ambulatory trust’Footnote ⁶³ of equal shares established at the time of registration had changed over time with the parties' intentions. Lord Collins remarked that the distinction between inferring and imputing an agreement was, in any event, a small one.Footnote ⁶⁴ The minority, Lord Wilson and Lord Kerr, concurred with the result but doubted that the evidence supported an intention not to share the beneficial interest equally. Such an intention had to be imputed in order to do justice.Footnote ⁶⁵ The minority did not explain how a 90:10 split could be justified by means of imputation, an omission Gardener and Davidson explained by arguing that a materially communal relationship should essentially be treated like a marriage. Adding together the value of both the properties Ms Jones and Mr Kernott purchased, Ms Jones had received roughly a 50 per cent share, a result she might well have received in a divorce.Footnote ⁶⁶

The majority, however, assumed that imputing an intention was permissible in relation to the quantification of the respective beneficial interests. Once the ‘presumption of equality’ established by joint registration had been rebutted by proof of a different intention, courts should look primarily for actual shared intentions, either expressed or inferred, to determine the relative shares.Footnote ⁶⁷ If it was then impossible to infer an intention with respect to the relative shares, the court could impute such intention.Footnote ⁶⁸

Whether, and, if so, to what extent, these principles are to be applied to cases where the title was in the name of one party alone, remains to be seen. In particular, it is unclear what role a contribution to the purchase price should play and whether the law as stated in Lloyds Bank v Rosset Footnote ⁶⁹ is to be modified. Lady Hale and Lord Walker acknowledged the desirability of a single regimeFootnote ⁷⁰ applicable to single-name as well as joint-name cases.Footnote ⁷¹ However, they went on to explain that the starting point in sole name cases was different because the non-registered party had to prove a beneficial interest while the jointly registered partner had only to bring proof that the beneficial interest should be shared in a different manner than would have been suggested by joint registration.Footnote ⁷² Nevertheless, it was argued that the two-step approach—of (1) proving an expressed or inferred intention to share a property interest either at all, or in manner different to that suggested by joint registration, and (2) quantifying according to an expressed, inferred or imputed intention—was essentially the same in both single-name cases like Oxley v Hiscock Footnote ⁷³ and joint name cases such as Stack and Jones.Footnote ⁷⁴ Mee criticized Jones for using two artificial forms of intention.Footnote ⁷⁵ In his view, the law was not settled after Jones, since neither single-name cases nor the future of the resulting trust in non-domestic situations were clear yet.Footnote ⁷⁶ Again, as with Stack, the details of the court's autonomy-oriented approach were discussed and questioned, with commentators differing on whether, and to what extent, a court might supplement the parties' intentions by reference to fairness-oriented factors derived from the parties' actual relationship.Footnote ⁷⁷

III. CANADA—JOINT FAMILY VENTURES AND UNJUST ENRICHMENT

In Canada, as in England, the resulting trust formed the starting point of the case law on domestic disputes. Later, however, Canadian courts developed an approach that focused on the overall wealth accumulated by the cohabitants, and not merely on the family home, as was the case in England and Wales.

Relying on Lord Diplock's speech in Gissing v Gissing, Martland J in 1975 in Murdoch v Murdoch, speaking for the majority, said that, absent financial contribution, a trust could also arise ‘where a court was satisfied by the words or conduct of the parties that it was their common intention that the beneficial interest was to be shared’.Footnote ⁷⁸ The approach was followed by the majority in Rathwell v Rathwell, even though it was said that a contribution could evidence the common intention to share the property in question,Footnote ⁷⁹ which slightly blurred the distinction between the classic resulting trust and the ‘common intention resulting trust’,Footnote ⁸⁰ the Canadian term for the English constructive trust.

In 1980, in Pettkus v Becker Footnote ⁸¹ the development of the common intention resulting trust ended, however, and the law of unjust enrichment became the decisive legal tool in cohabitational disputes. The Canadian law of unjust enrichment began with a traditional common law ‘unjust factor’ approach, where a successful claim in restitution requires there to be a reason justifying restitution, for example, that the claimant made a mistake when transferring a benefit to the defendant.Footnote ⁸² In Pettkus v Becker,Footnote ⁸³ where an unmarried couple had built a successful beekeeping business, however, the Supreme Court held that an obligation triggered by the defendant's unjust enrichment could arise where the defendant had been enriched, the plaintiff had suffered a corresponding deprivation and there was ‘no juristic reason’ for the enrichment.Footnote ⁸⁴ This approach comes closer to the civilian approach to unjust enrichment than the unjust factor model.Footnote ⁸⁵

In the 1993 decision of Peter v Beblow, where a woman moved in with her partner and took over the chores formerly performed by a professional housekeeper, the Supreme Court held that domestic services could constitute an enrichment in a claim for unjust enrichment, since neither a spouse nor domestic partner has a duty to provide home-making services. The Court rejected the view that such services were performed merely because of ‘natural love and affection’, since such a view would devalue such valuable contributions to the family economy.Footnote ⁸⁶ Speaking for the majority, MacLachlin J (as she then was) stated that ‘since there was no obligation existing between the parties which would justify the unjust enrichment and no other arguments under this broad heading were met, there is no juristic reason for the enrichment.’Footnote ⁸⁷

This approach was not confined to domestic disputes. In 2004 the Canadian Supreme Court declared in Garland v Consumers' Gas Co Footnote ⁸⁸ that the ‘no juristic reason’ approach was the right approach for all unjust enrichment cases in Canadian law. Nevertheless, the debate over the general direction Canadian law should take was not completely over.Footnote ⁸⁹ In the 2009 case of BMP Global Distribution Inc v Bank of Nova Scotia,Footnote ⁹⁰ the Supreme Court did not allude to Garland nor to the notion of ‘juristic reason’ but resolved the case by applying the unjust factor of mistake and the English decision of Barclays Bank v Simms.Footnote ⁹¹ However, in Kerr v Baranow (2011), another domestic relationship case, the Supreme Court confirmed its commitment to the juristic reason approach. A claim in unjust enrichment required, first, an enrichmentFootnote ⁹² of the defendant which, second, corresponded to a deprivation of the claimant.Footnote ⁹³ Third, there must be no reason in law or justice for the defendant's enrichment.Footnote ⁹⁴ There was no continuing role for the common intention resulting trust in family home cases, the court held,Footnote ⁹⁵ since unjust enrichment offered a more principled and less artificial basis to address the problems arising out of domestic partnership.

The remedies the Supreme Court awarded in Kerr v Baranow deserve special attention. Prior to that case, Canadian decisions had awarded monetary relief calculated on a quantum meruit basis, which meant that a cohabitant received a payment calculated in relation to the market value of services delivered during the partnership. The other remedy awarded by the courts was proprietary relief in the form of a beneficial interest under a remedial constructive trust of specific assets.Footnote ⁹⁶ However, in Vanasse v Seguin, decided with Kerr v Baranow, the Supreme Court restored the decision of the trial judge to award the homemaker partner a monetary claim for half the wealth her partner had accumulated during the relationship, including the proceeds of the profitable sale of his business.Footnote ⁹⁷ Cromwell J explained this unanimous decision by reference to the nature of the relationship. While there might be situations where the parties considered each other as essentially hired help, in which case a quantum meruit would be appropriate, in other relationships the parties created a ‘joint family venture’ in which to share life's benefits and burdens. Cromwell J named a number of non-exhaustive indicia to detect such joint family ventures including (1) mutual efforts for the relationship; (2) economic integration of the resources of both partners; (3) an actual intent to share property; and (4) priority given to the family over career opportunities in order to disburden the other partner.Footnote ⁹⁸

The remedy had to respect the underlying premise of the relationship and thus award a proportional share of the wealth accumulated by joint efforts. As regards the legitimacy of this approach, Cromwell J said that

Lower remarked that this approach focused on the actual relationship rather than the common intention stressed by English courts, and is close to what Gardner had suggested for English law. While the Canadian approach was less artificial than the English, however, it might not bring more certainty.Footnote ¹⁰⁰ Though the court's reasoning might have merit from a fairness-oriented policy perspective, McInnes criticized it for not being justifiable from an unjust enrichment perspective. The function of unjust enrichment was to trigger restitution and to restore a specific benefit to the plaintiff. Therefore, unjust enrichment could not justify a share in the profits which a former partner had accumulated without there being proof of a causal link between the work constituting the benefit and the specific profits obtained.Footnote ¹⁰¹

IV. GERMAN PARTNERSHIPS, CONTRACTS AND UNJUST ENRICHMENT

The trust has no real equivalent in German law.Footnote ¹⁰² Cohabitants only have property rights in land when both are registered. With respect to chattels, however, joint financial contributions are an important indication that the parties have established a common title, with shares relative to their financial contributionsFootnote ¹⁰³—an approach roughly comparable to the classic presumed intention resulting trust. Nevertheless, German courts have concentrated on the law of contract and unjust enrichment when deciding cohabitational disputes rather than on property law. German courts first developed a number of tools that allowed claims between spouses beyond the scope of the marital property regime. Only since 2008 have such tools been applied to both cohabitants and spouses.

V. SIMILARITIES: PRIVATE LAW IN FAMILY CONTEXT

In all three legal systems, courts use legal devices usually applied outside family law in situations where people have combined their efforts and resources in a personal relationship without clear agreements. In the process, courts grapple with approaches which stress the intentions of the parties, which aim at ensuring fairness, or which try to provide compensation or restitution for contributions to the partnership that continue to enrich the other partner once the relationship has ended.

Commentators in all three countries have criticized the courts for using purely fairness-oriented tools and for having introduced case law that provides quasi-statutory regimes for failed unmarried relationships. Karsten Schmidt criticized the implied partnership as simply a substitute for a marital property regime for unmarried couples (Güterrechtssurrogat).Footnote ¹⁴⁴ Lower has pointed out that the Canadian focus on the specific relationship hints at an attempt to create a judicially fashioned regime to replicate what is available at divorce.Footnote ¹⁴⁵ Mee argued that Jones was imposing a special regime on ‘domestic’ relationships which used two artificial forms of intentions.Footnote ¹⁴⁶ The UK Supreme Court in Jones praised the valuable work of the Law Commission while realistically stating that no action should be expected from the legislature, with the result that courts themselves had to find answers to the pressing problems.Footnote ¹⁴⁷ Thus, in all three legal systems, it could be argued that the case law developed by the courts was a substitute for a non-existence of a family law regime for cohabitants.

As appealing as this argument is, however, it must be taken with a pinch of salt. Though the case law might function as substitute for a statutory regime, it is doubtful whether all judges working on domestic disputes had such far-reaching ideas. Moreover, in Germany, as we have seen, the legal tools used for cohabitants are also used for married couples. In England, the constructive trust is used between married couples who are not divorcing, in order to ascertain the rights of third parties, such as, for example, the debtors of one spouse.Footnote ¹⁴⁸ Thus, courts have adopted special private law rules for intimate relationships in general. Where there is a lack of specific family-law rules, or where their application leads to results which judges consider unfair, be it for cohabitants or married partners who have concluded a nuptial agreement, the courts step in. It might be suggested, however, that the assumption of both the courts and legal scholars that cohabitation and marriage require the same private law rules has formed an important step in the legal recognition of unmarried relationships. The fact that German courts grant claims in unjust enrichment only to cohabitants and not spouses might suggest that the development is not yet complete in Germany.

The use of private law in the family law context is an interesting phenonmenon, given that our legal systems usually consider family law to be a distinct area of law.Footnote ¹⁴⁹ In all three legal systems, however, the courts have applied the law slightly differently in the family context than they would have done in the commercial context.Footnote ¹⁵⁰ In Stack v Dowden Baroness Hale remarked that ‘in law, context is everything, the domestic context is very different from the commercial world.’ Commentators have claimed that Stack has a ‘weak communitarian flavour’Footnote ¹⁵¹ and adopts a ‘context-specific approach’.Footnote ¹⁵² At least at the quantification stage, considerations of fairness and the whole course of dealings of the parties in relation to the property is used to infer or impute an agreement.

The Canadian Supreme Court has also held in Peter v Beblow Footnote ¹⁵³ and Kerr v Baranow Footnote ¹⁵⁴ that the family context required a different approach than the commercial context.

Even the German Bundesgerichtshof, which seldom engages in discussions of a non-doctrinal character and never acknowledges sociological research, applied a context-specific approach by developing family-specific contracts and partnerships.

VI. DIFFERENCES

Despite similarities in function and approach, the doctrinal approaches used in England, Canada and Germany differ considerably when studied in detail. The differences start with remedies. While German and Canadian courts prefer to provide monetary remedies, English courts concentrate on beneficial interests in specific rights to land. Thus, while a successful English claimant has a beneficial interest that is relatively secure should the former partner become insolvent, German and most Canadian claimants do not have the same security. While German claims are calculated in relation to the value of specific contributions to the partnership and fairness-orientated considerations, the Canadian approach of the ‘joint family venture’ allows the taking of a broader picture of the relationship and the wealth accumulated together.

The legal instruments used also vary considerably. German courts refer to a dazzling arsenal of contracts, agreements and joint intentions,Footnote ¹⁵⁵ while English and Canadian courts use only one legal instrument each, the constructive trust and unjust enrichment. German and English courts, on the one hand, focus on the parties' intentions, requiring contracts and shared purposes, as in Germany, or joint intentions to share a beneficial interests in a piece of land, as in England. Canadian courts on the other hand concentrate on the actual relationship of the coupleFootnote ¹⁵⁶ and benefits provided by one partner that still enrich the other.

The distinction between civil and common law first comes to mind to explain such differences. Germany is a civil law system. England is the ‘motherland’ of the common law. Canada has absorbed influences from both systems, especially in Quebec. Outside Quebec, there is a strong common law influence. In relation to the discourse on cohabitation in Canada, Leckey has cautiously observed that common law systems adopt a more functionalist approach, focusing on the realities of cohabitational relationships and their functional similarities with marriage, while civil law Quebec takes a more formalist, autonomy-oriented approach to cohabitation, focusing on the couple's decision not to get married.Footnote ¹⁵⁷

The cautious approach to cohabitation in Germany fits this description of a civil law approach. The assumption that granting rights to cohabitants would infringe the autonomy of parties who choose not to get married is common in Germany as well. At first, German courts even moved cohabitants out of the legal arena altogether in order to respect their (alleged) decision not to form a legally relevant union. This might reflect German legal culture. Contracts and private autonomy in the marital context have always been considered important.Footnote ¹⁵⁸ Moreover, Article 6 of the German constitution, the Basic Law, states that ‘marriage and family shall enjoy the special protection of the state.’Footnote ¹⁵⁹ Though ‘special protection’ does not constitute a constitutional duty to treat other legitimate family forms necessarily worse than married couples,Footnote ¹⁶⁰ this is frequently interpreted to mean that it would be unconstitutional to grant cohabitants the same rights as spouses.Footnote ¹⁶¹ The constitution, does not, however, forbid the courts or the legislator to grant cohabitants certain rights in order to provide some degree of protection.Footnote ¹⁶² In this context, the decision of the Bundesgerichtshof to apply private law almost equally to cohabitants and spouses is a big step towards bridging the gap between marriage and cohabitation.

Though a common law country, the English legislature is almost as hesitant as its German counterpart to introduce rights to spousal support and property distribution for cohabitants. In Jones and Stack, the focus was primarily on the parties' intentions. Their specific relationship is given more consideration than in German courts when it is looked at to determine those intentions.

In Canada, the background of the decisions discussed in this article is different again to that in England and Germany. There is extensive legislation on cohabitation in all provinces except Quebec. Moreover, unlike in Germany, where constitutional law might bar treating spouses and cohabitants alike, in Canada, where constitutional law also profoundly influences the legal system,Footnote ¹⁶³ the exclusion of cohabitants from spousal rights has been discussed as a possible instance of discrimination for a long time.Footnote ¹⁶⁴ In the 2013 decision of Quebec (Attorney General) v A, a mere five to four majority considered the exclusion of de facto spouses from any spousal rights constitutional.Footnote ¹⁶⁵ This legal environment might encourage Canadian courts today to adopt a bolder, more functional approach than courts in Germany and England, as well as focusing on the realities of the relationship rather than on allegedly autonomous agreements.

It is doubtful whether it is appropriate, however, to describe an approach, such as the Canadian, that focuses on contributions as necessarily more functionalist and relationship-orientated. In Jones,Footnote ¹⁶⁶ the contribution-oriented approach of the resulting trust was considered adequate only for a business relationship, where partners keep track of their contributions in order not to be short-changed. Moreover, the doctrinal tools developed in the three countries are not as clear-cut. German and English courts pay attention to contributions as well. Nevertheless, the destinction between autonomy-oriented approaches and enrichment-oriented approaches provides a useful starting point for discussing the doctrinal solutions more thoroughly.

VII. AUTONOMY

In England and Germany, courts use legal rules that are based on the parties' joint intention to share. Enforcing a common intention or contractual agreement to share despite their not being married, however, does not disrespect the (allegedly conscious) decision not get married but shows respect for the parties' autonomy. As Gardner and Davidson put it, the attraction of referring to the genuine agreements of the parties is that ‘it accords the parties control over their own affairs.’Footnote ¹⁶⁷

Courts in both Germany and England have looked for indications that the parties have come to an agreement even where they fail to express it, orally or in writing. Contracts, partnerships and trusts can, of course, be created even by laymen who do not know what they are doing but have a clear idea of what they want. This is difficult in domestic situations, however, where the partners have no or very different, often unexpressed and changing ideas. Research has shown that couples do not often discuss financal or legal matters at allFootnote ¹⁶⁸ and only rarely form agreements and common intentions. Even when it comes to decisions of considerable importance, for example, the purchase of a house, cohabitants often seem unable to discuss the issue at all and do not take legal advice.Footnote ¹⁶⁹ These findings cast serious doubt on all autonomy-oriented solutions. The less clear the understanding of the couples in question, the more the courts tend to impute intentions that the parties never actually had, rather than infer their real intentions from their conduct. The search for actual agreements becomes overshadowed by the search for fairness. As discussed above, this phenomenon has been criticized by commentators in Canada, England and Germany.

In both England and Germany, courts oscillate between approaches which either stress the importance of the parties' actual intentions or assume intentions to share with an eye to fairness and the way the parties actually lived and organized their relationship. The German arsenal of contracts, partnerships and underlying assumptions seems so artificial that hardly any couple could form the necessary intentions without the retrospective help of a court. The problem of how to infer the ‘right’ intention is also evident in the English decisions of Stack v Dowden and Jones v Kernott, especially in the dissenting opinions in both decisions. Problems with an autonomy-orientated approach were also expressed in the Canadian case Kerr v Baranow. The notion of a common intention, Cromwell J held, could be highly artificial and the search for such an intention ‘easily become a mere vehicle and formula for giving a share of an asset, divorced from any realistic assessment of the actual intention of the parties’.Footnote ¹⁷⁰

Moreover, if courts focused on the parties' true intentions, those would have to be enforced even if they were terribly unfair. However, so far, courts have not detected unfair intentions, which might suggest that the sincerity of the courts' commitment to autonomy in this area can be doubted. Indeed, Gardner and Davidson have questioned the importance of genuine common intentions in the domestic setting generally. In cases of an enduring economic partnership, the family constructive trust could give effect to the ‘implications of the parties' relationship’.Footnote ¹⁷¹ A genuine intention should not prevail over the implications of the actual family relationship.Footnote ¹⁷²

The problem with the approach of Gardner and Davidson, however, is that it allows judges to modify contract and trust law to create a non-marital property law for cohabitants based on something that is not an agreement according to classical contract or trust law. Something like that, as desirable as it might be, might better be introduced by the legislator, rather than the courts.Footnote ¹⁷³

VIII. ENRICHMENT

Another way of justifying claims is to allow for the recovery of contributions made to the partnership which continue to enrich the former partner after separation. This approach can be detected in parts of the classic resulting trust analysis as well. In Germany and Canada, as well as in ScotlandFootnote ¹⁷⁴ and Australia,Footnote ¹⁷⁵ the law of unjust enrichment is a well-established solution to cohabitation disputes. By contrast, in England, the law of unjust enrichment has yet to make an appearance in this area. However, following Stack v Dowden, Gardner and Sir Terence Etherton have argued that unjust enrichment should be used as a new doctrinal basis for family homes cases.Footnote ¹⁷⁶ For a court to hold that the unjust enrichment of one partner could trigger an interest under a trustFootnote ¹⁷⁷ is alien to a German lawyer, but is thought possible by many English commentators.Footnote ¹⁷⁸ In Canada, remedial constructive trusts are granted by the courts. However, even if English and Canadian courts would only award claims in money rather than decide on beneficial interests, it is unlikely that the law of unjust enrichment could form a new universal as well as doctrinally sound justification for domestic relationships. First, neither an ‘absence of basis’ nor an ‘unjust factor’ approach can be adequately applied to domestic cases. Moreover, unjust enrichment cannot provide adequate solutions for long-term relationships.

IX. WHERE NOW? LEGISLATIVE SOLUTIONS

The solutions developed by German, Canadian and English courts vary considerably in their doctrinal approach and it seems unlikely that adopting the approach of another legal system would improve the situation. Each approach is deeply entrenched in the legal and social culture and reflects in some way the general approach to cohabitation—either stressing the autonomous intentions of the parties or their contributions to the relationship.

To date, a completely convincing doctrinal solution has not been found. The reason might well be that the private law rules presently applied were not developed to fit the characteristics and needs of long-term personal relationships. The private law rules applied by the courts so far focus on agreements truly concluded and enrichments actually conferred, but it is the development of the relationship over time and its economic effects which need to be in the spotlight.

Courts could develop specific rules for family relationships, making it clear that they are modifying the traditional rules of trusts, contracts and unjust enrichment in order to meet the needs of unmarried cohabitants. It is questionable, however, if such an approachFootnote ¹⁹⁸ is the best way forward. It would be preferable for legislatures to provide specific statutory rules outside the established common law rules of trusts, contract and unjust enrichment, and the nineteenth-century contract and unjust enrichment rules of the German civil code.

This is not to say that in the absence of legislative actionFootnote ¹⁹⁹ courts must not address the problem. In the three jurisdictions considered in this article, courts do not violate constitutional law and the rights of the legislature by developing case law on the property rights of former cohabitants. In Canada and England, both common law systems, case law is an important source of law. Though it was formerly assumed that judges do not create but rather pronounce the law,Footnote ²⁰⁰ it seems the universal position in common law jurisdictions today that judges are meant not only to resolve the particular dispute before them but also to create law when doing so.Footnote ²⁰¹

Germany, however, is a civil law jurisdiction that does not accept that judicial decisions constitute binding precedents.Footnote ²⁰² Nevertheless, developing private law by the interpretation of statutory rules in de facto binding precedents is considered an important function of Germany's highest courts. In a decision of 11 July 2012, the German Constitutional Court held that the development of the law by the courts is not an infringement of constitutional law as long as courts do not contradict legislative intent.Footnote ²⁰³ The older a statute, the more necessary an adjustment by means of case law.Footnote ²⁰⁴ It is a matter of debate, whether the rules the courts create by interpreting statutory law can be considered ‘law’Footnote ²⁰⁵ and if, given the absence of a rule of binding precedent, people may rely on previous decisions.Footnote ²⁰⁶ Whatever label one may put on the case law on cohabitation, and whatever position one might take with respect to its doctrinal quality,Footnote ²⁰⁷ however, it is submitted that it does not violate constitutional law. Given that the German Civil Code was drafted in the nineteenth century, at a time when unmarried cohabitation was considered unacceptable, developing rules for cohabitants can be regarded as a constitutionally acceptable adjustment to modern developments.

However, although the courts' creation of case law relating to unmarried cohabitants is not an unconstitutional usurpation of the legislature's power, it is argued that a specific statutory regime would be preferable to judge-made law in all three legal systems. Judges are not ideal lawmakers. Their decision-making is focused on deciding the case before them.Footnote ²⁰⁸ Only the legislature can properly weigh the different values, policy options and their implications for individuals and the community.Footnote ²⁰⁹ Moreover, research rightly stresses the diversity of cohabiting couples.Footnote ²¹⁰ For some couples, informal cohabitation constitutes a functional equivalent of marriage, for others it is a precursor to the commitment of marriage. It would be desirable for the law to provide a comprehensive framework of rules covering such different cases, informed by consultation and research—something that a court lacks the resources to do and to which the procedural constraints of bilateral litigation do not readily lend themselves. Moreover, though there is no constitutional duty for parliamentarians to legislate on the specific issue of cohabitation,Footnote ²¹¹ politically, it seems desirable that the people's elected representatives engage in important issues themselves.Footnote ²¹² Unmarried cohabitation is such an important issue. It is time for the legislator to tackle the problem of unmarried cohabitation as a whole, ensuring the public debate necessary in a democratic society. Marital property, maintenance and child custody is regulated by statute in Canada, Germany and England. The law of unmarried cohabitants should also be regulated by specific statutory provisions.

In Canada, after the decision in Quebec (Attorney General) v A Footnote ²¹³ was handed down on 25 January 2013, legislative action, not a court decision, will set out the way forward as well. The former partner of a wealthy entrepreneur argued that the exclusion of cohabitants from spousal rights in Quebec law amounts to discrimination under section 15 of the Canadian Charter of Rights and Freedoms. While a majority of five justices considered the exclusion of de facto spouses from spousal rights to be an infringement of section 15 of the Charter, a majority of five justices decided that the Quebec law was constitutional. McLachlin CJ, who considered the approach of Quebec an infringement of section 15 but justified under section 1 of the Charter, was the only justice who voted with the majority on both issues. The majority, accepting freedom of choice and party autonomy as important policy considerations,Footnote ²¹⁴ considered Quebec law that leaves it to cohabiting couple to create rights by marriage or the conclusion of a cohabitation agreement, constitutional. However, the decision does not make legislative action in Quebec unnecessary, quite the opposite. Abella J, speaking for the minority, raised important problems about the actual limits of freedom of choice and the economic disadvantages many cohabiting partners, especially women, face.Footnote ²¹⁵ Such economic disadvantages made the introduction of marital rights and constructive trusts in favour of divorced women necessary and were just as important after the breakdown of an informal relationship.Footnote ²¹⁶ Now, however, the legislature, not the Supreme Court should decide on the rights of cohabitants in Quebec.Footnote ²¹⁷

Many suggestions have already been made as to how to regulate the rights of unmarried cohabitants.Footnote ²¹⁸ In some legal systems, statutory rules are already in force, as for example in New Zealand,Footnote ²¹⁹ New South Wales in Australia,Footnote ²²⁰ Scotland,Footnote ²²¹ and Ireland.Footnote ²²² Only some brief thoughts will be added here. The first problem faced by legislation on unmarried cohabitants is determining the point at which a statutory regime should become applicable. Unlike married couples or civil partners, informal cohabitants do not register their union and would probably not do so even if an alternative regime, like the French PACS,Footnote ²²³ were to be offered. The birth of a child, however—a crucial turning point for any relationship—might be taken as a starting point. If the couple has no children, legislation could become applicable after the couple has lived together for a minimum number of years, as the Law Commission has suggested.Footnote ²²⁴ However, some legal regimes, such as the Scottish Family Law (Scotland) Act 2006, lack such a minimum duration requirement and have not experienced any problems because of it. Properly tailored requirements for financial remedies seem to be enough to ensure that a regime is not applied too broadly.Footnote ²²⁵

Next, the rights cohabitants should enjoy need to be discussed. One could apply the same regime for married and unmarried couples. In Germany, as discussed above, it would be doubtful if such a statute would be constitutional. Leaving German constitutional law aside, the most common argument brought forward against applying marital law to cohabitants is that if couples have decided not to get married it would be wrong to force them into the same legal framework. In the Supreme Court of Canada decision in Miron v Trudel,Footnote ²²⁶ by Abella J in Quebec (Attorney General) v A Footnote ²²⁷ as well as in recent research, serious objections against this ‘autonomy argument’ have been expressed. Couples often make no conscious choice not to get married, or are mistaken about the rights of unmarried cohabitants.Footnote ²²⁸ Sometimes, the economically stronger partner, often the man, refuses to get married.Footnote ²²⁹

As important as these findings are, however, autonomy should not be disregarded completely. The ability to decide one's own affairs responsibly and independently is not only important in all areas of law, including family law, but in human life in general.Footnote ²³⁰ To treat cohabitants and spouses alike in every situation would fail to respect the fact that for whatever reason unmarried partners have not chosen to marry. In Quebec (Attorney General) v A, the majority also stressed the importance of freedom of choice and party autonomy as policy considerations.Footnote ²³¹ In order to strike the right balance between necessary protection and party autonomy, it is crucial to determine the situations in which unmarried cohabitants require protection. In this context, again, the diversity of cohabiting couples needs to be kept in mind.

Two areas can be identified where the legislature should, however, step in. First, the question of whether a couple is married should not affect their children.Footnote ²³² Thus, for example, rights to maintenance or the right to stay in the family homeFootnote ²³³ should be the same for married and unmarried parents as long as the couple's children benefit directly from it.

Second, autonomy cannot justify the exploitation of a weaker party. How this protection should be ensured, is a matter of debate. The same principles as in marital property law—compensation, needs and sharingFootnote ²³⁴—must be considered with regard to cohabitation. Barlow has favoured an approach that provides rights in order to fulfil the former partner's needs.Footnote ²³⁵ The Law Commission for England and Wales,Footnote ²³⁶ section 28 of the Family Act (Scotland) 2006,Footnote ²³⁷ and also Schwenzer and DimseyFootnote ²³⁸ proposed a legislative scheme that focuses on compensating economic advantages and disadvantages caused by the relationship. Relevant disadvantages could, for example, be losses in income and pension rights suffered because one cohabitant, typically the woman,Footnote ²³⁹ reduced her paid work in order to concentrate on raising children and home-making. The birth of a child often results in a loss of income and financial independence for the mother.Footnote ²⁴⁰ This burden should be borne by both parents. Moreover, couples often start pooling their financial resources when a child is born,Footnote ²⁴¹ acting like an economic unit in the same manner as spouses. This responsibility assumed during the relationship should not end completely when the relationship breaks down. A person who made contributions to the joint home, be it in buying food, taking care of the home or family or financial contributions, should receive some compensation for this expense because his or her partner derived an economic advantage from the relationship.

However, it is questionable whether someone who cannot work due to ill health should be supported by their former partner in situations where the person would have fallen ill anyway, irrespective of any question of advantage or disadvantage as a result of the relationship. Caring for people who can no longer work is the responsibility of the community rather than a former cohabitant, who might have a moral but not a legal obligation to help. With their marriage vows, spouses promise to take care of each other and can thus be asked to support each other even after a divorce. Cohabitants, for whatever reason, have not taken this step.

Thus, the approaches of the Family Act (Scotland) 2006 and the Law Commission seem promising. They allow an adequate allocation of the economic risks of the partnership by preventing the exploitation of the other partner, while acknowledging some differences between marriage and cohabitation. This approach acknowledges the worth of financial contributions as well as taking care of children or a sick partner, something that would be very difficult to achieve through the application of unjust enrichment or trust law. In order to resolve cases concerning jointly bought property, financial expenses on the purchase or renovation of that property that still enrich the other partner could also be compensated.

However, not every disadvantage and financial contribution to the relationship requires compensation. They are also extremely difficult to calculate correctly. Thus, as in marriage law in England, the judge requires some discretion when making a decision. Still, this discretionary decision-making would be different from today's case law. Fair compensation could be granted according to a number of factors as in the schemes in force not only in many Canadian provinces but also in New South Wales in Australia,Footnote ²⁴² Scotland,Footnote ²⁴³ and Ireland.Footnote ²⁴⁴ Such discretionary schemes are widely accepted in common law systems. In Germany, where judicial discretion in family law is less common, such a scheme would probably be described as alien to German legal tradition. However, such criticism would not be accurate. The case law applied in Germany today has already introduced a quasi-discretionary scheme. A scheme that set out some relevant factors for judges to take into account when deciding cases, rather than leaving them with contracts and unjust enrichment, would be a big step forward.

Another important question would be whether the new legislative scheme should provide for the possibility of opting out. Marital property agreements become increasingly important for married couples in England,Footnote ²⁴⁵ CanadaFootnote ²⁴⁶ and Germany.Footnote ²⁴⁷ It would seem that cohabitants, just like spouses, should have the opportunity to negotiate the terms of their relationship. However, as with marital property agreements, adequate protection of the weaker party is necessary to ensure that new safeguards are not bargained away.