Joint Family Ventures
A joint family venture involves a family-owned business where formal arrangements have not been made to ensure that all family members contributing to the business share in the accumulated wealth in the business. In some cases, the courts have recognized that it is appropriate to provide a monetary award to remedy unfairness. This is particularly true in family law litigation but may have application outside of a divorce. In Kerr v. Baranow, 2011 SCC 10, the Supreme Court of Canada stated that:
My view is that when the parties have been engaged in a joint family venture, and the claimant’s contributions to it are linked to the generation of wealth, a monetary award for unjust enrichment should be calculated according to the share of the accumulated wealth proportionate to the claimant’s contributions. In order to apply this approach, it is first necessary to identify whether the parties have, in fact, been engaged in a joint family venture.
In other words, if a court concludes that a spouse (or, conceivably, other member of a family) was involved in a “joint family venture” with respect to a business, this finding can form the basis for a claim for a monetary award for unjust enrichment, which would be proportionate to the contributions of that person.
The Court described four factors applicable to determining whether the parties were involved in a “joint family venture”. Those factors were:
- Mutual effort, namely whether the parties worked cooperatively towards common goals. Did they pool their effort and work as a team? Did they make joint contributions to a common pool?
- Economic integration, namely the degree of economic interdependence that characterizes the parties’ relationship. The more extensive the integration of finances, the more likely it is that they are engaged in a joint family venture.
- Actual intent, namely whether the parties shared in the intention to accumulate wealth together. The parties’ actual intent, express or implied from the evidence, is a relevant consideration.
- Priority of the family. Here, the court is to consider whether, and to what extent, the parties gave priority to the family in their decision-making.
Therefore, when bringing or defending a claim for unjust enrichment involving a family business, it is important to consider whether the parties were engaged in a joint family venture, and the effect that such a finding could have on your lawsuit.