Money, Relationships and the Small Claims Court

Who thinks about money while at a high point at a romantic relationship? In many if not most serious relationships, partners freely give each other financial assistance, as when, for example, a girlfriend helps her boyfriend to buy a new car or the boyfriend lends a hand when his significant other is short on rent money. In the event of a break-up, however, issues of money can often return to the forefront, together with the emotional turmoil brought on by the end of a relationship. It is important to know that if you can’t resolve a financial dispute with your ex-partner informally, it is possible to escalate the matter to the Small Claims Court.

It is quite possible, under certain circumstances, to recover money given to former partners in the Small Claims Court.  To do so, the plaintiff must prove the following:

  1. That he or she actually gave money to the defendant.
  2. That he or she was not in debt to the defendant and money given away was not a repayment of the debt.
  3. That there is no “presumption of advancement of money,” or the intention to use the money for mutually beneficial purposes. This presumption exists in a limited set of circumstances. There is usually such a presumption between spouses, but it is rare that it is applied to individuals who are engaged or dating.

The most common defence to a claim to collect money given to an ex-partner is that the money was a gift, and not a loan. In order to do so, he or she must demonstrate:

  1. That the ex-partner had the clear intention to donate the money or give a gift.
  2. That the money was actually delivered.
  3. That the money was accepted as a gift.

It must be noted that it is fairly difficult to prove that the money was a gift and not a loan. In most cases, saying “she told me it’s a gift” is not sufficient evidence of intention to donate. Courts are of the view that monies transferred between persons are loans, unless there is overwhelming evidence to the country. As stated in Murray v Toth, “public policy demands that such casual passing of monies should be repayable unless there is satisfactory evidence to show that it was not intended by both parties to be repaid.”

To sum up, all the money you have given your former partner can often be recovered through the Small Claims Court should the relationship go sour. Needless to say, this can be very helpful in addressing unfairness that results from the end of a one-sided relationship. 

Sylvie, Toronto

I really appreciated your attention to details, your level of preparation which was impressive, and enthusiasm. I am really happy we have Spectrum Paralegal in our corner. Thank you for being the champion of our small claims court!