Mullin v. Sherlock: When Equalization Falls Short — Unjust Enrichment and Joint Family Venture Claims For Married Couples

The Ontario Court of Appeal’s decision in Mullin v. Sherlock (2025 ONCA 510) is a reminder that, while the Family Law Act (“FLA”) equalization regime is intended to be the complete answer to property division for married spouses, there are exceptional cases where it will not achieve fairness and equitable claims warranted.

This is one of those cases.

At its heart, Mullin is about a decade-long relationship during which a spouse made deep personal, domestic, and economic contributions to the other’s business, followed by a very short marriage. The Court of Appeal upheld a $3 million unjust enrichment award and a significant lump sum spousal support order, finding that without without access to equitable claims, the legislative scheme would have failed to reflect the economic reality of the parties’ relationship.

The decision will be of particular interest to practitioners navigating property and support claims where long cohabitation precedes a short marriage and where one party’s chronic non-disclosure frustrates the court’s ability to value assets.

Factual Background

Katherine Mullin and John Sherlock began living together in 2000. At the time, Ms. Mullin worked in the architectural field. Early in the relationship, she left that work to take on a full-time role in Mr. Sherlock’s company, GS Medical Packaging Inc. Her duties varied over the years, but her contributions were substantial: she worked without pay for several months in 2011, accepted salary reductions to facilitate hiring, and handled many domestic responsibilities so Mr. Sherlock could focus on the business.

During their cohabitation, the parties mortgaged their home to secure a loan for GS Medical and the business thrived, growing from five employees to more than twenty-five by the time they separated.

The couple married in September 2012 but separated less than a year later, on June 28, 2013. This short marriage meant that, under the FLA’s equalization provisions, any property division would be calculated based on the difference between net family property at the date of marriage and the date of separation — in this case, only ten months apart. That calculation would ignore the significant increase in GS Medical’s value during the parties’ twelve years of cohabitation.

Litigation ensued. The proceedings were bogged down for years by Mr. Sherlock’s repeated failure to provide financial disclosure. His pleadings were ultimately struck in 2017, and while the Court of Appeal restored limited participation rights, disclosure remained incomplete right through trial.

The Trial Decision

At trial, Ms. Mullin advanced two main claims:

1. Unjust enrichment based on a joint family venture; and
2. Lump sum spousal support on both compensatory and non-compensatory bases.

Justice Bloom found that the parties’ relationship met the Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, criteria for a joint family venture:

• Mutual effort: They worked together to grow GS Medical.
• Economic integration: Proceeds from joint borrowing funded the business.
• Actual intent: Both intended the business to finance their joint retirement.
• Priority of the family: Ms. Mullin’s domestic and professional contributions supported their shared life and the business’s success.

On the unjust enrichment analysis, the trial judge found that Ms. Mullin had conferred a significant benefit on Mr. Sherlock, suffered a corresponding deprivation, and that there was no juristic reason for him to retain that benefit without compensation.

Remedy

Because there was a joint family venture, the judge applied the “value survived” approach from Kerr, awarding Ms. Mullin 50% of Mr. Sherlock’s interest in GS Medical. Lacking proper disclosure, the judge relied on mortgage applications signed by Mr. Sherlock valuing the business at $6 million, resulting in a $3 million award.

Spousal Support

A lump sum of $365,624, net of tax, was awarded. The court noted the parties’ privileged lifestyle — multiple properties, competitive sailing, golf club memberships, extensive travel — and Ms. Mullin’s loss of her own career. Lump sum support was justified to bring finality to high-conflict litigation where ongoing monthly payments would be impractical.

Costs

Given Ms. Mullin’s substantial success and Mr. Sherlock’s bad faith conduct, the trial judge awarded $475,000 in costs.

The Appeal

Mr. Sherlock appealed, arguing:

• The unjust enrichment framework should not have applied between married spouses.
• The trial judge misapprehended evidence on the joint family venture finding.
• The valuation was improperly based on limited evidence.
• The 50% award was arbitrary.
• The spousal support award failed to consider the property award.
• The costs award was excessive.

Court of Appeal’s Analysis

Unjust Enrichment in Marriage

The Court confirmed that while the FLA normally governs property division for married spouses, Iredale v. Dougall, 2025 ONCA 266, recognizes exceptions. Here, a long cohabitation followed a short marriage made equalization inadequate because it would ignore the value created during cohabitation.

Joint Family Venture

The trial judge properly applied the four Kerr factors

(1) mutual effort of the parties;

(2) economic integration of the parties’ finances;

(3) actual intent of the parties; and

(4) priority of the family

and found them satisfied. The evidentiary record, though limited, was a direct result of Mr. Sherlock’s own disclosure failures — justifying adverse inferences.

Valuation and Remedy

The “value survived” method was correct given the joint family venture finding. The reliance on mortgage applications for valuation was permissible in the face of non-disclosure (Meade v. Meade, 2002 CanLII 2806 (ON SC), principle). The 50% award was supported by the evidence.

Spousal Support

The Court found no error in the lump sum award or in the treatment of the property award. The SSAGs were properly considered, with appropriate income imputations and expert evidence relied upon.

Costs

The Court upheld the $475,000 trial costs, citing bad faith and substantial success. Costs of $20,000 were awarded for the appeal.

Practice Implications

Exceptional Pathway for Married Spouses: This case shows that unjust enrichment is available in marriage where equalization would be inequitable, particularly in long cohabitation/short marriage scenarios.

The Enduring Role of JFV Analysis: Kerr v. Baranow remains central in both common-law and marriage contexts where contributions are intertwined.

Non-Disclosure Carries Real Risks: Chronic disclosure failures will not only damage credibility but will allow the court to draw adverse inferences on valuation and entitlement.

Evidence Flexibility: Where disclosure is lacking, courts can and will rely on indirect valuation evidence, including mortgage applications.

Lump Sum Support in High-Conflict Cases: Lump sum awards can provide finality and avoid ongoing enforcement disputes.

Costs as a Sanction for Bad Faith: Significant costs can follow where a party’s conduct forces prolonged, complex, and expensive litigation.

Let’s continue to elevate the practice of family law in Ontario!

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Disclaimer: The information provided in this blog post is intended for general informational purposes only and should not be considered as legal advice. Consult with a qualified family law attorney for advice regarding your specific situation. Goldhart Mediation & Arbitration is not responsible for any actions taken based on the information presented in this blog.