Court File and Parties
Court File No.: CV-21-165-00 Date: September 3, 2025 Ontario Superior Court of Justice
Re: Stephanie Tillger, Plaintiff And: Christopher Figliano, Defendant
Before: M.T. Doi J.
Counsel:
- Matthew Stroh, for the Plaintiff
- Christopher Figliano, self-represented Defendant
Heard: March 4, 5, and 6, 2025
Reasons for Judgment
Overview
1In this action, the plaintiff, Stephanie Tillger, seeks to recover $500,000.00 on an alleged loan to her younger brother, the defendant Christopher Figliano. In the alternative, she seeks to recover the amount by claiming unjust enrichment and equitable fraud. The defendant submits that the action is statute barred and, in the alternative, asserts that the funds were gifted to him.
2As set out below, I am satisfied that the action is not statute-barred as it was brought within the applicable 2-year limitation period. In addition, I am satisfied that the defendant has rebutted the presumption of a resulting trust by proving that the plaintiff gave the funds to him as a gift and not as a loan. Furthermore, I have determined that it is not unconscionable for the defendant to retain the gifted funds in the circumstances of this case.
Pleadings
3Shortly after the start of the trial, I granted leave for the plaintiff to amend the statement of claim by adding her claim in equitable fraud. The following are my reasons for doing so.
4During the plaintiff's opening statement at the start of trial, her counsel advised that she wished to assert the doctrine of equitable fraud to recover the subject funds from the defendant. This basis for her claim was not previously pleaded in the statement of claim.
5Rule 26.01 of the Rules of Civil Procedure, RRO 1990, Reg 194, provides as follows:
On motion at any stage of an action, the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
6A court is required to grant leave for a party to amend a pleading unless: (a) the amendment if granted would cause an opposing party non-compensable prejudice (i.e., prejudice that cannot be compensated for in costs or by an adjournment); (b) the amendment is scandalous, frivolous, vexatious, or an abuse of the court's process; or (c) the amendment disclose no reasonable cause of action: Iroquois Falls Power Corp. v Jacob Canada Inc., 2009 ONCA 517 at paras 15-16, leave to appeal refused [2009] SCCA No 367; Andersen Consulting Ltd. v Canada (Attorney General) at para 37; 1588444 Ontario Ltd. v State Farm Fire and Casualty Company, 2017 ONCA 42 at para 25. At some point, delay in seeking to amend will be so lengthy and the justification so inadequate that prejudice will be presumed: State Farm at para 25; Horani v Manulife Financial Corporation, 2023 ONCA 51 at para 25. The party opposing the amendment bears the burden to show prejudice: Health Genetic Center Corp. v New Scientist Magazine, 2018 ONSC 3675 at paras 7-10. The court has a residual discretion to deny amendments where appropriate: McFadden v Psutka, 2024 ONCA 203 at para 12.
7After hearing submissions, I found that the defendant had not shown that the delay in raising the equitable fraud claim caused the kind of prejudice that should bar the plaintiff from asserting this ground for her claim at trial. The claim in equitable fraud is an alternative claim for relief that is based on the same facts initially pleaded in the statement of claim and, therefore, does not raise a new cause of action. An amendment does not assert a new cause of action if it simply pleads an alternative claim or legal basis for relief arising from the facts initially pleaded in the original action: Dee Ferraro Ltd. v Pellizzari, 2012 ONCA 55 at para 5; Ascent Inc v Fox 40 International at para 3. Adding the claim in equitable fraud to the statement of claim will not implicate an expired limitation period as its factual matrix was already pleaded in the claim to ground the initial cause of action in unjust enrichment: Saint-Fort v Ashcroft Homes - Eastboro Inc., 2023 ONSC 1981 at para 34.
8The plaintiff's delay in raising the claim in equitable fraud was not insignificant, but she raised this alternative ground for her action at the pre-trial conference on January 24, 2025, several months before the start of trial. In the circumstances, I found that the delay did not cause actual or presumed prejudice to the defendant that should prevent the claim in equitable fraud from being raised at trial, even after considering the impact on trial preparation for the defendant who is a self-represented litigant: King's Gate Developments Inc. v Drake at paras 5-7; Family Delicatessen Ltd. v London (City) at para 6.
9I found that the claim in equitable fraud was not an abuse of process and raised a reasonable cause of action on the allegations as pleaded: Anderson Consulting v Canada (Attorney General) at para 37. I was not persuaded that the equitable fraud claim would somehow alter the evidence adduced at trial, or significantly impact the litigation strategy for either side, and the defendant did not identify any such changes: Family Delicatessen at para 7; Horani at para 36. In my view, hearing the claim in equitable fraud at trial would allow for a just and appropriate determination of the action on its merits: r. 1.04 and 26.01; State Farm at para 25. Taking everything into account, I saw no basis to deny the amendment: McFadden at para 12.
Background
10On October 29, 2000, the plaintiff was a passenger in a Porsche convertible when the driver lost control and struck a mailbox. The impact caused the plaintiff to sustain a massive head injury that included a broken skull, vision and hearing loss, and soft tissue injuries. She also sustained injuries to her back. She became addicted to prescription pain medication, including Percocet and OxyContin, before she overcame the addiction by using marijuana. She is said to still have short-term memory loss, poor impulse control, and anger-management issues. The injuries to her back persisted and made it difficult for her to operate her equestrian business that closed in 2007. She tried other work and last worked as a waitress. However, her short-term memory issues left her unable to maintain employment.
11The plaintiff brought a claim for personal injury and other damages from the motor vehicle accident. Her accident-related injuries were assessed to be catastrophic. She obtained a structured settlement with a lump-sum component plus annuity payments of more than $24,000.00 per month over her lifetime. On May 18, 2018, she received $700,000.00 as part of the settlement. Under cross-examination, she acknowledged settling her claim for up to $11 million but could not recall the full or actual amount of the settlement. She also sued her former personal injury lawyer and possibly received $500,000.00 to settle that claim but could not recall the amount of that settlement or when the settlement was reached. No records were presented to verify the settlement figures or other particulars of her settlement agreements.
12Starting around November 2017, the plaintiff began self-medicating with alcohol to cope with back pain and postpartum depression following the birth of her second child. She started to drink heavily. Her alcohol use and other addictions led to behaviour that impacted her marriage and her relationships with family members.
13Sometime in April 2018, the plaintiff's husband called police after a domestic occurrence. The plaintiff was arrested and charged with assault. She was released on conditions that included not attending the family home located on a 15-acre property adjacent to a 20-acre farm where she kept horses and other livestock. Her release conditions were varied for her to attend the farm to care for the animals.
14On May 25, 2018, plaintiff was arrested after she drove to the family home, tore up the lawn with her truck, broke a window to gain entry to the home to retrieve some belongings, and scratched a profanity on her husband's car, among other things. On May 28, 2018, the plaintiff was released on bail with the defendant as her surety.
15During this time, the defendant was close to the plaintiff who was otherwise estranged from other family members due to her behaviour. Along with others, the defendant asked the plaintiff to attend a residential addiction treatment program, but she refused therapy or counselling and smoked marijuana, drank alcohol, and partied with friends while out on bail. To avoid exposing his young children to her drug and alcohol use, he did not invite her to stay at his home where he had no guest room and was sleeping on a couch himself while going through a marital separation. The plaintiff briefly stayed at a hotel until she was asked to leave after smoking marijuana on the premises. She moved to a motel where she continued to smoke marijuana and drink to excess.
16Eventually, the defendant stopped acting as the plaintiff's surety, as did several others, due to her non-compliance with her release conditions. After her behaviour exhausted the patience and goodwill of her family and friends, she could not arrange for a surety and ended up serving multiple periods of remand custody.
17The plaintiff testified that her overall memory of this period is hazy due to her short-term memory issues from the motor vehicle accident, her heavy drinking (i.e., that approached a 24-case of beer per day), and her use of marijuana around this time.
The Subject Funds
18In their testimony at trial, each party gave a very different account of how the plaintiff either loaned or gifted the subject funds to the defendant.
19The plaintiff testified that the defendant learned about her settlements and approached her for a $700,000.00 loan so that he could buy a home for himself after separating from his former spouse. The defendant wanted his children to stay in the matrimonial home with the former spouse to minimize their disruption from the separation, and wanted to buy a home where the children could stay when sharing parenting time with him. The plaintiff testified that she agreed to give the defendant a loan and either intended or expected that the parties would later enter into some form of agreement for the loan after she had advanced the funds to him.
20For his part, the defendant testified that the plaintiff approached him to make an unsolicited $700,000.00 gift that she told him was an advance of his inheritance that she otherwise intended to leave him in her will. He testified that she made this generous gift to help him to buy a post-separation home so his children would have a place to live during their parenting time with him. He testified that she gifted the funds without asking for or expecting any repayment. As she was close to him at the time, he testified that she gifted the funds to him as an early inheritance in the spirit of helping her younger brother in his time of need.
21On a prior occasion, the defendant borrowed $40,000.00 from the plaintiff to fund a project to renovate a garage to his home. The parties entered into a written agreement for the loan that he fully repaid. Unlike that prior occasion, the parties did not prepare any form of loan agreement for the $700,000.00 that she transferred to him in May 2018, nor discuss any repayment schedule or other terms for the funds, such as interest or security. He testified that she willingly and voluntarily gave him the $700,000.00 transfer not as a loan but as a gift to benevolently help and support him.
22On May 18, 2018, the plaintiff received $700,000.00 from the settlement of her personal injury claim from the motor vehicle accident. That same day, she made a $200,000.00 transfer to the defendant. Both parties attended her bank branch to arrange for the transfer. The defendant used the $200,000.00 transfer to cover the downpayment for his purchase of a home.
23On May 28, 2018, both parties returned to the plaintiff's bank to arrange for her to further transfer $500,000.00 to the defendant. The plaintiff testified that the defendant drove her from the Vanier Centre for Women (i.e., where she claims to have been released on bail) to the bank for her to transfer the funds to him. She testified that she was intoxicated when she made the transfer after smoking marijuana outside the defendant's vehicle (i.e., as he did not let her smoke in his vehicle as he used it to transport his children) before going to the bank. She testified that she had a medical card to use marijuana for medicinal purposes, had smoked marijuana with a pipe in custody, and was released on bail with some marijuana and the pipe in her possession. She did not recall what, if anything, the defendant said to her at the bank beyond asking for the funds to buy a home to avoid disrupting his family.
24The defendant testified that he met the plaintiff on May 28, 2018 at Orangeville Courthouse where she was released on bail (i.e., with him acting as her surety) after being arrested and held in custody on May 25, 2018 for breaching her release terms by attending her family home and causing a disturbance. He testified that he drove her from the courthouse to the bank that day to further transfer $500,000.00 to him as previously arranged. He testified that she was sober when she made this transfer after spending a few days in custody without drugs or alcohol. He stated that she did not smoke marijuana before attending the bank with him that day as she had been released at the courthouse without any marijuana or paraphernalia to consume it.
25The defendant used the $500,000.00 transfer to close the purchase of his home.
26A former co-worker testified at trial and corroborated the defendant's evidence that the plaintiff had gifted the funds for him to purchase a home. The co-worker and the defendant had worked together in a workshop for more than eight years. During this time, they often discussed their personal lives. On multiple occasions, the defendant talked to the co-worker about his marital separation, his need for a new home, and his associated financial issues. One day at work, he told the co-worker that the plaintiff was writing him out of her will to gift him an unspecified but substantial amount of funds over a few days as an early inheritance to help him to purchase a home. Given he co-worker's less-privileged background, he easily recalled this conversation with the defendant given generous nature of the gift. The defendant later went to a bank with the plaintiff to have the funds transferred to him and contemporaneously told the co-worker about this. The co-worker did not know the plaintiff well but considered her to be a generous person who bought cars for others and once offered to fly the defendant to the Calgary Stampede for a fun get away. The co-worker knew that the plaintiff had settled her claim for the motor vehicle accident but was otherwise unaware of her finances.
27At some point after transferring the funds to the defendant, the plaintiff realized that she wanted the transferred funds back and demanded that the defendant repay the funds, sign a loan agreement, or offer some form of security for the funds. The defendant responded that he could not return the funds as he had used them to buy his home. He declined to sign a loan agreement or to register a lien on his home and maintained that she had gifted the funds to him.
28Notably, the plaintiff went to her bank branch on June 12, 2018 (i.e., just 15 days after transferring the $500,000.00 tranche to the defendant on May 28, 2018) to transfer $100,000.00 to the defendant's former spouse who joined her at the bank that day for this purpose. The plaintiff testified that the former spouse had asked to borrow the $100,000.00 so that she could finance a mortgage on the matrimonial home after separating from the defendant. After the former spouse expressed concern about her ability to repay the loan, the plaintiff told her not to worry, assured her that immediate repayment would not be required, and proposed having her repay the loan in five years when she remortgaged her home after accumulating equity. On September 19, 2023, the plaintiff sued the former spouse in a separate action (CV-23-200-00) to recover the funds after a demand for repayment was not fulfilled. On July 30, 2024, the former spouse settled the action against her for $100,000.00 after taking a second mortgage to raise the settlement funds.1
29The defendant's former spouse testified that she never asked the plaintiff for a loan but discussed her separation with the plaintiff who was experiencing her own marital issues around that same time. During these conversations, the plaintiff made an unsolicited proposal to buy out the defendant's interest in the matrimonial home so the former spouse, who was pregnant, could remain in the home with her children. The former spouse was uncomfortable with this overly generous proposal and declined to accept it. The plaintiff responded by making three (3) further proposals. The first involved the plaintiff removing the former spouse from her will and immediately gifting funds to her as an early inheritance. The second involved the plaintiff giving funds to the former spouse in exchange for taking a mortgage against the matrimonial home. The former spouse declined these proposals.
30The former spouse testified that the plaintiff's third proposal involved lending funds that could be repaid by instalments every five years based on what the former spouse could afford when renewing her mortgage at these intervals. After the former spouse failed to qualify for a mortgage to acquire the defendant's interest in the matrimonial home, she verbally accepted a $100,000.00 loan from the plaintiff under the terms of the third proposal. On June 12, 2018, the plaintiff advanced $100,000.00 to the former spouse who used the loan to finance the matrimonial home. However, just two years after advancing the loan, the plaintiff reconciled with her husband, returned to her family home to resume her co-habitation with her husband, chose to renovate the family home, and demanded that the former spouse fully repay her loan to fund the renovations. As a single parent on a limited income, the former spouse could not afford to fully repay the $100,000.00 loan on demand. She testified that she had planned to pay off the loan by installments over time as agreed and would have declined the loan had she known that the plaintiff would demand full repayment by a fixed date. When the former spouse's mortgage came up for renewal after five years, interest rates were at 7% per annum. After assessing her finances, she offered to pay a $25,000.00 instalment against the loan. The plaintiff refused the proposal, insisted on having immediate full repayment of the loan, and then sued the defendant's former spouse to recover the loan. On July 30, 2024, the former spouse settled the action for $100,000.00 by borrowing the settlement funds.
Analysis
a. Credibility of the Witnesses
31In this case, each party gave a very different account to explain how events unfolded. As a result, aspects of this case will turn on the credibility of the parties. The real test in assessing the credibility of the story of an interested witness is its "harmony with the preponderance of probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions": Faryna v Chorney at para 10. A trier of fact may accept all, some, or none of the evidence of a witness that should be assessed on various factors including: (a) whether the evidence makes sense by being internally consistent, logical or plausible; (b) whether there are inconsistencies or weaknesses in the evidence of the witness, such as internal inconsistencies, prior inconsistent statements, or inconsistencies with the evidence of other witnesses; (c) whether there is independent evidence to confirm or contradict the witness' evidence, or a lack of evidence; (d) the witness' demeanour, including their sincerity and use of language, although this must be considered with caution; and (e) whether the witness, particularly one that is a party in a case, may have a motive to fabricate: Riva Plumbing Limited v Ferrari, 2025 ONSC 3219 at para 41; Caroti v Vuletic, 2022 ONSC 4695 at para 438.
32Both parties have obvious interests in the action. That said, the plaintiff's recollection of prior events was often foggy or unclear, as she candidly conceded. To fill the gaps in her memory, she showed a tendency to occasionally state things that she would have expected or preferred to have taken place without appearing to specifically recall whether they occurred. Much if not most of her testimony was uncorroborated. As a result, I have approached her evidence with caution.
33The plaintiff's best friend testified in a clear and straightforward manner, but much of her evidence about the disputed funds was based on information that the plaintiff gave her after-the-fact, as the friend fairly acknowledged. Accordingly, her evidence in respect of the central issues in dispute was of limited assistance.
34The defendant testified in a clear and direct fashion. His evidence was internally consistent, logical, and corroborated to an extent by records adduced at trial. He appeared to avoid overstating his evidence and seemed to be trying to give balanced evidence that accounted for the limits of his recollection due to the passage of time. I found him to be a credible witness.
35The defendant's former co-worker testified in a clear and forthright manner, conceded the limits of his recollection of past events that occurred years earlier, and gave thoughtful evidence that was internally consistent and balanced. I found that his evidence was credible and reliable.
36The defendant's former spouse testified in a clear and plain fashion. Her evidence was straightforward and consistent with an open or matter-of-fact approach. I found her to be a credible and reliable witness.
b. The Action is Not Statute-Barred
37As set out below, I am satisfied that the action is not statute-barred.
38The claims in this action are subject to ss. 4 (Basic limitation period) and 5 (Discovery) of the Limitations Act, 2002, SO 2002, c 24, Sched B (the "Limitations Act"), that provide as follows:
Basic limitation period
- Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
Discovery
- (1) A claim is discovered on the earlier of:
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
Presumption
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
Demand Obligations
(3) For the purposes of subclause (1)(a)(i), the day on which injury, loss or damage occurs in relation to a demand obligation is the first day on which there is a failure to perform the obligation, once a demand for the performance is made.
39The action is statute-barred unless it was brought within two years from the date on which the claim was discovered: s. 4 (Basic limitation period) of the Limitations Act.
40In Clarke v Sun Life Assurance Company of Canada, 2020 ONCA 11 at paras 19-20, the Court of Appeal offered the following guidance about the discoverability of a claim:
[19] The discoverability analysis required by s. 5(1) and (2) of the Act contains cumulative and comparative elements.
[20] Section 5(1)(a) identifies the four elements a court must examine cumulatively to determine when a claim was "discovered". When considering the four s. 5(1)(a) elements, a court must make two findings of fact:
(i) the court must determine the "day on which the person with the claim first knew" all four of the elements. In making this first finding of fact, the court must have regard to the presumed date of knowledge established by s. 5(2): "A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved"; and
(ii) the court must also determine "the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known" of the four elements identified in s. 5(1)(a).
Armed with those two findings of fact, s. 5(1) then requires the court to compare the two dates and states that a claim is discovered on the earlier of the two dates: see Nasr Hospitality Services Inc. v. Intact Insurance, 2018 ONCA 725 at paras 34-35.
41A claimant is presumed to have known of the claim on the day the act or omission on which the claim is based took place, unless the contrary is proved: ss. 5(2) of the Limitations Act. The claimant bears the burden of showing that they could not have discovered the claim on the day the act or omission took place: 1352194 Ontario Inc. v Vince, 2021 ONSC 8192 (Div Ct) at para 22.
42For a demand obligation, the "day on which the injury, loss or damage occurs … is the first day on which there is a failure to perform the obligation, once a demand for the performance is made": ss. 5(3) (Demand obligations) of the Limitations Act.
43In TO Estate v DO, 2024 ONCA 603 at para 29, Zarnett J.A. writing for the Court of Appeal offered the following guidance about the discoverability of a demand obligation:
[29] [F]or a demand loan"a demand is a condition precedent for the commencement of the limitation period": Bank of Nova Scotia v. Williamson, 2009 ONCA 754, 97 O.R. (3d) 561, at paras. 18-19. The claim is not considered to be discovered when the loan is created. Section 5(3) of the Limitations Act "require[s] a demand before the limitation period can commence in the case of demand promissory notes and other debt instruments where, at common law, the debt is owed as soon as the moneys are advanced": Bank of Nova Scotia, at note 1. Nor, in the absence of a demand, does the limitation period commence because it appears unlikely repayment without an action will occur: Skuy v Greennough Harbour Corporation, 2012 ONSC 6998, 10 B.L.R. (5th) 146, at paras. 32-33.
See also Gong v Jin, 2025 ONSC 3108 at para 81.
44The plaintiff testified that the funds that she advanced to the defendant were demand loans.
45In this case, the earliest record of a demand for repayment is found in an exchange of text messages on September 5, 2019 (i.e., when the plaintiff inquired about the defendant's ability to borrow funds to repay her), followed by further texts exchanged on September 9 and 13, 2019 with repeated demands for repayment. The plaintiff also pointed to subsequent correspondence in which she further demanded repayment of the advanced funds from him. Having regard to the exchange of text messages by the parties and their testimony at trial, I am satisfied that she initially demanded repayment of the subject funds from him on or about September 5, 2019.
46As a result of the global COVID-19 pandemic, limitation periods were suspended from March 16, 2020 and did not resume until September 14, 2020: Reopening Ontario (A Flexible Response to COVID-19) Act, 2020, SO 2020, c 17; OReg 73/20; Rail v 2014284 Ontario Limited, 2025 ONSC 4540 at para 72.
47During submissions, the plaintiff argued that the limitation period was paused or tolled because the parties were negotiating a potential settlement of her claim after she demanded the repayment of funds in September 2019. However, ongoing communications or negotiations will not postpone the commencement of a limitation period, although efforts to remedy a problem to make litigation unnecessary may do so: Presley v Van Dusen, 2019 ONCA 66 at para 25; Lilydale Cooperative Limited v Meyn Canada Inc., 2019 ONCA 761 at para 63. In this case, the defendant maintained that the funds advanced to him were a gift, and not a loan, and did not otherwise make efforts to remedy the issue before the statement of claim was served. In the circumstances, I am unable to find that either party took any steps to remedy the underlying dispute beyond engaging in settlement negotiations that did not postpone the running of the limitation period: Ibid. As a result, I am not persuaded that the limitation period was tolled due to any settlement discussions.
48The statement of claim was issued on November 1, 2021. By construing the funds that the plaintiff advanced to the defendant as demand obligations, and applying September 5, 2019 as the date when the plaintiff initially demanded repayment to trigger the limitation period, I am satisfied that the action was brought within two years from when the claim was discovered after excluding the period from March 16, 2020 to September 13, 2020 when the operation of limitation periods was suspended.2
49Accordingly, I am satisfied that the action is not statute-barred.
c. The Defendant has Rebutted the Presumption of a Resulting Trust
50As set out below, I find that the defendant has rebutted the presumption of a resulting trust in this case.
51The plaintiff relies on the presumption of a resulting trust to support her position that the funds that she advanced to the defendant are held in trust and, therefore, should be construed as a loan that should be repaid. The defendant submits that the plaintiff freely and willingly advanced the funds to him as a gift with the intention of gratuitously helping him during his time of need.
52The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to a gratuitous transfer: Pecore v Pecore, 2007 SCC 17 at para 24; Nishi v Rascal Trucking Ltd., 2013 SCC 33 at para 29; Kerr v Baranow, 2011 SCC 10 at para 19; MacIntyre v Winter, 2021 ONCA 516 at para 25; Alami v Haddad, 2025 ONCA 527 at para 15. Where a transfer is made for no consideration, the transferee has the onus to prove on a balance of probabilities that a gift was intended: Pecore at para 24; Nishi at para 30. This standard of proof requires clear, convincing, and cogent evidence: MacIntyre, at para 25; FH v McDougall, 2008 SCC 53 at para 46. The presumption of resulting trust is based on the principle that equity presumes bargains and not gifts: Ibid; Alami at para 15.
53The court undertakes its analysis by starting with the applicable presumption and weighing all the evidence to decide the transferor's actual intention on a balance of probabilities. Under this analysis, the relevant intention is that of the transferor at the time of the transfer: Kerr at para 18; MacIntyre at para 24; Barber v Magee, 2016 ONSC 7911 at para 77, aff'd 2016 ONCA 701 at para 3; JMM v CRM, 2025 ONSC 3067 at para 529. The presumption will only determine the result if there is insufficient evidence to rebut it on a balance of probabilities: Pecore at para 44. Evidence of intention that arises after a transfer may be relevant so long as it pertains to the transferor's intention at the time of the transfer: Pecore at para 59. In considering post-transfer evidence, the court must guard against evidence that is self-serving or that tends to reflect a change in intention: Ibid; Nishi at para 46; Chao v Chao, 2017 ONCA 701 at para 56; JMM at para 531.
54To rebut the presumption of a result trust, corroborating evidence is required: Foley (Re), 2015 ONCA 382 at para 29. The corroborating evidence may be direct or circumstantial and may consist of a single piece of evidence or several pieces considered cumulatively: Ibid; Buday v Buday (Estate), 2025 ONSC 3385 at para 61.
55To show that a transferor intended a gift rather than a resulting trust or loan, the transferee must establish the following criteria:
- an intention to make a gift without consideration or expectation of remuneration;
- an acceptance of the gift; and
- a sufficient act of delivery or transfer of the property to complete the transaction.
MacIntyre at para 40, citing McNamee v McNamee, 2011 ONCA 533 at para 24.
56On balance, I am satisfied that the defendant has met his onus to rebut the presumption of a resulting trust in this case.
57I acknowledge that no presumption of advancement arises in this case. Depending on the nature of the relationship between a transferor and transferee, a presumption of a resulting trust may not arise where a presumption of advancement is established, such as in the case of a transfer between spouses or between a parent and a child; Pecore at paras 27-28, citing Hyman v Hyman, [1934] 4 DLR 532 (SCC) at 538. Where a presumption of advancement applies, the party challenging the transfer has the onus to rebut the presumption of a gift. However, the presumption of advancement does not apply to a transfer between siblings: Pecore at para 37. As the advance in this case was made by the plaintiff sister to the defendant brother, it follows that the presumption of advancement does not apply. Nevertheless, evidence relating to the quality of the relationship between the parties may be considered in determining whether the presumption of a resulting trust has been rebutted as the factor of affection between the transferor and transferee is relevant to this analysis: Ibid.
58Around May 2018 when the plaintiff advanced funds to the defendant, I find that the parties shared a close sibling relationship. In my view, the defendant was trying hard to help and support the plaintiff around this time as she struggled with health and other issues that alienated her from other members of her family including her husband, mother, and other brother. Among other things, the defendant supported the plaintiff during her involvement in the criminal justice system, served as her surety, helped her to deal with her separation and issues related to her husband, ran errands for her, performed yard work at her home, and encouraged her to seek counselling or therapy for addiction and other issues that she faced at that time. From the evidence at trial, I am satisfied that the plaintiff appreciated the defendant's care and support and considered him to be a close and supportive brother when she transferred the funds to him in May 2018.
59Around the time that the funds were advanced, the parties had no discussion of any factors typically considered by parties to a loan agreement. The following criteria, among others, inform the analysis in determining whether a transfer of funds constitutes a loan or a gift:
- whether there are any contemporaneous documents evidencing a loan;
- whether the manner for repayment is specified;
- whether there is security held for the loan;
- whether there has been any demand for payment;
- whether there has been any partial repayment; and
- whether there was any expectation, or likelihood, of repayment.
Chao at para 54, citing Locke v Locke, 2000 BCSC 1300 at para 21; Kuo v Chu, 2008 BCSC 504 at para 78, aff'd 2009 BCCA 405 at para 9; Barber v Magee, 2017 ONCA 558 at para 4.
60During her testimony, the plaintiff gave no evidence of any verbal or written agreement by which the defendant was required to repay the funds that she advanced to him. Her evidence essentially consisted of assumptions, assertions, or conclusory statement about what she apparently expected when the funds were advanced, instead of what the parties actually said about the advance of funds or what they agreed upon in relation to them.
61In this case, there was no written agreement to record a loan in respect of the funds that the plaintiff transferred to the defendant. The absence of a contemporaneous written loan agreement departs from the practice that the parties had adopted when the defendant agreed to borrow $40,000.00 from the plaintiff. On that occasion, the parties made a written agreement for the loan that the defendant fully repaid as expected. Based on this, I am persuaded that the lack of a written loan agreement for the funds that the plaintiff advanced in May 2018 supports the defence position that those funds were not a loan but a gift that she intended to give him gratuitously.
62There is no evidence that the parties ever discussed repayment terms for the advanced funds or whether there was any intention or expectation of repayment. Similarly, there is no evidence of any discussion by the parties about how or when any repayment, or demand for repayment, would be made or addressed. In addition, there is no evidence of any discussion about security for the funds, whether interest on the funds would be payable, or whether any repayment instalments were expected. This lack of loan-related evidence supports the defendant's position that the funds were not a loan but a gift from the plaintiff, particularly as the prior loan that she gave him was discussed and documented.
63The defendant testified that the plaintiff approached him with an unsolicited offer to write him out of her will and immediately gift him funds as an early inheritance so that he could buy a home and relocate there after his separation. From the time that he received the advanced funds until the trial of this action, the defendant consistently maintained that the plaintiff intended to gift the funds to him so that he could buy a home where his children could stay for their parenting time with him after his separation. The defendant's position is set out in various post-transfer text messages that the parties exchanged. For her part, the plaintiff's demands for repayment, or for a mortgage or a lien on the defendant's home to secure the funds, were based on an undocumented verbal loan agreement that that parties never discussed, as she acknowledges, even though she testified that she always intended or understood that a loan agreement, payable on demand, was to have been made at some unspecified point after she had transferred the funds to the defendant.
64The defendant's evidence that the plaintiff gifted him the advanced funds is corroborated by the evidence of his former coworker who testified that the defendant told him around the time of the transfer of funds that the plaintiff was gifting him a substantial amount of money to buy a home after his marital separation. Although a prior consistent statement is generally inadmissible, the plaintiff has accused the defendant of having a motive to fabricate and tailor his evidence to his defence in this case. Consistent statements that pre-exist the time when a motive to fabricate has crystallized are relevant to allow the trier of fact to circumstantially evaluate the witness's trial evidence and the impact of any motive: R v Stirling, 2008 SCC 10 at para 5. In my view, the defendant's prior consistent statements to the co-worker about the transferred funds is probative to show that he made the statements before having any motive to lie: Stirling at para 5; R v DK, 2020 ONCA 79 at para 36; R v JN, 2025 ONSC 4040 at paras 12-13. As the generous nature of the gift stood out in the former coworker's mind, he clearly recalled the defendant discussing the gift around the time that the plaintiff advanced the subject funds in May 2018.
65The defendant's evidence that the plaintiff gifted him the $700,000.00 transfer of funds is further corroborated by the evidence of his former spouse. Among other things, the former spouse clearly testified that the plaintiff similarly offered her an unsolicited $100,000.00 gift around May or June 2018 an early inheritance (i.e., by removing the former spouse from her will) to help her qualify for a mortgage and take over the defendant's interest in their former matrimonial home. At the time, the plaintiff and the former spouse were on good terms as they shared their experiences of going through a separation around the same time. The former spouse was pregnant and worried about how she could remain in the matrimonial home with the children after her separation given her limited income that did not allow her to qualify for the mortgage required to finance the home. Ultimately, she declined the plaintiff's proposal of a generous $100,000.00 gift and instead chose to borrow the amount from her as a loan. Nevertheless, her testimony of how the plaintiff initially approached her with an offer to gratuitously gift her the funds with the intention of easing her financial strain from her separation is consistent with the defendant's testimony that the plaintiff gifted him the funds that she advanced to him with the same intention of financially helping him for similar reasons around the same time.
66I am satisfied that the defendant has established that the plaintiff had the financial means to gift the funds that she transferred to him. Around the time of the transfers to the defendant and his former spouse in May and June 2018, the plaintiff had received at least $700,000.00 as a lump-sum component of the settlement for her personal injury claim from the motor vehicle accident. In addition to the lump-sum part of the settlement, she received annuities totalling $24,304.50 per month (i.e., $8,004.37 + $16,300.13) under her structured settlement that gave her an income of $291,654.00 per year for life on just the annuities alone. Moreover, after transferring $700,000.00 to the defendant in May 2018 (i.e., being $200,000.00 on May 18, 2018, and a further $500,000.00 on May 28, 2018), the plaintiff received a $448,349.68 deposit to her account on June 8, 2018, that left her with ample funds to loan $100,000.00 to the defendant's former spouse on June 12, 2025. Given the plaintiff's financial means around the time that she transferred the funds to the defendant in May 2018, I find that this evidence supports the defence position that she generously intended to gift the funds as she could afford to financially do this. Later in these reasons, I shall return to the matter of the plaintiff's finances in my analysis for her claim in equitable fraud.
67I am satisfied that the defendant has shown that each party had a practice of gratuitously transferring funds to help the other in times of need. On October 28, 2019, the defendant gifted $35,000.00 to the plaintiff to help her retain a family lawyer for her family law matter. Although the plaintiff had started to demand repayment of the $700,000.00 transfer in September 2019, the defendant just gave her the $35,000.00 without any conditions. On June 22, 2023, he gratuitously gave her $200,000.00 from his share of their late-mother's estate after the sale of her townhouse for which he had a one-third interest. The plaintiff framed this $200,000.00 payment as a partial repayment against the $700,000.00 that he owed her. However, the defendant just gave this amount without asking her for anything in return, albeit to appease her as the statement of claim had been served by then. Taking this all into account, I find that the defendant has shown that the $35,000.00 and $200,000.00 amounts were gratuitously gifted to the plaintiff without any consideration or expectation of repayment: MacIntyre at para 40. Other evidence shows that the plaintiff also treated the defendant generously when they previously shared a close sibling relationship, such as when she offered to fly him to the Calgary Stampede for a fun get-away trip.
68The plaintiff testified at length about her intention to lend the funds that she transferred to the defendant in May 2018, although much if not all her evidence on this point was uncorroborated. The plaintiff's best friend was called to testify at trial, but her evidence about the transfer of funds was based on after-the-fact information from the plaintiff, as the friend fairly acknowledged in her testimony. In the circumstances, and mindful of the court's role to guard against self-serving evidence, I found that the evidence from the plaintiff and her friend about the plaintiff's intentions in advancing the funds to the defendant in May 2018 was less-than-reliable. In addition, I was skeptical about the extent to which this evidence would reveal the plaintiff's intentions when the funds were advanced to the defendant as opposed to reflecting a changed intention by the plaintiff that post-dated her transfer of the funds to him: Pecore at para 59; Nishi at para 46.
69During an exchange of messages on September 5, 2019, the plaintiff candidly texted her frustration and concern to the defendant that her marital separation would be causing her to incur significant financial costs due to the equalization, support, and other claims in her family litigation. Around this time, the plaintiff began to demand repayment from the defendant in September 2019. Based on this, I accept that the defendant has shown that the plaintiff came to believe that her financial situation had changed rather dramatically after providing the funds to him in May 2018.
70Taking everything into account, I find that the defendant has rebutted the presumption of a resulting trust. On balance, I find that the plaintiff intended to gift the $700,000.00 to the defendant when she transferred the funds to him. In my view, the transferred amounts were a gift that should not be characterized as funds held in a resulting trust for her, or as a loan that is owed to her.
Unjust Enrichment
71I am not persuaded that there has been an unjust enrichment.
72To establish an unjust enrichment, the plaintiff must prove that the defendant was enriched, that the plaintiff suffered a corresponding detriment, and that there was no juristic reason for the enrichment: Kerr v. Baranow, 2011 SCC 10 at para 32; Moore v. Sweet, 2018 SCC 52 at para 37. The established categories of juristic reasons for an enrichment include a donative intent, among others: Moore at paras 57-58; The Estate of William Robert Waters v. Gillian Henry et al., 2024 ONSC 4190 at para 367. A plaintiff who confers a benefit by gifting money to a defendant will be denied recovery for unjust enrichment as there is nothing unjust with the defendant retaining a gifted benefit, despite any corresponding deprivation to the plaintiff: Moore at para 57. As set out earlier, I found that the plaintiff had a donative intent and gifted the disputed funds to the defendant to generously help him. Given this finding, I am unable to find a basis for the plaintiff's unjust enrichment claim as there is nothing unjust about the defendant retaining gifted funds: Ibid.
73Accordingly, I find that the claim for unjust enrichment should be dismissed.
Equitable Fraud
74As set out below, I do not find that it would be unconscionable under the equitable fraud doctrine for the defendant to avail himself of the gifted funds from the plaintiff.
75The doctrine of equitable fraud is a tool to right unconscionable wrongs. It captures conduct that falls short of deceit that is unconscientious, unconscionable or unfair. Equitable fraud is not necessarily focused on abuse in relationships, although it often arises where one party is vulnerable. In Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club, 2002 SCC 19 at para 39, Binnie J. writing for the majority of the Supreme Court of Canada described the nature of equitable fraud in the following manner:
- What amounts to "fraud or the equivalent of fraud" is, of course, a crucial question. In First City Capital Ltd. v. British Columbia Building Corp., McLachlin C.J.S.C. (as she then was) observed that "in this context fraud or the equivalent of fraud' refers not to the tort of deceit or strict fraud in the legal sense, but rather to the broader category of equitable fraud or constructive fraud ... Fraud in this wider sense refers to transactions falling short of deceit but where the Court is of the opinion that it is unconscientious for a person to avail himself of the advantage obtained " (p. 37). Fraud in the "wider sense" of a ground for equitable relief "is so infinite in its varieties that the Courts have not attempted to define it", but "'all kinds of unfair dealing and unconscionable conduct in matters of contract come within its ken.'" [Citations omitted; emphasis added.]
76The analysis for equitable fraud does not assess the relationship within which the conduct occurred but rather the unconscionability of the conduct and whether it would be, for any reason, unconscionable for the defendant to rely on the advantage gained: Pioneer Corp. v Godfrey, 2019 SCC 42 at para 54; Holley v. Northern Trust Co., Canada, 2014 ONSC 889 at paras 122-123, aff'd 2014 ONCA 719.
77In this case, the parties are siblings who were close when the plaintiff transferred funds to the defendant in May 2018 so that he could afford to buy a home after his separation. As explained earlier, I have found that the plaintiff gifted $700,000.00 to the defendant to help him buy a home, which he did by using the gifted funds.
78From the evidentiary record at trial, I am not persuaded that the plaintiff was so vulnerable or debilitated that her monetary gift to the defendant should be determined to be unconscionable. The plaintiff testified that she was vulnerable due to health issues from her accident-related injuries and her addictions to prescription medication and alcohol when she advanced the disputed funds. However, she led no medical evidence at trial to show that she was incapacitated around this time, and she gave only subjective testimony on this point that was not meaningfully corroborated with any objective evidence. Given the significant amount of her personal injury settlement from the motor vehicle accident, I accept that she sustained a catastrophic impairment from the accident, as she has testified. I also accept that the plaintiff struggled with drinking and substance abuse issues. However, she led no evidence to establish that she was incapable of managing her legal or financial affairs when she agreed to settle her personal injury claim for the motor vehicle accident, received her settlement funds, and transferred the impugned funds to the defendant. There is no evidence that she required a litigation guardian or a substitute decision maker when she transferred the funds to the defendant, or at any other time that is relevant to this litigation.
79The plaintiff's best friend testified that she tried to have the plaintiff involuntarily admitted to hospital when she declined to continue as her surety, and the defendant testified that he asked the plaintiff to attend a residential addiction treatment program, but she declined any counselling or therapy. That said, no evidence was adduced at trial to show an involuntary hospital admission, and no medical or capacity evidence was led to show that the plaintiff was incapacitated or unaware of what she was doing when she transferred the subject funds to the defendant, or that she could not understand or appreciate the consequences of her actions in doing so.
80Even though the plaintiff's $500,000.00 claim (i.e., to reflect the $700,000.00 transfer in May 2018 to the defendant less the $200,000.00 that she received from him on June 22, 2023) is sizeable, I am not persuaded that the amount of the transferred funds makes it unconscionable for the defendant to retain and avail himself of the benefit of the funds. From the evidentiary record, I find that the plaintiff had the financial means to gift $700,000.00 to the defendant in May 2018. Around that time, she had received at least $700,000.00 under her accident settlement that also gave her annuity payments of $24,304.50 per month (i.e., over $290,000.00 per year) for life on her monthly annuity payments alone. In addition, she received a $448,349.68 deposit on June 8, 2018, that left her a bank account balance of $613,790.97 on June 22, 2018. She also testified that she settled a claim against her former personal injury lawyer for an amount that possibly approached $500,000.00. Taking this all into account, I am satisfied that she could afford to gift $700,000.00 to the defendant when she transferred the funds to him in May 2018.
81I am unable to see any basis to find that the plaintiff is facing any financial hardship that would make it unconscionable for the defendant to retain and use the funds that she gave to him. When she demanded repayment from him around September 2019, she was concerned that her separation would impose significant financial costs on her. However, I accept that no such costs were ever realized after she reconciled with her husband and resumed her marital relationship with him. In any event, no evidence was led at trial to suggest that she would face any financial hardship due to her transfer of funds to the defendant.
82For these reasons, I decline to give effect to the plaintiff's submission that the transferred funds should be repaid to her as it would be "unconscientious for [the defendant] to avail himself of the advantage obtained" under the equitable fraud doctrine: Performance at para 39.
Outcome
83Based on the foregoing, I find that the action should be dismissed.
84If the parties cannot resolve costs for the action, the defendant may deliver written costs submissions of up to 5 pages (excluding his bill of costs and any offer(s) to settle) within 20 days, and the plaintiff may deliver responding costs submissions on the same terms within a further 20 days. Reply submissions shall not be delivered without leave.
Date: September 3, 2025 M.T. Doi J.
Footnotes
- In the circumstances of this case, I am satisfied that evidence from the defendant's former spouse about her settlement of the plaintiff's action against her in CV-23-200-00 should be admissible as an exception to settlement privilege. The purpose of settlement privilege is to promote settlement by wrapping a protective veil around the settlement communications to make them inadmissible: Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 at para 2. Settlement privilege creates a prima facie presumption that settlement communications are inadmissible, but the privilege is subject to exceptions "when the justice of the case requires it": Sable at para 12. In this case, the release in CV-23-200-00 that the plaintiff and the former spouse executed as of July 26, 2024 includes at ss. 4(a) and (b) a confidentiality term to preserve settlement privilege by precluding either from directly or indirectly disclosing any information related to the release except as required by law. In Sabre Inc. v. International Air Transport Association at para 20, Pepall J. (as she then was) expressly adopted the reasoning of Doherty J. (as he then was) in Mueller Canada Inc v State Contactors Inc, [1989] OJ No 2059 (HC) at para 13 that"[w]here documents referable to the settlement negotiations or the settlement document itself have relevance apart from establishing one party's liability for the conduct which is the subject of the negotiations, and apart from showing the weakness of one party's claim in respect of those matters, the privilege does not bar production." [Emphasis added.] Applying this reasoning, I am satisfied that the defendant has established that the evidence of the former spouse regarding her $100,000.00 loan from the plaintiff and the settlement of the plaintiff's action to recover the loan is clearly relevant to the within action by explaining the circumstances of how that loan came about and similarities to events that form the subject of this action. To this end, I am satisfied that this evidence goes beyond establishing liability for the conduct that was negotiated by the plaintiff and the ex-wife or simply showing the weakness of the plaintiff's claim in that other (CV-23-200-00) action by offering important evidence about the circumstances giving rise to the loan, including other proposals that the plaintiff suggested for advancing funds to the ex-wife (i.e., including a proposal by the plaintiff to gift the funds to the defendant's former spouse as an early inheritance) before entering into the loan agreement with her, all of which is important to properly considering the plaintiff's claim against the defendant in this action given the clear and obvious similarity of the alleged early inheritance proposal to the former spouse that the plaintiff is said to have proposed to the defendant in the within matter. In any event, after considering whether the competing public interest favouring disclosure outweighs the interest in encouraging settlements, I find after taking everything into account that piercing settlement privilege to disclose settlement communications between the plaintiff and the former spouse is just and fair in the particular circumstances of this case to achieve justice on proper and available evidence: Sable at para 19, citing Dos Santos (Committee of) v Sun Life Assurance Co of Canada, 2005 BCCA 4 at para 20; Fluor Enterprises Inc v Leder Investments Ltd, 2025 ABKB 234 at para 135; TD Bank at paras 42-43; r. 1.04(1) of the Rules of Civil Procedure, RRO 1990, Reg. 194, Sabre Inc. at paras 14-20.
- The period from September 5, 2019 (i.e., the date when the plaintiff first demanded repayment from the defendant) to March 16, 2020 (i.e., the period when the limitation period was suspended due to the COVID-19 pandemic) spans 194 days. The period from September 14, 2020 (i.e., when the suspension of the limitation period was lifted) to November 1, 2021 (i.e., the date when the statement of claim was issued) spans 414 days. In total, the period between September 5, 2019 to November 1, 2021, excluding the suspended limitation period, totals 608 days (i.e., 194 days + 414 days), that is less than the 730 days comprising the 2-year limitation period (i.e., 365 days x 2). On the facts of this case, the 2-year limitation period from September 5, 2019 would have expired on March 4, 2022, well after the statement of claim was issued in this action.