Tillger v. Figliano, 2025 ONSC 4990, offers transactional real estate lawyers important insights into the risks that arise when family members transfer substantial funds without proper documentation, particularly when those funds are used to purchase real property. This decision underscores the critical importance of clear written agreements and serves as a cautionary tale about the presumption of resulting trust.
Background
Stephanie Tillger sued her younger brother, Christopher Figliano, seeking to recover $500,000 (net of a partial repayment). She claimed she had loaned him $700,000 in May 2018, which he used to purchase a home following his marital separation. The defendant maintained the funds were a gift—specifically, an advance on his inheritance after the plaintiff wrote him out of her will.
The plaintiff had recently received a substantial personal injury settlement following a catastrophic motor vehicle accident in 2000, which left her with ongoing cognitive and physical challenges. At the time of the transfers, she was experiencing addiction issues, legal troubles, and marital difficulties. Her brother had been supporting her through this turbulent period, even serving as her surety when she was released on bail.
The Core Legal Issues
The case turned on several key questions:
- Was the action statute-barred under the Limitations Act, 2002?
- Did the presumption of resulting trust apply, and if so, was it rebutted?
- Could the plaintiff succeed on alternative claims of unjust enrichment or equitable fraud?
The Limitation Period Analysis
Justice Doi first addressed whether the claim was statute-barred. For demand obligations (like demand loans), the limitation period only begins once a demand for repayment is made. The court found the plaintiff first demanded repayment on or about September 5, 2019, through text messages.
Accounting for the COVID-19 suspension of limitation periods (March 16, 2020 to September 14, 2020), the statement of claim issued on November 1, 2021 was within the two-year limitation period.
This analysis highlights the importance of documenting demands for repayment and understanding how limitation periods apply to different types of obligations.
The Presumption of Resulting Trust
The heart of the decision dealt with the presumption of resulting trust, a rebuttable presumption that applies when someone transfers property or funds gratuitously to another person. Under this doctrine, equity presumes bargains, not gifts.
Where this presumption applies, the recipient bears the burden of proving on a balance of probabilities that a gift was intended. The standard requires “clear, convincing, and cogent evidence.”
Justice Doi examined several factors typically relevant to determining whether funds constitute a loan or a gift:
- Absence of contemporaneous documentation: Unlike a previous $40,000 loan between the parties (which was documented and repaid), there was no written loan agreement for the $700,000 transfer
- No discussion of loan terms: The parties never discussed repayment schedules, interest, or security
- The plaintiff’s financial capacity: She had substantial means to make such a gift, including settlement funds and annuity payments exceeding $290,000 annually
- The close sibling relationship: At the time of transfer, the parties shared a supportive relationship
- Corroborating evidence: A co-worker testified the defendant contemporaneously told him the plaintiff was gifting funds as an early inheritance
- Pattern of similar conduct: Shortly after the disputed transfer, the plaintiff made a similar proposal to gift funds to the defendant’s ex-spouse. The plaintiff initially proposed to convey $100,000 as a gift to ease her financial strain from the separation. However, the ex-spouse declined the gift and chose to borrow the sum as a loan. Nevertheless, the court found that the plaintiff’s initial proposal was “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.”
Alternative Claims: Unjust Enrichment and Equitable Fraud
Having found that the defendant successfully rebutted the presumption of resulting trust by proving the funds were a gift, Justice Doi addressed the plaintiff’s alternative claims.
Unjust Enrichment
Justice Doi swiftly dismissed this claim, finding that one of the established categories of juristic reasons for an enrichment is donative intent. Since the court had already found that the plaintiff intended to gift the funds to the defendant, there was nothing unjust about him retaining the benefit. As the court stated, “there is nothing unjust with the defendant retaining a gifted benefit, despite any corresponding deprivation to the plaintiff.”
Equitable Fraud
Equitable fraud is broader than the tort of deceit. It captures conduct that is “unconscientious, unconscionable or unfair,” even where it falls short of actual fraud. The key question is whether it would be unconscionable for the defendant to avail himself of the advantage obtained. This doctrine often arises where one party is vulnerable, though vulnerability alone is not determinative.
Justice Doi found the equitable fraud claim could not succeed for several reasons:
Lack of established vulnerability: While the plaintiff testified about her cognitive challenges, addictions, and substance abuse issues, she provided no medical evidence establishing she was incapacitated or unable to manage her affairs when she made the transfers. There was no evidence she required a litigation guardian or substitute decision-maker. The court found insufficient evidence that she was so vulnerable or debilitated that her gift should be deemed unconscionable.
Financial capacity: The plaintiff had substantial financial means, including more than $700,000 in settlement funds and annuity payments exceeding $290,000 annually. She could clearly afford to make the gift without facing financial hardship.
No changed circumstances creating hardship: Although the plaintiff initially feared her marital separation would impose significant financial costs (prompting her demand for repayment in September 2019), she ultimately reconciled with her husband. No evidence suggested she faced any actual financial hardship resulting from the transfer.
Absence of unconscionable conduct: The defendant did not exploit or manipulate his sister. The evidence showed he was supportive during her difficult period, and the gift arose in the context of their close sibling relationship and his need for housing after his own separation.
Practical Implications for Real Estate Lawyers
This decision offers several important lessons for transactional lawyers:
- Document Everything, Even Among Family
The absence of a written agreement makes litigation more likely, and makes its outcome more uncertain. Any time a lawyer is aware of a large transfer of funds, even among close relatives, it is best practice to clearly document the nature of the transfer.
- Consider Resulting Trust Implications
When clients are purchasing real estate with funds provided by family members, lawyers should:
- Inquire about the nature of the arrangement
- Advise on the presumption of resulting trust
- Recommend clear documentation stating whether the funds are a gift, loan, or investment
- Consider whether a deed of trust or mortgage should be registered
- Address Capacity Concerns Proactively
While the court found insufficient evidence that the plaintiff lacked capacity, her cognitive challenges and substance use issues at the time raised questions. When dealing with vulnerable clients or family transfers involving vulnerable parties, consider:
- Obtaining capacity assessments where appropriate
- Ensuring independent legal advice
- Creating detailed file notes about the client’s understanding and intentions
- Timing Matters for Limitation Periods
The court’s analysis of demand obligations reinforces that the limitation clock doesn’t start ticking for demand loans until demand is actually made. Document all demands clearly and promptly.
- Settlement Privilege Has Limits
In an interesting procedural ruling, Justice Doi admitted evidence about the plaintiff’s settlement with the defendant’s ex-spouse, finding it had relevance beyond merely establishing liability or weakness of claim. This demonstrates that settlement privilege, while important, is not absolute.
- Alternative Claims Require Independent Grounds
The failure of both alternative claims illustrates that unjust enrichment and equitable fraud require more than simply proving a transfer occurred. Donative intent defeats unjust enrichment, and equitable fraud requires demonstrable unconscionability, not merely regret or changed circumstances.
Conclusion
Tillger v. Figliano ultimately reinforces a principle transactional lawyers know well but bears repeating: proper documentation prevents disputes. When a lawyer is aware that substantial funds are transferred between family members for real estate purchases, clear written agreements specifying the nature of the arrangement are essential.
The case also demonstrates that courts will carefully examine the totality of circumstances—including relationship dynamics, financial capacity, contemporaneous statements, and patterns of conduct—when determining whether transfers were intended as gifts or loans. The presumption of resulting trust can be rebutted, but only with clear, convincing evidence.
For real estate lawyers advising on family transactions, this case underscores the value of investing time upfront to properly document intentions and protect all parties’ interests, potentially avoiding costly litigation down the road.
