The Estate of Dr. Paul Morgan v. Lavelle, 2026 ONSC 2137
CITATION: The Estate of Dr. Paul Morgan v. Lavelle, 2026 ONSC 2137
COURT FILE NO.: CV-21-00000022-0000
DATE: 20260410
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: The Estate of Dr. Paul Morgan AND: Michael David Lavelle
BEFORE: Justice Patrick Hurley
COUNSEL: J. Kroeker and E. Chapple, for the Plaintiff K. Duggan, for the Defendant
HEARD: March 9, 2026
ENDORSEMENT
Overview
[1] This is a motion for summary judgment by the estate of Dr. Paul Morgan (the “Estate”) over an alleged debt owed by the defendant to Dr. Morgan at the time of his death in April 2020.
[2] The estate trustees are BMO Trust Company and Dr. Morgan’s sister Regina. They were issued a certificate of appointment of estate trustee with a will on December 1, 2020.
[3] Three documents were found at Dr. Morgan’s home after his death, stapled together – a promissory note dated December 11, 2015, a document entitled “Acknowledgement and Direction” bearing the same date and an undated one with the heading “Paul Russell (“Doc”) Morgan Amounts owing by Michael Lavelle As at December 9, 2015”.
[4] The promissory note was signed by Dr. Morgan and the defendant. The Acknowledgement and Direction was signed by the defendant. The third document was unsigned.
[5] The principal amount in the promissory note is $444,200. It provides for this sum to be paid in monthly instalments of $2,276 with the first payment due January 1, 2016, and the last one on December 1, 2021. The interest rate is described as “Creditor’s Prime Lending Rate +1%, currently 3.75%, subject to change without notice”.
[6] In the Acknowledgement and Direction, the defendant acknowledges that Dr. Morgan is an unsecured creditor in relation to the purchase of property at 3048 County Road 10, Milford; the principal amount of the indebtedness is $440,200; and he agrees not to dispose of the property or mortgage it without the prior written consent of Dr. Morgan.
[7] The third document has the heading “Amounts owing by Michael Lavelle As at December 9, 2015” and identifies seven amounts which total $444,200 and are described as “Projected loans owing”.
[8] The two documents were signed at the office of Donald Gerrior who was the accountant for Dr. Morgan and the defendant. Mr. Gerrior witnessed their signatures. His office prepared the third document.
[9] The defendant operated a restaurant and art gallery at the Milford property.
[10] The Estate is seeking payment of $536,294.74 representing the unpaid balance and interest accrued on the promissory note. According to the Estate, I can decide this case based on a written record because I can find that, as of December 11, 2015, the defendant owed Dr. Morgan the sum of $444,200 and there is documentary proof of only a few payments by the defendant, totaling $50,000, on account of this debt.
[11] The defendant says this amount was only an estimate. Further, Dr. Morgan recouped most of the money that he loaned to the defendant. The defendant contends that a trial is required for a fair and just adjudication of these two issues – the amount that Dr. Morgan loaned him and how much was paid back to him.
[12] The Estate relies on the affidavit of Greg Woolston who is a senior trust officer at BMO Trust Company. He has no personal knowledge of the loans that Dr. Morgan made to the defendant nor of their dealings with each other before and after the execution of the promissory note. His affidavit is essentially a review of documents and what has happened in the litigation to date.
[13] The defendant’s responding record consists of his affidavit and affidavits from Mr. Gerrior, Cathie Smith and David O’Connor. The latter two affiants knew Dr. Morgan and have personal knowledge of the relationship between Dr. Morgan and the defendant and the operation of the restaurant and art gallery in Milford.
[14] The Estate did not deliver any material in reply to this evidence.
The Law
[15] The legal criteria are set out in Hryniak v. Mauldin, 2014 SCC 7, at para. 49:
There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
[16] The onus of proof is on the moving party. It is only after the moving party has discharged its evidentiary burden of proving there is no genuine issue requiring a trial for its resolution does the burden shift to the responding party to prove that its claim or defence has a real chance of success: Dia v. Calypso Theme Waterpark, 2021 ONCA 273, at paras. 24-25.
[17] Although decided before Hryniak, the Court of Appeal’s decision in Irving Ungerman Ltd. v. Galanis (1991), 1991 CanLII 7275 (ON CA), 4 O.R. (3d) 545 (C.A.), remains a leading case on what constitutes a genuine issue for trial. Morden A.C.J.O. described the test as follows at p. 10:
It is safe to say that "genuine" means not spurious and, more specifically, that the words "for trial" assist in showing the meaning of the term. If the evidence on a motion for summary judgment satisfies the court that there is no issue of fact which requires a trial for its resolution, the requirements of the rule have been met. It must be clear that a trial is unnecessary. The burden is on the moving party to satisfy the court that the requirements of the rule have been met. Further, it is important to keep in mind that the court's function is not to resolve an issue of fact but to determine whether a genuine issue of fact exists.
[18] I decide whether a genuine issue exists by reviewing the factual record before me. If I determine that there is a genuine issue, I need to consider the fact-finding powers granted under subrules 20.04(2.1) and (2.2) of the Rules of Civil Procedure and whether the exercise of these powers would lead to a fair and just result and serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole: Hryniak, at paras. 45-46 and 63.
[19] In this type of motion, “[t]he focus must be on whether the summary judgment process enables a fair determination on the merits in light of the record presented by the parties” (emphasis in original): Moffitt v. TD Canada Trust, 2023 ONCA 349, at para. 50.
[20] Paraphrasing Brown J.A. in Moffitt, I should ask myself the following question: Is there something about the nature of the findings of fact and the application of the law to the facts needed to decide the “live issues” in the action that would lead me to lack confidence that the summary judgment process would enable a fair and just determination of the action?
[21] In many cases, an action for repayment of a debt based on a promissory note can be decided by a summary judgment motion but not always: Baywood Homes v. Alex Haditaghi, 2013 ONSC 2145, at paras. 21-22.[^1]
[22] As Benotto, J.A. noted in Trotter v Trotter, 2014 ONCA 841, at para. 55: “It is not always a simple task to assess credibility on a written record. If it cannot be done, that should be a sign that oral evidence or a trial is required”. Summary judgment is not appropriate if the credibility of the parties is squarely in issue and requires a trial: Demetriou v. AIG Insurance Company of Canada, 2019 ONCA 855, at para. 9.
[23] The Estate did not adduce any evidence that the principal amount stated in the promissory note was advanced to the defendant. There is a presumption that every party whose signature appears on a promissory note received valuable consideration. The presumption is rebuttable: Sluyter Capital Investments Inc. v. 1902408 Ontario Limited, 2021 ONSC 5549, at paras. 117-118.
Analysis
[24] The defendant admits that he signed the promissory note but disputes that he owed that $444, 200 to Dr. Morgan when it was signed.
[25] Mr. Gerrior filed an affidavit in support of the defendant. At paragraphs 3-10 of his affidavit, he deposes:
The Defendant and Paul Morgan entered into a joint venture to acquire and [sic] building and business in Milford which could be used for the sale of Indigenous art work.
The Promissory Note on which this action was based was prepared by my office using partial and incomplete information provided by Paul Morgan and the Defendant.
The amounts were never audited nor reviewed. I was not retained to do a review engagement nor was anyone else to my knowledge.
The document was to be a starting discussion point for Paul Morgan and the Defendant.
The amounts were incomplete from the start in that the Promissory Note never included certain monies paid by the Defendant and agreed to by Paul Morgan.
No information was ever provided to me by either Paul Morgan or the Defendant concerning the amounts.
At that time neither party wanted to engage in my services in preparing a proper statement of accounts.
Any analysis based solely on the Promissory Note should be considered incomplete, at best.
[26] Mr. Gerrior identified seven categories of payments made by the defendant to Dr. Morgan or in relation to the Milford property and business which Dr. Morgan acknowledged were made but not accounted for in the promissory note.
[27] The defendant claims that all debt owed to Dr. Morgan was repaid. He contends that he paid a total amount of $463,586 to Dr. Morgan over time.
[28] The defendant avows that he had a very close bond with Dr. Morgan, akin to a father-son relationship. He shared a home with Dr. Morgan and provided many services to him for which he was not compensated. He asserts that he made monthly payments of $750 for 21 years to Dr. Morgan as “an investment for my first home” which he now attributes to the purchase of the Milford property. He claims that Dr. Morgan took money out of the business. He also made cash payments to Dr. Morgan on account of money loaned to him. According to him, Dr. Morgan requested that he sign the promissory note “to show what his investment would have been in the project and that the credits and adjustments would be worked out later”. He has made a counterclaim for damages, alleging that Dr. Morgan wrongfully interfered with operation of the business; for lost rental income; and for unjust enrichment.
[29] The Estate’s theory of the case – that the promissory note accurately stated the amount owed by the defendant to Dr. Morgan in December 2015 and the documented payments by the defendant after that date should be the only reductions in this amount – could be the correct one.
[30] But the defendant’s version of events could be true too. Mr. Gerrior, who appears to be a disinterested witness, lends support to the defence. His evidence puts into serious question how reliable the promissory note is. A judge could find that the promissory note did not accurately state the indebtedness of the defendant. Further, a judge could find that the defendant is a credible witness and that he repaid all or most of the money that Dr. Morgan loaned him despite the lack of documented proof that he did.
[31] A trial is required to decide what, if any amount, the defendant owes to the Estate. This determination cannot be made on the written record before me, nor could I reach a just and fair adjudication of these issues by exercising the expanded fact-finding powers under rule 20.
[32] The Estate also sought a declaration with respect to title to the Milford property, an order for the sale of it and the dismissal of the counterclaim. Considering my decision to dismiss the motion in respect of the principal relief claimed in it, these are matters that will also need to be addressed at a trial.
[33] The defendant is the successful party and would normally be entitled to costs of the motion. However, the defendant did not prepare a costs outline as directed by Justice Muszynski in her endorsement dated June 26, 2025. Counsel candidly admitted that it was an oversight on his part. The Estate served and filed a costs outline. It is important that parties comply with directions. For this reason, I decline to award any costs to the defendant. The parties shall bear their own costs of this motion.
[34] The defendant intends to raise a limitation period defence but has not yet pleaded it. The Estate has indicated that it will consent to this amendment of the statement of defence. This can be done by filing a consent and the amended pleading pursuant to rule 26.02(a).
[35] Finally, the Estate brought a motion in writing with respect to the production of the defendant’s bank statements from the Bank of Montréal and the Canadian Imperial Bank of Commerce. The defendant consented to the motion. In an endorsement dated November 17, 2025, Justice Muszynski directed the Estate to provide proof of service of the motion on the banks. Affidavits of service have been filed. The motion is granted. I approve the draft order except for the wording “consider this request to be a priority request” in paragraphs 1 and 2 and the entirety of paragraph 3. The Estate can submit a revised order approved as to form and content to my attention which I will sign.
Hurley, J.
Date: April 10, 2026
CITATION: The Estate of Dr. Paul Morgan v. Lavelle, 2026 ONSC 2137
COURT FILE NO.: CV-21-00000022-0000
DATE: 20260410
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
The Estate of Dr. Paul Morgan
Plaintiff
AND:
Michael David Lavelle
Defendant
ENDORSEMENT
Hurley, J
Released: April 10, 2026
[^1]: An appeal of the motion judge’s decision to grant summary judgment on a release executed by the plaintiffs was allowed: 2014 ONCA 450.