Court File and Parties

CITATION: The Hearing Clinic (Niagara Falls) Inc. et. al. v. 866073 Ontario Limited et. al., 2017 ONSC 963

COURT FILE NO.: DC-679-15

DATE: 20170214

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: The Hearing Clinic (Niagara Falls) Inc., Appellant

AND:

Stefan Fridriksson and Carol Klassen, Co-Appellants

AND:

866073 Ontario Limited, Terry Lewis and Dee Lewis, Respondents

BEFORE: GORDON R.S.J., THEN AND FREGEAU JJ.

COUNSEL: Malte von Anrep, Kristi J. Collins and Civita M. Gauley, Counsel for the Appellant and Co-Appellants.

Valerie A. Edwards, Nicholas F. Ferguson and Harry Korosis, Counsel for the Respondents.

HEARD: In writing.

ENDORSEMENT on costs

[1] The Appeal in this matter involved two distinct issues.

[2] The first issue was the appeal of the trial decision based upon the Appellant’s contention that there was a reasonable apprehension of bias on the part of the trial judge and that the trial judge erred in failing to find liability and assess damages relative to certain claims that had been made. The appeal of the trial decision was dismissed.

[3] The second issue was the appeal by Stefan Fridriksson and Carol Klassen (added as Co-Appellants) of the order by which they were held personally liable for the costs of the trial, set at $1,001,094. They were successful in this appeal.

[4] This endorsement deals with costs arising from these appeal decisions.

[5] With respect to the first issue, the parties agree that the Respondents are entitled to partial indemnity costs. The Respondent claims $128,773. The Appellants take issue with the number of senior counsel working on the appeal (4) and the duplication of many of the services provided. Their view is that $100,000 is an appropriate amount.

[6] We have taken into account the factors enumerated under Rule 57, including the time spent, the result achieved, and the complexity of the matters, as well as the application of the principle of proportionality: Rule 1.04(1). In addition, we have considered the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario(2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) and Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.), specifically that the overall objective of fixing costs is to fix an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant. In our view the sum of $115,000 is an appropriate measure of the Respondent’s partial indemnity costs and it is ordered that this amount be paid by the Appellant The Hearing Clinic (Niagara Falls) Inc.

[7] With respect to the second issue the Co-Appellants seek substantial indemnity costs of $80,786.77. The Respondents submit that they should be entitled to partial indemnity costs of $50,000 all-inclusive and that these costs should not be payable by Terry Lewis and Dee Lewis.

[8] On consideration of the same factors outlined above, we order the Respondents to pay the partial indemnity costs of the co-appellants, set at $58,406.50. We decline to order substantial indemnity costs. Although allegations of dishonesty and improper conduct were the basis of the request for costs against Mr. Fridriksson and Ms. Klassen personally, those allegations were not entirely without foundation. Rather, we found that even if such conduct could result in an order for payment of costs by a non-party, they did not in the circumstances of this particular case. In our view this is not an appropriate case for the payment of costs on a substantial indemnity basis.

[9] This aspect of the costs award is payable by all of the Respondents. Mr. and Mrs. Lewis were parties to the main litigation and joined in the corporate Respondent’s request that costs be awarded against the non-parties. There is no legitimate basis for shielding them from this costs award.

[10] In summary, 8660073 Ontario Limited, Terry Lewis and Dee Lewis are entitled to costs against The Hearing Clinic (Niagara Falls) Inc. in the amount of $115,000.00. Stefan Fridriksson and Carol Klassen are entitled to costs against 8660073 Ontario Limited, Terry Lewis and Dee Lewis in the amount of $58,406.50.

Mr. Justice R. D. Gordon, R.S.J.

Mr. Justice E. F. Then

Mr. Justice J. S. Fregeau

Released: February 14, 2017