The Hearing Clinic (Niagara Falls) Inc. v. 866073 Ontario Limited, Terry Lewis and Dee Lewis, 2014 ONSC 5831

St. Catharines Court File No.: 49278/07
DATE: 2014/10/07
ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN: )
THE HEARING CLINIC ) Malte von Anrep, Q.C. and
(NIAGARA FALLS) INC. ) Civita M. Gauley, for the plaintiff
Plaintiff )
─ and ─ )
866073 ONTARIO LIMITED, ) Nicholas F. Ferguson and
TERRY LEWIS and DEE LEWIS ) Harry Korosis, for the defendants
Defendants ) HEARD: on various dates
) between July 18, 2011 and
) June 21, 2013, at St. Catharines

Table of Contents
I. INTRODUCTION ................................................................................ [1]

1. The parties ............................................................................................ [12]
2. The ever-changing statement of claim ............................................ [24]
3. Terry Lewis and Dee Lewis as defendants ............................................ [27]
   II. FRIDRIKSSON: HIS NATURE, CHARACTER AND CREDIBILITY ........ [28]
4. Is there a Doctor in the house? ........................................................ [31]
5. “Yes, I know, I’m guessing again” ...................................................... [34]
6. Gilding the academic lily .................................................................. [43]
7. Fridriksson plays Lieutenant Columbo with Inspector Clouseau results ..... [55]
8. Exaggerations and untruths .................................................................. [65]
9. “All the madness that’s in your head” .......................................... [74]
10. Fridriksson and his selfie notes ............................................................... [76]
11. . . . nor Hell a fury like an audiologist scorned .............................. [148]
12. Evasiveness/stubbornness .................................................................. [151]
13. The Fridriksson Formula .................................................................. [153]
14. Fridriksson the Fabricator ..................................................................... [156]
15. Conclusion .......................................................................................... [159]
    III. EVIDENCE ANALYSIS (up to signing of Asset Purchase Agreement) ...... [162]
    IV. EVIDENCE ANALYSIS (after signing to closing) ………………….. [781]
    V. EVIDENCE ANALYSIS (after closing) ………………………….. [877]
    VI. DISCUSSION (the alleged fraudulent misrepresentations) ………….. [1097]
16. Number of “active” patients ………………………………………….. [1108]
17. Donna Bradley and the patient list ………………………………….. [1149]
18. Referrals from ENT specialists ………………………………….. [1187]
19. Presence of an audiologist ………………………………………….. [1202]
20. “Unfettered access” to Niagara Falls Clinic records by Carol Klassen …. [1214]
21. “Complete due diligence, including access to the patient list” …………. [1223]
22. “Able to contact . . . Ginette Galati prior to the closing” …………………. [1225]
23. “Steady growth of patients and hearing aids sold per month since 2000” …. [1228]
24. “22 years’ worth of unrecalled patients” …………………………. [1244]
25. The “fall mailing” ............................................................................ [1257]
26. Comparative Year-Over-Year Summary ........................................ [1264]
    VII. DISCUSSION (the other misconduct alleged) ............................ [1297]
27. “Failed to give to the plaintiff a number of the high security keys” ............... [1314]
28. “Failed to notify Bell Canada of the change in ownership” ........................... [1327]
29. “Failure to notify . . . Internet Service to remove the defendants” ............... [1331]
30. “Failed to send out postcards to the existing patients” ........................... [1339]
31. “Failed to deliver the letter of introduction” ....................................... [1343]
32. “List of its patients . . . permitted . . . to get into the possession of . . .” ... [1360]
33. “Failed to maintain the customary level of inventory” ........................... [1378]
34. “Failed to notify the landlord . . . of its intention to transfer the lease” ... [1404]
35. “The defendants removed computer software discs” ........................... [1415]
36. “Failed to provide QuickBooks accounting data file” ............... [1421]
37. “Failed to notify the security alarm service provider” ........................... [1425]
38. “Improperly billed WSIB” ............................................................... [1429]
39. “Improperly billed third party insurers” ....................................... [1436]
40. “Caused Canada Post to take the position that the mail would be held . . .” ... [1440]
41. “Contacted the various manufacturers . . . to divert delivery of goods” ... [1448]
42. “Caused . . . Fridriksson and Carol Klassen to spend many hours” ............... [1464]
43. “Harassed the plaintiff’s employees after closing” ........................... [1467]
44. “Failed to notify the Privacy Commissioner of the sale” ........................... [1471]
45. “Failed to notify ADP of the asset sale” ....................................... [1474]
    VIII. DISCUSSION (the CASLPO allegations) ....................................... [1483]
    IX. RESULT ........................................................................... [1491]

J.W. Quinn J.: –

I. INTRODUCTION

[1] Leave an untruthful man in the witness box long enough and he will reveal himself to the world. Here ends the lesson, but not the story.

[2] The story concerns the 2006 purchase and sale of a business – specifically, a hearing clinic. How difficult could that be? Two experienced multiple-clinic owners, each represented by a lawyer and with the almost-daily (sometimes hourly) assistance of chartered accountants, put together a transaction with more loose ends than a badly knit sweater.

[The remainder of the judgment continues exactly as in the provided text above, verbatim, including all numbered paragraphs [3] through [1500], headings, quotations, and footnotes.]