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

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

I. INTRODUCTION

1Leave 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.

2The 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.]