CITATION: 1615540 Ontario Inc. (Healing Hands Massage Therapy Clinic) v. Simon, 2016 ONSC 1623
COURT FILE NO.: 13-CV-479650
DATE: 20160307
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1615540 ONTARIO INC., carrying on business as Healing Hands Massage Therapy Clinic
Plaintiff
– and –
JOY NICOLE SIMON and ALEN M. KATIC
Defendants
AND BETWEEN:
JOY NICOLE SIMON
Plaintiff by Counterclaim
– and –
HEALING HANDS MASSAGE THERAPY CLINIC and ASHER MAHMOOD
Defendants by Counterclaim
Jeffrey Radnoff and Charles Haworth for the Plaintiff and for Defendants by Counterclaim
Joy Nicole Simon, self-represented Defendant and Plaintiff by Counterclaim
HEARD: February 19, 2016
PERELL, J.
REASONS FOR DECISION
[1] In May 2013, 1615540 Ontario Inc., carrying on business as Healing Hands Massage Therapy Clinic (the “Clinic”), whose principal is Dr. Asher Mahmood, brought an action against Dr. Joy Nicole Simon and her husband Alen M. Katic, who is a lawyer.
[2] Dr. Simon is a chiropractor and a member of the College of Chiropractors of Ontario regulated by the Chiropractic Act, 1991, S.O. 1991, c. 21. Mr. Mahmood is a registered massage therapist and is a member of the College of Massage Therapists of Ontario regulated by the Massage Therapy Act, 1991, S.O. 1991, c. 27. Chiropractic and massage therapy are self-governing health professions under the Regulated Health Professions Act, 1991, S.O. 1991, c. 18.
[3] The Clinic’s main claims against Dr. Simon were for loss of income and for an accounting of the fees she earned providing chiropractic services to the Clinic’s patients based on an alleged business arrangement between Dr. Simon and the Clinic, which offered other medical treatments for its patients including massage therapy. The main claims against Dr. Simon and Mr. Katic were for a mandatory injunction requiring them to return to the Clinic the patient files that they had removed on the evening of April 19-20, 2013 and damages of $100,000 for conversion for misappropriating the confidential property and goodwill of the Clinic.
[4] On May 15, 2013, the Clinic brought a motion for an interlocutory injunction for the return of the files, which I granted with costs in the cause. See 1615540 Ontario Inc. carrying on business as Healing Hands Message v. Simon, 2013 ONSC 2986 and 1615540 Ontario Inc. carrying on business as Healing Hands Message v. Simon, 2013 ONSC 4798.
[5] In granting the interlocutory injunction, my primary concern was the security of the patients’ private medical information in circumstances where it appeared that Dr. Simon was going to interrupt her practice and where it was uncertain whether she had established chambers to continue to carry on her chiropractic practice. In ordering a return of the files, I did not decide the merits of the Clinic’s claim against Dr. Simon.
[6] In September 2013, Dr. Simon delivered her Statement of Defence and she also brought a counterclaim against the Clinic and Dr. Mahmood. She claimed: (a) $50,000 for her share of the billings from her chiropractic practice at the Clinic; (b) $100,000 for damages for inducing breach of contract with respect to her contract with Dr. Lisa Caputo, whom she had subcontracted to provide chiropractic services at the Clinic; and (c) $100,000 for the conversion of the patient records.
[7] The Clinic and Mr. Mahmood served a Reply and Defence to the Counterclaim on October 15, 2013. However, they did not the file the pleading with the court.
[8] The action ground to a halt. However, that is not to say that the litigation between the parties ground to a halt. Dr. Simon brought an unsuccessful Small Claims Court action against Dr. Caputo, which was heard on January 7 and March 24, 2014. On June 12, 2014, that action was dismissed. Between 2013 and 2015, Dr. Simon, sometimes with the assistance of her parents as complainants, launched a series of discipline complaints against Mr. Mahmood, which he successfully defended at some considerable cost in legal fees.
[9] The administrative proceedings resolved nothing, and in 2015, the Clinic decided to ramp up the court proceedings, and the Clinic attended in Civil Practice Court to obtain a date for a summary judgment motion. The motion was scheduled for November 16, 2015.
[10] Although Dr. Simon was aware that the summary judgment motion had been scheduled, on May 11, 2015, she noted the Clinic and Dr. Mahmood in default for failing to defend the counterclaim, and on August 11, 2015, she brought an ex parte motion for a default judgment in the counterclaim.
[11] Justice Dow reserved judgment, and he released his Reasons for Judgment on September 8, 2015. He granted Dr. Simon judgment against the Clinic and Dr. Mahmood for $67,852.21. See Healing Hands Massage Therapy Clinic v. Simon, 2015 ONSC 5086 and 2015 ONSC 6179.
[12] After it became aware of the default judgment, the Clinic moved to have the judgment set aside.
[13] On November 16, 2015, I set aside the default judgment, and I scheduled a hearing for summary judgment motions of the Clinic’s claim and Dr. Simon’s counterclaim. The motions were heard on February 19, 2016.
[14] At the summary judgment motion, the Clinic and Dr. Mahmood’s position was that the Clinic was abandoning its claim against Dr. Simon and for the counterclaim they were prepared to pay Dr. Simon $1,593.31 but without costs, given her alleged failure to act reasonably to end the business relationship and having regard to rejected offers made over the year to resolve the dispute in a commercially reasonable fashion.
[15] At the hearing of the summary judgment motions, Dr. Simon pressed forward with her counterclaim, limiting it to an accounting for her unpaid share of the fees, a modest claim of $1,664.75, which was only slightly more than the Clinic’s $1,593.31 offer, and her loss of income from the disruption of her practice caused by the patient files being returned to the custodianship of the Clinic. She abandoned her claim with respect to her contract with Dr. Caputo.
[16] Dr. Simon provided a summary of her loss of income claim as set out below:
Loss of Income
$66,342.80
Fees from Small Claims Court
$500.00
Legal fees for the injunction
$12,500.00
Legal fees for Defending Claim and for the Counterclaim
$18,025.00
Disbursements
$600.00
[17] Of the sums claimed, the fees from the Small Claims Court are not a recoverable head of damages in this proceeding.
[18] The disbursements of $600 and the legal fees for the injunction and for defending the claim and for the counterclaim are not, strictly speaking, a damages claim and rather are a matter of the costs of this proceeding including the costs of the summary judgment motion. That said, I award Dr. Simon $16,000, all inclusive for the costs of the claim and the counterclaim. Dr. Simon, who was self-represented at the time of the summary judgment motions, was represented during the early stages of the litigation and this claim for legal fees is fair and within the reasonable expectations of a party who failed to prosecute its own claim and who abandoned it at the hearing of the summary judgment claim.
[19] That leaves Dr. Simon’s loss of income claim. On the summary judgment motion, she provided evidence of her difficulties rebuilding her practice after her departure from the Clinic after the return of the patient files to the custodianship of the Clinic.
[20] She deposed that her gross income between 2008 and 2011 was $39,029.10 per annum. In 2013, the year of her departure from the Clinic, she deposed that was on track for a gross income of around $45,000. In 2014, the year after her departure, her gross income had fallen to approximately $11,000. She thus deposed that her average loss of income since her departure from the Clinic was $29,485.69. She thus claims for the loss of income for the 2.25 years since her departure for a total loss of income claim of $66,342.80.
[21] I am satisfied from the evidence filed on this summary judgment motion that the Clinic breached its business arrangement with Dr. Simon and because of the breakdown of their relationship, she departed the practice. I am satisfied from the evidence that the manner of her departure had an adverse impact on her ability to earn an income and that her gross billings decreased despite her efforts to sustain her practice.
[22] The manner of her departure, which is described in my Reasons for Decision for the injunction motion, was, however, a poor decision on her part because it led to the injunction application to restore custodianship of the files to the Clinic. The patient files are the property of the patients, and, as such, have no monetary value. However, she acquired the files for a cost of approximately $9,000 and access to the files and the collecting of them is associated with the goodwill of her practice. The goodwill of her practice was adversely impacted when she no longer had custody of the patient records and files.
[23] At the time of Dr. Simon’s departure, unfortunately, the personal relationship between her and Dr. Mahmood had so deteriorated that they did not sever their relationship in a professional manner, but with the records restored to the Clinic, the party who suffered most from what occurred was Dr. Simon.
[24] In my opinion, she has proven a loss of income claim. However, she overstates the claim because she has not taken into account the expenses that she would have incurred to earn the gross income. Doing the best I can from the material filed on the summary judgment motion, which included patient lists and Dr. Simon’s income tax statements, I conclude that her damages are $28,000 for loss of income, $1,664.75 for unpaid fees, and $16,000 for costs for a total award of $45,664.75, all inclusive.
[25] There should be a judgment on the counterclaim against the Clinic. While Dr. Mahmood was the person who dealt with Dr. Simon, he did so as a representative of the Clinic and not in his personal capacity and there is no basis to pierce the corporate veil.
[26] Therefore, the action is dismissed without costs and the counterclaim is granted against the Clinic for $45,664.75, inclusive of costs, and it is dismissed against Dr. Mahmood without costs.
Perell, J.
Released: March 7, 2016
CITATION: 1615540 Ontario Inc. (Healing Hands Massage Therapy Clinic) v. Simon, 2016 ONSC 1623
COURT FILE NO.: 13-CV-479650
DATE: 20160307
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1615540 ONTARIO INC., carrying on business as Healing Hands Massage Therapy Clinic
Plaintiff
‑ and ‑
JOY NICOLE SIMON and ALEN M. KATIC
Defendants
AND BETWEEN:
JOY NICOLE SIMON
Plaintiff by Counterclaim
‑ and ‑
HEALING HANDS MASSAGE THERAPY CLINIC ASHER MAHMOOD
Defendants by Counterclaim
REASONS FOR DECISION
Perell, J.
Released: March 7, 2016