Court File and Parties

Date: 2019-07-19 Ontario Superior Court of Justice

Court File No.: C-705-17 Between: ALEXANDER MICHEL, Plaintiff – and – SPIRIT FINANCIAL INC., FRANZ KRAMER and GUNTHER KRAMER, Defendants

Counsel for C-705-17: Jeffrey A.L. Kriwetz, Counsel for the Plaintiff David M. Steele and Daniel W. Veinot, Counsel for the Defendants

Court File No.: C-728-15 Between: FRANZ KRAMER, CHRISTA SCHMIDT and GUNTHER KRAMER, Plaintiffs

• and - ALEXANDER MICHEL, Defendant

Counsel for C-728-15: David M. Steele and Daniel W. Veinot, Counsel for the Plaintiffs Jeffrey A.L. Kriwetz, Counsel for the Defendant

Before: The Honourable Mr. Justice P.J. Flynn

Costs Endorsement

[1] In my Reasons for Decision made April 10, 2019, I directed the parties to deliver their costs submissions, with specific inclusions as follows: i. Michel by May 6, 2019, and ii. Kramer et al by May 31, 2019.

[2] I received Michel’s first submission dated May 2, 2019, on May 3, 2019, together with his draft Judgment, also as I directed.

[3] Then, on May 10, 2019, I received further correspondence from Michel’s counsel dated May 8, 2019, outlining his client’s specific instructions on actual costs incurred by him as well as different, conflicting interest calculations and amounts for the Judgment. This was not helpful for my determination of costs.

[4] Following that, on May 13, 2019, I received yet further correspondence from Michel’s counsel, dated May 9, 2019, pointing out and correcting an error in the interest calculations on the Swiss franc amounts, as well as 2 small typographical errors.

[5] All this correspondence was copied to counsel for Kramer et al.

[6] All of the Michel submissions were answered by Mr. Veinot’s submission of May 31, 2019, which I received the same date.

[7] In it, he approved the form and content of the draft Judgment in court file number C-705-17 which was enclosed in Mr. Krivetz’s letter of May 9, 2019. That draft required Kramer and Spirit to pay Michel $2,569,316.91 plus interest and costs.

[8] The only objection raised by Mr. Veinot to Mr. Krivetz’s draft Judgment on court file number C-728-15 related to costs. This objection has merit.

[9] I agree with Mr. Veinot that separate costs awards should be made in each action for a number of obvious reasons, not the least of which is that it would not be fair to require costs on the main (money judgment) action to be payable by Gunther, against whom the main action was dismissed, or by Christa Schmidt, who was not a party to that action.

[10] Michel’s amalgamated Costs Outline, in respect of both actions, shows a Substantial Indemnity costs claim totalling $271,814.16 or $220,614.99 on a Partial Indemnity basis.

[11] While the amount of Michel’s claim in the main action was substantial, as was the amount of the judgment, and while my findings showed that Kramer had scammed Michel of this huge amount of money by his various fraudulent acts, I would, on that basis alone, not have ordered substantial indemnity costs.

[12] But because Kramer used the offence of the second (the slander) action as a “gag and chill” defence to the first action, that second action came years after the first. And that is the totally inappropriate conduct upon which I would base my decision to award substantial indemnity costs.

[13] Moreover, had Kramer admitted the facts laid out in Michel’s Request to Admit, the trial would have been considerably shorter and that amplifies my reasoning towards substantial indemnity costs.

[14] In their Costs Outline for C-705-17, Kramer et al propose that Michel should: i. obtain total costs form Kramer and Spirit of $79,941.08; ii. but then be responsible for Gunther’s costs of $39,724.11. Both of these amounts are based on partial indemnity awards.

[15] As for the slander action, the Kramer family say that the successful side should see a partial indemnity award of $31,462.75.

[16] So accepting the Boucher principle approach of meting out reasonable costs within the reasonable expectations of the losing side and taking into account the difference in hourly rates claimed by Michel’s and Kramers’ lawyers, against which there was no real argument, I rule that the successful defence of the slander action merits a costs award to Michel by Franz Kramer, Gunther Kramer and Christa Schmidt in the all-inclusive amount of $60,000.

[17] Gunther Kramer is entitled to his costs against Michel in defending the main action in the amount he claims, namely $39,724.11.

[18] Finally, Michel is entitled to a costs award in the main action C-705-17 against Kramer and Spirit in the all-inclusive amount of $200,000.

[19] New draft Judgments are to be prepared and delivered to me by August 2, 2019, to reflect these reasons.

P.J. Flynn J. Released: July 19, 2019