Court of Appeal for Ontario
Date: 20220622 Docket: C70009
Judges: van Rensburg, Harvison Young and Copeland JJ.A.
Between:
The Fanshawe College of Applied Arts and Technology Plaintiff (Respondent)
And:
Hitachi, Ltd., Hitachi Asia, Ltd., Hitachi America, Ltd., Hitachi Displays Ltd, Hitachi Electronic Devices (USA), Shenzhen Seg Hitachi Color Display Devices, Ltd., Hitachi Canada, Ltd., Irico Group Corporation, Irico Group Electronics Co. Ltd., Irico Display Devices Co., Ltd., LG Electronics, Inc., LG Electronics Taiwan Taipei Co. Ltd., LG Electronics USA, Inc., LG Electronics Canada, Panasonic Corporation F/K/A Matsushita Electric Industrial Co. Ltd., Panasonic Corporation of North America, Panasonic Canada Inc., Koninklijke Philips Electronics N.V., Philips Electronics Industries (Taiwan) Ltd., Philips Amazonia Industrial Electronica Ltd., Philips Electronics North America Corporation, Philips Electronics Ltd., Samsung Electronics Co. Ltd., Samsung Electronics America Inc., Samsung Electronics Canada Inc., Samsung SDI Co., Ltd. (f/k/a Samsung Display Device Co.), Samsung SDI Brasil Ltda, Samsung SDI America, Inc., Samsung SDI Mexico S.A. de C.V., Shenzhen Samsung SDI Co. Ltd., Tianjin Samsung SDI Co., Ltd., Toshiba Corporation, Toshiba America Electronic Components Inc., Toshiba America Information Systems Inc., Toshiba of Canada Limited, Beijing Matsushita Color CRT Company, Ltd., Samtel Color, Ltd. and MT Picture Display Co., Ltd. Defendants
Counsel:
Brett Harrison and Paola Ramirez, for the appellant, Class Action Capital Recovery LLC Bridget Moran and Linda Visser, for the respondent, The Fanshawe College of Applied Arts and Technology
Heard: May 16, 2022
On appeal from the order of Justice A. Duncan Grace of the Superior Court of Justice, dated September 21, 2021.
Reasons for Decision
A. Introduction
[1] This appeal arises out of the claims process following the settlement of a class proceeding dealing with price fixing in the cathode ray tube (“CRT”) market, which includes products like televisions and monitors. The class is comprised of Canadian consumers who bought such products during the class period: between March 1, 1995 and November 25, 2007. Seven groups of defendants reached settlements totaling $49.8 million, which were approved by court orders in Ontario, British Columbia and Québec.
[2] The appellant is Class Action Capital Recovery LLC (“CAC”), one of several third-party claims filers who had filed claims on behalf of certain class members. CAC and other third-party claims filers had successfully appealed the rejection of some of their clients’ claims to the supervising judge for the class proceeding in Ontario, who ordered a reconsideration of certain claims. Following the reconsideration, CAC again sought the directions of the supervising judge. CAC appeals to this court from the supervising judge’s second order, dismissing its motion for directions in respect of the reconsideration. CAC seeks a further opportunity to prove the claims of the class members it represents. The appeal is opposed by the respondent, who is the representative plaintiff in the proceedings on behalf of the class. For the reasons that follow, we dismiss the appeal.
B. Relevant Facts
[3] As part of the CRT settlement, the parties – that is, the class and the defendants – agreed to a Distribution Protocol, which, together with the rest of the settlement agreement, was incorporated into court orders. The Distribution Protocol sets out the procedure for class members to submit claims and for their determination by a Claims Administrator. There is a limited right of appeal to the supervising judge in respect of rejected claims.
[4] CAC and other third-party filers submitted claims on behalf of some class members under the Distribution Protocol. They filed claims by submitting a declaration from each of their clients stating the purchase value of CRTs purchased during the class period. These claims were audited by the Claims Administrator. The Distribution Protocol provides that once a claim is audited, the claimant must provide documentation to substantiate its purchases. CAC provided responses to the audit. With respect to some claims, CAC appended additional documents to its clients’ declarations. Following the audit, the Claims Administrator issued Decision Notices and rejected 123 of the 125 claims filed by CAC on behalf of its clients. The Decision Notices did not explain the grounds for the rejections other than that the claimants “failed to provide adequate proof of purchase”.
(1) The Supervising Judge’s First Order
[5] CAC and other third-party filers appealed to the supervising judge on behalf of 258 settlement class members whose claims had been rejected. They proceeded by way of a motion for directions and sought an order allowing the appeals and remanding the various claims to the Claims Administrator for reconsideration. They challenged the Claims Administrator’s decision to reject claims for “[failing] to provide adequate proof of purchase”. After the appeal was launched, but before it was heard, some of the third-party filers, including CAC, provided additional documents to the Claims Administrator in support of the rejected claims. With the agreement of the Claims Administrator and Class Counsel, these additional documents went into the appeal record. Before the supervising judge, CAC argued that it had not received a deficiency notice before the claims were rejected, as required by s. 43 of the Distribution Protocol, and requested that the Claims Administrator “consider this additional material as if it was submitted in response to a deficiency notice”.
[6] For reasons dated January 6, 2021, [1] the supervising judge concluded that while the Claims Administrator was correct to reject claims accompanied only by a declaration without any documentary proof, it should not have rejected out of hand claims that consisted of a declaration that referred to and appended additional documentation that was delivered before the Decision Notice was generated. He commented on the type of documents that ought to have been acceptable to the Claims Administrator. He observed that, while contrary to the appeal process under the Distribution Protocol, the Claims Administrator and Class Counsel had agreed to permit the appellants to provide additional documentation as part of the appeal. He ordered the Claims Administrator to reconsider any claim that was more than just a declaration, including the additional documents that had been filed as part of the appeal, “in accordance with paras. 45 through 47 of the Distribution Protocol”. He also concluded that the Decision Notices were insufficient because they did not provide fact-specific and instructive grounds for the rejection, and he provided directions in this regard.
(2) The Reconsideration of the Claims
[7] The Claims Administrator reconsidered the claims in light of the supervising judge’s January 6, 2021 order and the new documents, and issued Reconsideration Notices. It approved some of CAC’s claims, at least in part, while upholding its rejection of other claims. Following the Reconsideration Notices, a total of seven claims filed by CAC were approved in full and 31 claims were partially approved (as compared to two claims that had previously been approved pursuant to the Decision Notices).
(3) CAC’s Objections and the Supervising Judge’s Second Order
[8] CAC appealed the Claims Administrator’s reconsideration of its clients’ claims. It objected to the process, arguing that the Claims Administrator failed to follow the requirements of the Distribution Protocol, in particular s. 43, which provides for the Claims Administrator to issue deficiency notices and afford a 30-day period for claimants to cure the deficiency, including by providing additional documents. Ultimately, the matter came back before the supervising judge for determination.
[9] For brief reasons issued on September 21, 2021, the supervising judge rejected CAC’s argument. He declined “the apparent invitation to retrace [his] steps and to then hollow a new path”. He stated that the Claims Administrator had not acted contrary to his instructions in the first order, which did not contemplate the issuance of deficiency notices or the filing of further additional documents. Accordingly, he dismissed the second motion for directions.
C. The Appeal to This Court
[10] In its appeal to this court, CAC contends that the supervising judge erred in refusing to give effect to the Deficiency Process set out in s. 43 of the Distribution Protocol. CAC asserts that, once it received the Reconsideration Notices, it should have been afforded the opportunity to provide additional documentation to prove the claims of the class members it represents. CAC says that after the supervising judge’s first decision was released, it reasonably expected to have this opportunity and that, in failing to follow a Deficiency Process, the Claims Administrator disobeyed the supervising judge’s order. To the extent the supervising judge’s order bypassed the deficiency notices mandated by the Distribution Protocol, CAC asserts that the supervising judge effectively amended the Distribution Protocol, which exceeded the court’s jurisdiction.
[11] The preliminary question is whether the process the supervising judge ordered in his first decision contemplated that the Claims Administrator would reconsider claims filed by CAC following a process that included deficiency notices under s. 43 and an opportunity to cure any defects in the documents provided before a final determination of the claims was made. The answer to this question is “no”. The supervising judge, who made the order in question after considering what the Claims Administrator had done to date and the complaints of CAC and the other third-party filers, concluded that CAC was seeking to re-argue matters raised in the first attendance. A review of his reasons in respect of the January 6, 2021 order is consistent with this conclusion. It is clear from these reasons that he contemplated that the further review and determination of certain claims by the Claims Administrator would result in a final determination of the claims. Moreover, a review of the record, which includes the materials that were before the supervising judge on the first attendance, makes it clear that exactly the argument made here – that the claims should be subject to further consideration, including under s. 43 – was before the court. In setting out the process for the Claims Administrator, the supervising judge did not refer to s. 43, and as we note below, resort to s. 43 was unnecessary in the circumstances.
[12] The appellant’s central argument is that the supervising judge was not entitled to order a process that departed from the Distribution Protocol, and that as such, recourse to s. 43 was mandatory. CAC contends that the supervising judge lacked the jurisdiction to do so, because this would have been an amendment of the settlement agreement without the parties’ consent, and because it was manifestly unfair to the interests of the claimants CAC represents.
[13] We do not give effect to this submission. First, as the respondent points out, this submission is a challenge to the supervising judge’s first order, which was not appealed. The issue before the supervising judge on the second occasion was whether the Claims Administrator had followed the process he had prescribed in the first order; he concluded that the process had been followed. This appeal is a collateral attack on the first order.
[14] Second, even if it could be argued that the first order was only finalized and took effect after the second attendance before the supervising judge (an argument that was not made directly, but is implicit in the appellant’s arguments before us), we reject the assertion that the supervising judge lacked jurisdiction to make the order he did. The Distribution Protocol requires the Claims Administrator to administer the protocol “under the ongoing authority and supervision of the Ontario Court”. Section 12 of the Class Proceedings Act, 1992, S.O. 1992, c. 6, provides that the court “may make any order it considers appropriate respecting the conduct of a proceeding under [the Class Proceedings Act, 1992] to ensure its fair and expeditious determination”, including imposing “such terms on the parties as it considers appropriate”. The supervising judge was equipped with the broad discretionary power of s. 12 of the Class Proceedings Act, 1992 during the settlement administration stage of the proceedings: see Canada (Attorney General) v. Fontaine, 2017 SCC 47, [2017] 2 S.C.R. 205, at para. 32; Bancroft-Snell v. Visa Canada Corp., 2016 ONCA 896, 133 O.R. (3d) 241, at para. 67. The order he made in respect of the initial appeal was within his authority to resolve the issue before him – to ensure that the Claims Administrator properly considered the documents the third-party filers, including CAC, had submitted in support of the claims of class members, including the additional documentation submitted during the appeal process.
[15] Finally, and contrary to the appellant’s submission, the process ordered by the supervising judge is not unfair. CAC had the opportunity to provide supporting documents for the claims it was advancing. It was required to do so as a result of the audit process, and did so again once the appeal of the rejection of some claims was commenced. The supervising judge required the Claims Administrator to consider all of these documents as part of the reconsideration process. This was a reasonable and practical solution. Requiring the Deficiency Process under s. 43 to be followed at this stage would provide CAC with an opportunity that other claimants did not receive, and would further delay the process for distribution of the settlement funds to eligible class members.
[16] For these reasons the appeal is dismissed. Costs to the respondent in the agreed amount of $7,500, inclusive of HST and disbursements.
“K. van Rensburg J.A.”
“A. Harvison Young J.A.”
“J. Copeland J.A.”