ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 06-CV-310529CP
DATE: 2012-09-19

BETWEEN:

THEADOSHIA MONCKTON
Plaintiff

– and –

C.B.S. INTERACTIVE MULTIMEDIA INC., CARRYING ON BUSINESS AS CANADIAN BUSINESS COLLEGE, CANADIAN BUSINESS SCHOOL, INC., CARRYING ON BUSINESS AS CANADIAN BUSINESS COLLEGE, MAZHER JAFFERY AND ROSELY CALAPINI
Defendants

J. Adam Dewar, for the Plaintiff

Rinku Deswal, for the Defendants

HEARD: September 14, 2012

REASONS FOR DECISION

PERELL, J.

A. INTRODUCTION

[ 1 ] This is a small class action. The certified class is composed of 19 former students of the Dental Hygiene Program formerly offered by the Defendant, Canadian Business College (“CBC”). The Representative Plaintiff is Theadoshia Monckton. Ms. Monckton moves for an order approving the settlement agreement signed by the parties on August 30, 2012 as being reasonable, fair and in the best interests of the Class. In addition to some ancillary relief associated with the distribution of the settlement proceeds, she also seeks approval of a contribution to her costs of this action payable to Class Counsel by the Defendants in the amount of $60,000.

[ 2 ] For the reasons that follow, I grant the relief requested.

B. FACTUAL AND PROCEDURAL BACKGROUND

[ 3 ] This action was commenced in May 2006. The current Representative Plaintiff, Ms. Monckton and the other Class Members’ had enrolled in the Dental Hygiene Program offered by the CBC. In the action, it was alleged that the Defendants failed to fully advise the Class Members of the risks associated with the Program’s lack of accreditation, which meant that Class Members faced delays in their ability to write the exam necessary to become a registered dental hygienist. It was alleged that the Defendants had breached the Consumer Protection Act, 2002. The Defendants denied and continue to deny liability.

[ 4 ] The certification motion was contested. Argument proceeded over four days followed by written submissions and a number of re-attendances. On January 22, 2008, Justice Hoy conditionally certified the action, subject to the appointment of a plaintiff with a valid claim under the Consumer Protection Act, 2002.

[ 5 ] The Defendants opposed the substitution of Ms. Monckton as Representative Plaintiff, but her substitution was approved by Justice Hoy by order dated August 29, 2008, and this action was certified as a class proceeding without qualification.

[ 6 ] The Class consists of 19 members. Nine of the Class Members graduated from the Program. Ten Class Members withdrew from the Program before graduation.

[ 7 ] Two judges presided over medication sessions to settle the action. The first mediation (conducted before the certification motion) was held before Justice Nordheimer in 2007. The second mediation (conducted after certification) was held before Justice Campbell in 2010. Neither mediation resulted in a settlement. At both mediations, the Defendants were not prepared to pay any amounts to Class Members to settle this action.

[ 8 ] The action continued until recently, when there were intense settlement negotiations. A settlement was reached. The key terms of the proposed settlement are as follows:

• The Defendants agree to pay to the 19 (now 18) Class Members $115,000 (minus the statutory 10% levy imposed by the Class Action Fund of the Ontario Law Foundation amounting to $11,500) to be divided as follows:

o Withdrawn Class Members: Class Members who withdrew from the Program after paying partial tuition will be reimbursed the amount of money they paid to the CBC;

o Withdrawn and Graduated Class Member: the monetary balance remaining following the reimbursement to Withdrawn Class Members will be divided into 18 equal shares and distributed to all class members.

• Distribution of Unclaimed Amounts - If, after reasonable attempts by Class Counsel some Class Members cannot be located, each member’s entitlement will be collected as being an unclaimed amount. Those unclaimed amounts will be divided equally among the balance of the Class who were located; and,

• Costs Contribution - The Defendants agree to make a contribution to the Plaintiff’s costs in the amount of $60,000.

[ 9 ] One Class Member has advised Class Counsel that she will not accept any compensation because she had already received a partial refund from the Defendant. Accordingly, Ms. Monckton and Class Counsel proposed to divide this share among the 18 remaining Class Members. They seek a Direction from the Court authorizing this distribution.

[ 10 ] Ms. Monckton and Class Counsel support the Settlement Agreement, and their opinion is that it is a realistic and reasonable compromise that balances the certainty of compensation for the Class Members today against the prospect of an uncertain award, or potential loss at trial.

[ 11 ] Class Counsel have canvassed the views of the Class Members and confirmed that the majority of the Class support or do not object to the proposed settlement. Only one Class Member formally objected to the proposed settlement. Her objection is that Withdrawn Class Members receive a tuition refund from the Withdrawn Class Members Fund and are entitled to additional compensation from the Withdrawn and Graduated Class Members Fund. In other words, she believes that some class members have been overcompensated.

[ 12 ] Over the last 6 years, Class Counsel have incurred over $500,000 in prosecuting this action on behalf of the Plaintiff and the Class. Class Counsel has incurred $12,500 in disbursements. Pursuant to the retainer agreement with Ms. Monckton, Class Counsel would be entitled to receive either a multiplier on its base fee or 25% of any recovery made by the class after certification. Class Counsel are not seeking to enforce the retainer agreement.

[ 13 ] The Settlement Agreement provides that Class Counsel are entitled to $47,126.97 from the Defendants’ $60,000 costs contribution, with the remaining $12,873.03 being to the Ontario Law Foundation as reimbursement for previously funded disbursements. Approximately $6,100 of that $47,126.67 will be payable as GST, leaving Class Counsel with approximately $41,000 in net fee contribution.

[ 14 ] Ms. Monckton approves of the costs contribution.

C. DISCUSSION

[ 15 ] Section 29(2) of the Class Proceedings Act , 1992 provides that a settlement of a class proceeding is not binding unless approved by the court. To approve a settlement of a class proceeding, the court must find that in all the circumstances the settlement is fair, reasonable, and in the best interests of the class: Fantl v. Transamerica Life Canada , [2009] O.J. No. 3366 (S.C.J.) at para 57 ; Farkas v. Sunnybrook and Women’s Health Sciences Centre , [2009] O.J. No. 3533 (S.C.J.), at para. 43 .

[ 16 ] In determining whether a settlement is reasonable and in the best interests of the class the following factors may be considered: (a) the likelihood of recovery or likelihood of success; (b) the amount and nature of discovery, evidence or investigation; (c) the proposed settlement terms and conditions; (d) the recommendation and experience of counsel; (e) the future expense and likely duration of litigation; (f) the number of objectors and nature of objections; (g) the presence of good faith, arms-length bargaining and the absence of collusion; (h) the information conveying to the court the dynamics of, and the positions taken by the parties during the negotiations; and, (i) the nature of communications by counsel and the representative plaintiff with class members during the litigation. See: Fantl v. Transamerica Life Canada , supra at para 59; Corless v. KPMG LLP , [2008] O.J. No. 3092 (S.C.J.), at para. 38 ; Farkas v. Sunnybrook and Women’s Health Sciences Centre , supra at para. 45.

[ 17 ] Although one member objects to the allocation between Class Members, in my opinion, the allocation is fair and rational and recognizes that those Class Members who did not withdraw received some benefit from completing the course.

[ 18 ] In the case at bar, the Settlement Agreement is the product of six years of litigation that encompassed a hard fought certification motion, the disclosure of a relatively large amount of evidence, two judicial mediations, and extensive negotiations. In my opinion, having regard to the various criteria set out above, the outcome of this class action is fair, reasonable, and in the best interests of the Class Members.

[ 19 ] Turning to the matter of Class Counsel’s fee request, the fairness and reasonableness of the fee awarded in respect of class proceedings is to be determined in light of the risk undertaken by the lawyer in conducting the litigation and the degree of success or result achieved: Parsons v. Canadian Red Cross Society , 2000 22386 (ON SC) , [2000] O.J. No. 2374 (S.C.J.), at para 13 ; Smith v. National Money Mart , 2010 ONSC 1334 , [2010] O.J. No. 873 (S.C.J), at paras 19-20 ; Fischer v. I.G. Investment Management Ltd. , [2010] O.J. No. 5649 (S.C.J.), at para 25 .

[ 20 ] Factors relevant in assessing the reasonableness of the fees of class counsel include: (a) the factual and legal complexities of the matters dealt with; (b) the risk undertaken, including the risk that the matter might not be certified; (c) the degree of responsibility assumed by class counsel; (d) the monetary value of the matters in issue; (e) the importance of the matter to the class; (f) the degree of skill and competence demonstrated by class counsel; (g) the results achieved; (h) the ability of the class to pay; (i) the expectations of the class as to the amount of the fees; (j) the opportunity cost to class counsel in the expenditure of time in pursuit of the litigation and settlement: Smith v. National Money Mart , supra , at paras. 19-20 ; Fischer v. I.G. Investment Management Ltd. , supra, at para 28.

[ 21 ] In the case at bar, Class Counsel will not recover its fees, let alone any premium on its fees in this action. The notional multiplier amounts to less than 0.1.

[ 22 ] In my opinion, Class Counsel should be commended for taking on this small class action. It provided access to justice for the Class Members and a fair and reasonable settlement. The fee request should be approved.

D. CONCLUSION

[ 23 ] For the above reason, Ms. Monckton’s motion is granted.

[ 24 ] Order accordingly.

Perell J.

Released: September 19, 2012

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

THEADOSHIA MONCKTON Plaintiff – and – C.B.S. INTERACTIVE MULTIMEDIA INC., CARRYING ON BUSINESS AS CANADIAN BUSINESS COLLEGE, CANADIAN BUSINESS SCHOOL, INC., CARRYING ON BUSINESS AS CANADIAN BUSINESS COLLEGE, MAZHER JAFFERY AND ROSELY CALAPINI Defendants

REASONS FOR JUDGMENT

Perell, J.

Released: September 19, 2012