Kidd et al. v. The Canada Life Assurance Company et al.

[Indexed as: Kidd v. Canada Life Assurance Co.]

Ontario Reports

Ontario Superior Court of Justice,

Perell J.

March 28, 2013

115 O.R. (3d) 256 | 2013 ONSC 1868

Case Summary

Civil procedure — Class proceedings — Settlement — Approval — Approved settlement in class action turning out to be not as favourable for one group of claimants as had been anticipated — Parties negotiating amendment to settlement and moving for approval of amendment — Motion dismissed — Court having jurisdiction under s. 29(2) of Class Proceedings Act to approve or deny approval of amendment to settlement — Amended settlement unfair substantively, procedurally, circumstantially and institutionally — Approval of unfair settlement not appropriate merely because it is best monetary choice in double bind — Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 29(2).

The plaintiffs brought a class action against the defendant for a declaration as to the ownership of pension plan surpluses and for damages for breach of the pension plan. The parties entered into a settlement which was approved by the court. Almost immediately, the parties discovered that their assumptions or predictions about the value of the surplus to be distributed to one group of claimants had been wrong, so that the settlement was not as favourable to that group as had been anticipated. The parties negotiated an amendment to the settlement and moved for approval of the amended settlement. Numerous class members from the affected group of claimants objected to the amended settlement and asked the court not to approve it, despite the fact that approving the amended settlement was monetarily better than the alternative of not approving it.

Held, the motion should be dismissed.

In addition to considering substantive and procedural fairness, a court that is asked to approve a settlement should also consider circumstantial and institutional fairness. Circumstantial fairness means the fairness of the settlement to the parties and the class members in their particular circumstances, and institutional fairness means the fairness of the settlement from the perspective of a robust notion of access to justice that includes an outcome that objectively should satisfy the class members' entitlement to justice for their grievances. The amended settlement was unfair substantively, procedurally, circumstantially and institutionally. The amended agreement was not substantively fair as class counsel and the defendant did very little to share the pain of the affected group of claimants. The minimum standard of procedural fairness was met as class members received adequate notice of the terms of the amended settlement and had an opportunity to voice support or opposition and to make representations at the fairness hearing. However, that minimum standard was not good enough for the circumstances of the amended settlement. Having regard to such things as the unprecedented campaign for approval of a settlement agreement and the fact that it was the position of both sides that the misfortune of false estimates was a matter of fact and forces beyond their control, the objectors needed something more than the minimum standard to provide them with procedural fairness. The proponents of the amended settlement ought to have paid for a lawyer to provide the objectors with independent legal representation. The amended settlement was not circumstantially fair as class counsel and the defendant did not share the pain caused by the original false assumptions and predictions and as [page257] there was fierce opposition to the amended settlement. In the circumstances of this case, the views of the objectors, who believed the amended settlement to be unfair, were entitled to considerable weight. From the perspective of institutional fairness, the best that could be said for the amended settlement was that it was monetarily better than the approved settlement, which was fair when it was approved, but which had since become unfair. However, a court should not approve an unfair settlement because it is the best monetary choice in a double bind.

Cases referred to

Berry v. Pulley (2011), 106 O.R. (3d) 123, [2011] O.J. No. 927, 2011 ONSC 1378 (S.C.J.); Burnett Estate v. St. Jude Medical Inc., [2009] B.C.J. No. 2403, 2009 BCSC 1651; Epstein v. First Marathon Inc., 2000 22797 (ON SC), [2000] O.J. No. 452, [2000] O.T.C. 109, 2 B.L.R. (3d) 30, 41 C.P.C. (4th) 159, 94 A.C.W.S. (3d) 1062 (S.C.J.); Kidd v. Canada Life Assurance Co., [2011] O.J. No. 4751, 2011 ONSC 6324, 22 C.P.C. (7th) 156, 93 C.C.P.B. 211, 207 A.C.W.S. (3d) 406 (S.C.J.); Kidd v. Canada Life Assurance Co., [2012] O.J. No. 506, 2012 ONSC 740, 95 C.C.P.B. 73, 19 C.P.C. (7th) 378, 211 A.C.W.S. (3d) 787 (S.C.J.); Lavier v. MyTravel Canada Inc., [2013] O.J. No. 674, 2013 ONCA 92; M.G. v. Associated Selwyn House, [2008] Q.J. No. 7721, 2008 QCCS 3695, J.E. 2008-1735, [2008] R.J.Q. 2239, EYB 2008-145897 (Sup. Ct.); M.G. v. Associated Selwyn House, [2009] Q.J. No. 19320, 2009 QCCS 989 (Sup. Ct.); Nolan v. Kerry (Canada) Inc., [2009] 2 S.C.R. 678, [2009] S.C.J. No. 39, 2009 SCC 39, 309 D.L.R. (4th) 513, EYB 2009-162383, J.E. 2009-1510, 391 N.R. 234, 49 E.T.R. (3d) 159, 76 C.C.P.B. 1, 76 C.C.E.L. (3d) 55, 92 Admin. L.R. (4th) 203, 253 O.A.C. 256, 179 A.C.W.S. (3d) 1202; Saunders v. Vautier (1841), Cr. & Ph. 240, 41 E.R. 482, [1835-1842] All E.R. Rep. 58 (L.C.C.)

Statutes referred to

Class Proceedings Act, 1992, S.O. 1992, c. 6 [as am.], ss. 12, 29(2)

Pension Benefits Act, R.S.O. 1990, c. P.8 [as am.]

Variation of Trusts Act, R.S.O. 1990, c. V.1 [as am.]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 59.06(2)(d)

Authorities referred to

Jones, Craig, Theory of Class Actions (Toronto: Irwin Law, 2003)

Kalajdzic, Jasminka, Access to Justice for the Masses? A Critical Analysis of Class Actions in Ontario (LL.M. Thesis: University of Toronto, 2009)

Marcus, Stanley, ed., Manual for Complex Litigation, Fourth (Washington, D.C.: Federal Judicial Centre, 2004)

Piché, Catherine, Fairness in Class Action Settlements (Toronto: Carswell, 2011)

Rothstein, Barbara J., and Thomas E. Willging, Managing Class Action Litigation: A Pocket Guide for Judges, 2nd ed. (Washington, D.C.: Federal Judicial Center, 2009)

Watson, Gary, "Settlement Approval — The Most Difficult and Problematic Area of Class Action Practice" (NJI Conference on Class Actions, 2008)

Motion for the approval of an amended settlement in a class action.

Mark Zigler and Clio M. Godkewitsch, for plaintiffs David Kidd, Alexander Harvey, Jean Paul Marentette, Susan Henderson and Lin Yeomans.

Darrell Brown, for plaintiffs Garry C. Yip and Louie Nuspl.

Jeffrey W. Galway and Doug Rienzo, for defendant Canada Life Assurance Company.

John C. Field, for defendants A.P. Symons, D. Allen Loney and James R. Grant.

PERELL J.: —

I. Introduction

[1] In this class action, under the Class Proceedings Act, 1992, S.O. 1992, c. 6 ("CPA"), the court has already approved a settlement. I shall refer to that settlement as the "Approved Settlement".

[2] This is a motion, and the moving parties seek the court's approve for an amendment to the Approved Settlement. I shall refer to the amendment as the "Amended Settlement".

[3] On a motion to approve a class action settlement, the court's only choices are to approve or to reject the settlement using the test of whether the proposed settlement is fair, reasonable and in the best interests of the class members. The court does not have the choice of fixing or revising the settlement to make it fair, reasonable or in the best interests of the class members. The court's only choices are to approve or to not approve the proposed settlement.

[4] Most unfortunately, in the case at bar, these choices of approval or disapproval present the court with a double bind, a choice between unpleasant and distressing alternatives. As the discussion below will reveal, the circumstances of the case at bar are such that the court is being asked to make a choice between two courses where neither course is substantively, procedurally, circumstantially or institutionally fair to the class members.

[5] As I will detail below, in this class action, the plaintiffs sued Canada Life Assurance Company for a declaration as to the ownership of pension plan surpluses and for damages for breach of the Pension Plan. In the class action, it was alleged that Canada Life employees owned any surplus in their Pension Plan and that Canada Life had wrongfully charged administrative expenses to the Pension Plan. There were also claims for partial wind-ups of the Pension Plan.

... (continues exactly as provided through paragraph [179])

VI. Conclusion

[178] For the above reasons, I dismiss the motion.

[179] There should be no order as to costs.

Motion dismissed.

End of Document