ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 10- CV-00413728-CP00
DATE: June 19, 2013
BETWEEN:
JO-ANNE BLAIR
Plaintiff
– and –
TORONTO COMMUNITY HOUSING CORPORATION and GREENWIN PROPERTY MANAGEMENT INCORPORATED
Defendants
- and –
JOHN/JANE DOE, STEPHEN VASSILEV, THE TORONTO BOARD OF HEALTH, CLAIMS PRO INC., HOUSING SERVICES INC., FORENSIC INVESTIGATIONS CANADA CARRYING ON BUSINESS AS MUSTANG SECURITY and 1507329 ONTARIO LTD. CARRYING ON BUSINESS AS J.S. SERVICES AND JAYA STAR SERVICES
Third Parties
M. Teplitsky, Q.C. and S. Sagle for the Plaintiff
Peter Lukesiwicz and Deborah Templer for the Defendant Toronto Community Housing Corporation
Sarah Pottle for the Defendant Greenwin Property Management Incorporated
Rivka Birkan for the Third Party Forensice Investigations Canada.
Proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6
HEARD: June 18, 2013
PERELL, J.
REASONS FOR DECISION
A. INTRODUCTION
[1] This is a motion in a certified class action under the Class Proceedings Act, 1992, S.O. 1992 for approval of a settlement, approval of Class Counsel’s fee, and for related ancillary relief. For the reasons that follow, I grant the motion.
B. FACTUAL AND PROCEDURAL BACKGROUND
[2] The Plaintiff Jo-Anne Blair was a tenant in an apartment building at 200 Wellesley Street East in Toronto where on September 24, 2010, there was a serious fire that damaged the personal property of many tenants and that caused the tenants to have to find temporary shelter until the building could be repaired.
[3] The apartment building was owned by the Defendant, Toronto Community Housing Corporation (“TCHC”) and operated by the Defendant Greenwin Property Management Incorporated. After the fire, the Defendant, TCHC, without admitting that it had been at fault offered a Compensation Plan to the tenants and after receiving independent legal advice about half of the tenants accepted the compensation offered by TCHC, which I understand to have an average value of approximately $4,000 per dwelling unit tenant. These tenants released their claims against TCHC, and they assigned to TCHC their claims against Greenwin.
[4] Ms. Blair, however, was not satisfied with the Compensation Plan. She retained the law firms of Shell Lawyers and Teplitsky, Colson LLP to commence a class action. She signed a Contingency Fee Retainer Agreement, and the law firms undertook to indemnify her for any adverse costs awards.
[5] On November 3, 2010, the day after the retainer agreement was executed, Class Counsel registered the internet domain name http://www.200wellesleyfire.ca. Thereafter, Class Counsel regularly communicated with Class Members using this website as one of the means of communication. As of June 4, 2013, the website had 31 posts providing information to class members including copies of court documents.
[6] Between November 2011 and May 2013, Class Counsel published and caused to be distributed by hand to residents of the Building and by mail to those residents who had moved, 17 newsletters. The newsletters were also published on the website.
[7] In addition to keeping class members up-to-date by newsletter and other postings on the webpage, Class Counsel would from time to time have “Town Hall Meetings” to which the class members were invited. Between January 2011 and May 2013, there were nine Town Hall Meetings.
[8] On November 5, 2010, the Statement of Claim was issued.
[9] By order dated July 18, 2011, after a strenuously opposed certification motion, I certified Ms. Blair’s action as a class action, and she became the representative plaintiff.
[10] Ms. Blair should be thanked for her dedication to the interests of the class members throughout the class proceeding from its inception to date.
[11] The class members were given notice of the certification decision and of their right to opt out. A summary of the Notice of Certification was published on Class Counsel’s website for the action in the following languages: Amharic, Arabic, Bengali, Croatian, Farsi, French, Hindi, Hungarian, Korean, Oromo, Pashto, Polish, Russian, Simplified Chinese, Somali, Spanish, Tagalog, Tamil, Tigrigna, Traditional Chinese, Urdu, and Vietnamese.
[12] On August 22, 2011, TCHC served its Statement of Defence and Crossclaim.
[13] On September 6, 2011, Greenwin served its Statement of Defence and Crossclaim and it commenced Third Party Claims.
[14] Class Counsel appreciated that for the prosecution or for the settlement of the action, they required relatively complete information about personal injuries, property loss, additional living expenses, and other information about the effect of the fire on potential class members. Accordingly, Class Counsel arranged interviews with individual Class Members to assist the class members in determining the nature and amount of their claims for compensation. One of the challenges for Class Counsel in this class action is that many of the class members were among our society’s more disadvantaged citizens with pre-existing health problems and disabilities and unfamiliarity with the legal system.
[15] Eleven interviewers were retained and trained to conduct probing interviews with Class Members. The interviewers were also provided with a 28-page interview intake form prepared by Class Counsel. The form was designed to guide the interview process and to facilitate the interviewer’s preparation of an interview summary. The contract interviewers worked for Class Counsel until the end of March, 2011. From that time, Shell Lawyers’ staff conducted interviews.
[16] In January 2011, Class Counsel retained National Fire Adjustment Co., Inc. (“NFA”), a professional fire adjuster company to perform property damage assessments for each class member who reported that they had suffered property loss as a result of the fire at the Building.
[17] From January 19, 2011 to May 2011, eight full-time NFA adjusters worked exclusively on the property assessments in connection with the Action. From May 2011 to the present day one full-time NFA adjuster, supported by two additional NFA staff members has worked exclusively on the property assessments in connection with the action. NFA conducted 168 detailed property loss assessments.
[18] There are 593 known class members who live in 333 apartments of the Building. Class Counsel have had contact with 93% of class members (554 people) from 92% of the apartments (305 apartments). Class Counsel has conducted interviews with 90% of class members (535 people) from 89% of the apartments (295 apartments).
[19] Beginning in April 2011, Class Counsel began to request medical reports from medical practitioners and hospitals who had treated Class members and whose reports were required to assess personal injury. To date, Class Counsel has received medical reports from medical practitioners and hospitals that support 123 personal injury claims.
[20] In 2011 and 2012, there were mediation sessions with Justice Strathy as mediator. The mediation sessions did not produce a settlement.
[21] On May 14, 2012, Class Counsel attended at the offices of counsel for TCHC for a full day to review TCHC’s Affidavit of Documents. On May 15, 2012 Class Counsel attended at the offices of counsel for Greenwin for a full day to review Greenwin’s Affidavit of Documents. In total Class Counsel reviewed, assessed and considered thousands of pages of documents produced by the Defendants and by the Third Parties.
[22] On May 28, 30, and 31, 2012, representatives of the Defendants were examined for discovery.
[23] Ms. Blair was examined for discovery on May 28, 2012.
[24] On February 21, 2013, the Trial record was delivered.
[25] In anticipation of a trial, Class Counsel retained experts reports from William A. Begal; Dr. Chava Finkler; David LeBlanc; and David Pruss.
[26] In late 2012, the parties agreed to further mediation with the assistance of former Associate Chief Justice J. Douglas Cunningham.
[27] On April 29-30, 2013, the parties attended a marathon mediation session with The Honourable Mr. Cunningham. The Representative Plaintiff and adjusters from NFA attended these mediation meetings. This session was successful, and the parties executed Minutes of Settlement in in Principle.
[28] It is Mediator Cunningham`s opinion that the Settlement achieved is in the best interests of the class.
[29] Class Counsel and counsel for the Defendants subsequently concluded formal Minutes of Settlement that have been signed by the Representative Plaintiff, the Defendants, and Housing Services Inc., the only Third Party Defendants defending the Main Action.
[30] On May 24, 2013, I approved the Notice of Proposed Class Action Settlement and directed that it be hand-delivered to the residents of 200 Wellesley Street East and mailed by regular mail to the non-residents at their last known addresses.
[31] I will use the Notice of Proposed Class Action settlement to describe the terms of the proposed settlement. The Notice states:
Terms of the Proposed Settlement
The Defendants have agreed to pay:
$5,500,000 for all claims, including for all personal injury (including psychological harm), property loss/damage, emotional upset, inconvenience, living expenses and lost income, of all Class Members as full and final satisfaction of all claims asserted in the Action (the “Claims Amount”). As is described further below, the lawyers for the Representative Plaintiff (“Class Counsel”) will request that the Court approve that a portion of the Claims Amount be paid in contribution towards legal fees; and
$1,400,000 as the full and final contribution of the Defendants to the legal fees and disbursements, including HST, including for all expenses related to the distribution of settlement funds to individual Class Members (the “Legal Fees and Disbursements Amount").
Class Counsel will ask the Court to approve a total of $1,150,000 as payment of all Class Counsel legal fees. Of this amount, $500,000 will come from the Legal Fees and Disbursements Amount and $650,000 will come from the Claims Amount. The Court must approve any legal fees before they are paid to Class Counsel.
The balance of the Claims Amount, namely $4,850,000, will be distributed by Class Counsel to Class Members.
Individual settlement amounts for each Class Member will be determined by Class Counsel subject to court approval and will be based on six categories of compensation:
Emotional Upset - a flat amount to each Class Member because of the September 24, 2010 fire at 200 Wellesley Street;
Inconvenience Loss - an amount per day to each Class Member related to the number of days reported to Class Counsel by the Class Member for displacement from their apartment because of the September 24, 2010 fire at 200 Wellesley Street, to a maximum number of days related to the location of the Class Member's apartment;
Property Loss an amount for property loss because of the September 24, 2010 fire at 200 Wellesley which will be a proportion of the total of each Class Member's property loss/damage assessment prepared by National Fire Adjuster (NFA) for Class Counsel, and with consideration of supporting corroborative evidence for claims which appear excessive in relation to the norm;
Personal Injury an amount for personal injury because of the September 24, 2010 fire at 200 Wellesley that conforms with one of three threshold criteria for personal injury as determined by Class Counsel and which is supported by physicians' medical reports;
Additional Living Expenses - receipted additional living expenses incurred when a Class Member was displaced from their apartment because of the September 24, 2010 fire at 200 Wellesley Street;
Employment/Income Loss - an amount supported by adequate third party documentation respecting employment/income loss because of the September 24, 2010 fire at 200 Wellesley Street;
The dollar amount to be paid to each Class Member for each category cannot be finalized until all additional claims documentation has been received by Class Counsel.
[32] Ms. Blair and Class Counsel both recommend the settlement.
[33] Class Counsel have compared the proposed settlement with the original TCHC Compensation Plan, and it is their opinion that: (a) Class Members with no property loss and no personal injury claim will recover more, on average, under the proposed Settlement than under the TCHC Plan; (b) Class Members with significant and/or total property loss will recover substantially more under the proposed Settlement than under the TCHC Plan; and (c) Class Members who have suffered personal injury loss, documented in medical reports procured and received by Class Counsel, will recover substantially more under the proposed Settlement than under the TCHC Plan.
[34] During the argument of the motion, Class Counsel explained the basis of their opinion that the proposed settlement was a substantial improvement from the original Compensation Plan. As noted above, approximately half of the tenants of the apartment complex participated in the Compensation Plan and approximately half of the tenants will participate in the proposed settlement if it is approved and thus rough comparisons were possible. The comparative analysis revealed that under the Compensation Plan, the average recovery for a residential unit was $4,000 and that under the settlement, after the deduction of Class Counsel’s contingency fees, the average recovery will be around $14,500 per unit.
[35] Assuming the settlement is approved, Class Counsel requests an Order establishing July 26, 2013 as the Deadline Date, in effect a Claims Bar date, for Class Members to deliver to Class Counsel any remaining documentation and information related to the losses they claim arising from the September 24, 2010 fire at the Building, after which date Class Counsel will not be required to accept or consider further claims-related material.
[36] After July 26, 2013, Class Counsel undertakes to complete all property loss assessments, and then prepare a Plan of Distribution for presentation to the Court for its approval. The Honourable Mr. Cunningham has been retained to assist in determining a fair distribution plan.
[37] Individual amounts for property loss will be assessed with reference to the property damage assessments conducted by NFA.
[38] The entirety of the Claims Amount will be distributed to Class Members. In the event some payments are not cashed/retrieved within six months following September 27, 2013, Class Counsel will propose as part of the Plan of Distribution for the Court's approval that any unclaimed amounts be paid in equal amounts to the following charitable organizations who provide emergency relief and related services to the poor and disadvantaged communities in Downtown Toronto: Lawyers Feed the Hungry; and Central Neighborhood House
[39] Class Counsel verily believes that the Settlement is fair, reasonable and in the best interests of Class Members and urges the Court to approve the Settlement.
[40] Save for one objector who spoke at the hearing, Yohannes Ghebrezghi, there was no objections to the settlement. Mr. Ghebrezghi`s objection, however, turned out to be a concern that his own claim has not been given and will not be given sufficient attention by Class Counsel. However, Mr. Ghebrezghi is one of the few tenants yet to be interviewed, and I encouraged him to meet with Class Counsel as soon as possible. Mr. Ghebrezghi did not question the quality of the settlement.
[41] Class Counsel asks that the Court approve a total of $1,150,000 as payment of all Class Counsel legal fees. Of this amount, Class Counsel proposes that $500,000 will come from the Legal Fees and Disbursements Amount ($1.4 million) and $650,000 will come from the Claims Amount ($5.4 million).
[42] The $1,150,000 total for Class Counsel’s fees represents 16.6% of the Total Settlement Amount and 20.9% of the Claims Amount. To date, all disbursements and expenses of any kind whatsoever have been borne by Class Counsel, save disbursements specifically related to the successful certification motion which were paid by the Defendants as costs from that Motion.
C. SETTLEMENT APPROVAL
[43] 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.
[44] 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, arm’s-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.
[45] In the case at bar, Class Counsel and Ms. Blair took on the challenge of bringing a class action when the Defendants, without admitting liability, had already offered a Compensation Plan that half of the tenants had accepted as fair and prompt compensation for their losses. With the Defendants continuing to not admit any liability for negligence, Class Counsel have succeeded in achieving a qualitatively better settlement.
[46] 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.
D. FEE APPROVAL
[47] 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.
[48] 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.
[49] Having regard to these various factors, Class Counsel’s fee request is fair and reasonable and I approve it.
E. CONCLUSION
[50] For the above reasons, this motion should be granted.
Perell, J.
Released: June 19, 2013
COURT FILE NO.: 10- CV-00413728-CP00
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JO-ANNE BLAIR
Plaintiff
‑ and ‑
TORONTO COMMUNITY HOUSING CORPORATION and GREENWIN PROPERTY MANAGEMENT INCORPORATED
Defendants
- and –
JOHN/JANE DOE, STEPHEN VASSILEV, THE TORONTO BOARD OF HEALTH, CLAIMS PRO INC., HOUSING SERVICES INC., FORENSIC INVESTIGATIONS CANADA CARRYING ON BUSINESS AS MUSTANG SECURITY and 1507329 ONTARIO LTD. CARRYING ON BUSINESS AS J.S. SERVICES AND JAYA STAR SERVICES
Third Parties
REASONS FOR DECISION
Perell, J.
Released: June 19, 2013