ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-11-426591CP
DATE: 20151126

BETWEEN:

JONATHON BANCROFT-SNELL and 1739793 ONTARIO INC.

Plaintiffs

– and –

VISA CANADA CORPORATION, MASTERCARD INTERNATIONAL INCORPORATED, BANK OF AMERICA CORPORATION, BANK OF MONTREAL, BANK OF NOVA SCOTIA, CANADIAN IMPERIAL BANK OF COMMERCE, CAPITAL ONE FINANCIAL CORPORATION, CITIGROUP INC., FEDERATION DES CAISSES DESJARDINS DU QUÉBEC, NATIONAL BANK OF CANADA TORONTO INC., ROYAL BANK OF CANADA, and -DOMINION BANK

Defendants

Reidar Mogerman and Jen Winstanley for the Plaintiffs

Michael Eizenga and Chris McKenna for the Defendant Bank of America Corporation
Mike Adlem for the Defendant Citigroup Inc.
Markus Kremer for the Defendant Bank of Nova Scotia
Rob Kwinter for the Defendant Visa Canada Corporation
James Musgrove for the Defendant MasterCard International Incorporated
Vincent de l’Ėtoile for the Defendant Federation des caisses Desjardins du Québec
David Rankin for the Defendant Bank of Montreal
Daniel G. Cohen for the Defendant Capital One Corporation
Katherine L. Kay for the Defendant Canadian Imperial Bank of Commerce
Paul J. Martin for the Defendant Royal Bank of Canada
Paul Morrison and Christine Lonsdale for the Defendant Toronto-Dominion Bank
William McNamara for the Defendant National Bank of Canada Inc.
Edward Babin for the Objector, Walmart

Proceeding under the Class Proceedings Act, 1992

HEARD: November 19, 2015

PERELL, J.

REASONS FOR DECISION

[1] In Bancroft-Snell v. Visa Canada Corporation, 2015 ONSC 7275, which was released on November 23, 2015, I made an award approving Class Counsel’s fees for three settlements in an action under the Class Proceedings Act, 1992, S.O. 1992, c. 6.

[2] On November 25, 2015, I received a letter from Class Counsel seeking clarification about several matters in my decision. The letter stated:

As we begin to prepare a formal order, we write to respectfully ask for clarification of certain issues arising out of the court’s Reasons for Decision in 2015 ONSC 7275.

The Fee Award

Class counsel requested a fee of $3,407,500.00 (25% of the settlement amounts), plus disbursements of $384,571.95 and applicable taxes on fees and disbursements.

In paragraphs 4 and 61 of the reasons, the Court approves class counsel fees and disbursements of $3,384,571.95, which is described in paragraph 61 as follows:

[61] The award of $3,384,571.95 includes full recovery of disbursements, including the expense of the consulting law firms but reduces Class Counsel Fee by 10%.

The figure of $3,384,571.95 appears to be derived from the sum of $3,000,000 in fees plus the hard disbursements of $384,571.95. However, $3,000,000 [?sic] is not a 10% reduction to the requested fee award of $3,407,500. Rather it is a 12% reduction.

Alternatively, was the court’s intention reduce the fee award by the $400,000 ostensibly required to be paid to Mr. Merchant at this stage? This is a possible interpretation suggested by paragraph 64 of the reasons, which indicates that the fee is being reduced by the unapproved amount.

We look forward to receiving clarification on this issue so that we may accurately prepare the order.

Taxes

The original motion sought approval of fees and disbursements, plus applicable taxes. Branch MacMaster and CFM will be subject to taxes of 12% (5% GST + 7% PST) on their fees, and the Quebec firm Consumer Law Group will be subject to taxes of 14.975%.

The reasons approve Class Counsel’s fees and disbursements of $3,384,571.95, “all inclusive”. The reasons do not address taxes on the fees and disbursements.

We are assuming that the court has approved applicable taxes in addition to the amount of approved fees and disbursements, but wanted to double check before we submit the proposed order.

The Consulting Law Firms

Paragraph 61 of the reasons suggests that the award includes “full recovery of disbursements, including the expense of the consulting law firms”. Further, the court stated at paragraph 62 that the proper treatment of these amounts was as a disbursement. However, the disbursement figure of $384,571.95 only includes the hard disbursements incurred by all firms, and not any additional amount for the consulting firms’ time incurred. The consulting firms reported time incurred was noted at paragraph 7 of the reasons as follows:

RKMC $ 509,828.32
Kirby McInerney $ 123,353.52
JSS $ 16,827.00
Total $ 650,007.84

The fee application does not include these amounts as disbursements. To do so would increase the total amount paid by the class. Rather, class counsel have asked for a fee of 25% of the settlement amounts and will compensate the consultants from the fee that was awarded. This reduces the total amount paid by the class as well as the amount received in fees by class counsel.

We wanted to confirm that the court intended to award the amount stated (as modified by the discussion above if necessary) and not to include consultants’ fees as an additional disbursement beyond the $384,571.95 in hard disbursements.

The Disclosure

Finally, we wish to address a point at paragraph 31 of the judgment where the court states “I suspect that Justice Martin insisted that the provision be included in the Fee Sharing Agreement that the agreement be disclosed”. In fact it was class counsel that insisted on this term, for precisely the reasons that eventually occurred; i.e., that the court would want to see the agreement flowing from the formal Judicial Dispute Resolution process before Justice Martin pursuant to the Alberta Rules of Court. We are prepared to provide affidavit material from J.J. Camp, Q.C. to this effect, or to seek the approval of Madam Justice Martin to speak to the Court to confirm this point, in light of the effect that the mistaken suspicion may have on the reputation of our firms. We note that the source of this provision was not a question posed to class counsel during the hearing.

We thank the court in advance for these clarifications, and would be pleased to participate in a case management conference if this would be helpful.

Yours truly,

Camp Fiorante Matthews Mogerman

[3] As appears, the letter raises four issues for which clarification is requested; namely: (1) the Fee Award; (2) the Consulting Law Firm; (3) Taxes; and (4) the Disclosure.

[4] Dealing with the Fee Award, in its factum, Class Counsel requested a Counsel Fee of $3,407,500 and disbursements of $384,571.95. The counsel fee of $3,407,500 included $650,007.84, of what in truth was a disbursement to the Consulting Law Firms.

[5] I awarded $3,384,571.95 for Counsel Fees, which I described in my reasons as full recovery of disbursements including the expense of the consulting law firms but reducing Class Counsel’s Fee by 10%.

[6] Because of Class Counsel’s inquiry, I acknowledge that I made an arithmetical error in calculating the fee award. The award I intend is $3,451,321.95. This sum is calculated by reducing Class Counsel’s claimed Fee of $3,407,500 by 10%; i.e., to $3,066,750 and then adding the disbursements to arrive at $3,451,321.95.

[7] I did not intend to reduce the Counsel Fee by the $400,000 plus disbursements and taxes that had been earmarked for the Merchant Law Group. I simply intended to reduce Class Counsel’s Fee, as it had been requested, by 10%. The deduction was for legal services that in my view were not earned. I ordered that no fees be paid to the Merchant Law Group for different reasons, including the fact that they were not authorized or earned for this class action.

[8] Turning to the Consulting Law Firm issue, the consulting law firms are to be paid from the $3,451,321.95. In the future, consulting law firm fees should be claimed as disbursements. I could achieve my intended result by reducing the $3,451,321.95 for Counsel Fee by $650,007.84 and then increasing the disbursements by the commensurate sum, but that is why I simply said in my Reasons that the approved Counsel Fee included the consultants’ fees and the other disbursements.

[9] As for taxes, I confirm that I approve applicable taxes in addition to the amount of approved fees and disbursements.

[10] Finally, turning to disclosure, I am prepared to accept that it was Class Counsel that insisted on the term in the Fee Sharing Agreement that it could be disclosed to the Court. However, the fact remains that while the existence of the Agreement was disclosed to the Court, the substance of the Agreement was not. I recessed court in order to have delivered to me a copy of the Agreement by email from Vancouver.

[11] I regard the failure to fully disclose the Fee Sharing Agreement as a step taken in what Class Counsel thought was in the best interests of the Class, but, as I explained in my Reasons, it was, nevertheless, a regrettable mistake.

Perell, J.

Released: November 26, 2015

COURT FILE NO.: CV-11-426591CP
DATE: 20151126

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

JONATHON BANCROFT-SNELL and 1739793 ONTARIO INC.

Plaintiffs

– and –

VISA CANADA CORPORATION, MASTERCARD INTERNATIONAL INCORPORATED, BANK OF AMERICA CORPORATION, BANK OF MONTREAL, BANK OF NOVA SCOTIA, CANADIAN IMPERIAL BANK OF COMMERCE, CAPITAL ONE FINANCIAL CORPORATION, CITIGROUP INC., FEDERATION DES CAISSES DESJARDINS DU QUÉBEC, NATIONAL BANK OF CANADA INC., ROYAL BANK OF CANADA, and TORONTO-DOMINION BANK

Defendants

REASONS FOR DECISION

PERELL J.

Released: November 26, 2015