COURT FILE NO.: CV-11-426591CP DATE: 20160601 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

Counsel: Reider Mogerman for the Plaintiffs Vincent de l’Ėtoile for the Defendant Federation des caisses Desjardins du Québec Markus Kremer for the Defendant Bank of Nova Scotia Rob Kwinter for the Defendant Visa Canada Corporation David Kent for the Defendant MasterCard International Incorporated Mahmud Jamal for the Defendant Bank of Montreal Katherine L. Kay for the Defendant Canadian Imperial Bank of Commerce Paul J. Martin for the Defendant Royal Bank of Canada Christine Lonsdale for the Defendant Toronto-Dominion Bank David Outerbridge for the Defendant National Bank of Canada Inc.

Proceeding under the Class Proceedings Act, 1992

HEARD: June 1, 2016

PERELL, J.

REASONS FOR DECISION

A. INTRODUCTION

[1] On May 16, 2011, in Ontario, pursuant to the Class Proceedings Act, 1992, S.O. 1992, c.6, the Plaintiffs Jonathon Bancroft-Snell and 1739793 Ontario Inc. commenced a proposed class action against Visa Canada Corporation, MasterCard International Incorporated, 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. The Plaintiffs allege that the Defendants have conspired in Canada since March 2001 to fix, maintain, or increase or control Merchant Discount Fees, including Interchange Fees, paid by merchants who accepted payment by Visa or MasterCard credit cards.

[2] Similar class actions were commenced in British Columbia, Alberta, Saskatchewan, and Québec, by parties represented by the same lawyers acting for the Plaintiffs in the Ontario action; namely: (1) Branch MacMaster, LLP; (2) Camp Fiorante Matthews Mogerman LLP; and (3) Consumer Law Group.

[3] The other four actions are: (1) Coburn and Watson’s Metropolitan Home, dba “Metropolitan Home” (previously, Watson) v. Bank of America Corporation, SCBC No. VLC-S-S-112003 (Vancouver), case managed by Justice Weatherill; (2) Macaronies Hair Club and Laser Center Inc., Operating as Fuze Salon v. BofA Canada Bank, Action No. 1203-18531 (Edmonton), case managed by Associate Chief Justice Rooke; (3) Hello Baby Equipment Inc. v. BofA Canada Bank, QB No 133 of 2013 (Regina), case managed by Justice Ball; and (4) 9085-4886 Québec Inc. v. Visa Canada Corporation, Superior Court of Québec No. 500-06-000549-101 (Montreal), case managed by Justice Corriveau.

[4] In this motion, the Plaintiffs seek: (1) approval of a settlement reached with Federation des caisses Desjardins du Québec (“Desjardins”), one of the twelve Defendants; and (2) approval of Class Counsel’s fees of $2,143,307.30 and disbursements of $367,107.61 plus applicable taxes.

[5] Previously, the action was certified for settlement purposes as against Desjardins and a notice plan advising Class Members of the settlement approval hearing was approved.

B. FACTUAL BACKGROUND

[6] This is the fourth settlement in this class action. Previously, settlements were approved with the Defendants Bank of America ($7.75 million), Citigroup ($1.63 million) and Capital One ($4.25 million).

[7] The background facts to those settlements and to the current settlement, which has been reached with the Defendant Desjardins, are set out in my Reasons for Decision approving the settlements with Bank of America, Citigroup, and Capital One. I shall not repeat those facts, but I shall simply incorporate them by reference. See Bancroft-Snell v. Visa Canada Corporation, 2015 ONSC 7275 and 2015 ONSC 7411.

[8] On December 23, 2015, following arm’s-length negotiations, the settlement was reached with Desjardins. The settlement is subject to the approval of each of the courts of British Columbia, Alberta, Saskatchewan, Ontario, and Québec. Approvals have already been granted in British Columbia and Québec.

[9] The key terms of the settlement are that: (a) Desjardins agrees to pay $9.9 million for the benefit of Class Members; (b) Desjardins agrees to pay up to a maximum of $50,000 for expenses in publishing notices of the certification and of the settlement hearing; (c) Desjardins agrees to pay Class Counsel’s fees and disbursements and applicable taxes; and (d) Desjardins agrees to co-operate with and produce documents to the Plaintiffs to assist them in their prosecution of the class action against the non-settling Defendants.

[10] The amount of the previous settlements was $13.63 million. Apart from the payment of counsel fees and disbursements, the settlement proceeds from those settlements were not distributed to Class Members but are being held in trust for a subsequent distribution. The same approach is proposed for the immediate settlement with Desjardins, if the settlement is approved by the court; i.e., the Class Members will await further developments before there is a distribution to them.

[11] Class Counsel and the Representative Plaintiffs recommend the settlement. No Class Member has delivered an objection to the settlement or to the request for payment of Class Counsel’s fees.

C. SETTLEMENT APPROVAL

[12] 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 ONSC 4200 at para. 57; Farkas v. Sunnybrook and Women’s Health Sciences Centre, 2009 ONSC 4201 at para. 43; Kidd v. Canada Life Assurance Company, 2013 ONSC 1868.

[13] 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 the 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, 2009 ONSC 4200, supra, at para. 59; Corless v. KPMG LLP, 2008 ONSC 4202 at para. 38; Farkas v. Sunnybrook and Women’s Health Sciences Centre, 2009 ONSC 4201, supra, at para. 45; Kidd v. Canada Life Assurance Company, 2013 ONSC 1868, supra.

[14] In determining whether to approve a settlement, the court, without making findings of fact on the merits of the litigation, examines the fairness and reasonableness of the proposed settlement and whether it is in the best interests of the class as a whole having regard to the claims and defences in the litigation and any objections raised to the settlement: Baxter v. Canada (Attorney General) (2006), 83 O.R. (3d) 481 (S.C.J.) at para. 10. An objective and rational assessment of the pros and cons of the settlement is required: Al-Harazi v. Quizno’s Canada Restaurant Corp. (2007), 49 C.P.C. (6th) 191 (Ont. S.C.J.) at para. 23.

[15] The case law establishes that a settlement must fall within a zone of reasonableness. Reasonableness allows for a range of possible resolutions and is an objective standard that allows for variation depending upon the subject-matter of the litigation and the nature of the damages for which the settlement is to provide compensation: Parsons v. Canadian Red Cross Society at para. 70; Dabbs v. Sun Life Assurance Company of Canada (1998), 40 O.R. (3d) 429 (Gen. Div.). A settlement does not have to be perfect, nor is it necessary for a settlement to treat everybody equally: Fraser v. Falconbridge Ltd. (2002), 24 CPC (5th) 396 at para. 13; McCarthy v. Canadian Red Cross Society (2007), 158 ACWS (3d) 12 (Ont. S.C.J.) at para. 17.

[16] The design of the approval process requires the court to carefully scrutinize any proposed settlement. The design of the approval process: (a) requires the proponents of the settlement to justify it; (b) provides an opportunity for those affected by the settlement to be heard; and (c) requires the court to evaluate the settlement and make a formal order. This design is meant both to deter bad settlements and also to ensure good ones that achieve the goals of the class action regime; namely: access to justice, behaviour modification, and judicial economy.

[17] In my opinion, having regard to the various factors used to determine whether to approve a settlement, the Settlement Agreement with Desjardins should be approved.

D. APPROVAL OF CLASS COUNSEL’S FEE

[18] 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] O.J. No. 2374 (S.C.J.) at para. 13; Smith v. National Money Mart, 2010 ONSC 1334 at paras. 19-20, varied 2011 ONCA 233; Fischer v. I.G. Investment Management Ltd., 2010 ONSC 6000 at para. 25.

[19] 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; and (j) the opportunity cost to class counsel in the expenditure of time in pursuit of the litigation and settlement: Smith v. National Money Mart, 2010 ONSC 1334, supra, at paras. 19-20; Fischer v. I.G. Investment Management Ltd., 2010 ONSC 6000, supra, at para. 28.

[20] In my opinion, having regard to the various factors used to determine whether to approve the fees of class counsel, the fee request should be approved.

E. CONCLUSION

[21] For the above reasons, I approve the settlement, and I approve Class Counsel’s fee request.

Perell, J.

Released: June 1, 2016