Emmanuel Village Residence Inc. v. Ontario (Attorney General), 2016 ONSC 7107
Court File and Parties
CITATION: Emmanuel Village Residence Inc. v. Ontario (Attorney General), 2016 ONSC 7107
FILE NO.: CV-16-11424-00CL
DATE: 20161121
SUPERIOR COURT OF JUSTICE – ONTARIO
COMMERCIAL LIST
BETWEEN:
EMMANUEL VILLAGE RESIDENCE INC.
Applicant
- and -
ATTORNEY GENERAL OF ONTARIO
Applicant
- and -
1250 WEBER STREET EAST, KITCHENER, ONTARIO OR THE PROCEEDS OF THE SALE THEREOF (IN REM)
Respondent
BEFORE: Newbould J.
COUNSEL: Jennifer A. Whincup and Bruce Darlington, for the applicant Emmanuel Village Residence Inc.
Ronald Carr, Gary Valiquette and Jennifer Malabar, for the Attorney General of Ontario
Leanne M. Williams, for BDO Canada Inc. the receiver.
HEARD: September 26, 2016
Endorsement
[1] Emmanuel Village Residence Inc. (“EVR”) has applied for approval of the fees of its counsel, DLA Piper (Canada) LLP (“DLA”) and Madorin, Snyder LLP (“Madorin Snyder”). A history of this matter is contained in my endorsement of September 12, 2016.
[2] So far as the work of the two law firms is concerned, I stated in my earlier endorsement in which I authorized the administration charge to be increased from $350,000 to $700,000:
[38] There does not appear to be any unwarranted duplication of roles. Madorin, Snyder LLP is local, Kitchener-based corporate counsel to EVR and has been primarily involved in dealing with transactional issues throughout the sales process, including reviewing and responding to letters of intent, engaging in negotiations related to the sale agreement, overseeing due diligence by the purchaser, and addressing RHRA licence extension issues. DLA Piper (Canada) LLP of Toronto has primarily been involved in the receivership application, the approval of the sale and litigation issues flowing from these proceedings.
[3] The AGO takes the position that the fees of the lawyers covered by the administration charge can only relate to the receivership proceedings and not to the forfeiture proceedings taken by the AGO. The AGO says that a review of the material filed indicates that a significant portion of the time spent by the law firms was spent in relation to the forfeiture proceedings, and that payment to the law firms out of the administration charge should be restricted to work for services rendered only in the receivership proceeding. No particulars of any kind are provided by the AGO as to what it says was work done by the law firms in relation to the forfeiture proceedings.
[4] I agree with the law firms that the distinction sought to be made by the AGO in this case is artificial. If the law firms did work that could only be categorized as work in the forfeiture proceeding, I would agree with the AGO. But that is not what happened. The receiver was appointed to oversee the sale of the EVR business to its conclusion. The work done to achieve the sale being completed was done by Madorin Snyder and DLA. The sale of EVR’s business was at all times affected by the AGO’s forfeiture application. I referred to this in my endorsement of September 12, 2016 in stating:
[14] The evidence filed in this matter on behalf of EVR, and there is no evidence to the contrary, is that the Professional Group have incurred fees and disbursements higher than originally anticipated in the Appointment Order for a number of reasons, including the following:
a. The complexity of the proceedings, mainly due to the commencement of the Kitchener Application for forfeiture of the same property at issue in the Toronto Application;
b. The increased time monitoring and responding to the needs of the parties in each of the proceedings, and in particular the AGO as a non-commercial party;
c. The increased number of steps required to complete the sale transaction as a result of the commencement of the Kitchener Application;
d. The additional time that the Professional Group was required to spend preparing materials and appearing at various motions in these proceedings (including both before and after the proceedings were consolidated);
e. The additional time spent finalizing the sale transaction given the complexity of the transaction; and
f. The additional time spent dealing with the RHRA in relation to the requests to extend the Licence.
[37] In this case, the sale has been made more complex by the fact that EVR operates a licensed retirement home that involves numerous stakeholders that are wholly unconnected with the alleged proceeds of unlawful activity. This has increased the complexity of the proceedings above and beyond the sale transaction of a regulated business to include issues surrounding the continued operations of the business and post-closing requirements. The CRA proceedings taken by the AGO has also greatly increased the amount of work involved.
[5] The law firms say, and I agree, that the AGO’s forfeiture application created barriers to the sale of EVR’s business that required time and attention in furtherance of the sale of the business. The fact that there was an intersection between the forfeiture application and the completion of the sale transaction does not change the underlying character of the work that Madorin Snyder and DLA did in working towards a closing of the sale of the business.
[6] The forfeiture application was brought by the AGO to cause the proceeds of the sale of the EVR property to be forfeited as being proceeds of unlawful activity. At the time of the involvement of the receiver and counsel for EVR, the AGO had sought and obtained a temporary preservation order. I am not aware of any steps being taken by either the receiver or the law firms for EVR to oppose that relief sought by the AGO. Thus I am not aware of any work done by the receiver or the law firms for EVR that could said to relate only to the forfeiture proceeding. Nor has the AGO identified any such work.
[7] The receiver earlier had its accounts passed by Hainey J. on August 26, 2016. The fees and disbursements of the receiver for substantially the same activities and appearances were approved on consent of the parties, including the AGO. The AGO did not take the position that the receiver was doing work on the forfeiture application that should not be approved.
[8] The AGO has not taken any issue with the quantum of the fees sought by Madorin Snyder or DLA. In my earlier endorsement I stated that it did not appear that the quantum of the increased administration charge was unreasonable. From my review of their accounts, the hourly rates appear quite reasonable and work appears to have been appropriately delegated. I cannot discern any overworking of the file.
[9] In the circumstances I find that the fees and disbursements of Madorin Snyder and DLA as contained in the draft order at tab 4 of the motion record of EVR dated September 21, 2016 are reasonable and they are approved, and may be paid from the funds held under the administration charge.
Newbould J.
Date: November 21, 2016