Brown v. Canada (Attorney General) 2018 ONSC 5456

COURT FILE NO.: CV-09-372025-CP

DATE: 20181115

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Marcia Brown / Representative Plaintiff

AND:

The Attorney General of Canada / Defendant

Proceeding under the Class Proceedings Act, 1992

BEFORE: Justice Edward P. Belobaba

COUNSEL: Jeffery Wilson and Morris Cooper for the Plaintiff

Catharine Moore, Travis Henderson and Gail Sinclair for the Defendant

HEARD: Written submissions

The “Sixties Scoop” National Settlement

Approval of Legal Fees in Brown v. Canada

[1] The supervising Federal Court judge has approved the maximum $37.5 million amount in legal fees for class counsel in Riddle,[^1] the companion Federal Court action. It is now my task to determine and approve the appropriate legal fees for class counsel in Brown.

[2] I prepared a draft of these reasons in mid-September, shortly after receiving the Federal Court’s decision in Riddle. I delayed the release of this decision until the appeal periods in Riddle had expired. I understand that several class members filed a motion for leave to appeal but the motion was dismissed last week by a judge of the Federal Court of Appeal.[^2] I can therefore release my decision in Brown.

Background

[3] The background to this final chapter in the Sixties Scoop class action saga - the legal fees payable to class counsel - is set out in my decision of June 20, 2018 and will not be repeated here.[^3] The essential chronology is this. On May 11, 2018 Justice Shore, who was the supervising Federal Court judge in Riddle approved the Settlement Agreement in its entirety, including section 11.01 which provided that Canada would pay a total of $75 million to class counsel in legal fees. Class counsel in Brown and Riddle agreed to divide this amount equally, with each group receiving $37.5 million.

[4] On June 20, 2018 I released my decision in my capacity as the supervising judge in the Brown action. I agreed with Justice Shore that the core provisions of the National Settlement were fair and reasonable and should be approved. I did not agree on the legal fees component. In my view, the $75 million total amount that Canada had agreed to pay to class counsel in legal fees was excessive and unreasonable.[^4]

[5] I made clear in my decision of June 20, 2018, based on the evidence before me, that the total amount should have been closer to half the allocated amount or about $37.5 million - with class counsel in Brown getting around $25 million (because they had done the bulk of the work) and class counsel in Riddle getting at most $12.5 million (because by comparison they did very little work – generally “sitting in the bleachers”[^5] waiting to see what happened in Brown).

[6] Because I did not approve the entirety of the Settlement Agreement, the Agreement under its own terms did not take effect and came to an end.[^6] Justice Shore noted correctly in his approval order that his order “will be rendered null and void in the event that the Settlement Agreement is not approved in substantially the same terms by [the other court]”.[^7]

[7] The only point of difference between me and my Federal Court counterpart was the reasonableness of the legal fees provision. Class counsel in Brown, to their credit, agreed to “de-link” the legal fees issue from the other provisions so that the national settlement could otherwise proceed.

[8] Given this gesture by class counsel in Brown, I made these concluding comments in my June 20, 2018 decision:

Class counsel in Brown have agreed to de-link the $75 million fees provision from the rest of the Settlement Agreement. They have done so in the interests of their class members. They obviously do not want to see an otherwise admirable Settlement Agreement derailed or delayed by a lawyers’ squabble over legal fees. Class counsel in Riddle have not yet agreed to any such de-linking …

I remain hopeful that class counsel in Riddle will also do the right thing and focus only on the section 11.01 legal fees provision. It would be beyond tragic if the Sixties Scoop Settlement Agreement was derailed or delayed because of an unseemly squabble among class counsel over legal fees.[^8]

[9] Class counsel in Riddle continued to insist that Justice Shore’s approval of the legal fees provision somehow survived the terms of the Settlement Agreement and the “null and void” language of his own order, and that his approval of $37.5 million to class counsel in Riddle remained in full force and effect.

[10] This submission didn’t make sense. At this point, the Settlement Agreement for both Brown and Riddle was dead. Justice Shore’s order was null and void and could not be resuscitated. Everything now depended on the parties in both actions agreeing in some way to resolve the legal fees impasse.

[11] Unfortunately, further negotiations proved unsuccessful. The “squabble among class counsel over legal fees”, as predicted, was delaying the implementation of the national settlement. Class members in both actions – the actual victims of the Sixties Scoop - were understandably frustrated and angry.

[12] On July 20, 2018 at a case conference in the Brown action, I suggested a way forward – that the parties amend the legal fees provision in the Settlement Agreement to make clear that (i) the overall total for legal fees remained at $75 million with class counsel in Brown and Riddle getting a maximum of $37.5 million each, but (ii) the actual quantum, i.e. the amount payable to class counsel in Brown and Riddle, would be determined and approved separately by the two supervising judges. Justice Phelan, who had replaced Justice Shore as the supervising Federal Court judge in Riddle, would decide what was fair and reasonable for class counsel in Riddle and I would decide what was fair and reasonable for class counsel in Brown – in each case, up to a maximum of $37.5 million.

[13] The parties and their counsel quickly agreed with my suggestion and amended the legal fees provision in the Settlement Agreement as just described. I approved the Amended Settlement Agreement on July 30, 2018, as did Justice Phelan shortly thereafter.

[14] All that remained in both actions was the judicial determination of the appropriate legal fees amount.

[15] I advised counsel that I would await Justice Phelan’s decision setting the legal fees in Riddle; I would then do likewise in Brown. I was still of the view that the appropriate overall award was in the range of $37 to $38 million. I was heartened by Canada’s position that any difference between the $75 million maximum and the actual amount awarded to the lawyers would not be retained by Canada but would go to augment the funding of the Sixties Scoop Foundation.

The Federal Court approves $37.5 million for legal fees in Riddle

[16] On September 10, 2018 Justice Phelan issued his decision regarding the legal fees in Riddle.[^9] Phelan J. decided that “Justice Shore’s Order is final and therefore this Court has no jurisdiction to deal with the matter of Federal class counsel fees.” In his view, Justice Shore’s Order “remained in full force and effect and fees are to be paid accordingly.” In other words, class counsel in Riddle would receive the maximum $37.5 million in legal fees.

[17] It is not clear to me how Justice Shore’s order of May 11, 2018, a court order that was rendered “null and void” by its own terms and by the terms of the Settlement Agreement, can nonetheless survive and remain “in full force and effect.” But I will not belabour this point. I accept that the Federal Court has made its decision and that the motion for leave to appeal this decision has been dismissed.[^10]

My dilemma in Brown

[18] Now that I have the legal fees decision in Riddle, I must decide what is fair and reasonable in Brown. In my decision of June 20, 2018, I went to great lengths to explain why class counsel in Brown, who did almost all of the “heavy lifting” in the Sixties Scoop litigation and incurred enormous risk, should still receive no more than $25 million. And class counsel in Riddle, who did very little by comparison, were entitled to less than half that amount. I concluded on the evidence before me that on any fair and reasonable measure, class counsel in Brown should receive at least two times more in legal fees than class counsel in Riddle.

[19] However, the Federal Court has now awarded class counsel in Riddle the maximum of $37.5 million.

[20] Given this decision in Riddle, I cannot in good conscience limit class counsel in Brown, who truly deserve many millions more than class counsel in Riddle, to $25 million. It would be unfair in the extreme to fix class counsel’s legal fees in Brown at an amount that is anything less than the amount that has now been awarded by the Federal Court in Riddle.

Decision

[21] I therefore find it fair and reasonable that class counsel in Brown also receive the maximum amount of $37.5 million.

[22] Order to go accordingly.

Justice Edward P. Belobaba

Date: November 15, 2018

[^1]: Riddle et al v. Her Majesty the Queen, 2018 FC 900 (September 10, 2018). [^2]: Frame v. Riddle, 2018 FCA 204 (November 9, 2018). [^3]: Brown v. Canada (Attorney General), 2018 ONSC 3429. [^4]: Ibid. at para. 90. [^5]: Ibid. at para. 75. [^6]: Ibid. at paras. 32-33. [^7]: Ibid. at para. 33. [^8]: Ibid. at paras. 84 and 88. [^9]: Supra, note 1. [^10]: Supra, note 2.