COURT FILE NO.: CV-15-532625-00CP
DATE: 2019/08/09
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
CHRISTOPHER BRAZEAU and DAVID KIFT Plaintiffs
- and -
THE ATTORNEY GENERAL OF CANADA Defendant
James Sayce and Janetta Zurakowski for the Plaintiffs
Greg Tzemenakis, Stephen Kurelek, Sean Stynes, and Diya Bouchedid for the Defendant
Proceeding under the Class Proceedings Act, 1992
HEARD: August 9, 2019
PERELL, J.
REASONS FOR DECISION
A. Introduction
[1] This is a fee approval motion in an action under the Class Proceedings Act, 1992.[^1] Under s. 32 (1) of the Act, an agreement respecting fees and disbursements between a solicitor and representative plaintiff shall be in writing and pursuant to s. 32 (2) the fee must be approved by the court.
[2] Class Counsel, Koskie Minsky LLP, seek the following Order:
a. that the fee payable to Koskie Minsky LLP with respect to the common issues phase of this class proceeding is set at $6,660,000 in respect of legal fees, plus $865,800 in respect of HST;
b. that the Class Proceedings Fund (the “Fund”) is entitled to a levy in the amount of 10% of the net monetary award to which one or more persons in the class is entitled plus $318,388.03 in respect of the disbursement funding provided by the Fund;
c. that the levy payable to the Fund pursuant to section 10 of Regulation 771/92 of the Law Society Act[^2] out of the Aggregate Damages Award shall be fixed at $1,280,857.23.
d. that the disbursements payable, in addition to the fees payable are $435,627.66 (inclusive of all applicable taxes);
e. that the Defendant shall pay Class Counsel $530,973, plus HST of $69,027, for a total of $600,000 pursuant to the Costs Order of Perell J. of June 5, 2019;
f. that the remaining $6,129,027 in fees, plus $796,773 in HST, ($6,925,800 total), shall be payable out of the Aggregate Damages Award;
g. that $200,000 in disbursements are to be paid by the Defendant to the Fund pursuant to the Costs Order of Perell J dated June 5, 2019, and the remaining $235,627.66 in disbursements is to be distributed out of the Aggregate Damages Award as follows: (i) current disbursements and $100,000 in future disbursements payable to Koskie Minsky LLP;(ii) $117,239.63; and, (iii) disbursements payable to the Fund in the amount of $118,388.03; and,
h. that a $15,000 honorarium shall be payable to each of David Kift and Christopher Brazeau out of the Aggregate Damages Award.
B. Factual Background
[3] Through the Correctional Service of Canada, the Federal Government operates penitentiaries and related penal institutions across Canada.
[4] Pursuant to the Class Proceedings Act, 1992,[^3] Messrs. Brazeau and Kift sued the Federal Government about the operation of those penitentiaries. On behalf of a class of inmates who are seriously mentally ill, Messrs. Brazeau and Kift alleged that by placing mentally ill inmates in administrative segregation, the Federal Government breached the Class Members’ rights under the Canadian Charter of Rights and Freedoms.[^4]
[5] In 2015, pursuant to a contingency fee agreement, Christopher Brazeau, later joined by David Kift, retained Class Counsel, Koskie Minsky LLP, to prosecute the action against the Federal Government.
[6] For present purposes, the pertinent portions of the retainer agreements state:
Except for any Costs paid to Class Counsel as provided in paragraph 13 below, Class Counsel shall be paid its fees, as set out herein, upon achieving Success in the action, whether by obtaining judgment on any of the common or individual issues in favour of some or all class members or by obtaining a settlement that benefits one or more class members. The fees shall be paid by a lump sum payment to the extent possible, or (if a lump sum payment is not possible) by periodic payments out of the proceeds of any judgment, order or settlement awarding or providing monetary relief, damages, interest or costs to the Class or any Class Member.
In the event of Success, Class Counsel shall be paid an amount equal to any disbursements not already paid to them by the Defendants as Costs, plus applicable taxes, plus interest thereon in accordance with section 33(7)(c) of the CPA, plus the greater of:
(d) If the Action is settled after a successful trial of the Common Issues, with individual issues including, without limitation, causation and damages, to be determined on an individual basis thereafter, thirty-three and one third percent (33 1/3 %) of the Recovery, less the fee portion of any costs already paid to Class Counsel, plus HST.
[7] On behalf of the Plaintiffs, Class Counsel applied for litigation funding and an adverse cost indemnity from the Class Proceedings Fund. The Fund approved the action for funding and for the costs indemnity.
[8] The action was commenced by way of Statement of Claim on July 17, 2015. An Amended Statement of Claim was filed on November 11, 2015. A Second Amended Statement of Claim was filed on July 4, 2016. Further amendments to the pleading were made as the case progressed.
[9] Canada initially opposed certification, but after certification records were exchanged containing expert and Class Member affidavits and after length negotiations, in 2016, on consent, the action was certified as a class proceeding.[^5]
[10] After the consent certification motion, Class Counsel brought a motion for summary judgment on the certified common issues. It took several years to prosecute the summary judgment motion.
[11] On February 10, 2017, Canada delivered its Statement of Defence denying any liability.
[12] In the spring of 2018, the Plaintiffs agreed to adjourn the summary judgment motion to conduct settlement discussions. The parties met for four mediation sessions, June 5, 2018 in Toronto, July 19, 2018 in Montreal, and September 7, 2018 and November 16, 2018 in Toronto. The settlement negotiations and the mediations were unsuccessful.
[13] The summary judgment motion was heard over five days in February 2019. The evidentiary record included eighteen expert reports from eleven experts. Not counting the compendiums prepared for the argument of the motion, the evidentiary record for the summary judgment motion was approximately 31,000 pages. Messrs. Brazeau and Kift proffered: a five-volume motion record of 3,512 pages, a three-volume reply motion record of 2,129 pages, and a ten-volume brief of answers to undertakings of 6,196 pages. The Federal Government proffered a responding motion record of thirty-eight volumes and 14,288 pages. The six-volume transcript brief of the cross-examinations was 4,981 pages long. Messrs. Brazeau and Kifts’ facta were 177 pages. The Federal Government’s facta were 290 pages. The Books of Authorities were approximately 8,000 pages.
[14] I granted the summary judgment motion - in part - and I dismissed it - in part.[^6] I found a class-wide procedural breaches of section 7 of the Charter and found additional substantive section 7 and section 12 Charter breaches for two subclasses. I awarded the Class Members $20 million in aggregate damages for vindication and deterrence for the Charter breaches to be paid into a fund for mental health services (the “Aggregate Damages Award”) and directed individual issues trials to determine compensatory damages for each Class Member.
[15] I subsequently awarded $600,000 for legal expenses, all inclusive, which along with the award for disbursements yielded an award of costs on a partial indemnity basis of $800,000, all inclusive.[^7]
[16] An appeal (currently returnable on November 5, 2019) before the Court of Appeal for Ontario, with potential for leave applications to the Supreme Court of Canada remain to be determined. Two motions for the individual issues framework process and the damages distribution protocol are still to be heard.
[17] There is significant work left to be done, leaving aside the individual issues phase of this litigation. It is estimated that Class Counsel will be required to devote time with a value of approximately $400,000-$500,000 during the post-judgment phase to argue motions and appeals, to give notice to the Class Members, and to communicate with Class Members. This does not include time that will be incurred on the individual issues trials for compensation to Class Members.
[18] This action was novel, large, complex and aggressively defended. There has been four years of hard-fought litigation.
[19] In total, Class Counsel devoted 3,704.8 hours of lawyer and student time to this action from commencement to July 11, 2019. The summary judgment motion was argued by James Sayce, a 2010 call. In summary, approximately 3,700 hours with a time value of $1,582,922.50 was incurred in the prosecution of the action.
[20] A rough breakdown of Class Counsel’s work is set out in the following chart:
Pleadings and Claim Investigation 99.7 hours
Litigation Funding Application and Communications with Class Proceedings Fund 58.1 hours
Certification 616.5
Notice of Certification 7.5 hours
Case Management Conferences 23.6 hours
Settlement Negotiations and Mediations 115.1 hours
Communications with Class Members 426.5 hours
Summary Judgment Motion to prepare and respond to expert reports – 99.7 hours preparation and attending cross-examinations - 547.8 hours legal research and drafting facta - 411.2 hours preparation of summary judgment motion -923.2 hours argument of the motion, 5 court days
[21] The outcome of the summary judgment motion was a substantial success for the class. The Brazeau and Kift Class Action is the first institutional abuse class action to proceed to a determination on the merits. It is the first class action about administrative segregation. It is the first class action where aggregate damages have been awarded pursuant to section 24(1) of the Charter and s. 24 of the Class Proceedings Act, 1992. The judgment will bring access to justice to approximately 2,000 current and former prisoners who suffer from serious mental illness and who were placed in administrative segregation, which I found to be a type of solitary confinement.
[22] Class Counsel faced very significant risk when the action was commenced on a contingency basis in 2015. All of the issues about the constitutionality of administrative segregation were open and contentious issues, yet to be litigated and resolved.
[23] Class Counsel seeks approval from the court of fees in the amount of $6,660,000 plus HST which amounts to a contingency fee percentage of 33.3%. The precise fee and disbursement request is set out above in the introduction to these Reasons for Decision.
[24] Class Counsel’s fee request represents a 33.3% contingency fee. The fees sought are equivalent to a multiplier of approximately 3.3.
[25] Messrs. Brazeau and Kift support the fee approval motion. It goes without saying that the Class Action was of ultimate importance to the Class Members. Messrs. Brazeau and Kift deposed that: (a) they were aware of the percentage of compensation Class Counsel would seek, at various stages of the case, if successful; (b) they knew that Class Counsel spent millions of dollars in fees and disbursements prosecuting the case without promise of payment, unless successful; they believe the fees sought are fair in all of the circumstances, especially considering the risks presented and the length of time the action to conclude; and (d) they believe that had Class Counsel not taken on this action, the Class Members never would have received compensation and vindication of their Charter rights.
C. Fee Approval
[26] 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.[^8]
[27] 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.[^9]
[28] The court must consider all the factors and then ask, as a matter of judgment, whether the fee fixed by the agreement is reasonable and maintains the integrity of the profession.[^10]
[29] In my opinion, having regard to the various factors used to determine whether to approve Class Counsel’s fee request, Class Counsel’s fee request in the immediate case should be approved. Class Counsel brought Messrs. Brazeau and Kifts’ extraordinary high-risk action to a very substantial and significant outcome. Class Counsel more than earned their fee and it should be and is approved.
D. Honorarium
[30] Where a representative plaintiff can show that he or she rendered active and necessary assistance in the preparation or presentation of the case and that such assistance resulted in monetary success for the class, the representative plaintiff may be compensated by an honorarium.[^11] However, the court should only rarely approve this award of compensation to the representative plaintiff.[^12]
[31] Compensation for a representative plaintiff may only be awarded if he or she has made an exceptional contribution that has resulted in success for the class.[^13]
[32] Compensation to the representative plaintiff should not be routine, and an honorarium should be awarded only in exceptional cases. In determining whether the circumstances are exceptional, the court may consider among other things: (a) active involvement in the initiation of the litigation and retainer of counsel; (b) exposure to a real risk of costs; (c) significant personal hardship or inconvenience in connection with the prosecution of the litigation; (d) time spent and activities undertaken in advancing the litigation; (e) communication and interaction with other class members; and (f) participation at various stages in the litigation, including discovery, settlement negotiations and trial.[^14]
[33] Class Counsel seeks approval of an honorarium in the amount of $15,000.00 for Messrs. Kift and Brazeau.
[34] I agree that these honorariums are appropriate given the extraordinary contribution made by Messrs. Kift and Brazeau and given the bravery of their leadership.
[35] Contacting and instructing counsel was challenging for Messrs. Brazeau and Kift especially given their personal health circumstances and their continuing time in prison. Notwithstanding these challenges and notwithstanding hardships and experiences that for present purposes I note but need not recount, Messrs. Kift and Brazeau were proactive and directly involved in every step in this litigation. They made an extraordinary contribution that was instrumental to the success of the class action, and they each deserve an honourarium.
E. Conclusion
[36] For the above reasons, I approve the retainer agreement and I grant Class Counsel’s fee requests and the associated orders.
Perell, J.
Released: August 9, 2019
COURT FILE NO.: CV-15-532625-00CP
DATE: 2019/08/09
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
CHRISTOPHER BRAZEAU and DAVID KIFT Plaintiffs
- and -
THE ATTORNEY GENERAL OF CANADA Defendant
REASONS FOR DECISION
PERELL J.
Released: August 9, 2019
[^1]: S.O. 1992, c. 6. [^2]: R.S.O. 1990. c. L.8. [^3]: S.O. 1992, c. 6. [^4]: Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11. [^5]: Brazeau v. Attorney General (Canada), 2016 ONSC 7836. [^6]: Brazeau v. Attorney General (Canada), 2019 ONSC 1888. [^7]: Brazeau et al. v. Attorney General (Canada), 2019 ONSC 3422. [^8]: Fischer v. I.G. Investment Management Ltd., [2010] O.J. No. 5649 at para. 25 (S.C.J.); Smith v. National Money Mart, 2010 ONSC 1334 at paras. 19-20, varied 2011 ONCA 233; Parsons v. Canadian Red Cross Society, 2000 ONSC 22386, [2000] O.J. No. 2374 at para. 13 (S.C.J.). [^9]: Fischer v. I.G. Investment Management Ltd., [2010] O.J. No. 5649 at para. 28 (S.C.J.); Smith v. National Money Mart, 2010 ONSC 1334, varied 2011 ONCA 233. [^10]: Commonwealth Investors Syndicate Ltd. v. Laxton, [1994] B.C.J. No. 1690 at para. 47 (B.C.C.A.). [^11]: Windisman v. Toronto College Park Ltd., [1996] O.J. No. 2897 at para. 28 (Gen. Div.). [^12]: Sutherland v. Boots Pharmaceutical plc, supra; Bellaire v. Daya, [2007] O.J. No. 4819 at para. 71. (S.C.J.); McCarthy v. Canadian Red Cross Society, [2007] O.J. No. 2314 (S.C.J.). [^13]: Toronto Community Housing Corp. v. ThyssenKrupp Elevator (Canada) Ltd., 2012 ONSC 6626; Markson v. MBNA Canada Bank, 2012 ONSC 5891 at paras. 55-71. [^14]: Robinson v. Rochester Financial Ltd., 2012 ONSC 911 at paras. 26-44.