Court File and Parties

Court File No.: 1872/16 CP Date: 2019-08-14 Superior Court of Justice - Ontario

Re: Dale Shippelt and Paul Ungoed, Plaintiffs And: General Motors of Canada Company and General Motors, LLC, Defendants

Before: Justice R. Raikes

Counsel: Matthew Baer and Emily Assini, Counsel for the Plaintiffs Robert B. Bell, Counsel for the Defendant

Heard: August 7, 2019

Endorsement

[1] This is a motion for approval of the retainer agreements between the representative plaintiffs and class counsel, approval of class counsel’s fees, disbursements and HST in the amount of $175,000, and approval of a payment of $500 to each representative plaintiff as an honorarium.

Honorarium

[2] The representative plaintiffs have diligently performed their duties for the benefit of the class. As a result of those efforts, class members will receive money or a voucher toward the purchase of another vehicle manufactured by the defendants through the settlement negotiated. Neither representative plaintiff undertook their role in the expectation that they would be paid for their efforts. Neither representative plaintiff has acted as such in other litigation. The amount proposed to be paid as an honorarium is quite modest. I approve that payment of $500 to each representative plaintiff as requested.

Retainer Agreement

[3] Both representatives entered into written retainer agreements with McKenzie Lake to act on their behalf and on behalf of the class in this litigation. The agreements are identical.

[4] The agreements provide that McKenzie Lake will be paid only if successful in the litigation. Success includes settlement of the action that benefits one or more class members. It is undisputed that success has been achieved through the settlement approved by this Court.

[5] Pursuant to para. 8 of the retainer agreement, McKenzie Lake is entitled to seek court approval to receive 30% of the value of the benefit recovered in addition to disbursements and HST. The retainer makes clear that the representative plaintiffs were made aware that they have the right to object to the fees sought by counsel. They do not; in fact, they swore affidavits supporting the fees to be paid to McKenzie Lake by the defendants.

[6] The retainer agreement also makes clear that “costs” awarded by the court and paid by the defendants do not form part of the benefits obtained by the class. The agreement contains an example as to how fees are to be calculated that is readily understandable.

[7] The retainer agreements are contingency agreements. Contingency agreements are permitted by s. 33(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”).

[8] The retainer agreement between the plaintiffs and McKenzie Lake satisfies the requirements of s. 32(1) CPA. It is in writing. It states the terms under which fees and disbursements are to be paid. It provides the basis on which fees will be calculated and provides an estimate of same. It clearly indicates that the payment of fees depends on success as defined and is payable as a percentage (maximum of 30%) of monies recovered.

[9] I approve the retainer agreements entered into with the representative plaintiffs pursuant to s. 32(2) of the CPA.

[10] The CPA requires that any fees payable to class counsel must first be approved by the court: s. 32(4). I turn now to the quantum of the legal fees and disbursements sought.

Quantum of Fees Approved

[11] In determining the reasonableness of class counsel fees, courts have traditionally considered the following factors:

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 fees; and j. the opportunity cost to class counsel in the expenditure of time in pursuit of the litigation and settlement.

(See Osmun, para. 23; Abdulrahim v. Air France, 2011 ONSC 512 at para. 8.)

[12] I would add to the above: whether the amount sought complies with the terms of the retainer agreement.

[13] Under the settlement, class members will receive a cheque between $983 and $1,201 under option one or a voucher worth $2,000 on the purchase of a new GMC vehicle from an authorized GMC dealer within three years under option two. Class Members have to make a choice to receive the voucher, failing which they receive the amount payable under option one.

[14] There are 405 Class Members. The exact number of vehicles is not disclosed but is likely slightly more than 405. Thus, at the low end, the amount payable to Class Members if everyone took option one is $445,500 ($1100 x 405). It is likely that some Class Members will opt for the voucher so the value of the settlement is probably in the range of $460-480,000.

[15] The defendants are paying 100% of class counsel’s fees and disbursements with applicable tax which they have agreed is fixed at $175,000. That is the amount for which approval is sought.

[16] The disbursements incurred by the firm are very modest - $1,455.53 plus applicable taxes. This is, in part, because the defendants are funding the full cost of the notice program and settlement administration. The value of that cost is likely in the range of $40-75,000.

[17] If those extra payments by the defendants are added to the value of the benefits directly paid to Class Members by cheque or voucher, the value of the settlement lies in the neighbourhood of $800,000. Thus, the amount requested for fees net of disbursements and HST is well under the 30% contemplated by the retainer agreements. Even if the cost of the notice program and legal fees are not added to the aggregate of what Class Members will directly receive, the amount to be paid for fees still lies under 30%, albeit closer to that limit.

[18] Counsel took this case on a contingency. In doing so, they took on significant responsibility and financial risk. There were litigation risks including that the action might not be certified as a class proceeding and the action might ultimately fail on the merits. These risks were taken into account in the assessment of the merits of the settlement and apply here.

[19] The issues in this case are not complex but, if the action had proceeded through to trial, would have required experts and significant additional cost to counsel. As is evident, but for this class proceeding it is unlikely that any Class Member would have received anything because the cost to litigate far outstrips the amount at issue for any individual purchaser/lessee.

[20] Counsel have disclosed that the aggregate value of time expended to date exceeds the amount that they will receive if the $175,000 is approved. Further, there will undoubtedly be some additional work to be done that will further reduce the benefits received by the firm. In short, there is no premium being paid for the risks taken.

[21] Counsel have demonstrated appropriate skill, diligence and competence in their carriage of this matter. They have extensive class action experience that benefitted the class.

[22] I am satisfied that the payment of $175,000 for fees, disbursements and applicable taxes is fair and reasonable, and I approve same.

Justice R. Raikes

Date: August 14, 2019