COURT FILE NO.: CV-15-536174
DATE: 2020/11/26
ONTARIO
SUPERIOR COURT OF JUSTICE.
BETWEEN:
JOSEPH S. MANCINELLI, CARMEN PRINCIPATO, DOUGLAS SERROUL, LUIGI CARROZZI, MANUEL BASTOS and JACK OLIVEIRA in their capacity as THE TRUSTEES OF THE LABOURERS’ PENSION FUND OF CENTRAL AND EASTERN CANADA, and CHRISTOPHER STAINES
Plaintiffs
– and –
ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANK OF AMERICA CANADA, BANK OF AMERICA NATIONAL ASSOCIATION, THE BANK OF TOKYO MITSUBISHI UFJ LTD., BANK OF TOKYO-MITSUBISHI UFJ (CANADA), BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., BARCLAYS CAPITAL CANADA INC., BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA INC., BNP PARIBAS (CANADA), BNP PARIBAS, CITIGROUP, INC., CITIBANK, N.A., CITIBANK CANADA, CITIGROUP GLOBAL MARKETS CANADA INC., CREDIT SUISSE GROUP AG, CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE AG, CREDIT SUISSE SECURITIES (CANADA), INC., DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS & CO., GOLDMAN SACHS CANADA INC., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., HSBC BANK CANADA, JPMORGAN CHASE & CO., J.P.MORGAN BANK CANADA, J.P.MORGAN CANADA, JPMORGAN CHASE BANK NATIONAL ASSOCIATION, MORGAN STANLEY, MORGAN STANLEY CANADA LIMITED, ROYAL BANK OF SCOTLAND GROUP PLC, RBS SECURITIES, INC., ROYAL BANK OF SCOTLAND N.V., ROYAL BANK OF SCOTLAND PLC, SOCIÉTÉ GÉNÉRALE S.A., SOCIÉTÉ GÉNÉRALE (CANADA), SOCIÉTÉ GÉNÉRALE, STANDARD CHARTERED PLC, UBS AG, UBS SECURITIES LLC and UBS BANK (CANADA)
Defendants
Louis Sokolov, Daniel E. H. Bach, and Andy Seretis for the Plaintiffs
Caroline Humphrey for the Defendants, Credit Suisse Group AG, Credit Suisse Securities (USA) LLC, Credit Suisse AG and Credit Suisse Securities (Canada), Inc.
Caitlin Sainsbury and Pierre Gemson for the Defendant Deutche Bank AG
Robert Carson for the Defendants Royal Bank of Canada and RBC Capital Markets LLC
Stephen Aylward for the Defendants Toronto Dominion Bank, TD Bank, N.A., TD Group US Holdings, LLC, TD Bank USA, N.A. and TD Securities Limited
Samantha Gordon for the Defendants Royal Bank of Scotland Group PLC, RBS Securities, Inc., Royal Bank of Scotland N.V., Royal Bank of Scotland PLC
Chris Kinnear Hunter for the Defendants Société Générale S.A., Société Générale (Canada), Société Générale
Zev Smith for the Defendants, UBS AG, UBS Securities LLC, UBS Bank (Canada)
Proceeding under the Class Proceedings Act, 1992
HEARD: November 26, 2020
PERELL, J.
REASONS FOR DECISION
[1] In this action under the Class Proceedings Act, 1992,[^1] the Plaintiffs, Joseph S. Mancinelli, Carmen Principato, Douglas Serroul, Luigi Carrozzi, Manuel Bastos, and Jack Oliveira, in their capacity as The Trustees of the Labourers’ Pension Fund of Central and Eastern Canada, and Christopher Staines, sue nineteen groups of financial institutions. The action was commenced on September 11, 2015, and the Plaintiffs allege that the defendants conspired to fix, raise, maintain, stabilize, control, or enhance unreasonably the prices of currency purchased in the foreign exchange or foreign currency market.
[2] To date, fifteen of the groups have entered into settlement agreements. The Defendants, RBC, Credit Suisse, Deutsche Bank, and TD have not settled.
[3] In a series of decisions, I approved the settlements. The settlement proceeds total approximately $110 million. In 2018, I approved a Distribution Protocol for the distribution of the settlement proceeds.[^2] In the summer of 2019, the Plaintiffs brought a motion to amend the Distribution Protocol and the motion was granted.[^3]
[4] The settlement proceeds are allocated into two pools, the first of which is responsive to claims made by Class Members who directly entered into FX transactions, and the second of which encompasses claims made by Class Members who indirectly entered into FX transactions via purchases of various funds that entered into FX transactions. Direct Claimants are more likely to be larger institutional investors with voluminous trading records and complex claims while Indirect Claimants are more likely to be individual investors, or less sophisticated entities, with simpler claims. Eighty percent (80%) of the Net Proceeds are allocated to the “Direct Claims Fund,” with the remaining twenty percent (20%) attributed to the “Indirect Claims Fund”.
[5] After consultation with the Claims Administrator, the Plaintiffs now bring a motion to further amend the Distribution Protocol. The proposed changes include: (a) transferring any unused funds in the pool allocated for Indirect Claimants into the pool for Direct Claimants; (b) making the minimum payout to approved Direct Claimants $1,000; and (c) removing any requirement that the Claims Administration consider any compensation received in settlements from class actions in other jurisdictions, including the U.S. Proceeding.
[6] None of the proposed modifications relate to any of the obligations of the settled defendants or impact them in any way. The possibility of amendments is built into the Protocol, which permit Class Counsel on notice to the Court to make alterations to the Protocol. Paragraph 9 of the Distribution Protocol states that “if there are more monies allocated to any Fund than is required to pay the maximum compensation to class members for all valid claims made against that Fund on the terms set out below, Class Counsel may apply such excess to proportionately increase the other Funds.”
[7] Based on the total anticipated payouts to the Indirect Claimants in accordance with the formula set out in the Distribution Protocol, the majority of the funds allocated to the Indirect Claims Fund will not be claimed. Class Counsel, therefore, recommends transferring the balance of the Indirect Claims Fund following distribution to Indirect Claimants to the Direct Claims Fund. It is not anticipated that Direct Claimants will be fully compensated through their share of the distribution and increasing the Direct Claims Fund will provide greater compensation to the Direct Claimants, who are mainly comprised of large public sector pension funds.
[8] The Distribution Protocol required detailed documentation to be gathered and submitted by Direct Claimants in support of their claims. As a result of the large transactional volume submitted by many of Direct Claimants, such as the large public sector pension funds, some Direct Claimants’ pro rata share is expected to be less than $1,000. Given the time and effort required to prepare a valid claim by Direct Claimants, including gathering and submitting detailed documentation, Class Counsel recommends that any valid claim submitted by a Direct Claimant should receive a minimum $1,000 payment and that the payments of the remaining Direct Claimants be adjusted pro rata accordingly. Class Counsel does not anticipate that this redistribution will materially decrease the compensation paid to Direct Claimants who are entitled to more than $1,000.
[9] Paragraph 3 and 5 of the Distribution Protocol requires the Claims Administrator to consider any compensation received by class members in other jurisdictions, including the US proceeding. The Protocol, however, does not require any particular reduction to be made on account of this. It is reasonable to infer that most of the larger Class Members will have submitted a claim in the US proceeding, while many of the smaller ones will not.
[10] Class Counsel believes it is inappropriate to discount the larger Class Members’ entitlements. Any reduction of the entitlements in favour of the smaller claimants would be arbitrary and subject to challenge by the adversely-affected Class Members. Moreover, waiting for final distribution in the U.S. Proceeding and determining the necessary changes to payouts in the Canadian proceeding could substantially delay the distribution. Class Counsel, therefore, recommends that no discount or other adjustment be applied on account of any compensation received pursuant to class action settlements in other jurisdictions, including the U.S. Proceeding.
[11] Section 12 of the Class Proceedings Act confers a broad discretion on this Court to make any order it considers appropriate respecting the conduct of a class proceeding in order to ensure its fair and expeditious determination. While a court cannot change the settlement agreement and impose new burdens on the defendant, in the immediate case, the amendments to the Distribution Protocol are within the ambit of the court’s administrative power.[^4]
[12] As was the case with the 2019 revisions to the Distribution Protocol, the proposed amendments impose no additional burden on the defendants and should be matters of indifference to them. The amendments to the distribution scheme are administrative and do not make any substantive change to the settlements.
[13] For the above reasons, I grant the Plaintiffs the relief requested.
Perell, J.
Released: November 26, 2020
COURT FILE NO.: CV-15-536174
DATE: 2020/11/26
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOSEPH S. MANCINELLI, CARMEN PRINCIPATO, DOUGLAS SERROUL, LUIGI CARROZZI, MANUEL BASTOS and JACK OLIVEIRA in their capacity as THE TRUSTEES OF THE LABOURERS’ PENSION FUND OF CENTRAL AND EASTERN CANADA, and CHRISTOPHER STAINES
Plaintiffs
– and –
ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANK OF AMERICA CANADA, BANK OF AMERICA NATIONAL ASSOCIATION, THE BANK OF TOKYO MITSUBISHI UFJ LTD., BANK OF TOKYO-MITSUBISHI UFJ (CANADA), BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., BARCLAYS CAPITAL CANADA INC., BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA INC., BNP PARIBAS (CANADA), BNP PARIBAS, CITIGROUP, INC., CITIBANK, N.A., CITIBANK CANADA, CITIGROUP GLOBAL MARKETS CANADA INC., CREDIT SUISSE GROUP AG, CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE AG, CREDIT SUISSE SECURITIES (CANADA), INC., DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS & CO., GOLDMAN SACHS CANADA INC., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., HSBC BANK CANADA, JPMORGAN CHASE & CO., J.P.MORGAN BANK CANADA, J.P.MORGAN CANADA, JPMORGAN CHASE BANK NATIONAL ASSOCIATION, MORGAN STANLEY, MORGAN STANLEY CANADA LIMITED, ROYAL BANK OF SCOTLAND GROUP PLC, RBS SECURITIES, INC., ROYAL BANK OF SCOTLAND N.V., ROYAL BANK OF SCOTLAND PLC, SOCIÉTÉ GÉNÉRALE S.A., SOCIÉTÉ GÉNÉRALE (CANADA), SOCIÉTÉ GÉNÉRALE, STANDARD CHARTERED PLC, UBS AG, UBS SECURITIES LLC and UBS BANK (CANADA)
Defendants
REASONS FOR DECISION
PERELL J.
Released: November 26, 2020.
[^1]: S.O. 1992, c. 6. [^2]: Mancinelli v. Royal Bank of Canada, 2018 ONSC 4192. [^3]: Mancinelli v. Royal Bank of Canada, 2019 ONSC 4518. [^4]: Lavier v. MyTravel Canada Holidays Inc., 2011 ONSC 3149; Bodnar v. The Cash Store Inc., 2011 BCCA 384.