COURT FILE NO.: CV-17-569023-00CP

DATE: 20221110

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ASHLEKA PERSAUD and TEN EIGHT VACATIONS LTD.

Plaintiffs

• and –

TALON INTERNATIONAL INC.

Defendant

Proceeding under the Class Proceedings Act, 1992

Sean A. Brown, Christopher Lupis, Laura Bassett, and Paul D. Mack for the Plaintiffs

Symon Zucker and Nancy J. Tourgis for the Defendant

Joseph P. Groia and Adam J. Wygodny for proposed Intervenors, MSTW Professional Corporation, Mitchell Wine, and Levine Sherkin Boussidan P.C.

HEARD: October 6, 2022

Contents

A. Introduction. 2

B. Factual Background. 4

C. The Terms of the Settlement Agreement 19

D. Settlement Approval 23

1. Settlement Approval: General Principles. 23

2. Settlement Approval: Analysis and Discussion. 25

E. Fee Approval 28

1. Fee Approval: General Principles. 28

2. Fee Approval: Analysis and Discussion. 30

F. The Fee Approval Claims of Former Class Counsel 31

G. Conclusion. 36

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] This is a certified class proceeding against Talon International Inc. (“Talon”) on behalf of abortive purchasers of hotel units in what was known as the Trump Tower in downtown Toronto.[^1] The motion now before the court is a settlement and fee approval motion under the Class Proceedings Act, 1992.[^2] It is a very troublesome motion.

[2] The first troublesome feature of the motion is that the settlement for which approval is sought is a mediocre success.

a. The Plaintiffs, Ashleka Persaud and Ten Eight Vacations Ltd. (collectively “Ms. Persaud”), and Class Counsel (Mack Lawyers and Flaherty McCarthy LLP), bring a motion for approval of a settlement with a settlement fund of $5.75 million. They also seek approval of Class Counsel’s fee of approximately $2.2 million, all inclusive of fees, taxes, and disbursements. The counsel fee and the costs of administration will reduce the settlement fund to approximately $3.4 million for a class of uncertain size.

b. In theory, there could be a maximum of 154 abortive purchasers of hotel units who might be claimants, but it seems that there may be perhaps 20 to 40 Class Members likely to make claims to a share of the settlement fund amongst the approximately 130 locatable Class Members that received notice of the proposed settlement. The prizes for the successful claimants are pro rata refunds of their deposits. The average deposit was approximately $225,000. For direct purchasers of hotel units in the Trump Tower, the refund is capped at 75% of their deposit. For indirect purchasers of hotel units in the Trump Tower, the refund is capped at 25% of the deposit.

c. To succeed in obtaining a partial deposit refund (in effect partial rescission), the Class Member must prove to the Claims Administrator by a paper record that he, she, or it relied on the sales material prepared by Talon. Under the Settlement Agreement, there is an appeal to a Claims Adjudicator and then a more apparent than real right of appeal to the court if a claim is disallowed. Significantly, any settlement funds not taken up are returned to Talon.

d. As I shall explain further below, this is a mediocre success.

[3] The second troublesome feature of the immediate case is that it is uncertain how much of the $3.4 million net settlement fund will be taken up by Class Members.

a. This is troublesome because if the settlement fund is not fully taken up, the residue is returned to Talon or more accurately to Talon’s deposit insurer.

b. Given the passage of time and the relocation of some of the Class Members and given the circumstance that many of the Class Members are not Ontario residents, it remains to be determined the extent to which Class Members will take up the opportunity to make claims and the extent to which they will be able to prove reliance and receive a payment from the settlement fund.

c. The possibility of a substantial portion of the settlement fund being remitted to Talon depreciates the quality of the settlement and complicates determining what is the appropriate contingency fee to Current Class Counsel.

[4] The third troublesome and also unusual feature of the motion for settlement and fee approval is the involvement of “Former Class Counsel.”

a. Levine Sherkin Boussidan P.C., Mitchell Wine, and MSTW Professional Corp. are the Former Class Counsel in this class action or their successor law firms.

b. Mr. Wine says that he has a fee sharing agreement with Paul D. Mack, of Current Class Counsel, for a share of Class Counsel’s fee from the settlement fund.

c. Mr. Mack denies any such agreement. The alleged fee sharing agreement is the subject matter of a separate lawsuit between Former Class Counsel and Paul Mack and Mack Lawyers (the “Wine v. Mack Action”).[^3]

d. How to deal with Former Class Counsel’s claim for a share of Current Class Counsel’s fee is an unprecedented problem in the immediate case.

[5] The fourth troublesome feature of the motion, which is related to the modest success of the settlement and to the involvement of Former Class Counsel, is that there is an extensive and complex factual background for the settlement. The factual background spans over 20 years and begins years before the commencement of the class action.

a. The lengthy complicated factual narrative for this class, including the involvement of Donald Trump before his ascendancy and descendancy to the presidency of the United States, requires close scrutiny because it is the context for evaluating the litigation risk, the providence of the proposed settlement, the contribution of Former Class Counsel, the contribution of Current Class Counsel, and the key issue of whether the court should in accordance with the Class Proceedings Act, 1992 approve the settlement agreement, Current Class Counsel’s counsel fee, and the alleged fee sharing agreement.

b. Of critical significance is that the factual background involves persons or corporations who are not Class Members but who could have been Class Members. These putative Class Members retained Former Class Counsel to sue Talon outside of the class action. Mr. Wine relies on his success for these other clients in the actions outside of the immediate class action in the Wine v. Mack Action and as one of his perches for approval of the fee sharing agreement in the immediate case.

[6] Thus, the matters now before the court requires me to rule on three far from ordinary requests for court approvals pursuant to the Class Proceedings Act, 1992. Notwithstanding the above and other troublesome features of the motion before the court, which will become apparent in the discussion below, for the reasons that follow:

a. I approve the settlement. While far from an exemplary outcome for the class, it is a modest success. The settlement is preferable and better than the only alternative to a negotiated agreement, which is prolonging this litigation with an even more uncertain outcome.

b. I approve a class counsel fee to a maximum of $2.2 million, all inclusive, of which $1.25 million, inclusive of fee, taxes, and disbursements, is payable forthwith, with the balance payable, if at all, subject to court approval, after the distribution of the settlement is completed and the actual take-up by the Class Members is determined. This is a fair and reasonable counsel fee and appropriate given the modest success of the settlement. This counsel fee and any future counsel fee is exclusively for Current Class Counsel.

c. With respect to the troublesome matter of the fee sharing agreement between Former Class Counsel and Current Class Counsel, it was rightfully conceded by all the parties, that this is a matter within the jurisdiction of the Class Proceedings Act, 1992. However, on this fee approval motion, I am in no position to decide: (a) whether the fee sharing agreement exists, and (b) if it exists, whether the agreement is legal.[^4] Nevertheless, what I can do on this motion is to assume that the fee sharing agreement exists and that it is lawful. Based on those assumptions, I do not approve the fee sharing agreement.

i. As the factual background will reveal, Former Class Counsel had been disqualified. Its litigation risk ended with the disqualification. Former Class Counsel had been paid for its former services with the award of costs for the certification motion. No more is owing to it.

ii. Former Class Counsel could not and did not contribute to the settlement. Former Class Counsel cannot take credit for the modest success of the settlement. Former Class Counsel has no intellectual property entitlement for having commenced the class action.

iii. Assuming the fee sharing agreement exists and that it is lawful, it would not be fair or reasonable for the court to approve a fee sharing agreement with Former Class Counsel for a share of a contingency fee earned by Current Class Counsel.

B. Factual Background

[7] As foreshadowed, the factual background to this troublesome settlement and fee approval motion is extensive. The following description of the factual background derives from my involvement in adjudicating a summary judgment motion in two test cases involving the hotel units of the Trump Tower[^5] and from my role as case management judge of the immediate class action.

[8] It is necessary to examine the factual background in some detail because it bares the issues of: (a) the litigation risk in continuing the class proceeding; (b) the worth of the settlement agreement; (c) the fee request of current Class Counsel; (d) the alleged existence of a fee sharing agreement between current Class Counsel and Former Class Counsel; and (e) whether the settlement, the counsel fee, and the fee sharing agreement should be approved in accordance with the Class Proceedings Act, 1992.

[9] The story begins in the early 2000s when Talon (Talon International Inc., Talon International Development Inc., Toronto Standard Condominium No. 2267) and its principals Val Levitan and Alex Shnaider entered into agreements with Donald Trump Sr., and Trump Toronto Hotel Management Corp, and Trump Marks Toronto LP, to develop a mixed-use project in downtown Toronto at 325 Bay St. The development was a 71-storey building to house two condominium corporations. One condominium corporation was a conventional residential condominium of 118 units. The other was a luxury hotel under the name Trump International Hotel with 261 hotel units.

[10] Talon’s sale of the hotel units in the condominium appeared to be the sale of “security,” under the Securities Act,[^6] and by letter dated April 28^th^, 2004, pursuant to s. 74 of the Securities Act, Talon’s lawyers applied to the Ontario Securities Commission (the “OSC”) on Talon’s behalf for an exemption from the requirement to file a prospectus. In May 2004, the OSC issued a ruling exempting Talon from having to file a prospectus. The OSC directed how the hotel units should be sold. The OSC required that before entering into an agreement of purchase and sale with a prospective purchaser, Talon should deliver an offering memorandum in the form of the disclosure statement required under the Condominium Act, 1998.[^7]

[11] After the OSC’s ruling, and while the Trump Tower was under construction, Talon began to market hotel units. Talon opened a sales centre. Prospective purchasers of the hotel units were provided with documents purportedly in compliance with the directive of the OSC. Amongst the documents that the purchasers received before they signed agreements of purchase and sale was a document called “Estimated Return on Investment” (the “Estimate”). The Estimate set out the hypothetical revenue stream from the hotel units and the anticipated expenses for the units. The Estimate predicted a return on investment. It was subsequently alleged that the Estimates contained numerous misrepresentations of revenues and expenses.

[12] The marketing of the units continued for many years during construction. The purchasers were provided with marketing materials including the Estimate. The purchasers were given materials in purported compliance with the disclosure requirements of the Condominium Act, 1998. The purchasers signed a variety of agreements including Talon’s standard form agreement of purchase and sale. The purchasers paid deposits.

[13] It shall become important to note that the hotel unit deposits are insured pursuant to an insurance policy issued by Lombard Canada Ltd. The policy remains in place. As it happens, Talon itself is now insolvent and the only recoverable asset is the deposits. Pursuant to s. 81 of the Condominium Act, 1998[^8] and its regulations, the Class Members’ deposits are either being held in trust by Talon’s lawyers, the Toronto law firm of Harris, Sheaffer LLP, or are insured deposits.

[14] In 2007, Ms. Persaud and her husband Jason Boccinfuso, who is a police officer, learned about the Trump Tower from a computer search. Ms. Persaud had no direct contact with any Talon representative. Mr. Boccinfuso contacted Ms. Zak, a Talon sales agent. Ms. Zak told Mr. Boccinfuso that an investment in a hotel unit would be very profitable. Mr. Boccinfuso saw a PowerPoint presentation and reviewed the Estimate.

[15] On March 7, 2008, Ms. Persaud signed an agreement of purchase and sale to acquire a hotel unit. By this time, five of Mr. Boccinfuso’s police officer colleagues had agreed to participate in the purchase. Ms. Persaud’s agreement was for Unit 1615 at a purchase price of $910,000. Ms. Persaud and Mr. Boccinfuso incorporated Ten Eight Vacations Ltd., to take title. The $227,500 deposit for the purchase was paid. The agreement of purchase and sale provided that the deposit would be forfeited if the purchaser defaulted in closing the transaction.

[16] In 2012, after many construction delays and extensions of the agreements of purchase and sale, the purchasers were given interim occupancy of the hotel units. On February 24, 2012, Ms. Persaud through Ten Eight Vacations Ltd. took interim occupancy of Unit 1615, and Ms. Persaud, Mr. Boccinfuso, and his five police officer colleagues began making interim occupancy payments.

[17] The interim occupancy period lasted until December 12, 2012, which was the date scheduled for final closing. By this time, because of poor occupancy rates, the purchasers of the hotel units were losing between $4,000 to $5,000 per month. The Estimates were wrong, overstating revenue, understating disclosed expenses, and failing to disclose some expenses. On December 12, 2012, Ms. Persaud did not complete the purchase of Unit 1615. Only 50 transactions closed.

[18] Because some purchasers, including Ms. Persaud, refused to close their transactions, lawsuits followed. One of Talon’s lawsuits (action CV-14-498306) was an action in which Ms. Persaud was the defendant. In that action, Talon sought to forfeit the deposit and to claim damages for breach of contract. Ms. Persaud defended, but she overlooked making a counterclaim for the return of her deposit.

[19] Following the abortive closings, some of the purchasers retained Levine Sherkin Boussidan P.C. to commence individual actions for rescission and damages for misrepresentation and breach of the Securities Act. There were 22 plaintiffs in 20 actions with respect to 27 hotel units. Of the 20 actions, 17 involved transactions that did not close and three actions involved purchases that did close. Of the 22 litigants, only seven resided in Ontario. Mr. Wine was litigation counsel for the actions. Amongst the individual litigants were Mr. Sarbit Singh and Ms. Se Na Lee.

[20] In 2013, Justice Janet Wilson was assigned to case manage the actions.

[21] On February 11, 2014, the action between Talon and Ms. Persaud, mentioned above, (action CV-14-498306) was commenced.

[22] On November 24, 2014, Levine Sherkin Boussidan P.C. wrote the OSC and requested the Commission to investigate alleged breaches of the Securities Act by Talon, including the distribution of the document entitled “Estimated Return on Investment” as contrary to the OSC’s ruling. Nothing much came of this request to the OSC, and the resolution of the dispute between Talon and the purchasers was left to the courts.

[23] Levine Sherkin Boussidan P.C.’s clients in the actions before the courts sought rescission or damages based on three legal theories. First, the purchasers alleged that Talon and the other defendants negligently misrepresented the Estimate, and that the purchasers were entitled to rescission and damages. The critical issues in this first theory were proving that: (a) the Estimate was an actionable misrepresentation; and (b) the purchaser was misled because he or she or it relied on the Estimate. Second, the purchasers advanced a statutory misrepresentation claim under s. 130.1 of the Securities Act. The key issues here were: (a) whether the Act applied; and (b) whether the Estimate was an actionable misrepresentation. Reliance, however, was presumed for the statutory claim, which was the major advantage of the statutory claim. Third, the purchasers alleged that the defendants had violated the OSC’s ruling making the agreements of sale illegal contracts for which the purchasers were entitled to rescission and damages, without proving reliance.

[24] Relying on these three theories as the basis for rescission and recovery of the deposits and damages, in 2015, Mr. Singh and Ms. Lee in their respective individual actions brought a motion for summary judgment. This summary judgment motion was designed to be a test case for the actions that were being case managed by Justice Wilson.

[25] I was assigned the summary judgment motion, which was argued on June 25 and 26, 2015. On July 10, 2015, I dismissed the motion for summary judgment.[^9] I also dismissed the action as against the principals of Talon and against the Trump Defendants. Mr. Singh and Ms. Lee appealed to the Court of Appeal. Mr. Wine was counsel for the appellants.

[26] On October 13, 2016, the Court of Appeal affirmed my decisions that: (a) Mr. Singh’s and Ms. Lee’s second and third legal theories for a summary judgment for rescission or damages were unsuccessful; and (b) the action against the Trump Defendants should be dismissed. However, the Court of Appeal held that I erred in dismissing the action against the principals of Talon because they had not been joined in the summary judgment motion.[^10] Further, the Court of Appeal held that after I had found that four of the five elements for negligent misrepresentation had been made out against Talon, I erred in holding that Mr. Singh and Ms. Lee had failed to establish that they had reasonably relied on the Estimate. Moreover, the Court of Appeal held that the provisions in the standard form agreements of purchase and sale that exculpated Talon were unenforceable as unconscionable terms. The Court of Appeal also left it open for Mr. Singh and Ms. Lee to seek damages for fraudulent misrepresentation. In the result, Mr. Singh’s agreement was rescinded. Mr. Lee was granted a judgment for damages with a trial to determine the quantum of the damages.

[27] The Court of Appeal awarded Mr. Singh and Ms. Lee costs of $180,000 for the motion for summary judgment and a further $35,000 inclusive of disbursements and taxes for the appeal.[^11]

[28] Talon was not prepared to treat the outcome in the Singh v. Talon appeal as dispositive of the claims by purchasers who had paid deposits but who had not closed their hotel unit purchases, and on February 3, 2017, while still a defendant in an action brought by Talon, Ms. Persaud and Ten Eight Vacations Ltd. transformed themselves from regular litigation clients of Levine Sherkin Boussidan P.C. into Representative Plaintiffs. They instructed the firm to commence a proposed class proceeding against Talon in which they would represent all the purchasers of the hotel units.

[29] On February 8, 2017, Ms. Persaud amended her Statement of Claim in the proposed class action. On behalf of the putative Class Members, the Plaintiffs sued for rescission of the agreements to purchase the hotel units and for a refund of the deposits paid by the putative Class Members. The class was defined as:

all purchasers, except "Excluded Purchasers", defined below, of hotel condominium units (the "Hotel Units") in the hotel portion (the "Trump Hotel") of the Trump International Hotel and Tower (the "Trump Tower") who: (a) signed or who had signed on their behalf agreements of purchase and sale with the developer; the Defendant ("Talon"); (b) paid or who had paid on their behalf deposits or portions of deposits to Talon; and (c) did not complete their transactions with Talon. The "Excluded Purchasers" are: (a) purchasers against whom Talon has obtained a judgment forfeiting their deposit(s); and (b) purchasers who have obtained a judgment against Talon for repayment of their deposit(s).

[30] Reiterating the legal theories that had been used in the test cases, Ms. Persaud advanced six causes of action. Five causes of action were advanced in support of claims for rescission and for refunds of the deposits; namely: (1) Talon contravened the ruling of the OSC voiding the exemption and, therefore it unlawfully sold securities without a prospectus; (2) Talon made misrepresentations contrary of the Securities Act and was liable for a statutory cause of action; (3) Talon made misrepresentations contrary to the Condominium Act, 1998 and was liable for a statutory cause of action; (4) Talon was liable for negligent misrepresentation; and (5) Talon was liable for fraudulent misrepresentation. The sixth cause of action was for rescission of the releases signed by purchasers who had settled their claims against Talon after October 13, 2016. (If the releases were set aside, then these purchasers could advance the other five causes of action.)

[31] On August 16, 2018, Ms. Persaud moved to have her proposed class action certified, and she asked that the class action be consolidated with the action in which she was a defendant but had omitted to assert a counterclaim.

[32] On September 13, 2018, the action was conditionally certified as a class proceeding.[^12] I certified only the causes of action for negligent misrepresentation and fraudulent misrepresentation. I certified the rescission cause of action to set aside the releases signed by the subclass of purchasers who signed releases after October 13, 2016. I certified the following three common issues:

(1) In this class proceeding is there issue estoppel with respect to the findings of fact and law of the Court of Appeal in Singh v. Trump, 2016 ONCA 747?

(2) Did Talon make fraudulent misrepresentations? If so, what is the appropriate remedy?

(3) Did Talon make negligent misrepresentations? If so, what is the appropriate remedy?

[33] I concluded that the preferable procedure criterion was satisfied. In an observation that is pertinent to the analysis later in this decision about the worth of the settlement agreement, I stated at paragraph 154 of my certification decision:

154. If Talon were successful on all three common issues, there is a dispositive result in favour of Talon and the action would be dismissed. If the Plaintiffs were successful on the estoppel issue, and the Plaintiffs also proved fraud, then there would be a dispositive result in favour of the Class Members. If the Plaintiffs were successful on the estoppel issue but the Plaintiffs did not prove fraud, the litigation would be substantially advanced and there would be individual issues trials to determine individual reliance by the Class Members.

[34] At paragraphs 157 to 185 of my certification decision, in a passage that is pertinent to several issues discussed later in this decision about settlement and fee approval, I had the following to say about the representative plaintiff criterion:

General Principles: Representative Plaintiff Criterion

157. The fifth and final criterion for certification as a class action is that there is a representative plaintiff who would adequately represent the interests of the class without conflict of interest and who has produced a workable litigation plan. […]

Analysis: Representative Plaintiff

164. There is, however, one major problem. The problem with respect to Ms. Persaud’s qualifications to be a representative plaintiff is that she has selected Levine, Sherkin, Boussidan to be Class Counsel and that firm is also lawyer of record for the plaintiffs in sixteen individual actions.

165. The plaintiffs in those sixteen actions are putative Class Members. The plaintiffs in those sixteen actions must each make a decision whether to participate in the class action or to opt-out.

166. While conceding that the plaintiffs in each of the sixteen actions must obtain independent legal advice about whether to opt out of the class action, it is apparent that Levine, Sherkin, Boussidan wish to continue to act for the plaintiffs in the sixteen individual actions and also be Class Counsel for Ms. Persaud and her fellow Class Members. This is not permissible. Class Counsel cannot act for a representative plaintiff and also act for putative Class Members who have opted out of the class action.[^13]

167. Levine, Sherkin, and Boussidan argue that they have no conflict of interest in simultaneously acting for the plaintiffs in the sixteen actions and the Class Members because it has not been suggested that there is a conflict of interest and they have not been disqualified from acting simultaneously for the plaintiffs in the sixteen actions.

168. This argument is fallacious for two reasons. First, whether it has been suggested or not, there is indeed a conflict of interest in the law firm acting for the plaintiffs in the sixteen actions. The truth is that Levine, Sherkin, and Boussidan do have a conflict of interest, but it is inchoate or a waivable conflict arising from joint retainers with the plaintiffs in the sixteen actions.

169. The law firm has the inchoate conflict of interest associated with a joint retainer. Rule 3.4-5 of the Law Society of Ontario's Rules of Professional Conduct requires that in cases of joint retainers, where a conflict of interest develops that cannot be resolved, the lawyer cannot continue to act for both or all of the clients and may have to withdraw completely. The firm has joint retainers with the plaintiffs in the sixteen actions and those clients can waive the conflict in accordance with the Rules of Professional Conduct promulgated by the Ontario Law Society.

170. At the moment, the conflicts of interest associated with Levine, Sherkin, and Boussidan’s joint retainers for the plaintiffs in the sixteen actions are not particularly acute because the plaintiffs in the sixteen actions are collectively seeking a judgment against Talon and the other defendants, and all of the plaintiffs in the sixteen actions are united in pursuing a claim against the defendants.

171. There is a pending summary judgment motion and thus the Plaintiffs in the sixteen actions are further advanced in their litigation than the Class Members. Conflicts of interest amongst the clients of the sixteen actions retainers, however, may yet arise and become quite acute, particularly if there are settlement negotiations with the plaintiffs in the sixteen actions.

172. There, however, is nothing inchoate or waivable in the conflict of interest arising from action for the plaintiffs in the sixteen actions and simultaneously acting for the Class Members.

173. For present purposes, the point to emphasize is that Levine, Sherkin, and Boussidan’s argument that they have no conflicts of interest in acting for the plaintiffs in the sixteen actions is incorrect, and the firm’s conflicts of interest will be exacerbated if it were to act simultaneously for the plaintiffs in the sixteen actions and also the Class Members, who are already being asked to give instructions to pursue fewer remedies and to pursue fewer defendants than the plaintiffs in the sixteen actions are pursuing.

174. The second reason why Levine, Sherkin, and Boussidan’s argument is incorrect, is that with joint retainers outside of the Class Action, Levine, Sherkin, and Boussidan have a conflict of interest in acting for the Class Members who as a collective are entitled to an unconflicted representation. It is not for the court to waive those conflicts and indeed the conflicts are irreconcilable and the Class Proceedings Act, 1992 directs that the court not certify a class action if there is a conflict of interest.

175. In the context of class proceedings, there are three types of conflict of interest that require examination:[^14] (1) conflicts of interest arising from a lawyer's direct financial interest in the class proceedings, which are an inherent conflict allowed by the entrepreneurial model of the class proceedings legislation; (2) conflicts arising from a divergence of interest between the representative plaintiff and class members; and (3) conflicts arising from the lawyer's divided loyalties arising outside of the class proceeding. In the immediate case, all three types of conflict of interest would be present should Levine, Sherkin, and Boussidan simultaneously act for the plaintiffs in the sixteen actions and for the Class Members.

176. As already noted, Class Members will seek a different set of remedies against Talon from the remedies being sought by the plaintiffs in the sixteen actions, and there is a different set of defendants in the sixteen actions and the class action that only includes Talon as a defendant. That is not an unconflicted representation, and it is a retainer that will raise enormous problems in settling the class action.

177. For certain, the Class Members cannot be used as a lever to increase the pressure on the defendants in the sixteen actions to settle the sixteen actions. There is an obvious conflict in Levine, Sherkin, and Boussidan purporting to act on a contingency fee basis for a collective while at the same time having joint retainers with the plaintiffs in sixteen individual actions.

178. There is the inherent conflict of interest of entrepreneurial class actions, where Class Counsel may be incentivized to recommend a settlement that provides a very provident recovery from contingency fees and an escape from the risks of litigation but which settlement may provide miserly access to justice for the Class Members. If Class Counsel also acts for the sixteen plaintiffs and the Class Members, the conflicts would propagate.

179. For example, the sixteen plaintiffs may be best served if the Class Members settled cheaply because the proportion of the deposits not returned to the Class Members will be the monetary resource for payment of the damages claims of the sixteen plaintiffs, claims not being advanced by the sixteen plaintiffs.

180. For example, the Class Members may be best served if they retained a greater proportion of the deposits and the sixteen plaintiffs received less for their deposits because the proportion of the deposits not returned to the plaintiffs in the sixteen actions will be the monetary resource for the Class Members’ claims for costs and pre and post-judgment interest.

181. Further, the Class Members and the plaintiffs in the sixteen actions may differ on tactics and strategy. There is a strong potential for conflicting instructions to Levine, Sherkin, and Boussidan regarding the prosecution of the claims in the sixteen actions and the singular claim for rescission in the class action.

182. In my opinion, it would be inappropriate to make it a condition of the certification decision that Levine, Sherkin, and Boussidan remove itself as lawyer of record for the sixteen plaintiffs who after obtaining independent legal advice may decide to opt out of the class action. It is, however, appropriate to recognize that Levine, Sherkin, and Boussidan are disqualified as Class Counsel.

183. I note that if Levine, Sherkin, and Boussidan are disqualified as Class Counsel, then their conflict in advising the plaintiffs in the sixteen actions whether to participate instead in the Class Action is not removed, and, as already acknowledged by Levine, Sherkin, and Boussidan, the firm’s clients should obtain independent legal advice about whether they should participate in the Class Action.

184. Therefore, I shall allow Ms. Persaud sixty days to retain a new Class Counsel and subject to court approval of her choice, her action shall be certified as a class action.

185. If Ms. Persaud fails to satisfy the above condition, then I shall dismiss her motion to certify the action as a class action, but her action may continue as an individual action to be consolidated with action CV-14-498306.

[35] Thus, in September 2018, I conditionally certified the class action. The precondition for certification was that Ms. Persaud replace Levine Sherkin Boussidan P.C. with new Class Counsel within 60 days, failing which her motion for certification would be dismissed, but her action would be consolidated with the action in which she was a defendant. I disqualified Levine Sherkin Boussidan P.C. I ordered that Ms. Persaud’s choice of new Class Counsel must be approved by the Court.

[36] On October 11, 2018, Ms. Persaud filed a Notice of Appeal of the conditional certification to the Court of Appeal. Her principal ground of appeal was with respect to the disqualification of Former Class Counsel.

[37] Talon brought a motion to quash the appeal on the grounds that it was an interlocutory order for which the appellate court was the Divisional Court. On November 13, 2018, Ms. Persaud abandoned her appeal to the Court of Appeal and filed a motion for an extension of time to appeal to the Divisional Court.

[38] On December 14, 2018, Justice McCarthy granted Ms. Persaud an extension of time to appeal to the Divisional Court, which required leave, and he stayed the term of the conditional certification order until the determination of the motion for leave and any subsequent appeal should leave be granted.

[39] On February 12, 2019, the Divisional Court dismissed Ms. Persaud’s motion for leave to appeal.

[40] The condition in the certification decision was not satisfied within the 60-day period or the extended period provided by the stay, and in April 2019, Talon brought a motion to have the action decertified.

[41] In the decertification motion, Talon’s counsel, Symon Zucker, filed an affidavit that deposed that Talon had six settlements and four tentative settlements with putative Class Members who would opt out of the Class Action. He deposed that in addition to the 16 lawsuits being prosecuted by Levine Sherkin Boussidan P.C., there were three other lawsuits by putative Class Members prosecuted by other counsel and these plaintiffs would be opting out of the class action. He deposed that two putative Class Members had already succeeded in obtaining judgments against Talon, but Talon had appealed.

[42] The decertification motion, however, was never set down for a hearing.

[43] Ms. Persaud found it difficult to retain new Class Counsel because it was not known how many Class Members had resolved their claims for deposits and the extent to which there was money available for refunds to Class Members with outstanding claims. In other words, Ms. Persaud with the assistance of Former Class Counsel was having difficulty recruiting and persuading replacement Class Counsel that the potential recovery of deposits was worth the litigation risk.

[44] Levine Sherkin Boussidan P.C. believed that 204 of the hotel units were under contract and that 50 transactions had closed, leaving 154 hotel units with unperformed contracts where deposits were paid in whole or in part. Levine Sherkin Boussidan P.C. was aware of approximately 25-30 hotel units that had been the subject of litigation, but the firm was not aware of the disposition of the deposits for the other 124-129 hotel units. Levine Sherkin Boussidan P.C. estimated that the average deposit paid to Talon was between $200,000 to $250,000, and thus the law firm believed that the value of the deposits for the hotel units for which deposit recoveries could be sought was between $24.8 million to $32.25 million.[^15]

[45] In her effort to recruit new Class Counsel, Ms. Persaud, with the assistance of Levine Sherkin Boussidan P.C., brought a motion to compel Talon to provide information about the outstanding claims for deposits. The disclosure motion was successful, and on April 23, 2019, I ordered Talon to produce: (1) copies of the agreements of purchase and sale or assignments of the agreements for which deposits or insurance policies are being held; and (2) confirmation of the amounts of the deposits paid respectively for each of those agreements of purchase and sale.[^16]

[46] Finally, a year after the conditional certification, Ms. Persaud found a possible replacement for Former Class Counsel. In October 2019, Ms. Persaud retained Mack Lawyers and Flaherty McCarthy LLP to replace Levine Sherkin Boussidan P.C. as Class Counsel. Ms. Persaud signed a new Contingency Fee and Retainer Agreement dated October 7, 2019 The contingency fee agreement provides that Class Counsel may seek Court approval for a contingency fee of 33.3%. Before signing the Contingency Fee and Retainer Agreement, Flaherty McCarthy LLP and Mack Lawyers agreed to indemnify Ms. Persaud from any adverse cost consequences in the event that the action was ultimately unsuccessful.

[47] It took some time for Talon to provide the information that I ordered disclosed in April 2019, and I scheduled a case management conference on April 17, 2020. At the case conference, Talon withdrew its decertification motion, and it consented or did not oppose the appointment of Flaherty McCarthy LLP and Mack Lawyers as Class Counsel. I was satisfied that Current Class Counsel were qualified to replace Former Class Counsel. This action was unconditionally certified as a class action.[^17]

[48] On June 15, 2020, I heard a motion: (a) to revise the Certification Order; and (b) for approval of the Notice of Certification to the Class Members. I held that it was not necessary to revise the Certification Order and I approved the Notice of Certification.[^18]

[49] In July 2020, by a motion in writing, Ms. Persaud represented by current Class Counsel sought her costs of the certification motion, which would be payable to Former Class Counsel, and also the costs of preparing costs submissions. On July 20, 2020, I awarded costs on a partial indemnity basis of $35,000, all inclusive, for the certification motion and costs of $1,000, all inclusive, for the costs submissions.[^19]

[50] On September 1, 2020, Notice of Certification was distributed to purchasers of 131 of the hotel units. The opt out deadline was November 16, 2020. The purchasers of 25 units opted out of the class action.

[51] Throughout 2021 there were on again, off again settlement negotiations between Current Class Counsel and Talon and its deposit insurer.

[52] On November 16, 2021, Former Class Counsel – as plaintiffs and as lawyers of record for the plaintiffs – commenced an action against current Class Counsel for a share of the future fees earned by Current Class Counsel. By notice of action issued on November 16, 2021 MSTW Professional Corporation, Mitchell Wine and Levine Sherkin Boussidan P.C. sued Paul Mack and Mack Lawyers (the “Wine v. Mack Action”).[^20] Former Class Counsel sought: (a) declaration that they are entitled to a portion of the counsel fees to be earned by the Current Class Counsel; (b) damages of $2 million arising from Current Class Counsel’s failure to pay Former Class Counsel the amount of fees to which they are entitled; and (c) punitive and aggravated damages in the amount of $200,000.

[53] I was not advised about the court action and the feud between Former Class Counsel and Current Class Counsel.

[54] On March 26, 2022, March 28, 2022, and June 16, 2022, Clifford Hendler, an experienced mediator presided at settlement discussions between Current Class Counsel and Talon. Eventually, the parties agreed to a settlement with a gross settlement fund of $5.75 million. The parties agreed to a general framework for the claims administration process.

[55] On June 17, 2022, counsel for Mr. Mack in the Wine v. Mack Action sent an email message to Former Class Counsel’s counsel in the Wine v. Mack Action. The email message stated:

Dear Counsel:

Re: MSTW Professional Corporation, Mitchell Wine and Levine Sherkin Boussidan Professional Corporation Court File No. CV-21-672206

I have reviewed the Statement of Claim as it relates to the above referenced matter. Apart from the fact that there is no properly pleaded cause of action, there is no claim as against Paul Mack and Mack Lawyers. Our recommendation to our client is to bring a motion under Rule 21 on the basis that there is no properly pleaded cause of action and that this matter is exclusively under the Class Proceedings Act, R.S.O. 1992 (inter alia, Sections 12 and 32). However, prior to doing so, we are serving the attached Demand for Particulars and Request to Inspect. Your clients’ claim for legal fees would be a claim in the class proceeding which would have to be approved by the court. What should occur, in our opinion, is that your client should seek an attendance before the case management judge in the class action proceedings and request that he/she direct that your client be added to the service list. At the fee approval stage, your client can make any claims in as it relates to fees. If your client is not agreeable to dismissing the action as against Paul Mack, we will be seeking costs on a full indemnity basis and proceeding by way of a motion pursuant to inter alia, Rule 21. Please note that this letter is written with prejudice and will be relied upon in any subsequent court proceedings including seeking costs on a full indemnity basis.

Yours very truly, TEPLITSKY, COLSON LLP per: Jonathan Kulathungam

[56] Once again, I was not advised of this feud between Former and Current Class Counsel.

[57] Meanwhile, Current Class Counsel and Talon set about to draft a formal settlement agreement. The drafting of the Settlement Agreement was complicated by the involvement of counsel for Northbridge Insurance, the parent corporation for the deposit insurer. On July 7, 2022, the parties signed a formal Settlement Agreement.

[58] Ms. Persaud supports the settlement as set out in the Settlement Agreement. Current Class Counsel recommends the Settlement Agreement as fair and reasonable and in the best interests of the Class Members.

[59] On July 19, 2022, I approved the notice and the notice plan for the settlement approval hearing.[^21]

[60] The notice was distributed, and Class Counsel also sent emails to the Class Members who had contacted them directly. There have been no objections to the settlement.

[61] Current Class Counsel will have spent approximately 1,500 hours from the time they were retained in 2019 until the return of the Settlement Approval motion. If the settlement is approved, Current Class Counsel anticipate expending 100 to 200 hours to implement the Settlement and to make reports to the parties and to the court.

[62] The settlement and fee approval motion was scheduled for October 6, 2022.

[63] On September 19, 2022, Ms. Persaud delivered her Motion Record for the settlement approval and fee approval motion. The motion was supported by the affidavit dated September 17, 2022 of Ms. Persaud and by the affidavit dated September 17, 2022 of Mr. Paul Mack.

[64] Meanwhile, on September 23, 2022, Current Class Counsel delivered a Statement of Defence in the Wine v. Mack action. I was not advised of the delivery of the Statement of Defence in the Wine v. Mack Action, of which I continued to be unaware.

[65] On September 29, 2022, Former Class Counsel delivered a motion to intervene in the settlement approval and fee approval motion. Former Class Counsel’s motion was supported by the affidavit dated September 30, 2022 of Mr. Wine. In their motion to intervene, Former Class Counsel sought:

a. if necessary, leave to intervene in the within proceeding as an added party;

b. if necessary, an Order approving the Fee Sharing for the purposes of ss. 12, 32, and 33 of the Class Proceedings Act, subject to the determination of the MSTW Professional Corporation, Mitchell Wine and Levine Sherkin Boussidan Professional Corporation v. Paul Mack and Mack Lawyers (the “Wine v. Mack Action”),[^22] and

c. if opposed, the costs of this Motion.

[66] Rather than paraphrase it, I shall set out below the relevant parts of Mr. Wine’s affidavit. Mr. Wine deposed:

1. I was the lawyer of record for the plaintiffs from the commencement of the within proceeding through to the certification of the within proceeding as a class action […]

2. At the time the within proceeding was commenced, I was a lawyer at the law firm of Levine Sherkin Boussidan Professional Corporation (“LSB”), although I currently practice through MSTW Professional Corporation (“MSTW”) […]

3. LSB and I were the lawyers for the plaintiffs from the commencement of the within proceeding.

4. Subsequent to the Certification Decision, the Moving Parties took steps to identify new counsel for the plaintiff herein, Ashleka Persaud (“Persaud”), experienced in the carriage of class actions. Although Persaud is the plaintiff, most of my conversations with Persaud occurred through her husband and authorized agent, Jason Boccinfuso (“Boccinfuso”). […]

5. Subsequent to the Certification Decision, Boccinfuso repeatedly acknowledged that the within proceeding was my idea in the first place and that if the within proceeding succeeds then that success was based upon an earlier decision I obtained in the Court of Appeal for Ontario, which decision is reported as Singh v. Trump, 2016 ONCA 747 […]

6. During these discussions, Boccinfuso consistently stated that it was important that I remain involved in the instant proceeding as much as possible because of my intimate knowledge of the within proceeding and because the Singh Decision significantly contributed to the success of the within proceeding and, therefore, I should share in the fees that would ultimately be earned in the within proceeding.

7. Subsequent to the Certification Decision, I identified another law firm experienced in prosecuting class actions, Landy Marr Kats LLP (“LMK”), and entered into discussions with members of that firm to transfer carriage of the within proceeding to that LMK, subject to the approval of Persaud and the Court, which included the opportunity for the Moving Parties to: (a) remain involved in a manner consistent with the Certification Decision; (b) re-assume carriage or co-carriage once circumstances allowed; and, (c)participate in the fees to be earned in the within proceeding.

8. While I was engaged in discussions with LMK, which discussions I reported to Persaud and Boccinfuso, Boccinfuso asked me to consider transferring carriage of the within proceeding to Boccinfuso’s long-time lawyer, Paul D. Mack, and Mr. Mack’s firm, Mack Lawyers (Mr. Mack and his firm being “Mack”).

9. In response to Boccinfuso’s request that I consider Mack assuming carriage of the within proceeding, I advised Boccinfuso that I had concerns about Mack’s lack of experience in dealing with class actions and that the Court would have to approve any person seeking carriage of the within proceeding.

10. On or about March 19, 2019, I received a telephone call from Mr. Mack who spoke as if it was a foregone conclusion that he would be assuming carriage of the within proceeding. I did not share that view and, after some unsatisfactory discussion, I ended that call by hanging up on Mack. I reported this phone call to Boccinfuso and Persaud.

11. Between March 19 and March 22, 2019, Boccinfuso tried to persuade me to work with Mack on the within proceeding in a manner consistent with the Certification Decision with any fees earned divided between Mack and me.

12. In light of my March 19, 2019, telephone call with Mack, and Mack’s lack of experience with class actions, I was skeptical that Mack was an appropriate choice for class counsel but, at Boccinfuso’s request, I agreed to meet with Mack in Oshawa to discuss the matter.

13. On or about March 22, 2019, I met with Mack, as well as Boccinfuso and Boccinfuso’s father, at a cigar club in Oshawa (the “Meeting”). During the Meeting, Mack and I agreed: (a) to work together on the within proceeding in a manner consistent with the Certification Decision; (b) that the fees that might ultimately be earned would be shared between them in a way that was fair to each of us; and (c) that I would resume carriage or co-carriage of the within proceeding if and when it became possible to do so within the terms of the Certification Decision (the “Agreement”).

14. By email dated October 7, 2019, Mack advised me that he was in discussions with another law firm to prosecute the within proceeding and that if I had any concerns then I should forthwith advise Mack of them. I did have concerns because the terms of the Agreement did not allow for another law firm to play a permanent role in the prosecution of the within proceeding.

15. Subsequent to Mack’s October 7, 2019 email, I repeatedly tried to communicate with Mack by telephone and email to express my concerns about Mack working with another law firm, but Mack did not respond to any of my telephone calls or my emails. I found this surprising because, to that point in time, Mack had been fairly good in the timeliness of his communications with me.

16. Mack failed to engage with me on this issue for six weeks. In fact, he wrote to me on November 15th and ignored my emails and phone calls. Finally, on November 20, 2019, Mack advised me that he had made an agreement with another law firm but confirmed my entitlement to share in the fees by, in relevant part, writing “It is very difficult to know just how to work a fair deal – but I can advise that there is a ‘carve-out’ of a portion of the legal costs that (hopefully) will allow us to recognize value added.” […]

17. Subsequent to Mack’s email dated November 20, 2019, Mack resiled from the Agreement and denied ever having made the Agreement. Mack continues to deny the Agreement.

18. The Agreement, and Mack’s breach of same, are the subject of an action the Moving Parties commenced in the Superior Court of Justice, at Toronto, having the title MSTW Professional Corporation, Mitchell Wine and Levine Sherkin Boussidan Professional Corporation v. Paul Mack and Mack Lawyers bearing Court File No. CV21-672206, which action was commenced by Notice of Action issued November 17, 2021 (the “Wine Action”). The Wine Action claims damages Mack for, amongst other things, breach of the Agreement or, in the alternative, on the basis of quantum meruit and unjust enrichment for a reasonable share of the entrepreneurial legal fees. […]

19. On June 17, 2022, Mack’s lawyers in the Wine Action served a Demand for Particulars and Request to Inspect Documents. […]

20. Between June 17, 2022, and September 23, 2022, the lawyers for the parties to the Wine Action exchanged correspondences but were unable to reach a resolution acceptable to said parties.

21. In the meantime, and unbeknownst to me at the time, on July 19, 2022, the Honourable Justice Perell approved the form and content of the proposed Notice of Settlement Approval Hearing for the approval of the proposed settlement of the within proceeding (the “Proposed Settlement”). The Notice of Settlement Approval Hearing discloses that the Proposed Settlement, amongst other things, contemplates a payment by the defendant herein, Talon International Inc. (“Talon”), of five million and seven hundred and fifty thousand dollars ($5,750,000) (the “Gross Settlement Fund”) and the payment of 33.3% of the Gross Settlement Fund (i.e. $1,914,750) to the lawyers for the plaintiffs herein (the “Contingency Fee”).

24.On or about August 29, 2022, I learned of the Proposed Settlement and on August 29, 2022, my lawyers in the Wine Action wrote to Mack’s lawyers in the Wine Action and, amongst other things, advised them that I had learned of the motion brought by the plaintiffs to the within proceeding for approval of class counsel’s fees and asked that Mack’s lawyers confirm by September 6, 2022, that they will disclose the Wine Action to this Honourable Court. […]

25. On September 7, 2022, Wine’s lawyers, having received no response from Mack’s lawyers to the email of August 29, 2022, followed-up with Mack’s lawyers and requested the courtesy of a response. […]

26. On September 16, 2022, Mack’s lawyers wrote to the Moving Parties’ lawyers but did not confirm that Mack would be disclosing the Wine Action to this Honourable Court.

27. On September 17, 2022, the Moving Parties’ lawyers again asked Mack’s lawyers whether they will be disclosing the Wine Action and the claims made therein to this Honourable Court. […]

28. On September 23, 2022, Mack’s lawyers delivered a Statement of Defence to the Wine Action, which denies the Agreement and the Moving Parties’ entitlement to receive any monies from Mack at law or in equity, under cover of correspondence wherein Mack’s lawyers advised that Mack will not be disclosing the Wine Action to the Court hearing the motion to approve the settlement of, and class counsel’s fees for, the within proceeding; and that if the Moving Parties are going to do so then Mack’s lawyers ask that the Demand for Particulars, Request to Inspect and Statement of Defence be disclosed to the Court. […]

29. The Moving Parties take no position on the motion to approve the Proposed Settlement and lack the information sufficient to take a position with respect to the quantum of fees being sought by counsel.

30. The Moving Parties seek leave to intervene (1) to ensure that the Court is aware of the fee dispute between the Moving Parties and Mack, and (2) to ensure that any Order approving said settlement and fees not impede the Moving Parties’ prosecution of the Wine Action.

31. The Moving Parties are concerned that the Order made approving the Proposed Settlement could adversely affect the Moving Parties by impairing the Moving Parties’ prosecution of the Wine Action and ask that any Order made by this Honourable Court when it determines whether or not the Court will approve the Proposed Settlement be made without prejudice to the Wine Action.

32. The Moving Parties ask that this Honourable Court approve the Agreement for the purposes of ss. 12, 32, and 33 of the Class Proceedings Act, 1992, S.O. 1992, c. 6, subject to the determination of the Wine Action, so that the issues in the Wine Action may be determined on its merits.

33. I make this affidavit in support of the motion brought by the Moving Parties and for no other or improper purpose.

[67] Mr. Wine appends to his affidavit, his Statement of Claim in the action against Current Class Counsel (the Wine v. Mack Action). The Statement of Claim is a recital of the same narrative and the same allegations made in his affidavit. For present purposes, the following additional allegations should be noted. They are set out in the concluding paragraphs of the pleading, as follows:

30. As a result, the Defendants are in breach of contract entitling the Plaintiffs to damages.

31. In the alternative, the Plaintiffs plead that they are entitled to recovery on the basis of the doctrines of quantum meruit and unjust enrichment.

32. In assessing the value of Wine’s contribution to the Class Action, the Plaintiffs plead it should be based on the entrepreneurial portion of the Class Action legal fee to be earned.

33. To calculate the entrepreneurial portion of the fee, the Plaintiffs plead the docketed hours spent by Mack and other lawyers involved in the Class Action should be deducted from the total fee to be paid to the lawyers for the Class Action. The balance of the legal fees to be paid are the entrepreneurial fees to be earned in the Class Action.

34. The Plaintiffs plead their entitlement to recovery under the doctrines of quantum meruit and unjust enrichment should be based upon a reasonable share of the entrepreneurial legal fees to be earned.

35. In the further alternative, the Plaintiffs plead they are entitled to a referral fee for agreeing on March 22nd, 2019 to transfer representation in the Class Action to the Defendants.

[68] In the Wine v. Mack Action, as noted above, Current Class Counsel have delivered a Statement of Defence. For present purposes, the pertinent portions of that pleading are as follows:

STATEMENT OF DEFENCE

4. There is no properly pleaded cause of action.

5. There is no basis to claim punitive or aggravated damages.

6. The Defendant Mack is a lawyer licensed to practice law in the Province of Ontario and operates his practice under the business name Mack Lawyers from Oshawa, Ontario. Mack has been a lawyer for over 4 decades.

7. On or about February 28, 2018, a motion was brought to certify a class in a class action bearing Court File CV-17-569023-00CP (“Class Action”). The Class Action involved the purchase of hotel condominium units by purchasers in the former Trump Hotel in Toronto.

8. On or about September 13, 2018, prior to the involvement of Mack, an order was issued by Justice Perell certifying the Class Action making the Certification CONDITIONAL on Mitchell Wine (“Wine”) ceasing to be counsel because of conflict of interest (“Perell J. Order”).

9. The Perell J. Order was appealed, the appeal was dismissed.

10. The representative Plaintiff and her husband Jason Boccinfuso (“Boccinfuso”) contacted Mack to seek his advice and to retain him to act for the Defendants [sic] in the Class Action.

11. Contrary to what is set out in the Statement of Claim, there was no agreement reached on March 22, 2019 or any other date with the Plaintiffs in the within action. The Defendants specifically deny inter alia:

(a) Paragraph 22 of the Statement of Claim: there was no agreement that Wine and Mack “agreed to work together.” The simple fact was that pursuant to the Order of Perell J., Wine could not represent the Class.

(b) Paragraph 23 of the Statement of Claim: there was never any agreement that the fees “that might ultimately be earned in the Class Action would be shared between Wine and Mack.”

12. Ultimately, the Plaintiffs in the Class Action retained Paul Mack and Sean Brown of Flaherty, McCarthy LLP to act as counsel for the Class.

13. There was no contract between the Defendants and the Plaintiffs. Accordingly, there was no breach of contract. There could be no breach, when there was no contract.

14. The Defendants specifically deny that the Plaintiffs are entitled to recover on the basis of quantum meruit and/or unjust enrichment.

15. The Plaintiffs have suffered no damages and the Defendants put the Plaintiff to the strict proof thereof. In fact, the Plaintiffs were paid for their efforts and time up to the Perell J. Order.

16. There is no basis in law or in equity as to the Plaintiffs’ claim for the “entrepreneurial portion of the Class Action legal fee to be earned.”

17. There is no basis in law, in equity or in contract to any claim for “referral fee” as set out in paragraph 35 of the Statement of Claim.

18. The Defendants specifically deny paragraph 36 and the Plaintiffs’ claim for punitive and aggravated damages. There is no such basis.

19. The Defendants served a Demand for Particulars and Request to Inspect. The Plaintiffs have refused to respond to both the Demand for Particulars and the Request to Inspect.

20. The Defendants seek an order dismissing this action in its entirety with costs on a substantial indemnity basis and in the alternative, a partial indemnity basis.

[69] On October 6, 2022, the settlement approval and fee approval hearing was argued. I granted Former Class Counsel intervenor status as a party for the fee approval motion. I otherwise reserved judgment.

[70] As a housekeeping matter, I direct the parties to take out an order granting Former Class Counsel intervenor status as a party to the fee approval motion.

C. The Terms of the Settlement Agreement

[71] The key terms of the settlement agreement are as follows:

1. The Defendant makes no admission of liability. The Defendant pays $5.75 million, all inclusive, (the “Settlement Amount”) to a Claims Administrator The payment is revisionary as described below.

2. The Defendant pays the claims adjudication expenses including, but not limited to, interest, costs, fees, class counsel fees, disbursements, and taxes.

3. The “Net Settlement Amount” means the Settlement Amount minus (1) approved Class Counsel fees (including HST and disbursements) and (2) a $150,000 holdback intended to pay for Claims Administration and Claims Adjudication Expenses.

4. Assuming Class Counsel’s fees and disbursements are approved, this draws down the Settlement Amount by $1,914,750 for legal fees, $248,917.50 for HST applicable to legal fees, and $15,000 for disbursements inclusive of HST. These sums are a first charge upon the Settlement Amount and may be deducted by Class Counsel from the Settlement Amount before transferring the Net Settlement Amount.

5. Assuming that Class Counsel’s fees, HST and disbursements are fixed and approved, and assuming the entirety of the $150,000 holdback is required to pay for Claims Administration and Claims Adjudication Expenses, the net Settlement Amount will be $3,421,332.50.

6. Ricepoint Administration Inc. is to be appointed and act as the Claims Administrator.

7. Clifford Hendler is to be appointed and act as the Claims Adjudicator.

8. The claims bar deadline is 100 days after the date on which the Notice of Settlement Approval is first provided in accordance with the Notice Plan.

9. In accordance with the Settlement Agreement and Distribution Protocol, to establish that he or she is an Eligible Claimant, a Class Member shall:

a. provide Proof of Identification to the Claims Administrator;

b. complete the Claim Questionnaire and Attestation, which will include:

i. confirmation as to whether the Class Member signed an Agreement of Purchase and Sale directly with Talon (Direct Purchaser), or acquired their interest in a Hotel Unit by way of an Assignment Agreement with a person or corporate entity who purchased a Hotel Unit (Indirect Purchaser);

ii. proof of payment under the agreement whether to Talon or to an Assignor;

iii. the reason or reasons why the Class Member chose to purchase a Hotel Unit;

iv. the Class Member’s occupation at the time of purchasing the Hotel Unit;

v. confirmation that the Class Member: received or did not receive the Estimated Return on Investment documentation; from whom the Class Member received the documentation; and when and what the Class Member received;

vi. confirmation that the Class Member relied upon the Estimated Return on Investment documentation and the basis upon which they relied on the documentation;

vii. production of any documentation between Talon and the Claimant after entering into the Agreement of Purchase and Sale or Assignment Agreement, including without limitation: any settlement agreements, mutual releases or judgments in favour of the Claimant or in favour of Talon; and

viii. production of the Estimated Return on Investment documentation and if not production, an explanation as to why it is not produced.

10. The Claim Questionnaire and Attestation, and any further documentation provided by the Eligible Claimant to the Claims Administrator shall be provided to the Defendant’s Counsel for review. The Defendant’s Counsel shall, upon receiving same, provide its written response to the validity of the Eligible Claimant’s Claim within 30 days of receipt by the Defendant’s Counsel.

11. The Claims Administrator will make the initial determination as to whether a Class Member is an Eligible Claimant.

12. If there is a dispute as to who is an Eligible Claimant, it will be determined by the Claims Adjudicator. The Claims Adjudicator shall have 10 days to make a determination as to whether the Eligible Claimant is an Approved Claimant.

13. To be an “Approved Claimant”, a Class Member must

a. submit the Claim Questionnaire and Attestation prior to the Claims Bar Deadline;

b. not have previously opted out of the class proceeding;

c. not have previously obtained a valid judgment against Talon for a deposit refund;

d. not have previously had a valid judgment obtained against them by Talon for forfeiture of the refund;

e. not be an Ineligible Claimant, meaning they are not a corporate entity or person who purchased a Hotel Unit for the purpose of re-selling the unit by direct sale or assignment;

14. The Claims Adjudicator shall determine if an Eligible Claimant is an Approved Claimant on the basis of the documentation produced by the Claimant and the written response provided by the Defendant’s Counsel as set out above.

a. Among other things, the Claims Adjudicator may be required to determine the validity of a settlement as between the Claimant and Talon entered into after October 13, 2016, which is the date of the Court of Appeal’s decision in Singh v. Trump, 2016 ONCA 747.

15. The Claims Adjudicator shall have the sole discretion to complete a video interview with an Eligible Claimant via video-conference call where the Claims Adjudicator is of the view that such an interview is necessary to determine whether an Eligible Claimant is an Approved Claimant. The Claims Adjudicator shall record the video interview. The video interview shall be released with the Claims Adjudicator’s decision of whether an Eligible Claimant is an Approved Claimant.

16. The decision of the Claims Adjudicator is subject to an appeal on an error of law only. The procedure for the appeal is as required by the Rules of Civil Procedure. [I take this to be a reference to Rules 54 and 55 with respect to the confirmation of a report of a referee.]

17. An Approved Claimant will be entitled to compensation based on whether they were a Direct Purchaser or Indirect Purchaser of the Hotel Unit.

a. A Direct Purchaser’s share of the Settlement Fund is limited to a pro rata basis up to 75% of the total original deposit amount paid, with no interest payable under the Condominium Act, 1998, or the Courts of Justice Act, and no payment towards costs. (The reduction reflects the litigation risk facing each Direct Purchaser should he or she be required to participate in an individual issues trial.)

b. The recovery of an Indirect Purchaser is limited to a pro rata basis up to 25% of the total original deposit amount paid, with no interest payable under the Condominium Act, 1998 or the Courts of Justice Act and no payment towards costs. (The reduction reflects the much more significant litigation risk facing each Indirect Purchaser should he or she be required to participate in an Individual Issues Trial.)

18. Any surplus amounts remaining in the Escrow Account following the payment of Claims Administration and Claims Adjudication Expenses and Class Counsel Fees, and which are not distributed to Approved Claimants pursuant to the Distribution Protocol shall be considered further deposit monies that are forfeited to and in favour of the Defendant and shall accordingly revert to the Defendant and be paid to such entity as the Defendant may direct.

19. The Claims Administrator shall send Notice to Class Members, by regular lettermail to the address or addresses for each Class Member based on information in the Defendant’s documents, including letters to the lawyer representing the class members when they entered into the Agreement of Purchase and Sale as identified in the defendant’s documents.

20. Class Counsel will post the Notice at the website under the domain name www.TalonClassAction.com. Class Counsel will create a Facebook Page providing Notice to Class Members.

[72] In seeking approval of the settlement, in paragraphs 27-28 of her supporting affidavit, Ms. Persaud deposed as follows:

27. I acknowledge that the proposed settlement is imperfect. However, it is still fair and reasonable in the circumstances. It gives a significant recovery to Direct Purchasers because they have the best chance of success if the matter proceeded through the litigation process. A reduction from their full recovery is reasonable and reflects the risk they face in litigation. As well, there is still recovery available for Indirect Purchasers even though their legal claim is tenuous if they never dealt directly with the Defendant.

28. Both Direct and Indirect Purchasers will be assisted by the Claims Administrator through the Claims Administration and Claims Adjudication process. They will be required to complete a fairly straightforward Questionnaire and produce the same information and documentation that would be required at an Individual Issues Trial. They may also be subjected to a Claims Adjudication process that does not require them to be cross-examined by counsel for the Defendant (which was initially demanded by the Defendant and firmly refused by Class Counsel).

[73] In recommending approval of the settlement, Paul D. Mack as Class Counsel deposed the following as to the merits of the settlement at paragraphs 65-68 of his affidavit:

65. Class Counsel strongly believes that the proposed settlement represents a fair resolution that achieves for all Class Members a consequential financial award obtained by way of a relatively simple and efficient claims process. It is the opinion of Class Counsel that the proposed settlement falls within the “zone of reasonableness”. It provides financial recovery for those same Class Members who would have been required to participate in a lengthy and unpredictable series of individual issues trials. It removes the necessity of a formal and lengthy court process and replaces it with a paper-based claims process and a limited adjudication process where necessary.

66. The litigation has been hard-fought by a Defendant represented by respected and experienced counsel. The Defendant has been transparent that it intended to fight this matter if Class Counsel proceeded to a summary judgment motion, common issues trial and individual issues trials. It has maintained that it can successfully defend against any Class Member who comes forward and attempts to prove that they subjectively relied on the Defendant’s marketing materials. The Defendant has fought this litigation on that basis and has fought other litigation brought by other Hotel Unit purchasers.

67. There were serious risks for the Plaintiffs if this matter did not resolve. Having said this, we believe strongly that we would be successful on the common issues if the dispute proceeds by way of a summary judgment motion or a common issues trial. Having said this, there was no certainty that the Plaintiffs and Class Counsel would be successful, and certainly not with respect to all causes of action and in relation to all Class Members.

68. Bearing in mind the significant risks of proceeding through litigation and considering that the recovery could likely be restricted to only some of the affected Class Members who came forward and participated in a trial, Class Counsel, who have significant experience in this challenging area, view this settlement as extremely favourable.

D. Settlement Approval

1. Settlement Approval: General Principles

[74] Section 27.1 (1) of the Class Proceedings Act, 1992, provides that a settlement of a class proceeding is not binding unless approved by the court. To approve a settlement of a class proceeding, the court must find that, in all the circumstances, the settlement is fair, reasonable, and in the best interests of the class.[^23] For present purposes, the relevant provisions of s. 27 are as follows:

Settlement

27.1 (1) A proceeding under this Act may be settled only with the approval of the court.

(3) A settlement under this section is not binding unless approved by the court.

Effect of settlement

(4) If a proceeding is certified as a class proceeding, a settlement under this section that is approved by the court binds every member of the class or subclass, as the case may be, who has not opted out of the class proceeding, unless the court orders otherwise.

Settlement must be fair and reasonable

(5) The court shall not approve a settlement unless it determines that the settlement is fair, reasonable and in the best interests of the class or subclass members, as the case may be.

Differences not a bar

(6) The court may approve a settlement even if individual class or subclass members, including a representative party, are subject to different settlement terms.

Evidentiary requirements

(7) On a motion for approval of a settlement, the moving party shall make full and frank disclosure of all materials facts, including, in one or more affidavits filed for use on the motion, the party’s best information respecting the following matters, which the court shall consider in determining whether to approve the settlement:

1. Evidence as to how the settlement meets the requirements of subsection (5).

2. Any risks associated with continued litigation.

3. The range of possible recoveries in the litigation.

4. The method used for valuation of the settlement.

5. The total number of class or subclass members, as the case may be.

6. A plan for allocating and distributing the settlement funds, including any proposal respecting the appointment of an administrator under subsection (14), and the anticipated costs associated with the distribution.

7. The number of class or subclass members expected to make a claim under the settlement and, of them, the numbers of class or subclass members who are and who are not expected to receive settlement funds.

8. The number of class or subclass members who have objected or are expected to object to the settlement, and the nature or anticipated nature of the objections.

9. A plan for giving notice of the settlement to class or subclass members in the event of an order under section 19, and the number of class or subclass members who are expected to obtain the notice.

10. Any other prescribed information.

Supervisory role of the court

(13) The court shall supervise the administration and implementation of the settlement.

Court-appointed administrator

(14) The court may appoint a person or entity to act as an administrator to administer the distribution of settlement funds.

Duty of administrator, other person or entity

(15) An administrator appointed by the court or, if no administrator is appointed, the person or entity who administers the distribution of the settlement funds, shall administer the distribution in a competent and diligent manner.

[75] In determining whether a settlement is reasonable and in the best interests of the class, the following factors may be considered: (a) the likelihood of recovery or likelihood of success; (b) the amount and nature of discovery, evidence or investigation; (c) the proposed settlement terms and conditions; (d) the recommendation and experience of counsel; (e) the future expense and likely duration of the litigation; (f) the number of objectors and nature of objections; (g) the presence of good faith, arm’s-length bargaining and the absence of collusion; (h) the information conveying to the court the dynamics of, and the positions taken by, the parties during the negotiations; and (i) the nature of communications by counsel and the representative plaintiff with class members during the litigation.[^24]

[76] In determining whether to approve a settlement, the court, without making findings of fact on the merits of the litigation, examines the fairness and reasonableness of the proposed settlement and whether it is in the best interests of the class as a whole having regard to the claims and defences in the litigation and any objections raised to the settlement.[^25] An objective and rational assessment of the pros and cons of the settlement is required.[^26]

[77] The case law establishes that a settlement must fall within a zone of reasonableness. Reasonableness allows for a range of possible resolutions and is an objective standard that allows for variation depending upon the subject-matter of the litigation and the nature of the damages for which the settlement is to provide compensation.[^27] A settlement does not have to be perfect, nor is it necessary for a settlement to treat everybody equally.[^28]

[78] Generally speaking, the exercise of determining the fairness and reasonableness of a proposed settlement involves two analytical exercises. The first exercise is to use the factors and compare and contrast the settlement with what would likely be achieved at trial. The court obviously cannot make findings about the actual merits of the Class Members’ claims. Rather, the court makes an analysis of the desirability of the certainty and immediate availability of a settlement over the probabilities of failure or of a whole or partial success later at a trial. The court undertakes a risk analysis of the advantages and disadvantages of the settlement over a determination of the merits. The second exercise, which depends on the structure of the settlement, is to use the various factors to examine the fairness and reasonableness of the scheme of distribution under the proposed settlement.

2. Settlement Approval: Analysis and Discussion

[79] By far the hardest task of a judge managing a class action pursuant to the Class Proceedings Act, 1992[^29] is settlement approval and fee approval. Why? There are at least four reasons.

[80] First, the adversary system, upon which judges rely, disappears in the procedure for settlement and fee approval. Typically, there is no opposition to the settlement or the contingency fee. The adversarial system, the usual habitat of a judge, and the inquisitorial system, in which a judge may from time to time foray, both break down in the procedure for settlement approval and fee approval. There is no crucible of debate or inquisition from which the truth may emerge. The judge must rely on surrogate factors, such as the views of the Representative Plaintiff, who is behooved to have no conflicts of interest with the class members and who acts on their behalf. The surrogate factors, however, are suspect. The parties proffer evidence that is all of predictably self-serving and often less than candid. The pro forma evidence is untested by discovery or by cross-examination. The few occasions when a settlement is rejected can be explained by the concerted objections of a class member, but this rarely occurs. It is not difficult to prove that a settlement in the hand is better than a judgment waiting in the thorny thickets of litigation, and with the absence of opposition, how can a judge, even a cynical one, refuse settlement even in appropriate cases?

[81] Second, a judge is discomfited by being required to be a doctor for the litigation to make sure that the inherent conflicts of interest of an entrepreneurial model of class proceedings have not metastasized. Under the entrepreneurial model of contingency fees measured against the value of the settlement for the entire class, Class Counsel has far more to gain than any Class Member from a settlement. This inherent conflict of interest emerges in full bloom on the occasion of settlement and fee approval.

[82] Third, in this last regard, instead of being just an impartial adjudicator, the judge is discomfited by being required to take sides in a litigation because the settlement approval procedure requires the doctor/judge to investigate and to diagnose whether the settlement is fair and in the best interests of the Class Members. This means that the doctor/judge is required to side with a litigant, the Class Members, and to protect their interests - from their own lawyer, who typically has far more to gain from the settlement than do individual Class Members.

[83] Fourth, in this last regard, instead of being just an impartial adjudicator under the adversary system, the judge is discomfited because the fee approval procedure requires the doctor/judge to investigate to determine whether Class Counsel’s fee is reasonable and fair and genuinely earned and deserved. Again, this means that the doctor/judge is required to side with a litigant, the Class Members, and to protect their interests - from their own lawyer.

[84] Of course, it is not every case where settlement and fee approval is challenging. The challenge is always there in theory, but the challenge does not always appear in reality, and most of the time there is no difficulty and no troublesome features and even the cynical judge can rest easy when approving the settlement and the fee. The case at bar is not one of those untroublesome cases.

[85] The first trouble in the immediate case is that based on Mr. Wine’s evidence, it appears that Ms. Persaud abandoned her responsibility as Representative Plaintiff by allowing her husband to assume command and encourage the disqualified Mr. Wine to continue to act in the class action. This is most unfortunate because it appears that Mr. Boccinfuso either did not understand or intentionally ignored my ruling that Former Class Counsel were disqualified. With that disqualification, Former Class Counsel was not in a position to give advice or take instructions. Ms. Persaud was no longer a client. When Mr. Boccinfuso asked Mr. Wine to stay involved, Mr. Wine should have told him that it would be improper and impossible for him to do so. Mr. Wine was bound by the conditional certification order that Ms. Persaud had been unsuccessful in appealing. There was no basis for Mr. Wine to act like he had a say in who should be replacement class counsel. There was no basis for Mr. Wine to give advice about whether Mr. Mack had the competence to be replacement Class Counsel; that was a matter for the court to determine. It was wrong for Mr. Boccinfuso to allow Mr. Wine to act as if he had an ownership interest in the class action because of his creativity and success in Singh v. Trump. A class action is not the property of entrepreneurial Class Counsel; the class action belongs to the litigants not their lawyer. In short, the recommendation of Ms. Persaud in favour of the settlement has been compromised by her abandonment of her post as representative plaintiff. A representative plaintiff is obliged to act in the best interests of the class members and not in the best interests of Former Class Counsel or Current Class Counsel for that matter.

[86] The second trouble in the immediate case is that the recommendation of Current Class Counsel is also compromised by the litigation between Current Class Counsel and Former Class Counsel. Mr. Mack denies that there was any fee sharing agreement, but the issue is before the court in an action external to the class action, and Current Class Counsel should have brought the matter to my attention. I should not have had to learn about this feud by an intervenor motion. The Counsel Fee is part of the settlement fund, and the settlement fund belongs to the Class Members. The feud is about the Class Members’ settlement funds and the court should have been told about the claim being advanced by Former Class Counsel.

[87] A third trouble is that I have had opaque disclosure of the information provided by Talon that led to the creation of a gross settlement fund of $5.75 million. I have not been provided with the details of what was achieved by the production motion that I described above, and I have had to piece together what is the likely number of claimants to a share of the net settlement fund. However, despite the paucity of information, I am satisfied that the settlement fund is the best that could have been achieved. I am satisfied that the settlement fund was the product of hard bargaining and that Class Counsel had the requisite information to arrive at this sum.

[88] In any event, once I consider the other factors, these troubles, large and small, are not enough by themselves to justify rejecting the settlement. Turning to the other factors, given my eight-year involvement with the trials and tribulations of Trump Tower purchasers, I have excellent insight into the litigation risk of the class action. I am satisfied that the proposed settlement is much better than proceeding with the litigation to have a trial of the three common issues and possible individual issues trials on the issue of reliance. The settlement agreement avoids any adjudication about whether the Estimate was a misrepresentation and about whether there was any fraud. The settlement makes reliance the issue to be adjudicated by the Claims Administrator and reliance may be proven on a paper record. That is a better outcome than contested individual issues trials about reliance. The caps on the refunds of 75% or 25% are reasonable compromises. Although the claims program allows Talon to challenge the Class Members’ claims, it will be difficult, although not impossibly difficult, for Talon to rebuff the paper proof. So overall the approach of the settlement agreement is far better and far less risky and far less expensive than the alternative of a common issues trial possibly with individual issues to follow.

[89] The Class Members benefit from the narrowing of the issue to be determined to whether the Class Member reasonably relied on Talon’s documents that are alleged to have been misrepresentations inducing them to purchase the Hotel Units. The Class Members benefit from not having to go through the delay of a common issues trial before addressing the reliance question that would have to be determined at an individual issues trial. The settlement is better than the alternative of prolonged litigation ending in individual issues trials.

[90] The settlement brings certainty to what has been throughout a proceeding with high litigation risk.

[91] The right of appeal to a Claims Adjudicator may help improve the success rate of Class Members. While little turns on it, the further right of appeal to this court is, practically speaking, of little utility. The major issue to be determined by the Claims Administrator and the Claims Adjudicator is the factual matter of reliance and the appeal right is limited to issues of law. The right of appeal is more apparent than real, but this circumstance is not a reason to reject the settlement.

[92] The net settlement fund appears to be sufficient and there might be no pro rata reductions depending on the take-up. I was advised that the likely take-up was to a maximum of around 40 claimants, the majority of whom would be indirect purchasers. By my reckoning, assuming that there were 30 indirect purchasers and 10 direct purchasers each with a deposit of $225,000, then the take-up would be $3.4 million, which is the net settlement fund, without any pro rata distribution.

[93] In my opinion, it is in the best interests of the Class Members to approve this settlement.

[94] While I shall approve the settlement, I do not agree with Class Counsel that the settlement is “extremely favourable.” I rather agree with Ms. Persaud that the settlement is imperfect. The settlement is a mediocre success, and it remains to be determined how much of the Settlement Fund will be taken up by Class Members and how much will revert to the Defendant.

E. Fee Approval

1. Fee Approval: General Principles

[95] Section 32 (2) of the Class Proceedings Act, 1992 stipulates that an agreement respecting fees and disbursements between class counsel and a representative plaintiff is not enforceable unless approved by the court. For present purposes, the pertinent provisions of the Act are sections 32 and 33 as set out below:

Fees and disbursements

32 (1) An agreement respecting fees and disbursements between a solicitor and a representative party shall be in writing and shall,

(a) state the terms under which fees and disbursements shall be paid;

(b) give an estimate of the expected fee, whether contingent on success in the class proceeding or not; and

(c) state the method by which payment is to be made, whether by lump sum, salary or otherwise.

Court to approve agreements

(2) An agreement respecting fees and disbursements between a solicitor and a representative party is not enforceable unless approved by the court, on the motion of the solicitor.

Fees must be fair and reasonable

(2.1) The court shall not approve an agreement unless it determines that the fees and disbursements required to be paid under the agreement are fair and reasonable, taking into account,

(a) the results achieved for the class members, including the number of class or subclass members expected to make a claim for monetary relief or settlement funds and, of them, the number of class or subclass members who are and who are not expected to receive monetary relief or settlement funds;

(b) the degree of risk assumed by the solicitor in providing representation;

(c) the proportionality of the fees and disbursements in relation to the amount of any monetary award or settlement funds;

(d) any prescribed matter; and

(e) any other matter the court considers relevant.

Same

(2.2) In considering the degree of risk assumed by the solicitor, the court shall consider,

(a) the likelihood that the court would refuse to certify the proceeding as a class proceeding;

(b) the likelihood that the class proceeding would not be successful;

(c) the existence of any other factor, including any report, investigation, litigation, initiative or funding arrangement, that affected the degree of risk assumed by the solicitor in providing representation; and

(d) any other prescribed matter.

Same

(2.3) In determining whether the fees and disbursements are fair and reasonable, the court may, by way of comparison, consider different methods by which the fees and disbursements could have been structured or determined.

Priority of amounts owed under approved agreement

(3) Amounts owing under an enforceable agreement are a first charge on any settlement funds or monetary award.

Holdback

(6) The court may determine and specify an amount or portion of the fees and disbursements owing to the solicitor under this section that shall be held back from payment until,

(a) the report required under subsection 26 (12) or 27.1 (16), as the case may be, has been filed with the court and the court is satisfied that it meets the requirements of that subsection; and

(b) the court is satisfied with the distribution of the monetary award or settlement funds in the circumstances, including the number of class or subclass members who made a claim for monetary relief or settlement funds and, of them, the number of class or subclass members who did and who did not receive monetary relief or settlement funds.

Agreements for payment only in the event of success

33 (1) A solicitor and a representative party may enter into a written agreement providing for payment of fees and disbursements only in the event of success in a class proceeding.

[96] 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.[^30] The actual take-up rate as a measure of the success of the settlement is a relevant factor in determining an appropriate counsel fee.[^31]

[97] 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.[^32]

[98] The risks of a class proceeding include all of liability risk, recovery risk, and the risk that the action will not be certified as a class proceeding.[^33]

[99] Fair and reasonable compensation must be sufficient to provide a real economic incentive to lawyers to take on a class proceeding and to do it well.[^34]

[100] Accepting that Class Counsel should be rewarded for taking on the risk of achieving access to justice for the Class Members, they are not to be rewarded simply for taking on risk divorced of what they actually achieved.[^35] Placing importance on providing fair and reasonable compensation to Class Counsel and providing incentives to lawyers to undertake class actions does not mean that the court should ignore the other factors that are relevant to the determination of a reasonable fee.[^36] 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.[^37]

2. Fee Approval: Analysis and Discussion

[101] In the immediate case, the matter of fee approval is complicated by Former Class Counsel’s claim for a share of the class counsel fee being sought by Current Class Counsel. That complication, however, can be dealt with separately, and I will deal with the fee sharing agreement in the next section of these Reasons for Decision. In this section of my reasons, I shall decide whether Current Class Counsel’s fee request should be approved.

[102] As noted in the introduction section in these Reasons for Decision, a troublesome feature complicating the determination of the appropriate counsel fee is that a portion of the settlement may remit to Talon, and it remains to be determined how much of the net settlement fund will be taken up by Class Members.

[103] If the whole net settlement fund were to be taken up, then in my opinion, Current Class Counsel would truly have earned a counsel fee of $2.2 million. Current Class Counsel took on the high-risk litigation and they achieved a settlement that I have found to be fair and reasonable and in the best interests of the Class Members. I have described the settlement as a mediocre success, but it was a success, and it was the product of a hard-fought litigation and hard-fought negotiations.

[104] Further, regardless of what the take-up may eventually turn out to be, Current Class Counsel has truly earned an immediately payable counsel fee of $1.25 million, and they deserve some considerable credit for taking on the case after I disqualified Former Class Counsel.

[105] In the circumstances of the immediate case, because the amount of the take-up is uncertain, in my opinion, the appropriate approach is to approve a counsel fee of $2.2 million, all inclusive, and make $1.25 million, inclusive of fee, taxes, and disbursements, payable forthwith, and to holdback $950,000. The holdback shall be payable, if at all, subject to court approval, after the distribution of the settlement is completed and the actual take-up by the Class Members is determined.

[106] In my opinion, Current Class Counsel has underestimated the work that they will have to do to implement the settlement and to assist Class Members in making claims to the Claims Administrator and the Claims Adjudicator. The holdback of approximately $1 million will incentivize Current Class Counsel to take on these tasks. If take-up and success is improved, the holdback will provide Current Class Counsel with the source for remuneration for the services rendered.

[107] Residual settlements are not as common as they once were, but when there is a residual settlement, it has been common to use the approach of holdbacks to better determine the worth of the contingency fee and to encourage Class Counsel to increase the take-up, which, in turn, increases the access to justice, which is the primary purpose of a class proceeding.

[108] I, therefore, approve a counsel fee of $2.2 million with a holdback of $0.95 million. Current Class Counsel may apply for court approval for a further payment of the counsel fee after the Claims Administrator reports to the court about the implementation of the settlement.

F. The Fee Approval Claims of Former Class Counsel

[109] I turn now to Former Class Counsel’s request in its notice of motion that, if necessary, the court make an Order approving the fee sharing agreement for the purposes of the Class Proceedings Act, 1992 subject to the determination of the Wine v. Mack Action.

[110] The discussion and the analysis of a fee approval for Former Class Counsel may begin by confirming, as was conceded by both Former Class Counsel and Current Class Counsel that it is necessary for Former Class Counsel to have its Fee Sharing Agreement approved pursuant to the Class Proceedings Act, 1992. I also agree with Former Class Counsel that it was necessary that the fee sharing agreement be disclosed to the court as a part of the fee approval motion. Thus, it is this court’s responsibility to scrutinize and approve or reject Class Counsel’s contingency fee agreement and Class Counsel’s fee. And it is this court’s responsibility to scrutinize and approve or reject any fee sharing agreement associated with Class Counsel’s fee.

[111] Although I agree with Former Class Counsel that the existence of the fee sharing agreement and its legality is not before me to decide on this motion, rather those matters are the subject matter of the Wine-Mack Action; nevertheless, it remains this court’s responsibility to scrutinize and approve or reject the alleged fee sharing agreement. This I can do by assuming that the agreement exists as Mr. Wine outlined it to be in his affidavit. Assuming I approved that fee sharing agreement, the court in the Wine v. Mack Action would have to determine whether the agreement actually exists and whether it is a lawful agreement.

[112] Should I then approve the alleged fee sharing agreement between Former and Current Class Counsel?

[113] In answering that question, I shall assume that the fee sharing agreement exists and that it is a legal agreement.[^38] Then, the questions become:

(1) Is Former Class Counsel entitled pursuant to the Class Proceedings Act, 1992 to share the counsel fee that I have awarded Current Class Counsel? and,

(2) If so, how should the court assess the value of Mr. Wine’s contribution to the class action be it: (a) as a contracting party fee to the sharing agreement; or (b) based on a quantum meruit and unjust enrichment share of the contingency fee, which Former Class Counsel describes in its Statement of Claim as the “entrepreneurial portion of the class action legal fee to be earned”?

[114] My answer to those questions is that there is no basis for Former Class Counsel to lawfully share in the class counsel fee that I have awarded to Current Class Counsel.

[115] I would have thought that it is obvious that Former Class Counsel is no longer a Class Counsel for this action. I would have thought that it is obvious that while a former lawyer of record is entitled to be paid for the legal services that he or she did while he or she was lawyer of record, he or she is not entitled to share in the payment for the legal services performed by his or her successor. A discharged lawyer may have a solicitor’s lien for services rendered, but a lien is a debt security instrument, it is not an equity instrument in the future outcome of the action in which the former lawyer is no longer lawyer of record.

[116] With its disqualification, Former Class Counsel was disqualified from acting for Ms. Persaud and the Class Members in the future. Mr. Wine’s behind-the-scenes activities after I disqualified Former Class Counsel that I was unaware of until the fee approval motion are proof positive that I was correct in disqualifying Former Class Counsel. Mr. Wine purported to continue to be involved in a class action in which he had no retainer while at the same time acting for 16 putative Class Members who must have opted out of the class action in order for Mr. Wine to act for them. I explained to Mr. Wine that there is a conflict of interest to purport to act for clients both inside and outside a class proceeding against the same defendant seeking the same relief. He was unsuccessful in having my decision reversed, and he ought to have downed tools and any involvement with the class action. Subsequent case law confirms that a lawyer cannot simultaneously represent a representative plaintiff or class members and putative class members who opt out of the class action; one or the other retainer, not both.[^39]

[117] Given his ongoing legal work for his portfolio of 16 or more actions against Talon, had Mr. Wine actually contributed to Ms. Persaud’s ongoing class action, I query how he and his clients would avoid breaching the deemed undertaking of rule 30.1 of the Rules of Civil Procedure.[^40]

[118] With the disqualification of Former Class Counsel, Ms. Persaud entered into a new contingency fee agreement with Current Class Counsel. Former Class Counsel is not a party to the contingency fee agreement pursuant to which a counsel fee has just been approved in the immediate case. Former Class Counsel provided no services and was exposed to no litigation risk under the retainer for which a counsel fee was just rewarded. I would have thought it was trite that no sweat, no sweet.

[119] Former Class Counsel is not entitled to a quantum meruit on the basis of some sort of intellectual property conceit based on Mr. Wine’s success in another action that Mr. Boccinfuso believes was Mr. Wine’s “idea in the first place.” Former Class Counsel is not entitled to a quantum meruit on the basis of Mr. Boccinfuso’ s belief that “if the within proceeding succeeds, then that success was based upon an earlier decision [Mr Wine] obtained in the Court of Appeal for Ontario, which decision is reported as Singh v. Trump, 2016 ONCA 747.”

[120] Mr. Wine’s admirable success in Singh v. Trump, 2016 ONCA 747, for which his clients received costs of $215,000 is not the basis for a quantum meruit or an unjust enrichment. His admirable success was based on good advocacy and hard work in a conventional negligent misrepresentation and fraudulent misrepresentation claim. The “ideas in the first place” of violations under the Securities Act and the Condominium Act, 1998 and the availability of statutory causes of action where reliance would not have to be proved were not resuscitated by the Court of Appeal.

[121] With Former Class Counsel’s disqualification, Mr. Wine left Current Class Counsel with a challenging case where there were no statutory causes of action. It was a challenging case because Current Class Counsel had to establish fraud, not an easy task, or the Class Members at individual issues trials would have to establish reliance, not an easy task. Former Class Counsel left the heavy lifting for Current Class Counsel. In any event, Former Class Counsel cannot be regarded as some sort of ghost writer or muse for whom Current Class Counsel should pay a royalty for their “ideas in the first place.”

[122] Moreover, in any event, there is no basis for a claim to a share of Current Class Counsel’s counsel fee based on unjust enrichment. That idea is a non sequitur. The counsel fee in the case at bar is a deduction from the Class Members’ partial recovery of their deposits. The elements of a cause of action for unjust enrichment are: (1) the defendant has been enriched; (2) the plaintiff has suffered a deprivation that corresponds to the defendant’s enrichment; and (3) the absence of any juristic reason justifying the defendant’s retention of that transfer of value.[^41]

[123] Analyzing Mr. Wine’s unjust enrichment claim, presumably Mr. Wine is the plaintiff, and Current Class Counsel or the Class Members are the defendants who have been unjustly enriched. This leads to absurdity. It is impossible to conceive that Mr. Wine has been deprived because he was not paid for his “ideas in the first place.” It is impossible to conceive that Current Class Counsel or the Class Members enjoyed a corresponding enrichment. Nobody in this class action is being enriched save perhaps Talon to the extent that it is keeping deposits or the balance of the deposits from the abortive sale of hotel units. Talon, however, has never admitted liability, and save for a few lawsuits where purchasers have been successful in obtaining a refund, it has not been determined that Talon was not entitled to forfeit and keep the deposits.

[124] Assuming the fee sharing agreement exists and that it is a legally enforceable agreement, there is no legal basis to approve the agreement under the Class Proceedings Act, 1992 and if there was a basis to approve it, I would not approve it for the above reasons.

[125] Former Class Counsel relied on the Court of Appeal’s variation of my decision in Bancroft-Snell v. Visa Canada Corp.,[^42] in support of their argument that I could approve counsel fee and the fee sharing agreement and leave the matter of its existence and enforcement to the court deciding the Wine v. Mack Action.

[126] The Bancroft-Snell v. Visa Canada Corp. decision is the opposite of helpful to Former Class Counsel. Rather, it confirms that I should not approve the fee sharing agreement in the immediate case.

[127] In that case, class counsel commenced a multimillion-dollar national class action against Visa, Mastercard, and ten banks and major financial institutions. The national class action was very well advanced when the Merchant Law Group commenced a competing national class action in Alberta. To avoid a carriage fight, class counsel entered into a fee sharing agreement with the Merchant Law Group. Under the fee sharing agreement, the Merchant Law Group agreed to abandon its fight for carriage of what was destined to be a very remunerative class action in exchange for $800,000 payable from the judgements or settlements reached in the class action. There were a several settlements with some of the defendants. Those settlements generated settlement funds of $13.6 million, and class counsel brought a motion for approval of a $3.4 million fee payable from the settlement fund.

[128] At the fee approval motion, I was surprised to learn about the fee sharing agreement between class counsel and the Merchant Law Group. Once apprised of it, I did the following to determine the fee approval motion: (a) I approved class counsel’s fee, but I reduced it by 10% to $3.06 million; (b) I ordered that class counsel could not use any of the settlement funds from which the class counsel’s contingency fee was being paid to pay the Merchant Law Group $800,000; and (c) I ordered that the fee sharing agreement was unenforceable and that Class Counsel could not pay the $800,000 from other sources.

[129] In a judgment written by Justice Blair, the Ontario Court of Appeal varied my judgment only in so far as my ruling that $800,000 could not be paid by Class Counsel to the Merchant Law Group from other sources. The Court concluded that this prohibition could not be justified on due process procedural grounds. Justice Blair stated at paragraph 4 of his judgment for the Court:

4. […] I would uphold the motion judge's decision to reduce Class Counsel's fees by 10% and that part of the order enjoining Class Counsel from paying any sums to the Merchant Law Group from the settlement funds or the fees approved in relation to the settlements. I would also uphold the motion judge's order that the Fee Sharing Agreement is unenforceable to the extent it renders paragraph 6 of that Agreement unenforceable. On procedural fairness grounds, however, I would set aside that part of his order declaring the Fee Sharing Agreement otherwise unenforceable and enjoining Class Counsel from making payment on account of the Fee Sharing Agreement from "any other source".

[130] In Bancroft-Snell v. Visa Canada Corp., Justice Blair confirmed that fee sharing agreements in the context of a class proceeding can and must be scrutinized. He confirmed that fee sharing agreements require court approval pursuant to the Class Proceedings Act, 1992. The fee sharing agreement in Bancroft-Snell v. Visa Canada Corp. arose in the context of a settlement of a carriage dispute, but Justice Blair made it clear that the Superior Court’s jurisdiction to scrutinize and review fee sharing agreements arose in every context, including carriage contests but also in the context of fee sharing agreements with respect to co-class counsel or with respect to fee sharing agreements between class counsel and outside counsel who may have contributed to the prosecution of the class action and in the context where fees are being paid by the defendant directly to class counsel. At paragraphs 40-44, and 54 of his decision, Justice Blair stated:

40 It is well-accepted that courts are charged with a broad supervisory role over the conduct of class proceedings, including the approval of settlements and the approval of fees and disbursements to be paid to class counsel. […] underpinning the court's broad supervisory mandate is the need to ensure that the members of the class are protected and that outcomes are fair and reasonable and in their best interests in circumstances where the interests of class counsel and defendants may conflict with those of the class and there is no one to speak for the interests of the class. As this Court noted in Fantl v. Transamerica Life Canada, 2009 ONCA 377, 95 O.R. (3d) 767, at paras. 39-40 ("Fantl ONCA"):

The existence of the absent class members, among other factors, is the reason that the court's supervisory jurisdiction is engaged from the inception of an intended class proceeding. It continues throughout the "stages" of the proceeding until a final disposition, including the implementation of the administration of a settlement or, where applicable, a resolution of all individual issues... The parties acknowledge that the court has supervisory jurisdiction throughout the proceeding.

41. Viewed through the lens of those governing principles, I interpret s. 32 to grant the motion judge authority to review fee arrangements like the Fee Sharing Agreement, and their effect, and to determine what terms and conditions, if any, should be imposed in relation to them in the fee approval process. In any event, if I am wrong in that interpretation, s. 12, alone or in combination with s. 32, provides the motion judge with that authority.

42 Jurisprudentially, the broad approach courts have taken to the importance of their supervisory role in class proceedings -- as reflected in this Court's decision in Fantl ONCA -- supports a wide and liberal interpretation of s. 32.

43 For example, fee arrangements between class counsel and outside counsel are routinely considered on fee approval motions, often in the context of determining whether they are to be treated as a disbursement or a component of class counsel's fees and, if the latter, as a factor in the overall "fair and reasonable" analysis: […]

44 In other circumstances, courts have reviewed the fee payment portion of class action settlement agreements in which defendants have agreed to pay the fee of class counsel, albeit that such agreements are not, strictly speaking, agreements between class counsel and a representative party. […]

54. Nor do I accept the view that the court ought not to look behind Class Counsel's decision to enter into the Fee Sharing Agreement in order to resolve the carriage dispute. The court is not entitled to delegate its responsibility to ensure that the best interests of the class are protected to what class counsel -- even experienced class counsel -- believe to be in the best interests of the class. To put it another way, the fact that class counsel genuinely believe they are acting in the best interests of the class does not transform a fee sharing agreement that is in reality one that is not in those best interests into one that is. That class counsel are in an inherently conflicting position in such circumstances cannot be ignored.

[131] Justice Blair also noted at paragraph 62 of his decision that because class counsel’s fee is ultimately borne by the class members, the court has an interest in knowing how the work and fees are divided and accounted for.[^43]

[132] Applying Bancroft-Snell v. Visa Canada Corp. to the circumstances of the fee sharing agreement in the immediate case, I have the jurisdiction to scrutinize it and approve it or reject it. To quote Justice Blair, I am obliged to scrutinize the fee sharing agreement “to ensure that the members of the class are protected and that outcomes are fair and reasonable and in their best interests in circumstances where the interests of class counsel […] may conflict with those of the class and there is no one to speak for the interests of the class.”

[133] Speaking for the class members in the immediate case, there is no reason that their settlement fund, from which the counsel fee is coming, should pay for services to a disqualified Class Counsel who no longer had carriage or responsibility or risk in prosecuting the class action and who did not negotiate the settlement and who had been paid for the services it had rendered prior to being disqualified. Just as I did in the Bancroft-Snell v. Visa Canada Corp., I do not approve the fee sharing agreement.

G. Conclusion

[134] For the above reasons, I approve the settlement and I approve a class counsel fee to a maximum of $2.2 million, all inclusive, of which $1.25 million, inclusive of fee, taxes, and disbursements, is payable forthwith from the settlement fund, with the balance payable, if at all, subject to court approval, after the distribution of the settlement is completed and the actual take-up by the Class Members is determined. This counsel fee and any future counsel fee is exclusively for Current Class Counsel.

[135] If the parties cannot agree about the costs to be awarded, if any, for the motion to intervene, and the approval motions, they may make submissions in writing beginning with the Plaintiffs’ submissions within twenty days of the release of these Reasons for Decision followed by Former Class Counsel’s submissions within a further twenty days.

Perell, J.

Released: November 10, 2022

COURT FILE NO.: CV-17-569023-00CP

DATE: 20221110

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ASHLEKA PERSAUD and TEN EIGHT VACATIONS LTD.

Plaintiffs

• and –

TALON INTERNATIONAL INC.

Defendant

REASONS FOR DECISION

PERELL J.

Released: November 10, 2022

[^1]: Persaud v. Talon International Inc. 2018 ONSC 5377 and 2020 ONSC 2362. [^2]: S.O. 1992, c. 6. [^3]: MSTW Professional Corporation, Mitchell Wine and Levine Sherkin Boussidan P.C. v. Paul Mack and Mack Lawyers Court File No. CV-21-672206. [^4]: There are concerns about compliance with the Ontario Law Society’s Rules of Professional Conduct about referral fees and about champerty and maintenance and trading in litigation. [^5]: Singh v. Trump, 2015 ONSC 4461 rev’d in part 2016 ONCA 747, leave to appeal to the S.C.C. ref’d [2016] S.C.C.A. No. 548. [^6]: R.S.O. 1990, c. S.5. [^7]: S.O. 1998, c. 19 [^8]: S.O. 1998, c. 19. [^9]: Singh v. Trump, 2015 ONSC 4461, rev’d in part 2016 ONCA 747, leave to appeal to the S.C.C. ref’d [2016] S.C.C.A. No. 548. [^10]: Singh v. Trump, 2016 ONCA 747, leave to appeal to the S.C.C. ref’d [2016] S.C.C.A. No. 548. [^11]: Singh v Trump, 2017 ONCA 34. [^12]: Persaud v. Talon International Inc., 2018 ONSC 5377. [^13]: Vaeth v. North American Palladium 2016 ONSC 5015; Setterington v. Merck Frosst Canada Ltd., 2006 2623 (ON SC), [2006] O.J. No. 376 (S.C.J.); Logan v. Canada (Minister of Health), [2002] O.J. No. 522 (S.C.J.). [^14]: P. Perell, "Class Proceedings and Lawyers' Conflict of Interest" (2009), 35 Advocates' Quarterly 202. [^15]: A class counsel’s contingency fee for a successful recovery of between $24.8 million to $32.25 million would be between $8.3 million and $10.8 million. [^16]: Persaud. v. Talon International Inc., 2019 ONSC 2488. [^17]: Persaud. v. Talon International Inc., 2020 ONSC 2362. [^18]: Persaud v. Talon International Inc., 2020 ONSC 3858. [^19]: Persaud v. Talon International Inc., 2020 ONSC 4432. [^20]: The Wine-Mack Action is Court File No. CV21-672206. [^21]: Persaud v. Talon International Inc., 2022 ONSC 4250. [^22]: The Wine-Mack Action was commenced by Notice of Action issued November 17, 2021. [^23]: Kidd v. Canada Life Assurance Company, 2013 ONSC 1868; Farkas v. Sunnybrook and Women’s Health Sciences Centre, [2009] O.J. No. 3533 at para. 43 (S.C.J.); Fantl v. Transamerica Life Canada, [2009] O.J. No. 3366 at para. 57 (S.C.J.). [^24]: Kidd v. Canada Life Assurance Company, 2013 ONSC 1868; Farkas v. Sunnybrook and Women’s Health Sciences Centre, [2009] O.J. No. 3533 at para. 45 (S.C.J.); Fantl v. Transamerica Life Canada, [2009] O.J. No. 3366 at para. 59 (S.C.J.); Corless v. KPMG LLP, [2008] O.J. No. 3092 at para. 38 (S.C.J.). [^25]: Baxter v. Canada (Attorney General) (2006), 2006 41673 (ON SC), 83 O.R. (3d) 481 at para. 10 (S.C.J.). [^26]: Al-Harazi v. Quizno’s Canada Restaurant Corp. (2007), 49 C.P.C. (6th) 191 at para. 23 (Ont. S.C.J.). [^27]: Dabbs v. Sun Life Assurance Company of Canada (1998), 1998 14855 (ON SC), 40 O.R. (3d) 429 (Gen. Div.); Parsons v. Canadian Red Cross Society, [1999] O.J. No. 3572 at para. 70 (S.C.J.). [^28]: McCarthy v. Canadian Red Cross Society (2007), 158 ACWS (3d) 12 at para. 17 (Ont. S.C.J.); Fraser v. Falconbridge Ltd., [2002] O.J. No. 2383 at para. 13 (S.C.J.). [^29]: S.O. 1992, c. 6. [^30]: Smith v. National Money Mart, 2010 ONSC 1334 at paras. 19-20, var’d 2011 ONCA 233; Fischer v. I.G. Investment Management Ltd., [2010] O.J. No. 5649 at para. 25 (S.C.J.); Parsons v. Canadian Red Cross Society, 2000 22386 (ON SC), [2000] O.J. No. 2374 at para. 13 (S.C.J.). [^31]: Lavier v. MyTravel Canada Holidays Inc., 2013 ONCA 92. [^32]: Smith v. National Money Mart, 2010 ONSC 1334, var’d 2011 ONCA 233; Fischer v. I.G. Investment Management Ltd., [2010] O.J. No. 5649 at para. 28 (S.C.J.). [^33]: Endean v. Canadian Red Cross Society, 2000 BCSC 971 at paras. 28 and 35; Gagne v. Silcorp Ltd., 1998 1584 (ON CA), [1998] O.J. No. 4182 t para. 17 (C.A.). [^34]: Sayers v. Shaw Cablesystems Ltd., 2011 ONSC 962 at para. 37; Vitapharm Canada Ltd. v. F. Hoffmann-La Roche Ltd., [2005] O.J. No. 1117 at paras. 59-61(S.C.J.); Parsons v. Canadian Red Cross Society (2000), 2000 22386 (ON SC), 49 O.R. (3d) 281 (S.C.J.); Gagne v. Silcorp Ltd. (1998), 1998 1584 (ON CA), 41 O.R. (3d) 417 (C.A.). [^35]: Welsh v. Ontario, 2018 ONSC 3217 at para. 103. [^36]: Smith Estate v. National Money Mart Co., 2011 ONCA 233 at para. 92. [^37]: Commonwealth Investors Syndicate Ltd. v. Laxton, [1994] B.C.J. No. 1690 at para. 47 (C.A.). [^38]: I have serious reservations and concerns that the fee sharing agreement is actually illegal as champerty and maintenance, but I shall assume not. [^39]: Singh v. RBC Insurance Agency Ltd. 2020 ONSC 3796; Whitehouse v. BDO Canada LLP, 2020 ONSC 144. [^40]: R.R.O. 1990, Reg. 194. [^41]: Moore v. Sweet, 2018 SCC 52; Kerr v. Baranow, 2011 SCC 10; Garland v. Consumers' Gas Co., 2004 SCC 25; Peel (Regional Municipality) v. Canada, 1992 21 (SCC), [1992] 3 S.C.R. 762; Pettkus v. Becker, 1980 22 (SCC), [1980] 2 S.C.R. 834. [^42]: 2015 ONSC 7275 and 2015 ONSC 7411, var’d 2016 ONCA 896. [^43]: See also Mancinelli v. Barrick Gold Corporation, 2016 ONCA 571 at para. 71.