Court File and Parties

Court File No.: CV-22-00683059-00CP Date: 2023-04-06 Superior Court of Justice - Ontario

Re: CHRISTOPHER LOCHAN, Plaintiff – and – BINANCE HOLDINGS LIMITED, BINANCE CANADA CAPITAL MARKETS INC., and BINANCE CANADA HOLDINGS LTD., Defendants

Before: E.M. Morgan J.

Counsel: Kyle Taylor and Jordan Allison, for the Plaintiff Caitlin Sainsbury, Graham Splawski, and Mohit Sethi, for the Defendants

Heard: April 5, 2023

Third Party Funding Motion

[1] The Plaintiff moves for an order approving the Litigation Funding Agreement entered into between the Plaintiff, his counsel Orr Taylor LLP, Parabellum Partners III, LP, and LitFun PCC Limited – Cell 1 (“Parabellum”) dated September 6, 2022 (the “Agreement”).

[2] The affidavit evidence supporting this motion establishes that following lengthy negotiations, Orr Taylor concluded that the Agreement would serve to provide the funding required to pursue this action and is in the best interest of the proposed class. The Plaintiff reached the same conclusion and received independent legal advice about the Agreement before executing it.

[3] Pursuant to the Agreement, Parabellum has agreed to pay disbursements and any costs awarded against the Plaintiff in exchange for reimbursement of any amounts paid together with a funding fee, all subject to specified caps. Plaintiff’s counsel deposes, and I accept, that the amounts allocated for disbursements and costs constitute sensitive and privileged information that relates to the plaintiff’s litigation strategy, but that they are expected to be sufficient to cover the expenses they are designed to cover.

[4] In this respect, Parabellum has given an undertaking for the Plaintiff’s benefit providing that it attorns to this court’s jurisdiction in relation to any court ordered costs. The undertaking also provides that Parabellum will pay any court ordered costs to the Defendants. Courts have previously held that such an undertaking also embraces any order for security for costs, and have issued court orders authorizing third party funding that attach the undertaking as a schedule: David v. Loblaw, 2018 ONSC 6469.

[5] The plaintiff has filed the motion materials with those amounts redacted and has provided the Court with an unredacted copy under seal.

[6] Parabellum is an established litigation funder with a substantial track record of litigation funding. The record shows that it has sufficient capital to meet its obligations under the Agreement. Parabellum therefore meets the financial criteria set out in section 33.1(9)(a)(iii) of the Class Proceedings Act, 1992, SO 1992, c. 6 (“CPA”).

[7] Given the risk and expense of litigation, the Agreement is in the best interests of the class members. Without the Agreement it is unlikely that a class action could be pursued in this matter. The Agreement therefore furthers access to justice.

[8] The record demonstrates that the procedural and evidentiary requirements for third party funding set out in section 33.1 of the CPA are satisfied. It also establishes that the Agreement is not champertous.

[9] An analysis of the substantive terms of a funding agreement is necessarily highly contextual: Houle v. St. Jude Medical Inc., 2017 ONSC 5129, at paras 80-81, aff’d 2018 ONSC 6352 (Div Ct). Given the circumstances of this claim, I conclude that the terms of the Agreement are fair and reasonable. They are more generous to the putative class than are the standard terms imposed by the Law Foundation’s Class Proceedings Fund. The terms reflect prevailing market rates for such funding agreements, and do not overcompensate Parabellum.

[10] Furthermore, the Agreement does not interfere with the lawyer-client relationship. Nor does it negatively impact on counsel’s duty to the class members or with the carriage of the proceeding. The Plaintiff remains fully in charge of instructing counsel, including entering into any settlement agreement. Moreover, Parabellum’s right to terminate the Agreement is restricted to narrow circumstances and is subject to court approval.

[11] The Agreement is designed to protect relevant legal privileges and the confidentiality of the parties’ information: see Hoy v. Expedia Group, 2021 ONSC 2840. Further, Parabellum is bound to adhere to the implied undertaking with respect to evidence discovered during the course of the action.

[12] In addition, the Agreement protects the legitimate interests of the Defendants. Overall, it is established to my satisfaction that the Agreement satisfies the requirements of the CPA.

[13] As a final matter, the Plaintiff seeks an order designating Orr Taylor as class counsel and precluding the filing of similar actions without notice to Orr Taylor and leave of the court. In any case, over 60 days has passed since the commencement of the action and no known actions alleging similar facts appear to have been filed anywhere in Canada. Given the investigative efforts already undertaken by Orr Taylor, and the commitment of capital to the action by Parabellum, a preclusion order is reasonable under the circumstances: Eaton v. Teva Canada Limited, 2021 FC 968, at paras 79-80.

[14] The funding of this action as set out in the Agreement is hereby approved. There will be an order to go as submitted by counsel.

Date: April 6, 2023 Morgan J.