Court File and Parties

COURT FILE NO.: CV-13-492525-00CP DATE: 20230816 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: MARC-OLIVER BAROCH Plaintiff - and - CANADA CARTAGE DIVERSIFIED GP INC., DIRECT GENERAL PARTNER CORPORATION and CANADA CARTAGE SYSTEM, LIMITED Defendants

Proceeding under the Class Proceedings Act, 1992

Counsel: Jonathan C. Lisus, Rahool P. Agarwal, and Michael A. Currie for the Plaintiff

HEARD: In writing

PERELL, J.

Reasons for Decision

[1] In this certified and settled class action, Marc-Oliver Baroch, the Representative Plaintiff, brings a consent motion for an order to amend the Distribution Protocol to allocate an additional $90,000 for administrative expenses to complete a Second Distribution.

[2] Pursuant to the Class Proceedings Act, 1992, S.O. 1992, c. 6, Mr. Baroch sued Canada Cartage Diversified GP Inc., Direct General Partner Corporation, and Canada Cartage System, Limited with respect to their obligations to pay overtime in accordance with federal law.

[3] On January 30, 2015, the action was certified as a class proceeding.

[4] In June 2021, the parties settled the class action, and the defendants agreed to pay $22,250,000, inclusive of legal fees, disbursements, taxes, administration costs, and litigation funding expenses. Justice Belobaba approved the settlement on November 1, 2021. His settlement approval order approved an allocation of $780,000 for administrative expenses.

[5] The certified Class definition is:

all persons who, at any time during the Class Period, were employed by Canada Cartage and (a) who were entitled to receive overtime compensation pursuant to the Canada Labour Code, R.S.C. 1985, c. L-2 and its regulations; and (b) whose terms and conditions of employment were, for any part of the Class Period, not governed by a collective agreement between Canada Cartage and a union.

[6] The certified Class Period is March 1, 2006 to January 30, 2015, inclusive.

[7] The settlement extends to June 3, 2021, for a total class period of over 15 years.

[8] By the time of the settlement, both sides’ experts had prepared detailed models that analyzed individual trips/days of work to calculate underpaid overtime under various legal scenarios.

[9] When Justice Belobaba approved the settlement, RicePoint was appointed as the settlement administrator and Cohen Hamilton Steger & Co. (CHS) was directed to update the models.

[10] Class Counsel, CHS, and RicePoint are responsible for administering the distribution of the settlement funds. Under the settlement agreement, the distribution protocol has two distributions.

[11] A key feature of the distribution process is that it does not include a claims process. Instead, if the records indicate that a class member is entitled to a distribution over $50, the class member will receive a cheque at the last known location provided by the defendants.

[12] The Distribution Protocol calls for two distributions. A first distribution of 80% of each person’s share is to be done first.

[13] Any uncashed funds from the first distribution, along with the remaining 20% of the funds after any adjustments, are then paid out to the class members who cashed their first distribution cheques in the second distribution.

[14] This distribution plan allows any errors and omissions in the first distribution to be rectified and avoids leaving a significant share of funds uncashed.

[15] There are approximately 7,300 class members, of whom about 4,600 were calculated to have amounts greater than $50 and therefore were sent a first distribution cheque.

[16] Class Counsel communicated on the case’s web site that, if someone has not contacted RicePoint by September 1, 2023, and requested that a first distribution cheque be reissued, those funds will be reallocated in a second distribution.

[17] Out of the first distribution cheques, 2,647 were cashed, representing $4,441,852.55 (81.5%) in after-tax payments, whereas 2,236 were uncashed, representing $1,009,054.99 (18.5%) in after-tax payments.

[18] Although RicePoint has performed its duties within its allocated budget, there are insufficient funds allocated to pay the latest invoice issued by RicePoint and its overall estimated costs to complete the Second Distribution.

[19] Cohen Hamilton Steger & Co. estimates it will require approximately $27,000, plus HST to complete the second distribution.

[20] There are other expenses that are associated with the second distribution, and Class Counsel requests an additional $90,000 be approved for administrative expenses to cover the estimated costs from CHS and RicePoint to complete the second distribution.

[21] Depending on how many second distribution cheques remain uncashed, it is proposed that any funds not spent will either be added to the pool for distribution or will be the subject of a cy-prés order.

[22] The court has the jurisdiction to grant the request for additional funds for administrative expenses.

[23] In the immediate case, the additional administrative expenses are fair and reasonable given the value of the settlement, the number of class members, the complexity of the distribution protocol, and the efforts of Class Counsel, CHS, and RicePoint in administering the distribution.

[24] I am satisfied that it is appropriate to grant this motion as requested. I have signed the Order.

Perell, J. Released: August 16, 2023