Court File and Parties

Court File No.: CV-22-00686288-00CP Date: 2025-09-16 Ontario Superior Court of Justice

Between: Brittany Christopher, Plaintiff – and – Royal Bank of Canada, Defendant

Proceeding under the Class Proceedings Act, 1992

Before: Leiper, J.

Counsel:

• Elie Waitzer & Adam Tanel, for the Plaintiff
• Eric Lefebvre, Ted Brook & Brittany DiTrani, for the Defendant

Heard: September 9, 2025

Reasons for Decision

Introduction

[1] Brittany Christopher, the plaintiff in this action seeks approval of a proposed settlement pursuant to section 27.1 of the Class Proceedings Act, S.O. 1992, c. 6 (the "CPA"). The defendant Royal Bank of Canada ("RBC") consents to the settlement.

[2] Class counsel also seeks court approval of their proposed fees and payment of a modest honorarium to the representative plaintiff. RBC takes no position on those orders.

[3] On August 9, 2023, Akbarali, J. certified this action as a class proceeding with the consent of the parties: Christopher v. Royal Bank of Canada, 2023 ONSC 4590 (the "Certification Order"). The claim alleged breach of contract as between RBC and customers who were charged duplicative non-sufficient funds fees ("NSF fees") for pre-authorized debit transactions.

[4] In summary, I find that the parties have achieved a reasonable settlement after lengthy negotiations, with the input of expert support and the assistance of an experienced mediator, the Honourable Todd Archibald.

[5] The settlement agreement provides for an all-inclusive settlement fund of $7,050,000 to compensate the class members and to provide for fees, taxes, disbursements and an honorarium. Each eligible class member will receive an estimated pro rata distribution of approximately $25. This net figure is the difference between the total settlement amount after subtracting $1,891,440.25 in fees, $245,887.23 in taxes, $172,035.46 in disbursements and $381,494.59 as the private funder's court approved levy.

[6] RBC has created a list of eligible class members to enable direct deposit of the settlement funds to each without the need of a claims administration process. This reduces the cost of distribution and ensures a higher take-up of the settlement proceeds by those entitled to receive compensation.

[7] For the reasons set out below, I approve the terms of the settlement, counsel's fees and an honorarium of $5,000 payable to the representative plaintiff, Ms. Brittany Christopher.

Background

[8] This action arises from RBC's practice of charging NSF fees to its customers when they have insufficient funds in their account.

[9] The claim alleged that RBC charged undisclosed NSF fees on pre-authorized debits ("PADs") which were re-presented for payment by third party vendors, without disclosing those charges on its standard form contract with its customers.

[10] Akbarali J. defined the "Class" in the Certification Order at para. 13 as:

Every individual resident in Canada who is or was a personal deposit account holder with Royal Bank of Canada and whose personal deposit account was charged a non-sufficient funds fee by Royal Bank of Canada on a re-presented pre-authorized debit transaction between August 30, 2020 and August 1, 2022.

[11] The parties consented to certification on common issues relating to breach of contract, unjust enrichment, aggregate damages, and pre-judgment interest.

[12] As part of the consent certification agreement, the plaintiff agreed to limit her claims to breach of contract and unjust enrichment and to abandon her statutory consumer protection claims. The plaintiff agreed to limit the class period to August 30, 2020 until August 1, 2022. The end date of the class period reflects the date on which RBC amended its standard form contract by including a footnote disclosing it would charge an NSF fee "For every instance of presentment or re-presentment" of a payment instrument rejected or returned due to insufficient funds.

[13] Prior to this amendment and during the certified class period, RBC's standard form contract disclosed a $45 "per item fee" if a cheque, pre-authorized payment, or other instrument was "returned due to insufficient funds."

[14] RBC has not admitted liability in consenting to a settlement, nor has it admitted that the 2022 amendment to its standard form contract is an admission that it acted in breach of the prior version of the standard form contract.

[15] The plaintiff's material describes a careful, extensive, arm's length settlement negotiation by the parties, beginning with issues of disclosure of confidential data to guide the damages calculations followed by extensive mediation with the Honourable Todd Archibald. The parties' settlement discussions were also guided by the settlement agreement in a similar action against The Toronto-Dominion Bank and The Canada Trust Company (the "TD Settlement"): See Dufault v. The Toronto-Dominion Bank, 2024 ONSC 961. I note that while the TD Settlement was a larger amount than that proposed in this case, it is useful as a benchmark because it is proportional to that achieved here, once I factor in the variables of a longer class period in the TD litigation, the higher NSF fees charged by TD and Canada Trust, and the differences in market share.

[16] I turn next to briefly discuss the relevant factors which support approving the settlement, fees and honorarium.

Settlement Approval

[17] The gross settlement funds of $7,050,000, means that each member of the approximate 172,000 members of the class will receive a payment of $25 from RBC. RBC has agreed to bear the expense of notifying the class members of this settlement approval and distributing the settlement funds.

[18] The exclusions from settlement funding were negotiated by the parties and are expected to affect approximately 7% of class members. Those members will not be eligible to receive compensation for one or more of the following reasons:

a. The accountholder is deceased, and the account is controlled by their estate;

b. The account is closed and unable to accept deposits as of the distribution date; or

c. The account already received a $45 fee credit within forty-five (45) days of a Subsequent Identical NSF.

[19] In addition to allocating class counsel fees, disbursements and taxes, which I discuss below, in the event there are residual funds after the distribution to all eligible class members, a cy-près donation will be made on behalf of the class to Food Banks Canada, a national charitable organization that works to support more than 5,500 food banks and community organizations across Canada. Counsel submit that they expect any cy-près payment will be minimal.

[20] In order to approve a settlement in a class action proceeding, the Court must find that, in all the circumstances, the settlement is fair, reasonable, and in the best interests of the class as a whole: CPA, at s. 27.1(5); Mancinelli v. Royal Bank of Canada, 2017 ONSC 2324 at para. 36.

[21] Courts have applied the following non-exhaustive list of factors to settlements:

a. the likelihood of recovery or likelihood of success;

b. the amount and nature of discovery, evidence or investigation;

c. the Settlement Agreement 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.

See: Doucet v. The Royal Winnipeg Ballet, 2022 ONSC 976 at para. 48, rev'd in part 2023 ONSC 2323.

[22] Based on the material filed, the relevant factors support approving the settlement. The following factors are particularly persuasive:

a. Likelihood of Recovery: The likelihood of the plaintiff succeeding was not certain. This settlement was reached before any determination on the merits. In particular, there were impediments to establishing proof of damages, which were overcome during the lengthy settlement negotiations with the help of finance expertise. Litigating proof of aggregate damages would have been expensive and cumbersome.

b. Terms of Settlement: The terms of the settlement agreement were the product of arm's-length negotiations. These terms are salutary because they ensure a broad take-up by the class members. Here, there is a projected take-up rate of 93% based on the exclusions above. Each member will receive meaningful and prompt compensation without requiring complex individual assessments. In similar circumstances, courts have noted the efficiencies involved: MacDonald et al v. BMO Trust Company et al, 2021 ONSC 3726 at para. 10; Austin v. Bell Canada, 2021 ONSC 5068 at para. 6; Kaplan v. PayPal CA Limited, 2021 ONSC 1981 at paras. 61, 65.

c. The Presence of Objections: The class members received direct notice of the proposed settlement. No class member has objected to the settlement.

[23] For these reasons, I am satisfied that the proposed settlement is fair, reasonable and in the best interests of the class.

Class Counsel Fees

[24] A court will approve class counsel fees on finding the proposed fees are fair and reasonable, taking into account the results achieved, and the risks undertaken by class counsel.

[25] The results achieved in terms of the take-up rate surpass those regularly present in other class actions in which class members must complete a claim to receive their share of compensation. For example, a 2019 study by the U.S. Federal Trade Commission based on an analysis of administration data collected from 149 U.S. consumer protection class actions found that the median take-up rate where there was a claims process was approximately 9%: Federal Trade Commission, "Consumers and Class Actions: A Retrospective and Analysis of Settlement Campaigns" (2019) at p. 11. This take-up rate is, in part, the result of the Distribution Protocol that class counsel negotiated.

[26] The risks to counsel of undertaking class actions on a contingency basis are well-known and are considered in any fees approval. Fees in this context, do more than compensate for work done, but also promote access to justice by encouraging class action litigation more broadly.

[27] In this litigation, RBC maintained that its contractual language was distinguishable from TD Bank's in Dufault on several grounds. This distinction created a real risk that the plaintiff would not succeed in establishing her claim in breach of contract on a class-wide basis.

[28] Class counsel also bore some of the risks of an adverse costs award, having selected a private funder with a lower fee than via the alternatives.

[29] In terms of the class expectations, the Phase 1 notice set out the proposal for counsel fees, which here are 27.5% of the gross compensation. Ms. Christopher has filed an affidavit which includes her knowledge of the proposed fee and her view that this is a fair fee based on the work done by class counsel and the results they achieved.

[30] Given the amounts payable to the individual class members and the complexity in bringing claims outside the class proceedings model, it can fairly be said that the class would not have achieved this compensation without the work of class counsel. As of August 21, 2025, class counsel has incurred $167,035.46 in disbursements (including taxes) to prosecute this matter on behalf of the class.

[31] The material filed supports approving the payments of class counsel fees, disbursements and funder's fees. I approve amounts sought.

Honorarium to the Representative Plaintiff

[32] On a fee approval motion, the court has jurisdiction to grant the request for an honorarium payment to the representative plaintiff. Here, class counsel seeks approval of a $5,000 honorarium for the representative plaintiff.

[33] An honorarium is not an award but a recognition that the representative plaintiff "meaningfully contributed to the class members' pursuit of access to justice": Johnston v. The Sheila Morrison Schools, 2013 ONSC 1528, 37 C.P.C. (7th) 417 at para. 43. Further, an honorarium is appropriate where a representative plaintiff is a real plaintiff, with a real grievance and with an active involvement in the case: Mortillaro v. Unicash Franchising Inc., 2011 ONSC 923, 16 C.P.C. (7th) 352 at para. 27.

[34] In Doucet v. Royal Winnipeg Ballet, 2023 ONSC 2323 at para. 92, the Divisional Court held that "modest payment to the representative plaintiff could be available in exceptional circumstances". The court held that courts should have regard to the following factors in considering whether to exercise that discretion:

a. The nature of the case, including whether the representative plaintiff brings forward a claim (such as for sexual abuse) in which they expose themselves to re-traumatization for the benefit of the class.

b. The nature of the remedies available for the cause of action asserted, particularly cases where even complete success would lead to only a tiny monetary remedy for each class member or none at all.

c. The steps taken by the representative plaintiff, who must do more than take an active role and fulfill the normal steps required in class proceedings, [in] achieving a settlement. Exceptional circumstances include enduring significant additional personal or financial hardship in connection with the prosecution of the class proceeding.

d. The rationale for the requested payment, which must not be added compensation for losses or damages that fall within the potential remedies available for the causes of action asserted in the claim itself or for the necessary steps to fulfill the responsibilities of a representative plaintiff.

e. The exposure to a real risk of an adverse costs award.

f. The quantum of the requested payment must be modest in general terms and in relation to the remedies available to the class members in the settlement.

[35] Ms. Christopher has meaningfully contributed to class members' pursuit of access to justice by taking on the role of representative plaintiff. She contributed her own time to the action, provided extensive information and records relating to her personal circumstances for the purpose of drafting the pleadings, affidavits for motions, and advancing settlement discussions. This included private employment and financial information that she would not have had to publicly file had she not taken on the role of representative plaintiff.

[36] When Ms. Christopher retained class counsel to commence this action in 2022, she was on long-term disability leave due to a chronic illness. Before retaining class counsel to commence this action, she had no experience with the civil justice system. She had a steep learning curve to navigate in fulfilling her duties as representative plaintiff. Justice Akbarali recently highlighted similar personal challenges as factors supporting a $10,000 honorarium to the representative plaintiff in Bonnick v. Krimker et al., 2025 ONSC 1151 at para. 84.

[37] The class members have received notice of the proposed honorarium. None of them have objected to this payment.

[38] The quantum sought for Ms. Christopher's honorarium is modest. It is lower than a recent honorarium granted by this Court in similar circumstances, where the terms of the Settlement Agreement were substantially similar: See Dufault at para. 51.

[39] I find that the circumstances are extraordinary and warrant an honorarium of $5,000 paid to the representative plaintiff:

a. The results of the settlement achieved a significant benefit for the majority of the class, with a 93% take-up rate;

b. Without the litigation, in view of the small amount of loss suffered by each class member, the remedies available to them would have been impractical;

c. The representative plaintiff was actively involved in the litigation and was required to disclose personal financial data as part of the claim. While this is not an exceptional circumstance, it is a relevant factor;

d. The quantum of payment requested is in line with other honoraria awarded to representative plaintiffs, including in similar litigation involving banks and NSF fees;

e. The class had direct notice of the proposed honorarium, and there were no objections received by class counsel;

f. Given the lengthy and complex negotiations over damages, a settlement this modest cannot be said to create a conflict of interest or an appearance of a conflict of interest.

Conclusion

[40] For these reasons, I approve the proposed settlement, class counsel fees, disbursements, funder's fees and the representative plaintiff's honorarium.

Leiper J.

Released: 16 September 2025