Cv-12-9667-Oocl Ontario Superior Court of Justice Commercial List in the Matter of the Companies' Creditors Arra
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Court File No.: CV-12-9667-OOCL ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED, AND IN THE MATTER OF A PLAN OF COMPRISE OR ARRANGEMENT OF SINO-FOREST CORPORATION Court File No. CV-11-431153-00CP ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: THE TRUSTEES OF THE LABOURERS' PENSION FUND OF CENTRAL AND EASTERN CANADA, THE TRUSTEES OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 793 PENSION PLAN FOR OPERATING ENGINEERS IN ONTARIO, SJUNDE AP-FONDEN, DAVID GRANT and ROBERT WONG Plaintiffs - and - SINO-FOREST CORPORATION, ERNST & YOUNG LLP, BDO LIMITED (formerly known as BDO MCCABE LO LIMITED), ALLEN T.Y. CHAN, W. JUDSON MARTIN, KAI KIT POON, DAVID J. HORSLEY, WILLIAM E. ARDELL, JAMES P. BOWLAND, JAMES M.E. HYDE, EDMUND MAK, SIMON MURRAY, PETER WANG, GARRY J. WEST, POYRY (BEIJING) CONSULTING COMPANY LIMITED, CREDIT SUISSE SECURITIES (CANADA), INC., TD SECURITIES INC., DUNDEE SECURITIES CORPORATION, RBC DOMINION SECURITIES INC., SCOTIA CAPITAL INC., CIBC WORLD MARKETS INC., MERRILL LYNCH CANADA INC., CANACCORD FINANCIAL LTD., MAISON PLACEMENTS CANADA INC., CREDIT SUISSE SECURITIES (USA) LLC and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (successor by merger to Banc of America Securities LLC) Defendants Proceeding under the Class Proceedings Act, 1992 SUPPLEMENTAL BOOK OF AUTHORITIES OF THE PLAINTIFFS (Motion for Fee Approval, returnable December 13, 2013) KOSKIE MINSKY LLP 900-20 Queen Street West, Box 52 Toronto ON M5H 3R3 Kirk M. Baert (LSUC No. 309420) Tel: 416-595-2117 / Fax: 416-204-2889 Jonathan Bida (LSUC No. 54211D) Tel: 416-595-2072 / Fax: 416-204-2907 SISKINDS LLP 680 Waterloo Street, P.O. Box 2520 London ON N6A 3V8 Charles M. Wright (LSUC No. 36599Q) Tel: 519-660-7753 / Fax: 519-660-7754 A. Dimitri Lascaris (LSUC No. 50074A) Tel: 519-660-7844 / Fax: 519-660-7845 PALIARE ROLAND ROSENBERG ROTHSTEIN LLP 250 University Avenue, Suite 501 Toronto, ON M5H 3E5 Ken Rosenberg (LSUC No. 21102H) Massimo Starnino (LSUC No. 41048G) Tel: 416-646-4300 / Fax: 416-646-4301 Lawyers for the Plaintiffs and CCAA Representative Counsel TO : THE ATTACHED SERVICE LIST TABLE OF CONTENTS TAB DESCRIPTION 1. Gagne v. Silcorp. Ltd., [1998] O.J. No. 4182 (C.A.) 2. Mondor v. Fisherman, [2002] O.J. No. 1855 (S.C.J.) 3. Hislop v. Canada (Attorney General, [2004] O.J. No. 1867 (S.C.J.) 4. Wilson v. Servier Canada Inc., [2005] O.J. No. 1039 (S.C.J.) 5. Vitapharm Canda Ltd. v. F. Hoffman-La Roche Ltd., [2005] O.J. No. 1117 (S.C.J.) 6. Garland v. Enbridge Gas Distribution Inc., [2006] O.J. No. 4907 (S.C.J.) 7. Martin v. Barrett, [2008] O.J. No. 2105 (S.C.J.) 8. Cassano v. Toronto-Dominion Bank, [2009] O.J. No. 2922 (S.C.J.) 9. Lawrence v. Atlas Cold Storage Holdings Inc., [2009] O.J. No. 4067 (C.A.) 10. Fantl v. Transamerica Life Canada, [2009] O.J. No. 4324 (S.C.J.) 11. Smith Estate v. National Money Mart Co., [2011] O.J. No. 1321 (C.A.) Page 1 Indexed as: Gagne v. Silcorp Ltd. Proceeding under the Class Proceedings Act, 1992 Between Sherrie B. Gagne, (plaintiff), and Silcorp Limited, (defendant) [1998] O.J. No. 4182 41 O.R. (3d) 417 167 D.L.R. (4th) 325 113 O.A.C. 299 39 C.C.E.L. (2d) 253 27 C.P.C. (4th) 114 83 A.C.W.S. (3d) 125 Docket No. C28348 Ontario Court of Appeal Toronto, Ontario Charron, Rosenberg and Goudge Heard: May 27, 1998. Judgment: October 21, 1998. (14 pp.) Barrister and solicitor -- Compensation -- Agreements, contingent fees -- Review and approval -- Multiplier -- Calculation of -- Accounts -- Hourly rates -- Measure of compensation -- Relevant considerations -- Reasonable charges, reasonably performed -- Respecting successful services -- Class services. Page 2 Appeal by solicitors for the plaintiff in a class action, Gagne, from the dismissal of their motion for court approval to increase their base fee by a multiple of three. Gagne brought a class action for wrongful dismissal against the defendant, Silcorp. Pursuant to a written agreement, the lawyers took her class action on a contingency basis as permitted by the Class Proceedings Act. They agreed that the base fee would be the product of the hours worked by the lawyers and their usual hourly rates. Negotiations resulted in a fairly quick settlement. Mini hearings were held to resolve individual claims. The final total gross recovery was $1,945,723. The lawyers motion for court approval to in- crease their base fee by a multiple of three was denied, and they were allowed only their base fee. The motions judge found that there was no material risk in accepting the retainer and that the base fee was fair compensation for the lawyers' services in obtaining the degree of success they had. They appealed to the Ontario Court of Appeal. HELD: Appeal allowed. A multiplier of two was to be applied to the base fee. This was fair and reasonable compensation as contemplated by the retainer, and it represented a multiplied fee that was much less than ten per cent of gross recovery. It provided a sufficient real incentive for solici- tors in future similar cases. The motions judge erred by failing to give due weight to relevant risk and success considerations. Both the degree of risk assumed by the lawyers and the degree of suc- cess they achieved were relevant considerations. Here, while the risk of an adverse finding on lia- bility was minimal, there was a material risk of non-certification. As well, there were significant elements of success in the way the solicitors conducted the proceedings. Weighed against these success factors was the fact that individual class members incurred further legal fees to finally real- ize on their claims after the settlement. Class members' views about whether the base fee should be increased were not to be considered. Statutes, Regulations and Rules Cited: Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 33, 33(2), 33(7)(b). Employment Standards Act, R.S.O. 1990, c. E-14. Counsel: Paul S.A. Lamek, Q.C., for the appellant solicitors. McGowan & Associates and Jeff Burft, advocate. The judgment of the Court was delivered by 1 GOUDGE J.A.:-- The Class Proceedings Act, 1992, S.O. 1992, c. 6 (the "Act") permits a solicitor to take a class action on a contingency basis. If the action is successful the Act permits the solicitor to seek the court's approval to increase his or her base fee by applying a multiple to that fee. This appeal concerns the appropriate considerations that should inform the court's decision on such a motion. 2 The appellants are solicitors who acted on behalf of the plaintiff Sherrie Gagne in a class ac- tion against the defendant Silcorp Limited. The action was concluded successfully and the appel- lants, having taken the case on a contingency basis, moved to increase their base fee by a multiple of three. Southey J. denied this request, allowing the solicitors only their base fee, namely the prod- Page 3 uct of their usual hourly rates and their hours worked on the matter. This is an appeal from that dis- position. THE FACTUAL BACKGROUND 3 Beginning in late 1996, the defendant Silcorp proceeded to merge the operations of the Beck- er's and Mac's convenience store chains which it owned. As a consequence of the merger, a number of its employees were no longer needed and were dismissed. Initially Silcorp offered those termi- nated only an amount that was less than the minimum termination and severance pay to which they were entitled under the Employment Standards Act, R.S.O. 1990, c. E.14. 4 On March 24, 1997 the appellant solicitors commenced a class action for wrongful dismissal on behalf of those former employees who had been terminated. Sherrie Gagne was the representa- tive plaintiff. 5 Immediately after commencing the action, the appellants brought a motion before Southey J. seeking an injunction to compel Silcorp to comply with the Employment Standards Act. This mo- tion was adjourned from April 3, 1997 to April 17, 1997 on the undertaking of Silcorp to immedi- ately comply with the requirements of that Act. 6 The parties then engaged in intensive negotiations which culminated in minutes of settlement dated April 14, 1997. On April 17, 1997, that settlement was approved by Southey J. as required by s. 29 of the Act. The settlement order was very complex but its essential elements were the follow- ing: • The action was certified as a class proceeding for the purposes of the Act. • Sherrie Gagne was appointed the representative plaintiff on behalf of the class of former employees who had been terminated by the defendant Sil- corp. * The appellant solicitors were appointed as counsel for the class. * The defendant was adjudged liable for compensatory damages and Em- ployment Standards Act entitlements. * The claims for punitive and exemplary damages were dismissed. * Pursuant to s. 25 of the Act, a reference was directed to determine the quantum of damages for each class member. * The terms of the reference created a mini-hearing process with a mediation stage and an arbitration stage. * The class members were each permitted to be represented in the mini-hearing process by a personal lawyer rather than the appellant solici- tors. 7 Between the date of the settlement and August 26, 1997, when the appellant solicitors pre- pared the material seeking to triple their base fee, thirty-five individual claims were finally resolved through the mini-hearing process.