Law Times

Law Times • sepTember 5, 2016 Page 3 www.lawtimesnews.com CORRECTION In the Aug. 22 edition of Law Times, an incorrect photo was identified as Richard Johnston. Law Times apologizes for the error. BY SHANNON KARI For Law Times M oral values must be part of the analysis when interpreting a settlement agree- ment, a senior Ontario Superior Court judge has stated, in ruling against the federal government's claim to more than $200 million in "excess capital" from settle- ments in two national class ac- tions stemming from the tainted- blood tragedy. The ruling is the latest chapter in the long-running and multi- jurisdictional litigation related to the tainted-blood scandal of the 1980s. The process by Justice Paul Perell, Chief Justice Christopher Hinkson of the B.C. Supreme Court and Quebec Superior Court Justice Chantal Cor- riveau, who adjudicated the dis- pute, may also pave the way for similar hearings in national class actions. "It is legal arguments, not moral ones, which will decide these applications," said Perell in his ruling on how to interpret a settlement agreement reached 17 years earlier, stemming from the failure of the Canadian Red Cross to screen blood donations for Hepatitis C. "That is not to say, however, that morality has no role to play in deciding these applications. The law of contract and the law of civil procedure, including the law that governs class proceed- ings, are infused with moral val- ues," wrote Perell, in his decision issued Aug. 15. Toronto lawyer Kathryn Po- drebarac, part of a joint com- mittee that was set up to ad- minister the ongoing disburse- ment of funds from the initial $1.1-billion settlement with the federal government that was ap- proved in 1999, says the ruling is "one of the first of its kind." It is believed to be the first time judges from different juris- dictions in Canada have sat to- gether in a class action proceed- ing other than to decide whether to approve a joint settlement agreement, Podrebarac says. The judges were presiding over applications by the federal government seeking the return of $207 million held in trust, which was described as excess capital from what it agreed to pay in the 1999 settlement. The class actions involved people who contracted Hepa- titis C from blood transfusions between 1986 and 1990. By the end of 2013, nearly $780 million had been paid out to 5,283 in- fected class members. A successful investment strat- egy undertaken by the trustee on the recommendation of the joint committee resulted in more money remaining in the fund than was originally expected. For any order to take effect, approval from the judges in all three prov- inces where the class actions were brought was required. Rather than hold separate proceedings, the judges presided over a special joint hearing in Toronto this summer. Video technology was used so the public could watch the hearing in courts in B.C. and Quebec (a Supreme Court of Canada deci- sion on whether video links are required in each court in these types of hearings is expected to be released this fall). There were more than 700 submissions from class members and their families, as part of the eviden- tiary record. While each judge was re- quired to come up with inde- pendent decisions, they were permitted to consult with each other, despite being from differ- ent jurisdictions. "This was an ambitious hear- ing," says Podrebarac, principal at Podrebarac Barristers, in ref- erence to the extensive eviden- tiary record and the use of video technology. The approach taken by the courts "saved costs and saved money for class members," she adds. Ranjan Agarwal, a partner at Bennett Jones LLP in Toronto who specializes in class actions, says more courts in multi- jurisdictional proceedings may adopt this approach. Agarwal was not involved in the case. "Judges are increasingly look- ing for common sense solu- tions," he says. The main decision was issued first by Perell. His colleagues released rulings that concurred with his findings along with their own analysis of the issues. The joint order was that $175 million of the excess funds be al- located for class members. The courts rejected a request by the joint committee to allo- cate $27.6 million for loss of in- come payments as a result of de- NEWS Kathryn Podrebarac says the approach by the courts in recent class actions rulings 'saved costs and saved money for class members.' Untitled-3 1 2016-08-30 9:21 AM T he Ontario Court of Appeal has set aside a possession of guns and drugs conviction after finding the Crown used inap- propriate tactics to question a defence witness. During a break from cross- examining a key defence wit- ness, the Crown attorney made a long-distance call in the court- room to verify the witness's claim with her family member in India, a man named Par- minder. The call was placed on speakerphone, and the family member could be heard contra- dicting the witness's evidence. "Crown counsel spoke in a loud voice, as though he wanted everyone in the courtroom to hear the conversation. Both sides of the conversation were, in fact, clearly audible to everyone pres- ent," said appeal court Justice George Strathy, in R. v. Dhaliwal. Once the cross-examinations resumed, the Crown used infor- mation from the telephone call and asked the witness if anyone had told her about the call he had just made and what was said. "In my view, the Crown's telephone call to Parminder, in the courtroom with spectators present, was improper. So was the manner in which the Crown used the information obtained on the phone call," said Strathy, who wrote on behalf of a unani- mous panel. "The reasonable in- ference is that he made the call, in public, in the courtroom, on a speakerphone, in a loud voice, so that word of Parminder's denials would get back to the witness . . . through one of the spectators." Strathy said the phone call was "a deliberate ploy" to inf lu- ence the witness's evidence in the middle of cross-examina- tions through communication that wasn't part of the record. "It was entirely improper," said the judge, who set aside the convic- tion and ordered a new trial. The appeal court also took issue with the way Crown counsel cross-examined the accused, Bickramjit Dhaliwal, finding that he was improperly asked to explain the charges against him. LT New trial after Crown 'ploy' ductions for other government benefits. That money, though, is to remain in the trust fund rather than be returned to the federal government. In describing the case before the court as one of strict con- tractual interpretation, Perell referred to an amendment to the 1999 settlement agreement that gave the courts "unfettered dis- cretion" to decide what to do with surplus funds. He noted that while the federal government was seeking the excess capital in this case, it was not obligated to provide more money to funds from other tainted-blood class actions that are now depleted. Bill Dermody, who represents two class members who were successful in having their com- pensation claims re-assessed be- cause of their personal circum- stances, says it was appropriate to make a reference to morality. "I think Justice Perell and the other judges are speaking to class members. That is impor- tant. At the same time, the deci- sion is grounded in the terms of the settlement agreement," says Dermody, who heads Dermody Law in Hamilton. That view is shared by Daniel Bach, a class action lawyer and partner at Siskinds LLP in To- ronto. Bach was not involved in the case. "Justice Perell is affected by the life stories of class members, but he makes clear his decision is consistent with the intention of the parties," says Bach. The outcome in this case is a reminder for class action lawyers to be careful about every term in a settlement agreement, even if it is being urged by the judge presiding over the hearing, says Agarwal. "No matter what the judge says, the deal is yours. It is your words that will be scrutinized," he states. The federal govern- ment has not yet stated if it will appeal the decisions. LT Moral values highlighted in tainted-blood settlement

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