Poulus v. WestJet Airlines Ltd.

2024 BCSC 2484 Poulus v. WestJet Airlines Ltd.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Poulus v. WestJet Airlines Ltd., 2024 BCSC 2484 Date: 20241011 Docket: S197550 Registry: Vancouver Between: Kathleen Poulus Plaintiff And WestJet Airlines Ltd. and WestJet Encore Ltd. Defendants Before: The Honourable Justice Francis Oral Reasons for Judgment In Chambers Counsel for the Plaintiff: K.J. McLaren S. Lin A.S. Majidi S.A. Paquette J.J. Martin Counsel for the Defendants: M. Dery N.V. Pimentel A.G. Kay Place and Date of Hearing: Vancouver, B.C. October 11, 2024 Place and Date of Judgment: Vancouver, B.C. October 11, 2024 Table of Contents Overview.. 3 Terms of Settlement. 4 Legal Authorities. 4 Is the Settlement Fair and Reasonable?. 6 Feel Approval. 7 Payment of Honorarium.. 9 Overview [1] THE COURT: In this application, the plaintiff seeks an order approving the settlement of this proceeding, as well as an order approving class counsel fees, disbursements, and an honorarium for the representative plaintiff. The defendant, WestJet Airlines Ltd., supports the application approving the settlement and takes no position on class counsel fees, disbursements, and the representative plaintiff's honorarium. [2] The action was commenced on July 5, 2019, against WestJet, pursuant to the Class Proceedings Act, R.S.B.C. 1996, c. 50 [CPA], alleging that WestJet charged its passengers baggage fees even though the written terms of

WestJet's tariffs provided that fare‑paying passengers were entitled to one free checked bag. [3] In her pleadings, the plaintiff claims that WestJet's practice of charging baggage fees for checked luggage was contrary to its tariffs and a violation of s. 54 of the Competition Act, R.S.C., 1985, c. C-34 [CA]. [4] On September 26, 2019, WestJet filed a response to civil claim denying all liability. [5] The certification hearing took place from November 16 to 18, 2020. On January 2, 2021, I issued reasons for judgment certifying the matter as a class action. In my reasons, I declined to certify the claims related to s. 54 of the CA but allowed the plaintiff to submit proposed amendments. After further written submissions, the remaining claims were certified on March 3, 2021. [6] The certification decision was appealed, which appeal was dismissed by the Court of Appeal on January 21, 2022. [7] The parties proceeded to mediation from November 30 to December 1, 2023, and were able to successfully resolve the matters at issue. A long‑form settlement agreement was signed on April 12, 2024, and dated for reference as of January 15, 2024 (the "Settlement Agreement"). [8] Between the time of the filing of the claim and settlement, a number of litigation steps were taken, including by my count, at least six judicial management or case management conferences, an adjournment application of

the certification hearing, and a document disclosure application that was resolved on a consensus basis by the parties. [9] On May 8, 2024, I granted an order to substitute the representative plaintiff and gave plaintiff's counsel leave to file a second amended notice of civil claim to reflect the new representative plaintiff. [10] On May 13, 2024, I approved the plaintiff's proposal for notice to class members. [11] As of the date of this application, there have been no objections. There have been approximately 94 opt‑outs. Terms of Settlement [12] Under the Settlement Agreement, WestJet has agreed to a settlement valued at $12.5 million without admission of liability. After payment of class counsel fees, honorarium for the representative plaintiff, and taxes and disbursements, the remaining amount will be used to create a compensation fund in the form of credits to be established by WestJet to pay provable losses submitted by class members. Any settlement amounts remaining, in the form of credits, will be distributed cy pres to a non-profit organization or organizations selected by WestJet and approved by the Court. [13] The representative plaintiff has approved the terms of the settlement and class counsel's fee request. Legal Authorities [14] Under s. 35 of the CPA, "[a] class proceeding may be settled only with the approval of a judge" and, once approved, binds every class

member "who has not opted out of or has been excluded from the class proceeding." [15] In considering whether to approve a settlement of a class proceeding, the court must look to whether the settlement is "fair and reasonable and in the best interests of the class as a whole." A class action settlement is not required to be perfect; rather, the settlement must "fall within a range or zone of reasonableness to be approved": Cardozo v. Becton, Dickinson and Company, 2005 BCSC 1612 at para. 16; Bodnar v. The Cash Store Inc., 2010 BCSC 145 at para. 17. [16] Public policy favours the settlement of complex disputes. There is a strong presumption of fairness when a settlement has been negotiated at arm's length. Experienced class counsel is in a unique position to assess the risks and rewards of litigation and their recommendation is given considerable weight by the reviewing court: Jones v. Zimmer GMBH, 2016 BCSC 1847 at para. 36. [17] There are a number of factors that the court may consider in assessing whether settlement is reasonable. These include: a) likelihood of success; b) amount and nature of discovery evidence; c) settlement terms and conditions; d) recommendations and experience of counsel; e) future expense and likely duration of litigation; f) recommendations of neutral parties, if any, g) number of objectors and nature of objections; h) presence of good faith and absence of collusion; i) degree and nature of communications by counsel and the representative plaintiff with class members during the litigation; and j) any information conveying to the court, the dynamics of and the positions taken by the parties during the negotiation: Cardozo at para.

17. Is the Settlement Fair and Reasonable? [18] In this case, the plaintiff submits that the settlement is fair and reasonable and is in the best interests of the class members. The plaintiff also submits that this is a complex litigation with a myriad of possible defences available to WestJet. There is a risk that the plaintiff would not be successful at the common issues at trial. Even if successful at trial, the plaintiff would face the prospect of lengthy appeals. [19] Negotiations in this case were conducted at arm's length and facilitated by Barb Cornish, who is an experienced mediator. [20] I am satisfied that Hammerco Lawyers LLP, Matthew P. Good Law Corporation, Evolink Law Group and Champlain Avocats are experienced in this specialized area of class action litigation. There is sufficient evidence before me to conclude that they have weighed the risks and benefits of continued litigation against the certainty of a timely recovery effected by the proposed settlement. I am also satisfied that class counsel has adequately researched the legal issues in the case and identified relevant litigation risk factors that support a decision to settle this class action pursuant to the terms of the Settlement Agreement. [21] I also note that the proposed settlement is consistent with a similar settlement in the Federal court that also involves s. 54 of the CA, a travel provider, and

settlement in the form of credits. [22] The settlement proposes a departure from s. 36.2 of the CPA, which requires that 50% of any remaining settlement funds be donated to the Law Foundation of BC, unless it would be impractical or impossible for the court to make such an order. In this case, if the settlement has remaining credits after distribution to class members, payments to charities will be chosen by WestJet. Since the settlement involves a payment of travel bank credits, which expire after 24 months, rather than cash, it is not practical or desirable, for the remaining settlement credits to go to the Law Foundation of BC, which most likely would not be able to use them. [23] Considering all of the evidence, I find that the proposed settlement is appropriate, is in the range of other similar settlements, and reflects the risk that the plaintiff would be unsuccessful at trial or on appeal. The settlement is therefore approved. Feel Approval [24] Class counsel seeks an order approving the retainer agreement with the representative plaintiff, as well as approving legal fees in the amount of $4,166,667 (which amounts to a one‑third contingency fee) plus taxes and disbursements, disbursements in the amount of $38,971.37. [25] Under s. 38 of the CPA, "an agreement respecting fees and disbursements between a solicitor and a representative plaintiff is not enforceable unless

approved by the court". [26] In McLean v. Cathay Pacific Airways Limited, 2021 BCSC 1456, Justice Kent noted: [45] It has long been recognized that for class proceedings legislation to achieve its policy goals, counsel must be well rewarded for their efforts, and the contingency agreements they negotiate with clients should be respected. [27] Factors to be considered in assessing whether a fee is fair and reasonable include: a) results achieved; b) risks undertaken; c) time expended; d) complexity of the matter; e) degree of responsibility assumed by counsel; f) importance of the matter to the client; g) skill and competence demonstrated by counsel; h) ability of the client or the class to pay; i) client and class' expectation; and j) fees in similar cases: Green v. Tecumseh Products of Canada Limited, 2016 BCSC 217 at para. 57. [28] Class counsel in this case are experienced class action lawyers. They were successful at the certification hearing and on appeal. [29] This was complicated litigation due to the procedural complexity of class actions, and the substantive legal complexity of the pled cause of action. It involved a certification hearing and an appeal. Given the extent to which the litigation progressed prior to settlement, an enormous amount of work has been done by the lawyers on this file. According to the second affidavit of Ms. Majidi, a combined 2,000 hours have

been recorded for all class counsel on this file. [30] This was also a case that involved some litigation risk as there were a number of defences available to WestJet. As Justice Masuhara wrote in Pro-Sys Consultants Ltd. v. Infineon Technologies AG, 2014 BCSC 1936: [54] The considerations in approving fees should recognize not only meritorious effort in achieving a positive result, but also encourage counsel to take on difficult and risky class action litigation. [31] A contingency fee of 33% has frequently been held to be valid in class proceedings: Pro-Sys at para. 56; Denluck v. The Board of Trustees for the Boilermakers' Lodge 359 Pension Plan, 2021 BCSC 242 at para. 42. [32] In all of the circumstances, considering the work performed, success achieved, and risk taken by class counsel, I find it is appropriate to approve the fee sought by class counsel, which is one‑third of the value of the settlement funds, being $4,166,667, plus taxes, to be separated amongst the four law firms who worked on the case. I also approve disbursements in the amount of $38,971.37. I also order that class counsel's further disbursements for completing settlement approval and administering the distribution protocol shall be payable as a first charge prior to distribution to the class members. Payment of Honorarium [33] Where a representative plaintiff can show that they rendered active and

necessary assistance in the preparation or presentation of the case, and that such assistance resulted in monetary success for the class, the representative plaintiff may be compensated by an honorarium: Karasik v. Yahoo! Inc., 2021 ONSC 1063 at para. 182. [34] In my view, the honourarium sought in this case is reasonable and in keeping with the fact that Ms. Poulus only got involved in the later stage of the litigation. As such, I approve a $1,500 honorarium for Ms. Poulus to be paid out of the settlement funds. [35] The order shall issue on the terms set out in the draft orders provided by counsel as amended in discussions this morning. "Francis, J."