Saturday, 16 March 2019

Justice Hainey gives his reasons for siding with JTI-Macdonald.

In the middle of the week, Justice Glenn Hainey of the Ontario Superior Court issued his reasons for granting JTI creditor protection in a way that sideswiped ability of some Quebec injured smokers to claim compensation.

His ruling is now downloadable (2019 ONSC 1625). In case the spring thaw was beginning to make you feel better, reading his explanation will quickly restore your winter depression.

Justice Hainey seems to feel his job is to ensure that lawsuits against tobacco companies don't put them out of business.
[3] As a result of a judgment of the Quebec Court of Appeal released on March 1, 2019 in a class proceeding (“Quebec Class Action”), JTIM and two other defendants are liable for damages totaling $13.5 billion (“Quebec Judgment”). If this judgment is not stayed, its enforcement could destroy the company because JTIM does not have sufficient funds to satisfy the judgment. [emphasis added]
To be precise, he identifies concerns about the impact of "enforcement of the Quebec Judgment" on employees, suppliers, retailers and taxes. His expressed concerns for the 790,000 customers of JTIM does not extend to those whose claims against the company have been tried and proven.

"Is it appropriate to grant the requested stay of proceedings?" he asks and then replies in the affirmative based on the importance he sees in the court protecting the economic interests of the company.
[13] JTIM cannot pay the amount of the Quebec Judgment. Any steps to enforce the judgment could cause serious harm to JTIM’s business to the detriment of all of its stakeholders. In my view, it is appropriate for this reason to grant the requested stay of proceedings in favour of JTIM. 
And why did he extend his generosity to the other two companies? Because it was "just and reasonable" to do so, and that "the balance of convenience" the protection of the companies. Not once does he acknowledge the impact of his actions on Quebec class action members, or even how they might factor into his "balance of convenience."

Carved out of his general stay is the right of JTI-Macdonald to appeal the Appeal Court ruling to the Supreme Court. He gives no rationale for this decision - other than it being asked and considered by him to be "reasonable to permit" it happening.

Those who disagree will likely be in his court at 10 a.m. on April 4th when the "comeback motion" will be heard.

April 4th will be a busy day

It would appear that both the Imperial Tobacco and JTI Macdonald comeback motions will be heard on April 4th.  Not clear yet how this will be managed -- but the ITL date is clearly laid out in the notice to creditors that appeared in the Globe and Mail (and La Presse) this morning.