Everyone seemed to agree, so tobacco companies get a 3 month extension

It was all over before today's hearing had begun. With agreements hammered out well before Justice McEwen entered the court room, it took less than an hour to impose a further suspension of the rights of injured Quebec smokers to receive compensation for the wrongdoing of tobacco companies.

The negotiations towards this 95 day extension were more or less conducted in public view.

• Last week, tobacco companies filed notice that they would be asking for a further 6 month extension on the creditor protection they received in March under Canada's Companies' Creditors Arrangement Act.
  (e.g.  Imperial Tobacco's motion)
• Soon after, those to whom the companies owe or will owe money filed notice that they thought that six months was twice as long as it should be. The Quebec Class Action team suggested September 27. Counsel from 9 of the provinces suggested October 16.
  (e.g. letter from from counsel for Alberta)  
• The companies blinked and amended their request to align with a midpoint between these earlier dates: October 4.
  (e.g. Blacklined amended stay order from Imperial)

With this matter settled to everyone's apparent satisfaction, the mood of the room was a dramatic contrast to that of the first comeback hearing, less than 3 months ago. The tension had left the air. Body language was relaxed. There was no nervous fussing with papers. There were few corridor conversations.

As it turned out, the only one in the room willing to voice opposition to the consensus was Justice McEwen. Before any of the paperwork had been handed over to him for signature, he expressed his reservations about reducing the proposed extension from 6 months to 3: "I am a little surprised by the date - it seems ambitious. I am not going to get into the way of a consent order, but I have some misgivings about where we are going to be on October 4th."

He was not going to let his concerns stand in the way, however - If the parties have agreed to that, frankly I am prepared to go along. I will set October 2nd as the date for the next comeback hearing."

Objections to the extended stay on litigation were expressed outside the room, however. Yesterday several tobacco control organizations made public their request that provincial justice and health ministers step back from the CCAA process.

A very short leash for outsiders 

The Canadian Cancer Society joined in the CCAA proceedings several weeks ago, and last week intervened for the first time by filing a notice that they opposed the "such a lengthy [6 month] extension of the Stay Period."

This action triggered Justice McEwen to issue some guidance on what he would require of external parties in any future interventions.

"No doubt the Canadian Cancer Society is a well respected organization," he prefaced his remarks before cautioning that before being allowed to meaningfully participate in the CCAA proceedings, the CCS would be required to demonstrate its financial stake in the process. This condition would be equally applied to any participation in proceedings outside the courtroom: "Those entities don’t have a role in mediation. The mediation proceedings are with those people who have financial stakes in the ongoing dispute."

"I just want to be clear. I am not foreclosing participation."  His meaning was clear to me: I'm-not-saying-you-can't-but-you-will-understand-that-it's-not-going-to-happen.)

More non-opposition

A few other non-opposed requests from the companies were also quickly approved.

• Rothmans, Benson and Hedges clarified the rights of certain pensioners.  
• Imperial Tobacco's settlement with Genstar was approved (with some chit-chat about their place in any future pecking order) 
• The monitors will coordinate a common service list.

Where there was opposition, Justice McEwen refused to hear it. The Quebec Class action lawyers have objected to a transfer of $3.5 million by JTI-Macdonald to its sister company, which was identified in the most recent Monitor's report. This, they felt, went against an earlier direction of the court, and they wanted Justice McEwen to order the payment reversed. This prompted a rebuttal from JTI's receiver, as well as the Monitor.   

Justice McEwen was clearly in no mood to manage a discussion over what he sees as a penny ante sum that had no urgency attached to it. He proposed that the issue be instead handed to the mediator to manage. In doing so, he identified that he knew that Warren Winkler has engaged accounting experts to help him. Perhaps he learned this as a result of discussions between the two of them, now permitted under a special court order. Mr. Winkler now has one more issue on his plate!

Parting words

The CCAA process is now in its 4th month and, as reported, nothing of substance has yet happened to forward meaningful discussions between the parties. The Quebec class action plaintiffs expressed concern that "Nearly four months into this CCAA process, no tangible progress has been made by any of the Applicants." Meanwhile, injured Quebecers - "whose conditions are deteriorating significantly and often rapidly" - are unable to receive the compensation awarded to them.

Justice McEwen has not acknowledged the frustration of these victims' entitlements, but today he expressed his own frustration about the types of matters that he has been asked to adjudicate.

"It exhausts me - the number of small issues that we have to deal with. It is fiddling while Rome burns. We need to get to the big issues. We have to drive past these [small things]– or park them and get to the big picture. That’s my speech for this morning."

The August 1st deadline

The court-appointed mediator, Mr. Warren Winkler, has requested all sides to submit mediation briefs by August 1st.