JTI's request for an amendment to its initial order is granted.

This morning the monitor for JTI-Macdonald uploaded recent decisions by Chief Justice Morawetz, to agree to the company's request for an amendment to its initial orders, as discussed in a previous post.

The "Second Amended and Restated Order" giving the company CCAA protection is available, as is the "endorsement" in which Chief Justice Morawetz' reasons, pasted below, are given.

[1] The motion proceeded on April 29, 2025, on an unopposed basis. The evidence to support the requested relief is set out in the 26th and 27th Reports of the Monitor and in the Affidavit of William E. Aziz, sworn April 23, 2025. 

[2] The relief as set out in the Notice of Motion requests rectification of two points in paragraph 20 of the Initial Order. However, at the hearing, it became apparent that the Applicant was actually seeking to amend two inadvertent errors in paragraph 20 and relied upon Rule 59.06(1) of the Rules of Civil Procedure for such relief. 

[3] At the hearing, I indicated that the motion was conditionally approved upon being satisfied that there was direct contact with the Attorney General of Canada, representing Health Canada regarding the motion and that the Monitor was satisfied that no party in interest would be prejudiced if the relief was granted. 

[4] The Monitor’s 27th Report confirms that direct contact has been made with both the Attorney General of Canada, representing Health Canada and no objection to the requested relief has been made. The Monitor has reaffirmed its view that no party in interest will be prejudiced by the requested relief. 

[5] Having reviewed the record, I am satisfied that paragraph 20 of the Initial Order contains two inadvertent errors as referenced in the Notice of Motion and it is appropriate that these errors be corrected as requested by the Applicant. 

[6] The Motion is granted and an Order giving effect of the foregoing has been signed.

Newfoundland reveals its lawyers will receive 25% of $520 million settlement

All but two of the Canadian jurisdictions which reached a settlement with tobacco companies to resolve their claims for health-care cost recovery chose to enter into contingency-fee arrangements with the lawyers who represented them in court. These arrangements were discussed in a previous post.

Contingency fee arrangements mean that the lawyers agreed to be paid only upon a successful outcome, often as a percentage of any final payment. 

Newfoundland is one of the few Canadian provinces which had previously put on record its contractual obligation to the team it hired. In 2011 it said that the U.S. firm and its Canadian partners would share 30% of the proceeds of a lawsuit. 

Earlier this month, the Minister of Finance for Newfoundland and Labrador reported that the final fee that will be paid to the lawyers will be $130 million. This represents 25% of the $520 million slated for that province.

On May 13, the Minister was questioned by a member of the opposition, who wanted precision on how much the province would receive: "L. PADDOCK: This year's budget included $520 million in revenue from the tobacco settlement. So I ask the minister: How much of that will actually be received, in hand, this fiscal year?"

Mr. Siobhan Coady, the Minister of Finance and President of Treasury Board replied that "The payment terms are still being finalized... Newfoundland and Labrador's share of that $32.5 billion is $520 million, of which we have to pay legal fees. As the Member opposite knows, yesterday in Estimates we talked about what the legal fees cost out of that $520 million. If memory serves it was $130 million. So $390 million is what we are receiving in revenue, what we can book in revenue in this particular fiscal year."

JTI releases more information on its request for its own litigation stay to be removed

More details have emerged following the quiet (unobserved?) hearing held before Justice Morawetz on April 29th. The hearing took place at the request of JTI Macdonald, which wants to tweak the ground rules of their insolvency protection which were set in 2019.

The requested change would prevent an expiry of their own limitation period to sue other parties. The proposed change is shown in blackline below:

Yesterday, JTI's monitors tabled their 27th report (dated May 15, 2025), which provides details on why they want this wording change: they want to challenge federal regulations. "The Applicant sought the relief requested in the Amendment Motion in consideration of its current and future rights in respect of federal regulations applicable to the Applicant."

From this report, it would appear that Chief Justice Morawetz had sought reassurance that the federal government was aware of the potential change. According to the report (and the Appendix B to it), the  federal government was duly notified and decided to voice no opposition.