Roy O’Connor LLP is prosecuting a class action lawsuit against Transamerica Life Canada. This class action is brought by the representative plaintiff (Joseph Fantl) on behalf of persons who invested or purchased units in a number of segregated funds that were offered as investment options by the defendant, NN Life Insurance Company of Canada (or its predecessors) and subsequently Transamerica Life Canada.

The Plaintiff’s Statement of Claim alleges that the Defendant made commitments or representations related to the Can-Am Fund replicating the performance of the S&P 500 Total Return Index on a best efforts basis. The Can-Am fund was available as an investment option through a number of different insurance policies offered by the Defendant. The alleged commitments and representations were either: i) express contractual commitments in the Class Members’ written insurance contracts or (“Contract Class Members”); or ii) representations (not contractual promises) contained in the “summary information folders” that were provided to Class Members in connection with their application for their insurance contract (Class Members with for whom the alleged commitments and representations are found only in the summary information folders are “Misrepresentation Class Members”). The text of the court-ordered class definition is available for review at: www.canamfundclassaction.ca.

Proposed Settlement of Cloning Claim

Following a series of court decisions and appeals issued between 2013 and 2017 this action was certified (or approved to proceed) as a class action with Joseph Fantl as the representative plaintiff.

As set out below, the Class was notified of the certification of this class action in 2019 and given the opportunity to exclude themselves (opt-out) from this class action. Anyone remaining in this class action following the close of the opt-out period agreed to be bound by any decision at trial or court-approved settlement in this action.

Following several years of additional litigation, including an extensive discovery process and a mediation before a retired judge, the Parties reached the proposed settlement summarized below. Click here to view or download a copy of the court-approved Notice of Proposed Settlement.

The Proposed Settlement

Under the proposed Settlement, the Defendant ivari has agreed to make an all-inclusive settlement payment of CAD $7 million. Compensation to Class Members (the “Net Settlement Fund”) will be paid from the net amount of the $7 million sum remaining after payment of Class Counsel’s legal fees and incurred expenses, settlement administration expenses, and payments owing the Class Proceeding Fund (including the Fund’s 10% statutory levy).

In exchange for its $7 million payment, ivari will receive a full release of all claims and any potential claims that the more than 71,000 Class Members may have against it relating to their investments in the Can-Am Fund. The Net Settlement Fund will be distributed among the Class Members pursuant to the Distribution Protocol (defined below). If approved, this settlement will be binding on all Class Members who have not opted out of this class action, regardless of whether or not that Class Member received any share of the Net Settlement Fund pursuant to the Distribution Protocol.

Subject to the Court’s approval, the Parties have agreed to the following protocol (“Distribution Protocol”) to distribute the Net Settlement Fund. If this settlement is approved:

1. No Class Member shall be required to make a claim or provide evidence regarding their individual allocation. Instead, each relative share of the Net Settlement Fund allocated to a qualifying Class Member shall be calculated on the basis of that Class Member’s Can-Am Fund transaction data that is already in the possession of the Defendant;

2. An outside financial services and consulting firm has been retained to calculate each Class Member’s individual share of the Net Settlement Fund;
3. Individual Class Member allocations are based on a comparison of the returns of their investments in the Can-Am Fund to the returns of the S&P 500 Total Return Index between June 1, 2000 through July 31, 2019. Individuals who divested from the Can-Am Fund prior to June 1, 2000 or invested after July 31, 2019 will not be entitled to a share of the Net Settlement Fund;
4. The difference between a Class Member’s Can-Am Fund returns and the S&P 500 Total Return Index within that time period is used to generate a notional amount specific to that Class Member;
5. The statutory pre-judgement interest of 3.3% is then added to this notional amount for each Class Member from the time of their divestment from the Can-Am Fund or July 31, 2019 (whichever is earlier) to May 3, 2023;
6. Class Members whose insurance contracts did not contain express best efforts language (i.e. Misrepresentation Class Members) will have their notional amount reduced by 50% to account for the greater risks and lower likelihood of recovery on the misrepresentation claims if the case had proceeded forward on the merits. The misrepresentation claims and damages resulting therefrom would arguably have been more difficult to establish than the claims and damages based on the breach of contract claims;
7. Class Members whose insurance contracts contained express best efforts language (i.e. Contract Class Members) will not have their notional amount reduced;
8. The notional amount of each Class Member as calculated and potentially reduced as per above will in turn be expressed as a percentage of the sum of all notional amounts and then multiplied by the Net Settlement Fund to determine the initial allocation of each Class Member.
9. Class Members whose initial allocation amounts to $50 or less shall not receive any compensation from the Net Settlement Fund, and $50 or less amounts otherwise allocated to those Class Members shall be distributed to the balance of the Class on the basis of their proportionate share;
10. It is anticipated that approximately 17,000 Class Members will have an initial allocation of more than $50 and will receive a payment. For those Class Members whose initial allocation pursuant to the Distribution Protocol is greater than $50, the estimated median payout amount is approximately $130.
11. The Funds from any uncashed compensation cheques will be pooled and, 13 months following the first distribution of settlement funds, will be paid out in a second distribution to those Class Members who cashed cheques during the first distribution, with each such Class Member receiving a proportionate percentage of the uncashed compensation calculated by dividing the value of their cashed cheque from the initial distribution by the sum total value of all cashed cheques from the initial distribution; and,
12. Any Settlement Funds remaining following the second distribution will not be returned to ivari but will be donated to charity.

The complete text of the proposed Distribution Protocol can be reviewed at: www.canamfundclassaction.ca.

The Representative Plaintiff and Class Counsel strongly recommend the settlement. In their opinion, when viewed against the alternative of continued litigation and the delay and uncertain outcome of same, the Settlement is fair, reasonable and in the best interests of the class. The Plaintiff’s full submissions in support of the settlement will be set out in materials to be filed with the Court and made available for your review through a posting or link on www.royoconnor.ca in advance of the settlement approving hearing (as described below). A full copy of the Settlement Agreement is available now for your review through the same posting or link.

Motion for Settlement Approval

The settlement is subject to the approval of the Court, which will decide whether the settlement is fair, reasonable, and in the best interests of Class Members. The Court will hold a hearing, via Zoom, to decide whether to approve the settlement on December 11, 2023.

The Court will decide whether to approve or reject the Settlement as proposed. It does not have the authority to unilaterally change the material terms of the Settlement. If the Court does not approve the Settlement, the lawsuit will continue. If the lawsuit continues, it may take several more years to complete the pre-trial procedures, trial, and possible appeals. The Class may or may not be successful at trial and, even if successful, the trial of the common issues would not result in payments of any compensation to Class Members. Any compensation available to Class Members would need to be decided in a subsequent individual issues phase of this proceeding after the common issues trial. Any compensation awarded to Class Members following the individual issues phase would not necessarily be greater than, and might possibly be less than, the compensation available under this proposed Settlement.

How to Comment on the Proposed Settlement

Class Members may, but are not required to, attend the Settlement Approval hearing. Please contact Class Counsel as set out below for instructions on how to access the Zoom hearing.

Class Members were also entitled, but not obligated, to express their opinions about the settlement and whether it should be approved. The deadline to make submissions on the settlement closed on November 30, 2023.

Updating Class Member Contact Information

In order to communicate with you better and, in the event this Settlement is approved, and to assist in the mail-out of cheques, Class Members are requested to confirm or update their contact information by sending an email to the proposed settlement administrator Epiq Class Action Services Canada, Inc. at info@canamfundclassaction.ca or through the change of address link or portal at www.canamfundclassaction.ca.

Class Counsel’s Motion for Fee Approval

The law firm of Roy O’Connor LLP is Class Counsel and has represented the members of this Class in this action for the last 11 years of the litigation. Roy O’Connor LLP can be reached as set out below.

Class members will not have to personally pay for the legal work done or for the associated expenses incurred over the years since this case began. The contingency fee agreement with Class Counsel sets out that Class Counsel will ask the Court to approve legal fees of 30% of any settlement funds, plus their disbursements and applicable taxes.

Approval of the Settlement Agreement will not be contingent upon the court approval of legal fees.

For clarity, as explained above, any approved legal fees and disbursements (and related taxes) will be paid out of the $7 million settlement fund.

In this case, the Plaintiff has received financial support from the Class Proceedings Fund (the “Fund”), which is a body created by statute and designed to allow access to the courts through class actions in Ontario. The Fund agreed to reimburse the Plaintiff for some expenses incurred in pursuing this action. The Fund would also have been responsible for costs that may have been awarded against the Plaintiff in this case. In exchange, the Fund is entitled to recover, from any court award or settlement in favour of the Class Members, the amounts it has reimbursed the Plaintiff for expenses as well as 10% of any amounts payable to Class Members.

Certification of Cloning Claim

Certification Motion - The hearing of the Plaintiff’s motion for the certification of the “cloning” claim was heard on April 9 & 10, 2013.  In Reasons for Decision released on April 18, 2013 the Plaintiffs’ action was certified as a class proceeding as it related to a subset of Class Members whose insurance contract contained a provision relating to the replication of the performance of the S&P 500. Among other things, the Plaintiff sought leave to appeal to the Divisional Court to, among other things, certify a claim in negligent misrepresentation for a larger Class.  In April 2014, the Divisional Court granted the Plaintiff leave to appeal.  The Divisional Court appeal was heard in February 2015.

Plaintiff’s Divisional Court Appeal Allowed - In Reasons released on March 9, 2015, a unanimous three-judge Divisional Court allowed the Plaintiff’s appeal and certified the claim in negligent misrepresentation for a broader Class. Please click here to view or download a copy of the Divisional Court’s Reasons for Decision.  The Defendant Transamerica sought and was granted leave to appeal to the Court of Appeal.  That appeal was heard in May 2016.

 Transamerica’s Appeal to the Court of Appeal Dismissed - We are pleased to report that, in Reasons for Decision released on August 22, 2016, a unanimous three-judge panel of the Court of Appeal dismissed Transamerica’s appeal and confirmed that the claim in negligent misrepresentation would proceed to a common issues trial. Please click here to view or download a copy of the Court of Appeal’s Reasons for Decision. 

Transamerica’s Application for Leave to Appeal to the Supreme Court of Canada Dismissed – On February 23, 2017 Transamerica’s application for leave to appeal from the Ontario Court of Appeal’s decision to uphold the expanded certification was dismissed with costs. 

Notice of Certification 

• Click here to view or download the court-approved notice of certification in English.

• Cliquez ici pour un avis de certification approuvé par le tribunal en français.

 

The Plaintiff, through our firm, will now seek to press the matter forward to seek a determination on the merits of the certified common issues.  Additional updates will be posted on this site as the case develops.

Settlement of Management Fee Overcharge Claim

In 2009 the parties reached an agreement to settle the excess management fee aspect of the class action. The other aspect of the claim, relating to the question whether the Can-Am Fund cloned or replicated the performance of the S&P 500, did not settle at that time. The aim of the settlement was to return any excess management fees that were charged to Class Members and to compensate affected Class Members for any related losses. The parties developed a formula for calculating the amounts owing to individual Class Members. The settlement formula and the financial and policyholder information used to calculate the amounts owing to Class Members were examined and verified for their accuracy and fairness by independent accounting experts retained by each party. Under the settlement agreement, compensation was paid to Class Members pursuant to the provisions of the restitution program set out in the settlement agreement.

Settlement of Management Fee Overcharge Claim Approved – On August 10, 2009, the Ontario Superior Court of Justice approved the proposed settlement of the Excess Management Fee Claim in this proceeding and certified the Excess Management Fee Claim as a class proceeding. A formal notice of certification was delivered to the class. To view or download the settlement approval and certification click here.

Donation to the Heart & Stroke Foundation – The Certification and Settlement Approval Order was, by order of the Ontario Superior Court of Justice, varied to accelerate the date by which the de minimus amounts are to paid the Heart & Stroke Foundation. As a result of this settlement, the Heart & Stroke foundation has received to date over $23,000. To view or download a copy of the Superior Court’s order click here: Issued And Entered Variation Order

Close of Management Fee Settlement – On September 11, 2013, the Management Fee Overcharge settlement was formally concluded. The Representative Plaintiff, Class Counsel and Monitor/Administrator were formally discharged by the court.   To view or download a copy of the Superior Court’s order please click here: Discharge Order

Notice of Settlement Approval Hearing – to view or download a copy of the Court approved notice of the settlement approval hearing click here: Notice of Settlement Approval Hearing

Press Release – To view the joint press release issued by Roy O’Connor, on behalf of the Representative Plaintiff, and Transamerica regarding the settlement of the management fees issue please click here: Transamerica Fund Press Release – English. For the French version please click here: Transamerica Fund Press Release – French.

Summary of the Settlement Agreement – to view or download a summary of the proposed settlement agreement click here: Transamerica Fund – Summary of the Settlement Agreement – English.

Settlement Agreement – to view or download a copy of the proposed settlement agreement, click here: Transamerica Fund – Final Signed Settlement Agreement – English.

Notification de l’Audition pour l’Approbation – Pour voir ou télécharger une copie de la notification de l’audition pour l’approbation approuvé par le Tribunal, Appuyez Ici.

Sommaire de la Convention De Règlement – Pour voir ou télécharger un sommaire de la convention, Appuyez Ici.

La Convention De Règlement – Pour voir ou télécharger une copie de la convention, Appuyez Ici.