Court Orders Undistributed Settlement Funds To Be Paid To The Class Proceedings Fund

A short but novel decision was released in the mid-summer that may have slipped under many radars.

On July 29, 2019, Justice Perell of the Ontario Superior Court of Justice approved a cy près distribution of settlement funds to the Class Proceedings Fund in Cappelli v. Nobilis Health Corp. However, in what is likely a first of its kind, the cy près distribution was approved upon undistributed settlement funds.

In this case, the plaintiff was a shareholder of Nobilis Health Corp. ("Nobilis") who pursued causes of action in misrepresentation against several defendants. In 2018, the plaintiff entered into a settlement pursuant to which the action was dismissed as against several individual defendants, while the defendant accounting firm agreed to pay USD$1 million (which was the statutory maximum of damages against these defendants). At that point, only Nobilis remained as a defendant.