Imperial Tobacco: who checks the monitors' bills

Three CCAA proceedings run together under three court file numbers opened in 2019: Imperial Tobacco Canada Limited, JTI-Macdonald Corp., and Rothmans, Benson & Hedges Inc. Each has its own monitor — FTI Consulting Canada Inc., Deloitte Restructuring Inc. and Ernst & Young Inc. respectively — and each monitor has its own counsel.

Six sets of professional accounts, running for seven years, in a proceeding whose purpose is to pay sick people.

On June 2, 2026, Justice Kimmel approved a quarter of those fees in three paragraphs, per Directions re: Fee Approvals, June 2, 2026.

The mechanism

Fee approval in an insolvency is ordinarily done by the supervising judge, on affidavit evidence, with the accounts and dockets in the record. That is workable when there is one court officer and a few motions a year. It scales badly when there are six billing parties, the proceeding has run since 2019, and every hour reviewed is an hour the judge is not spending on the plan.

The answer here, directed by an order of then-Chief Justice Morawetz on June 26, 2025, was to delegate the review:

the Court-Appointed Mediator was directed to review the fees and disbursements of the Monitors and their counsel incurred since the commencement of the CCAA Proceedings and to advise the Court if, in his sole discretion, it is the opinion of the Court-Appointed Mediator, that the fees and disbursements of the Monitors and their counsel are fair and reasonable in the circumstances.

Per Directions re: Fee Approvals, June 2, 2026, para. 1.

The Court-Appointed Mediator is the Honourable Warren K. Winkler, a former Chief Justice of Ontario.

His letter for this quarter is two paragraphs. He reviewed the January, February and March 2026 fees and disbursements of all three monitors and their respective counsel, and gives his opinion that the amounts rendered by all six parties during the period are fair and reasonable in the circumstances. He notes that the opinion and the review are subject to the Confidentiality Protocol and the protections afforded to the Court-Appointed Mediator by the June 26, 2025 direction, per Directions re: Fee Approvals, June 2, 2026, Schedule "A".

Justice Kimmel accepted the opinion and approved the fees, per Directions re: Fee Approvals, June 2, 2026, paras. 2–3.

It is a quarterly rhythm rather than a one-off. A materially identical direction issued on April 1, 2026, per Direction re: Fee Approvals, April 1, 2026.

Why this arrangement is unusual, and why it works here

Three features are worth separating out, because the structure is not obviously available in an ordinary file.

The reviewer already knows everything. A taxing officer brought in cold would have to be educated about seven years of proceedings before an hourly rate meant anything. The Court-Appointed Mediator has been inside the negotiation of the plans themselves. He is uniquely positioned to know whether a month of monitor time was proportionate to what was happening that month — which is the actual question in fee approval and the one that dockets alone never answer.

The confidentiality protocol makes it possible at all. Detailed dockets in a mediated multi-party settlement reveal who met whom, about what, and for how long. Publishing them would map the negotiation. Routing the review through a mediator already bound by a confidentiality protocol lets the accounts be genuinely examined without the examination itself becoming disclosure.

The opinion is stated as an opinion, and the court still decides. The direction asks the mediator to advise the court, in his sole discretion, whether the fees are fair and reasonable. The order then records that the judge accepts that opinion and approves. The approval remains the court's; what is delegated is the examination, not the decision.

The obvious objection is that a two-paragraph letter and a three-paragraph direction is a thin public record for the approval of six professional firms' quarterly fees. That is true, and it is the trade the structure makes: rigour behind a confidentiality wall in exchange for opacity in front of it. Whether that trade is right depends on how much confidence the reviewer's identity and independence carry — which, in this instance, is the point of appointing a former Chief Justice.