Watts v. Myers, 2019 ONMIC 15

TOWN OF DEEP RIVER INTEGRITY COMMISSIONER, GUY GIORNO

Citation: Watts v. Myers, 2019 ONMIC 15
Date: September 15, 2019

REASONS FOR DECISION

Notice: Municipal Integrity Commissioners provide investigation reports to their respective municipal council and, in most cases, make recommendations for imposition of penalty or other remedial action to the municipal Council. Therefore, reference should be made to the minutes of each particular municipal council to obtain information about the particular council's consideration of each report. When possible, a link to the relevant municipal council minutes is provided.

Please find below the link to the corresponding council decision. No council decision. Because this is an inquiry under the Municipal Council of Interest Act, the Integrity Commissioner’s decision is not required to be filed with the municipal council.

TABLE OF CONTENTS

CONTEXT 3 THE APPLICATION 3 DECISION 3 BACKGROUND 4 STANDING TO BRING APPLICATION 5 TIMING 6 PROCESS 7 POSITIONS OF THE PARTIES 8 ISSUES 9 ANALYSIS AND FINDINGS 10 (A) Does Ms Lapping have a pecuniary interest in her own appointment? 10 (B) Is Ms Lapping a partner of the Respondent or does the Respondent otherwise have an indirect pecuniary interest in her appointment? 10 (C) Should I make an application to a judge? 12 DECISION 12 PUBLICATION 12

CONTEXT

1Among their responsibilities, municipal Integrity Commissioners in Ontario conduct inquiries into applications alleging that council members or members of local boards have contravened the Municipal Council of Interest Act. At the end of such an inquiry, the Integrity Commissioner shall decide whether to apply to a judge under section 8 of the Municipal Conflict of Interest Act for a determination as to whether the member has contravened section 5, 5.1 or 5.2 of that Act, and shall publish reasons for the decision. Such decision is not subject to approval of the municipal council and does not take the form of a recommendation to council. There is, therefore, no municipal council resolution necessary to give effect to the decision.

THE APPLICATION

2This inquiry involves new statutory responsibilities of Integrity Commissioners that took effect March 1, 2019.

3Section 223.4.1 of the Municipal Act allows an elector or a person demonstrably acting in the public interest to apply in writing to the Integrity Commissioner for an inquiry concerning an alleged contravention of section 5, 5.1 or 5.2 of the Municipal Conflict of Interest Act (MCIA) by a member of council or a member of a local board.

4Claire Watts (the Applicant) alleges that Councillor Terry Myers (the Respondent) contravened section 5 of the MCIA by failing to declare a pecuniary interest and failing to withdraw from decision making and voting in relation to the nomination and appointment of Kelly Lapping to the Deep River Police Services Board.

5The Application was completed when the statutory declaration required by subsection 223.4.1(6) of the Municipal Act was submitted May 8.

6Upon receiving the completed Application, I conducted an inquiry.¹

DECISION

7Subsection 223.4.1(15) of the Municipal Act states that, upon completion of an inquiry, the Integrity Commissioner may, if the Integrity Commissioner considers it appropriate, apply to a judge under section 8 of the MCIA for a determination whether the member has contravened section 5, 5.1 or 5.2 of that Act.

8After considering all the evidence and the submissions of the parties, I have decided that I will not apply to a judge for a determination whether Councillor Myers has contravened section 5 of the MCIA.

9Subsection 223.4.1(17) of the Municipal Act requires me to publish written reasons for my decision. These are my reasons.

BACKGROUND

10The Respondent, Councillor Myers, is a co-owner of a company called Digest Media Inc. The company publishes the North Renfrew Times.

11There are two other co-owners. One of them is Kelly Lapping.

12On January 23, the Striking Committee, of which Councillor Myers was a member, went into closed session to consider the matter of citizen appointments. Councillor Myers participated in the meeting and did not declare a pecuniary interest.

13Later that day, Town Council voted (Resolution 2019 26) to receive Report 2019‑M-001 of the Striking Committee and, among other steps, to re-advertise a request for applications for appointment to the Police Services Board. Councillor Myers did not declare a pecuniary interest in the matter. Indeed, he moved the motion.

14On March 5, the Striking Committee went into closed session to review applications. Councillor Myers participated in the committee meeting and did not declare any pecuniary interest.

15On March 20, Town Council voted (Resolution 2019 96) to receive Report 2019‑M‑002 of the Striking Committee and to appoint Kelly Lapping to the Police Services Board. Councillor Myers did not declare a pecuniary interest in the matter. In fact, he seconded, and voted for, the motion of appointment.

16As a Police Services Board member, Ms Lapping is entitled to an honorarium.

17Twenty-three people signed an April 25 letter alleging that the Respondent contravened the MCIA by participating in decision making on Ms Lapping’s appointment and failing to declare a pecuniary interest. On May 2, Claire Watts submitted the letter to the Town, explaining that the letter was a formal complaint to the Integrity Commissioner and that she was the contact person for the 23 signatories (including her).

18Upon receiving the letter, I understood it to be an application under section 223.4.1 of the Municipal Act. I noted, however, that the Application lacked the mandatory statutory declaration. A statutory declaration of Ms Watts, identified in the declaration as the Applicant, was provided to me on May 8. I consider May 8, the date of completion, to be the date of the Application.

19The Applicant alleges a contravention of the MCIA on the basis that Councillor Myers has an indirect pecuniary interest in Kelly Lapping’s appointment because he and she are business partners.

STANDING TO BRING APPLICATION

20The Respondent argues that the Application is deficient in that no individual is clearly identified as the Applicant. He points out that the first letter was co-signed by 23 individuals and that Ms Watts was identified merely as “contact for the signatories.” He notes that the letter is silent about its authorship. Only later, in the May 8 statutory declaration, did Ms Watts refer to herself as the Applicant.

21Subsection 223.4.1(2) of the Municipal Act does not prescribe any particular form of an MCIA application to an Integrity Commissioner. It merely states:

An elector, as defined in section 1 of the Municipal Conflict of Interest Act, or a person demonstrably acting in the public interest may apply in writing to the [Integrity] Commissioner for an inquiry to be carried out concerning an alleged contravention of section 5, 5.1 or 5.2 of that Act by a member of council or a member of a local board.

22Subsection 223.4.1(6) establishes the required content:

An application shall set out the reasons for believing that the member has contravened section 5, 5.1 or 5.2 of the Municipal Conflict of Interest Act and include a statutory declaration attesting to the fact that the applicant became aware of the contravention not more than six weeks before the date of the application or, in the case where an applicant became aware of the alleged contravention during the period of time described in paragraph 1 of subsection (5), a statutory declaration attesting to the fact that the applicant became aware of the alleged contravention during that period of time.

23I believe that it is appropriate to recognize Ms Watts as the Applicant. She did what is described in subsection (2) and submitted the content required by subsection (6).

24Regardless of who authored the original letter, by the time of the May 8 statutory declaration Ms Watts clearly was adopting the content of the letter as her request for an Integrity Commissioner inquiry and as the reasons supporting her allegation that Councillor Myers had breached the MCIA. The statutory declaration plus the original letter together comprise her Application under section 223.4.1 of the Municipal Act.

25I also note that there is no prejudice to the Respondent. He was given complete details of the allegations against him. He received a full and fair opportunity to respond.

TIMING

26The Act requires that an MCIA application to the Integrity Commissioner be made within six weeks after the Applicant became aware of the alleged contravention.²

27The letter was originally submitted May 2, exactly six weeks after the March 20 vote on Ms Lapping’s appointment. At this point, the Application was incomplete. It was not completed until six days later.

28The case law indicates that the six-week period is to be calculated, not as six weeks from when the facts occurred, but as six weeks from when the Applicant personally became aware of the alleged contravention. This is a subjective condition based on the timing of the Applicant’s personal knowledge³ including constructive knowledge.⁴ The six-week period starts not when the Applicant knows that the Respondent may have a conflict of interest in a matter, but when the Applicant knows that the Respondent was present at a particular meeting at which a matter of pecuniary interest was considered, and failed to declare the interest or took part in the discussion, voted, or tried to influence the outcome.⁵ The timing is calculated based not on what the Applicant could have known, but on when the Applicant did know.⁶ Once the Applicant believes that the MCIA has been contravened, the six-week clock starts running, even if the Applicant later acquires additional facts to support the belief.⁷

29The Respondent points out that his participation in meetings was a matter of public record and public knowledge from the date of each meeting, and suggests that the Applicant must have known earlier than she claims. (The Applicant acknowledges being present at the March 20 meeting where the appointed was made.) The Respondent also says that critical comments about Ms Lapping’s appointment were being made prior to March 20, so it is implausible that the Applicant was unaware of the alleged conflict at that time.

30While I understand the Respondent’s argument about what is plausible, the case law makes clear that the six-week period runs from when the Applicant actually knows, not when she ought to have known or when she plausibly knew. More specifically, the six-week period runs from when the Applicant knew of the alleged MCIA contravention, not merely when she learned of Ms Lapping’s appointment.

31On May 8, the Applicant submitted a statutory declaration that March 27 was when the Applicant became aware of the Respondent’s indirect pecuniary interest in Ms Lapping’s appointment. The Applicant understood this to be the statutory declaration of time of awareness required by the Act.⁸

32May 8 is within six weeks of March 27. I accept that the Applicant has satisfied the timing condition and I have conducted the inquiry on that basis.

PROCESS

33The Municipal Act does not direct the procedure that an Integrity Commissioner must follow in handling MCIA applications. I have chosen to follow a process that ensures fairness to both the individual making the application (Applicant) and the Council Member alleged to have contravened the MCIA (Respondent). This fair and balanced process includes the following elements:

• The Respondent receives notice of the Application and is given an opportunity to respond.
• The Respondent is made aware of the Applicant’s name. I do, however, redact personal information such as phone numbers and email addresses.
• The Applicant receives the Respondent’s Response and is given an opportunity to reply.
• I may accept supplementary communications and submissions from the parties, but generally on the condition that parties get to see each other’s communications with me. I do this in the interest of transparency and fairness.

34In making my decision, I have taken into account all the submissions of the parties and all of the evidence obtained during the inquiry.

POSITIONS OF THE PARTIES

35The Application is based on an assumption that the Respondent and Ms Lapping are business partners. It states, “There is no disagreement on the basic fact that Kelly Lapping is the business partner of Councillor Myers.”

36The Application includes a copy of a news story that refers to the Respondent and Ms Lapping as business partners.

37The Applicant provides evidence that Police Services Board members get paid an honorarium and argues that the Respondent knows this, given his experience on Council.

38Working from the assumption that Ms Lapping is his business partner, the Applicant concludes that the Respondent has a pecuniary interest in Ms Lapping’s appointment. The Applicant relies on clause 2(b) of the MCIA, which provides that a member has a pecuniary interest in a matter if “the member is a partner of a person … that has a pecuniary interest in the matter.”

39The Application contains extensive information and argument related to the history of the newspaper and local conflict of interest issues. It makes the point that Councillor Myers was aware, or should be aware, of how the MCIA operates and of what constitutes a conflict of interest. I understand why this context has been provided, but it does not help to determine whether the Respondent actually has a pecuniary interest in Ms Lapping’s appointment to the Police Services Board.

40It is common ground that the Respondent did not declare a pecuniary interest and did participate in decision making and voting on Ms Lapping’s appointment.

41The Respondent’s position is that he has no pecuniary interest, so none was declared.

42Frist, the Respondent argues that Ms Lapping does not have a “pecuniary interest” (within the meaning of the MCIA) in her Police Services Board appointment. He basis this argument on the principles and purpose of the MCIA as well as the exemption in MCIA clause 4(j).

43Second, the Respondent submits that he is not Ms Lapping’s “partner” under the MCIA as they are not “partners” as that term is defined in law.

44He acknowledges referring to Ms Lapping as his “business partner” in a colloquial sense, but states she is not his “partner” in the legal sense.

45According to the Respondent, he, Ms Lapping and a third individual are the shareholders of a corporation, Digest Media Inc. He relies on section 2 of the Partnerships Act as authority that corporate shareholders are distinct from partners.

46Third, the Respondent argues that this situation falls within the exemption in clause 4(k) of the MCIA (an interest so remote or insignificant that it cannot reasonably be regarded as likely to influence the member).

47In reply, the Applicant points out that the clause 4(j) exemption does not apply to Ms Lapping in these circumstances, and argues that the clause 4(k) exemption does not apply to the Respondent.

48The Applicant also suggests that the exact nature of the business relationship between Ms Lapping and the Respondent should be investigated, because it is beyond the ability of residents to uncover the facts on their own.

49The Applicant points to the publication’s claim that the North Renfrew Times is employee-owned. If that is the case then Ms Lapping and the Respondent might be employees of the company they co-own, resulting in another type of relationship between them.

ISSUES

50I have considered the following issues:

(A) Does Ms Lapping have a pecuniary interest in her own appointment?

(B) Is Ms Lapping a partner of the Respondent or does the Respondent otherwise have an indirect pecuniary interest in her appointment?

(C) Should I make an application to a judge?

ANALYSIS AND FINDINGS

(A) Does Ms Lapping have a pecuniary interest in her own appointment?

51Yes. Ms Lapping is paid to serve on the Police Services Board. She has a pecuniary interest in being appointed.

52The exemption to which the Respondent refers (clause 4(j) of the MCIA) refers to a Council Member or local board member who otherwise would be required to declare a pecuniary interest. It does not refer to an individual whose relationship with the Council Member or local board member gives rise to the conflict of interest issue.

53While Ms Lapping has a pecuniary interest in her own appointment, there is no evidence, and no reason to conclude, that Digest Media Inc. has any pecuniary interest in the Police Services Board appointment. The appointment is personal, not corporate. The relevance of this fact is considered below.

(B) Is Ms Lapping a partner of the Respondent or does the Respondent otherwise have an indirect pecuniary interest in her appointment?

54Under clause 2(b) of the MCIA, the pecuniary interest of a Council Member’s partner is an indirect pecuniary interest of the Council Member.

55Who is a partner?

56The modern approach to statutory interpretation favoured by the Supreme Court of Canada is that:

the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.⁹

57In the specific context of the MCIA, interpretation is guided by the principles summarized by the Court of Appeal in Orangeville (Town) v. Dufferin (County):¹⁰

The courts have held that the MCIA is to be construed broadly and consistently with its purpose. It was enacted to encourage open, accountable and honest municipal government by demanding “high standards of those elected to public office”: Re Moll and Fischer et al. (1979), 1979 CanLII 2020 (ON SC), 23 O.R. (2d) 609 (Div. Crt.), at 612. In that context, courts have held that what constitutes a pecuniary interest sufficient to trigger the provisions of the MCIA is not to be narrowly confined: Re Edwards and Wilson et al., 1980 CanLII 1583 (ON SC), [1980] O.J. No. 3873 (Div. Crt.), at para. 20. There is no exhaustive guideline for its determination.

58A partnership is a common, long-standing and well-understood form of business organization, and partner has a corresponding meaning. Taking the principles of statutory interpretation into account, I believe that clause 2(b) of the MCIA refers to “partner” in that sense.

59The rest of section 2 of the MCIA refers almost entirely to business organizations and business relationships. It mentions shareholders, officers, directors, and corporations that do and do not offer their securities to the public. It mentions controlling interests. It mentions members of bodies. It mentions employment. In this context, the mention of “partner” must indicate a member of the type of business organization known as a partnership.

60I also note that members of a partnership have responsibilities and obligations to one another, and a pecuniary connection to one another, that shareholders of a corporation lack. This might be the public policy rationale for the specific mention of partners in section 2. In any event, it must be presumed that “partner” belongs in the provision and is there for a reason. “Every word in a statute is presumed to make sense and to have a specific role to play in advancing the legislative purpose.”¹¹

61The Respondent and Ms Lapping are shareholders of Digest Media Inc. Based on my review of corporate documents, they are also directors of the corporation. Further, they were incorporators of the company.

62What the Respondent and Ms Lapping are not, is partners. They are shareholders and directors of the same company, but not partners in the accepted, legal sense of the term.

63Because Ms Lapping is not his partner, the Respondent does not have an indirect pecuniary interest in her appointment on that basis.

64Further, the company of which they are shareholders and directors does not, itself, have a pecuniary interest in the Police Services Board appointment. Consequently, the Respondent does not possess an indirect pecuniary interest on that alternative basis.

65Finally, as the company does not have a pecuniary interest in the appointment, an employee of the company would not thereby possess an indirect pecuniary interest.

66In my view, the Respondent does not, and at the time of Council and committee consideration did not, possess a pecuniary interest in Ms Lapping’s appointment.

67In my view, the Respondent did not contravene the MCIA.

(C) Should I make an application to a judge?

68The Municipal Act leaves this decision to the Integrity Commissioner, based on what the Integrity Commissioner feels is appropriate.

69Having concluded that the Respondent did not contravene the MCIA, it would make no sense for me to commence a Court application in which I argue the opposite.

70If I commenced a Court application then I would bear the onus of proving that Councillor Myers breached the MCIA.¹² I do not have evidence that would prove a breach.

71I do not consider it appropriate for me to apply to a judge for a determination as to whether Councillor Myers has contravened section 5 of the MCIA.

DECISION

72I will not apply to a judge under section 5 of the MCIA for a determination as to whether Councillor Myers contravened the MCIA when he failed to declare a pecuniary interest in Kelly Lapping’s appointment to the Police Services Board and participated in decision making and voting on that matter.

PUBLICATION

73The Municipal Act requires that after deciding whether or not to apply to a judge, the Integrity Commissioner shall publish written reasons for the decision. This decision will be published by providing it to the Town to make public and by posting on the free, online database as decision 2019 ONMIC 15.

74Subsection 223.5(2.3) of the Municipal Act states that I may disclose in these written reasons such information as in my opinion is necessary. All the content of these reasons is, in my opinion, necessary.

Guy Giorno
Integrity Commissioner
Town of Deep River
September 15, 2019

Footnotes

1. 1The Town of Deep River numbered the Application as File 1-2019.
2. 2Municipal Act, subs 223.4.1(4).
3. 3MacDonald v. Ford, 2015 ONSC 4783, at para. 81; Kamstra v. Caldarelli (No. 2), 1971 CanLII 675 (ON HCJ), [1972] 1 O.R. 200 (H.C.J.) at 205; Re Smith and Adam (1987), 1987 CanLII 4232 (ON HCJ), 58 O.R.(2d) 579 (H.C.J.) at para. 12.
4. 4MacDonald v. Ford, at para 92.
5. 5Van Schyndel v. Harrell (1991), 1991 CanLII 7184 (ON CTGD), 4 O.R. (3d) 474 (Gen. Div.) at 476.
6. 6MacDonald v. Ford, at para 158.
7. 7Hervey v. Morris, 2013 ONSC 956, at para. 60-61.
8. 8Municipal Act, sub. 223.4.1(6).
9. 9Bell ExpressVu Limited Partnership v. Rex, [2002] 2 SCR 559, 2002 SCC 42, at para. 26, quoting Elmer Driedger, Construction of Statutes (2nd ed. 1983), at 87.
10. 102010 ONCA 83, at para. 22.
11. 11Aurora (Town) v. Her Majesty the Queen in Right of Ontario, 2013 ONSC 6020, at para. 27, quoting Sullivan on the Construction of Statutes.
12. 12Gammie v.Turner, 2013 ONSC 4563, at para. 25.