Court File and Parties

Court File No.: Halton, 3158/11 Date: 2012-06-29 Ontario Court of Justice

Between: Wendy Gunn, Applicant

— And —

The Halton District School Board The Halton District School Board Compliance Audit Committee Kathryn Bateman-Olmstead, Respondents

Before: Justice Richard J. LeDressay

Heard on: May 14, 2012

Reasons for Judgment released on: June 29, 2012

Counsel

Novalea Jarvis — for the applicant, Wendy Gunn

Michael Kerr and C. O'Donohue — for the respondent Halton District School Board and for the respondent Halton District School Board Compliance Audit Committee

Raivo Uukkivi — for the respondent Kathryn Bateman-Olmstead

LeDRESSAY, J.:

THE ISSUE

1On May 10, 2011, the Halton District School Board Compliance Audit Committee considered the application submitted by the applicant, Wendy Gunn, pursuant to s. 81(1) of the Municipal Elections Act, R.S.O. 1996, Ch. 32. The applicant had indicated in her application that she believed on reasonable grounds that a candidate, Kathryn Bateman-Olmstead, had contravened a provision of the Municipal Elections Act relating to election campaign finances. Specifically, the applicant alleged that statements made by the candidate, Kathryn Bateman-Olmstead, in her Form 4 Financial Statement, filed in accordance with the provisions of the Municipal Elections Act, were false, misleading and untrue. The applicant had therefore applied for a compliance audit of the candidate's campaign finances.

2The decision of the Halton District School Board Compliance Audit Committee was that it did not agree with the applicant that there were reasonable grounds that the candidate, Kathryn Bateman-Olmstead, had contravened a provision of the Municipal Elections Act and so a compliance audit was not ordered by them.

3The applicant in this case has therefore appealed the decision of the Halton District School Board Compliance Audit Committee to the Ontario Court of Justice pursuant to s. 81(6) of the Municipal Elections Act.

THE PROCESS AND EVIDENTIARY CONSIDERATIONS

4On April 16, 2012 a ruling was made by this court with respect to this matter indicating that because of the particular circumstances of this case the appeal would be heard by way of a de novo hearing in the Ontario Court of Justice. The parameters of the hearing were established as follows. The applicant, Wendy Gunn, was permitted to have the material that was in her original application that had previously been considered by the Halton District School Board Compliance Audit Committee as well as the additional affidavit material that she had filed on the appeal prior to the evidentiary and process issues being argued on March 30, 2012 be considered on the appeal itself. The respondent, Kathryn Bateman-Olmstead, was provided an opportunity to respond, if she chose to do so, to the allegations made by the applicant to the Halton District School Board Compliance Audit Committee and to the applicant's material which had been filed on the appeal. Ms. Bateman-Olmstead did, in fact, file responding material with respect to this matter.

5In order to be clear, the evidentiary basis being taken into consideration on this application is as follows:

• The affidavit of Wendy Gunn, sworn June 15, 2011, which is part of the original application record on the appeal.
• The affidavit of Catherine Duncan, sworn June 15, 2011, which is also part of the original application record on the appeal.
• The affidavit of Sharon Baroni, sworn June 15, 2011, which is also part of the original application record on the appeal.
• The affidavit of Wendy Gunn, sworn June 26, 2011.
• The affidavit of Cathie Best, sworn September 29, 2011.
• The affidavit of Wendy Gunn, sworn September 28, 2011.
• The affidavit of Wendy Gunn, sworn December 29, 2011.
• The affidavit of Kathryn Bateman-Olmstead, sworn April 30, 2012.
• The affidavit of Don Vrooman, sworn May 10, 2012.
• The affidavit of Carolyn Spinney, sworn May 2, 2012.
• The affidavit of Laura Lynn Klemenchuk dated April 26, 2012.
• The affidavit of John Gowing dated April 27, 2012.
• The affidavit of Barb Gowing dated April 27, 2012.

6In a separate oral ruling made at the start of proceedings on May 14, 2012, an evidentiary ruling was made that the court would not consider the further affidavit material filed on behalf of the applicant in response to the affidavit material presented by the respondent, Kathryn Bateman-Olmstead. I am specifically referring to the affidavit of the applicant, Wendy Gunn, dated May 8, 2012. That ruling was, in essence, for two reasons. First, the court had allowed this matter to proceed by way of a de novo hearing in the particular and somewhat unusual circumstances of this case reasoning that it was important, in all the circumstances of this case as the process unfolded before the Halton District School Board Compliance Audit Committee, to allow the applicant to fully set out the basis of her belief that she had reasonable grounds that the candidate had violated the campaign finance provisions of the Municipal Elections Act and to allow the candidate an opportunity to respond. It was conceded at the hearing on March 30, 2012 that the applicant had completed her evidentiary basis for her belief in her reasonable grounds. As such, the candidate was provided with an opportunity to respond. There was no provision made for the applicant to further reply to the candidate's response. The process has to have a fair end point and in the court's view, it was reached once both the applicant and the candidate had a full opportunity to put forward the material that they wished the court to consider and then to make submissions based on the material submitted. Second, the parts of the applicant's additional affidavit, dated May 8, 2012, related to signs and websites could have been easily included in her initial material and to allow that material to be considered would result in unfairly splitting the applicant's case.

7In another oral ruling on May 14, 2012, the court also made clear to the parties that the narrow issue to be decided that day was whether the applicant had reasonable grounds to believe that the candidate, Kathryn Bateman-Olmstead, had violated the Municipal Elections Act related to campaign financing. A ruling was therefore made that the material in Kathryn Bateman-Olmstead's responding affidavit concerning the background of counter-allegations between the parties regarding the dispute each side had with the other side's respective political positions, which has clearly led to some animosity between the parties, was not relevant and was not going to be considered by the court, nor was the applicant's response on this issue in her affidavit dated May 14, 2012.

THE FACTS

8On September 3, 2010, Kathryn Bateman-Olmstead registered as a candidate for Trustee for the Halton District School Board, Ward 4. There were two other candidates for this position. The election was held on October 25, 2010 and Kathryn Bateman-Olmstead was elected Trustee with 3,568 votes.

9On March 18, 2011, Kathryn Bateman-Olmstead filed her Form 4 Financial Statement as required by the Municipal Elections Act. That financial statement is found in the original application record filed on this appeal. It is Exhibit B in the affidavit of Wendy Gunn dated June 15, 2011 and it is found at Tab B in the original application record.

10In the Form 4, the candidate indicated that her spending limit was $25,002.20. The total contributions received were $1,828.83. The only direct financial contribution was from the candidate herself in the amount of $1,315.83. There were no contributions listed from any other party. The balance of contributions of $513.00 was made up from signs contributed from past inventory.

11The campaign expenses listed in the Form 4 were $2,136.83. The candidate claimed the following expenses:

Advertising	0.00
Bank Charges	8.00
Brochures	720.38
Inventory Contributed	513.00
Nomination Filing Fee	100.00
Phone and/or Internet	212.38
Signs	383.07
Sign Deposit	200.00

12On April 15, 2011, the applicant Wendy Gunn applied for a compliance audit of the candidate Kathryn Bateman-Olmstead's election campaign finances pursuant to s. 81(1) of the Municipal Elections Act. In the initial written material that was filed by the applicant, she outlined three reasons for her reasonable grounds to believe that Kathryn Bateman-Olmstead had contravened a provision of the Municipal Elections Act relating to election campaign finances.

13First, the applicant submitted that Kathryn Bateman-Olmstead had indicated zero contributions from others in the 2010 election despite receiving $3,495 in contributions from others in the 2006 election. This, coupled with the fact that her campaign website indicated a statement saying, "Thank you for the financial support, campaign expenses add up," made it unlikely, in the applicant's view, that Kathryn Bateman-Olmstead did not receive any funds from other contributors for the 2010 election campaign.

14Second, a newspaper article was submitted indicating that Kathryn Bateman-Olmstead had solicited funds on her website before being registered as a candidate. The applicant, therefore, wanted the Halton District School Board Compliance Audit Committee to investigate whether Kathryn Bateman-Olmstead received donations outside of her election period.

15Third, the applicant submitted that, considering the number of signs that the applicant observed in the neighbourhood that the candidate, Kathryn Bateman-Olmstead, must have spent more than the $383.07 which the candidate claimed she spent on signs in her Form 4, Financial Statement. This submission was supported by a documented example of pricing for election signs.

16The Halton District School Board Compliance Audit Committee met on May 10, 2011. The committee considered the material in the applicant's initial application as well as receiving some clarification and a response from the candidate, Kathryn Bateman-Olmstead, regarding the allegations in the application. The committee concluded that the candidate accurately and in good faith completed her Form 4 Financial Statement and declined to order an audit.

17The applicant then appealed this matter to the Ontario Court of Justice pursuant to s. 81(6) of the Municipal Elections Act. In the additional material filed and ruled admissible at this de novo hearing, the applicant provided some further detail to support the reasons provided in her initial application to the Halton District School Board Compliance Audit Committee and the applicant submitted a further new allegation with respect to Kathryn Bateman-Olmstead's campaign website. The additional allegation related to the fact that the candidate's website was neither noted as a contribution nor as an expense in her Form 4 Financial Statement.

18The applicant, Wendy Gunn, has indicated in her initial application to the Halton District School Board Compliance Audit Committee and in her additional affidavit material filed on appeal that she has reasonable grounds to believe that the candidate, Kathryn Bateman-Olmstead, has contravened the Municipal Elections Act relating to election finances. The applicant states that she believes that the statements made by Kathryn Bateman-Olmstead in her Form 4 are false, misleading and untrue. In paragraph 28 of her affidavit dated June 15, 2011, the applicant states that she believes that Kathryn Bateman-Olmstead has contravened the following sections of the Municipal Elections Act: Section 69(1)(a-d), Section 69(f)(ii) and (iii), Section 69(g), Section 69(k), Section 70(1) and (2), Section 74(1), Section 76(1) and (2), Section 78, Section 89(h) and (m), Section 90 and Section 91.

19The applicant's belief that the candidate contravened these provisions of the Municipal Elections Act is based on the following submissions.

ALLEGED REASONABLE GROUNDS - RE CONTRIBUTIONS

20The applicant asserts that the only contributions set out in the candidate's Form 4 Financial Statement are a contribution from the candidate in the amount of $1,315.83 and an amount regarding the signs contributed from past inventory. The applicant notes that the candidate claims that she received no contributions from any other individuals, unions or corporations and denies that she received any contributions in goods or services.

21The applicant asserts that her reasonable grounds to believe that Kathryn Bateman-Olmstead received contributions which are not listed in her Form 4 Financial Statement are the following.

22First, the candidate received 3,568 votes in the 2010 election. The applicant asserts that given the number of supporters and the fact that the candidate had a live website asking for donations, that it is inconceivable that no one donated to her campaign expenses, particularly considering that during the 2006 election, Kathryn Bateman-Olmstead had received $3,495 in contributions. The applicant asserts that this provides her with reasonable grounds to believe that Kathryn Bateman-Olmstead received contributions from persons other than herself to her campaign.

23Second, Kathryn Bateman-Olmstead had a website that was active as of August 24, 2010. This website indicated "re-elect Kathryn Bateman-Olmstead, School Trustee, Oakville Ward 4." In addition, the website had a heading reading "Donate" and underneath that indicated that an election campaign is an expensive undertaking and "even a small donation to my campaign will help me communicate with voters via this website, signs, literature and advertising. To make a donation, please email Kathryn4kids@cogeco.ca or call me at 905-827-8271."

24Cathie Best in her affidavit indicates that on September 2, 2010, she received an email from the applicant Wendy Gunn at 4:54 p.m. relating to this website which promoted the candidacy of Kathryn Bateman-Olmstead. At that time Kathryn Bateman-Olmstead had not filed nomination papers relating to the 2010 municipal election. As a result, according to Ms. Best's affidavit, she contacted Kathryn Bateman-Olmstead and left a message for her on her home phone number advising her that the Municipal Elections Act prohibits an individual from incurring expenses under s. 76 of the Municipal Elections Act or accepting contributions under s. 70 of the Municipal Elections Act until the candidate has filed a nomination paper to be registered as a candidate for office in accordance with s. 33 of the Municipal Elections Act.

25In Kathryn Bateman-Olmstead's material, she concedes that while her website was active prior to her registering in the election campaign, that it was entirely an accident and that she believed that she was working on her campaign website in a way that it could not be accessed by the public. She confirms in her affidavit material that she received the telephone message from Cathie Best on September 2nd and, as a result, she immediately contacted Mr. Vrooman for assistance in temporarily shutting down the website. The website was then shut down until she was officially registered as a candidate on September 3, 2010 when the website was again activated by her for the duration of the election campaign. The affidavit material of Donald Vrooman and Laura Lynn Klemenchuk support the affidavit of the candidate in that they confirm that her computer website skills were relatively limited.

26The applicant's response to the candidate's assertion regarding the unintentional activation of her campaign website is that the candidate, Kathryn Bateman-Olmstead, has participated in three websites and as such, is experienced in computer knowledge and that the posting on the website could not have been done accidentally. The applicant also asserts that the activation of the candidate's campaign website prior to September 3, 2010 when Kathryn Bateman-Olmstead registered as a candidate is, in and of itself, a violation of the Municipal Elections Act.

27Third, the applicant further asserted in her affidavit material that in addition to the solicitation of donations on the candidate's website that she accessed Kathryn Bateman-Olmstead's website, on or about October 26, 2010, and noted the following was posted on the website:

Thank you for your financial support. Campaign expenses add up. Thanks again to those of you who stepped up and stepped out and to all of you for the many types of support you have provided!

28The applicant therefore asserts that the fact that Kathryn Bateman-Olmstead asked for donations on her website some 11 days prior to her officially registering as a candidate on September 3, 2010 and that she asked for donations during the course of her election campaign on her website, coupled with the fact that in late October, she posted a thank you for the financial support, provides her with reasonable grounds to believe that Kathryn Bateman-Olmstead received contributions from persons other than herself to her campaign.

29Fourth, the applicant further asserts that since, to her knowledge, the candidate only has an income of $12,000 per annum and the candidate stated in her Form 4 Financial Statement that she contributed $1,315 of her own funds towards her campaign, this also provides reasonable grounds for her to believe that Kathryn Bateman-Olmstead received contributions which were not listed on her Form 4 Financial Statement.

30Fifth, the applicant asserts that a campaign website was prepared with the assistance of Michael Scorcia, who is a professional web designer. The applicant alleged that Mr. Scorcia did a similar website for a candidate by the name of Paul Marai and the value of the contribution on Mr. Marai's Form 4 Financial Statement was $700. The applicant alleges that Kathryn Bateman-Olmstead's Form 4 did not include this as a contribution from Michael Scorcia Designs or note it as an expense.

31The candidate, Kathryn Bateman-Olmstead, has responded to this allegation by indicating in her affidavit material that she sought assistance from Mr. Vrooman to build her own website with Word Press, which is a free web service available to anyone who signs up for it. She indicates in her affidavit material that she began establishing and creating a Word Press website but that she was struggling through this process. As a result, she responded to an unsolicited email from Mr. Scorcia which offered his web design services. The candidate indicates that she did not know Mr. Scorcia before that time. She asserts in her affidavit that she was concerned about her low budget campaign and raised the issue of costs with Mr. Scorcia. He assured her that the cost would be reasonable because he would copy from the same format that he used for a website he had already created for Paul Marai. His offer, according to her affidavit material, seemed reasonable and appropriate to the candidate and they agreed on a final price for the work of $175. She attaches Mr. Scorcia's invoice to her affidavit material as Exhibit F. She indicates that his fees together with the domain name registration fees came to a total of $212.38, which is reported under Internet and Phone charges in her Form 4 Financial Statement.

32In summary, the affidavit of the candidate, Kathryn Bateman-Olmstead, clearly asserts that she did not receive any financial contributions towards her campaign from anyone other than herself and the details of the reasons why she decided not to accept any campaign contributions. It should be noted that the candidate was nowhere near either her contribution or expense maximums. She appears to have run a minimalist campaign according to all the material submitted to the court. The affidavit of Carolyn Spinney confirms that while she attempted to make a small financial contribution to the candidate's election campaign that the candidate refused to cash her cheque. The affidavits of Laura Lynn Klemenchuk, John Gowing and Barb Gowing indicate that they made financial contributions to the 2006 campaign but did not contribute financially to the 2010 campaign.

ALLEGED REASONABLE GROUNDS – RE EXPENSES

33The applicant, in her initial application material, indicated that she questioned the validity of the expenses noted by the candidate, Kathryn Bateman-Olmstead, when the candidate claimed that her cost for signs was $383.07. The basis of her belief was that she had an example of pricing for election signs which would have resulted in a much higher expense for signage and the candidate had an abundance of signs supporting her nomination. In her subsequent affidavit of June 15, 2011, the applicant further detailed that she believed that the candidate had over 250 signs. The applicant stated that the candidate had not inventoried some extremely large, approximately 36" by 24", signs which she had out during the campaign. The affidavits of Catherine Duncan and Sharon Baroni also indicate that they believed that the candidate had more signs displayed than she accounted for in her Form 4 Financial Statement.

34The candidate, in her affidavit, indicates that she had 190 signs for her election campaign. She further indicated that she inventoried signs she had left over from her 2006 election campaign and that there were a sufficient number of large signs so that no new signs needed to be purchased. She also indicated that she did purchase 100 small signs and wires for the election campaign and she asserts that after diligently shopping on the Internet, she found a price for those 100 signs from Signs101 Canada for $383.07. She indicates that she had no personal association with this company, did not know the owners and that this was a publicly offered price. She attached as Exhibit H to her affidavit material, which is the invoice dated October 4, 2010. This invoice supports her assertion concerning the purchase of these signs. In paragraph 34 of her affidavit material, she sets out how she calculated the amount of $513 which was the value she placed as an expense to her campaign as inventory contributed to candidate's campaign. Regarding her assertion in paragraph 34 concerning the calculation of the inventory value, the candidate asserts that the value of the signs was slightly overstated in order to be on the "safe side."

ANALYSIS

35S. 81(1) of the Municipal Elections Act reads as follows:

Compliance audit

Application

81. (1) An elector who is entitled to vote in an election and believes on reasonable grounds that a candidate has contravened a provision of this Act relating to election campaign finances may apply for a compliance audit of the candidate's election campaign finances. 2009, c. 33, Sched. 21, s. 8 (44).

36S. 81(1) of the Municipal Elections Act is designed to achieve a proper balance between an elector's right to challenge an elected official in regard to his or her statutory obligations and the need to limit and ensure the legitimacy of the tax on elected officials. See Audziss v. Santa, 2003 CanLII 35121 (ON CA), [2003] 223 D.L.R. (4th) 257 (O.C.A.) at paragraph 28.

37In Jackson v. Vaughan (2009), 59 M.P.L.R. (4th) 55, Justice Lauwers of the Ontario Superior Court of Justice noted the following concerning the purpose of the election campaign funding rules at paragraphs 15 through 19:

15 Courts and commentators have discussed the purposes of election campaign funding rules. J. Patrick Boyer commented in Local Elections in Canada: The Law Governing Elections of Municipal Councils, School Boards and Other Local Authorities (Toronto: Butterworths, 1988) at 18:

Campaign costs have been mounting in recent years, and electors and elected people alike have become concerned that campaign financing be as open, fair, and as broadly based as possible. This represents nothing more than a recognition of the importance and pervasiveness of modern government and the attendant need to ensure that the campaigns of candidates reflect general rather than specific interests in society.

16 In Figueroa v. Canada (Attorney General), 2003 SCC 37 (CanLII), [2003] 1 S.C.R. 912, the Supreme Court noted at para. 72 that: "Electoral financing is an integral component of that process, and thus it is of great importance that the integrity of the electoral financing regime be preserved."

17 In Libman v. Quebec (Attorney General), 1997 CanLII 326 (SCC), [1997] 3 S.C.R. 569, the Court held at para. 47:

To ensure a right of equal participation in democratic government, laws limiting spending are needed to preserve the equality of democratic rights and ensure that one person's exercise of the freedom to spend does not hinder the communication opportunities of others. Owing to the competitive nature of elections, such spending limits are necessary to prevent the most affluent from monopolizing election discourse and consequently depriving their opponents of a reasonable opportunity to speak and be heard.

18 In Harper v. Canada (Attorney General), 2004 SCC 33 (CanLII), [2004] 1 S.C.R. 827, the Court held at para. 103:

Maintaining confidence in the electoral process is essential to preserve the integrity of the electoral system which is the cornerstone of Canadian democracy. In R. v. Oakes, 1986 CanLII 46 (SCC), [1986] 1 S.C.R. 103, at p. 136, Dickson C.J. concluded that faith in social and political institutions, which enhance the participation of individuals and groups in society, is of central importance in a free and democratic society. If Canadians lack confidence in the electoral system, they will be discouraged from participating in a meaningful way in the electoral process. More importantly, they will lack faith in their elected representatives. Confidence in the electoral process is, therefore, a pressing and substantial objective.

19 These principles apply with necessary modifications to municipal campaign funding.

38In Jackson v. Vaughan (2009), supra, affirmed 2010 ONCA 118 (O.C.A.), the court indicated the following:

36 The "balance" referred to by the Court of Appeal is between the policy goals of public accountability and transparency that compliance with the MEA campaign finance provisions are designed to accomplish on the one hand, with a certain degree of protection for candidates from legal challenges that do not comply with the standards in s. 81 (1) of the MEA on the other hand. Trafford J. referred to the latter aspect in his decision in Hall v. Jakobek (2003), 42 M.P.L.R. (3d) 55 at para. 21 (S.C.J.):

Given the Legislative intention, that is, to ensure the legitimacy of attacks on elected officials and, I infer, other candidates, by electors, it is my view that s. 81 of the Act is, in its purpose and effect, a provision to screen allegations by electors of election campaign finance wrongdoing by candidates and elected officials, especially where the allegations are determined by an auditor and/or a Council to be frivolous, vexatious or otherwise devoid of merit.

39In the Court of Appeal decision in Jackson v. Vaughan, supra, the Ontario Court of Appeal at paragraph 31 indicated that s. 81(1) is a threshold requirement only and the audit is intended to be comprehensive, even if the trigger is but a single apparent contravention.

40The court, in Jackson v. Vaughan, supra, noted the following at paragraph 51 regarding the minimal discretion to appoint an auditor if reasonable grounds are established:

51 In the context of the MEA, there is minimal discretion in the council's decision on whether to appoint an auditor under ss. 81 (1) and (4). If the application shows reasonable grounds, that is the end of the matter and council must appoint an auditor. The section requires the exercise of judgment on which council may be right or wrong and will be subject to judicial oversight through an appeal under s. 81 (3.3).

41At paragraph 53, the court did indicate that there may be some minimal discretion when it comes to minor breaches regarding technical violations of the Municipal Elections Act. However the court also went on to indicate the following at para. 65 and 68:

65 I find that s. 81 (1) is a threshold requirement only. Once it is plain to a municipal council that there are reasonable grounds for the belief "that a candidate has contravened a provision of this Act relating to election campaign finances" under s. 81(1), then the result is "a compliance audit of the candidate's election campaign finances"; in other words, the audit is comprehensive and is not restricted to the matters referred to in the complaint. The trigger can be a single contravention, although in this case the applications for a compliance audit identified numerous possible contraventions.

68 I find that there are good reasons for this approach. In terms of the statutory structure, the role of the Ontario Court judge in an appeal under s. 81(3.3) of the Act is limited. The judge's responsibility is to deal with the issue of reasonable grounds. It is the responsibility of other actors in the statutory framework, not the Ontario Court judge at this stage, to conduct the audit, evaluate the results, authorize a prosecution, carry it out and try the case. Further, the MEA's provisions are interrelated, and the identification of a problem may suggest that there might be more awaiting discovery. For example, the failure to issue a campaign receipt may be related to an unauthorized expenditure; this is grist for the auditor's mill and is well beyond the purview of an Ontario Court judge on an appeal under s. 81(3.3).

42In the case of Fuhr v. Perth South (Township), [2011] O.J. No. 4251, Ontario Court of Justice McKerlie, J. indicated the following regarding the applicability of the doctrine of de minimis non curat lex in the context of the determination of reasonable grounds at paragraph 44:

44 As noted in the April 26, 2011 decision of the Compliance Audit Committee, the campaign period expenses incurred by the candidates were indeed "minimal". I also note that the sole contributors to the campaigns in question were the candidates themselves. However, while the doctrine of de minimis non curat lex ("the laws does not concern itself with trifles") may apply to a review of a decision whether to prosecute under s. 81(14), the issue at this stage of the review is simply whether the appellant had reasonable grounds to believe that the candidates contravened a provision of the Act relating to election campaign finances. [Reference: Jackson v. Vaughan (City), [2009] O.J. No. 1057 (Ont. S.C.) at paragraphs 101-102]

43In the case of Lyras v. Heaps, October 17, 2008 ONCJ 524 (CanLII), 2008, 51 M.P.L.R. (4th) 277 Justice Lane did a comprehensive review of the meaning of "reasonable grounds" in paragraphs 20 through 25 of her decision:

20 The meaning of "reasonable grounds" under the MEA is one such question of law. The appellant submits that "reasonable grounds" should be defined as "credibly based probability ...... not to be equated with proof before a reasonable doubt or a prima facie case." This is the standard of persuasion articulated by Justice Hill in R. v. Sanchez and Sanchez 1994 CanLII 5271 (ON SC), 93 C.C.C. (3d) 357 with respect to the issuance of a search warrant and adopted by Culver J. in Chapman, supra at para. 41-42. The respondent submits that a more appropriate standard is the standard of "reasonable grounds" as determined by the jurisprudence relating to applications for judicial recount under s. 47(1) of the MEA: Devine v. Scarborough (City) Clerk, 27 M.P.L.R.(2nd) 18 (MacDonnell Prov. J.) and Harris v. Ottawa (City), 27 M.P.L.R. (2d) 36 (Blishen Prov. J.). In Harris, the court held at paras. 17 and 18 that the test for "sufficiency and reasonableness of the grounds" is "certainly a lower test than the usual civil burden of proof on a balance of probabilities .... but must simply provide a prima facie case."

21 There is no dispute that "mere suspicion, conjecture, hypotheses or fishing expeditions,'" and that which is "speculative and remote" fall short of the minimally acceptable standard. The question is whether the test for "reasonable grounds" is "credibly based probability" or "a prima facie case."

22 In Savage supra, Duncan J. at para. 10 thought that the "reasonable grounds" requirement had been met where the applicant raised issues which "an auditor might very well choose to investigate." In Sanchez (adopted in Chapman, supra), Hill J. defined "reasonable grounds" as "a practical, non-technical and common sense probability as to the existence of the facts and the inferences asserted."

23 I note that, in this case, the two chartered accountants on the Committee made up the majority who did not think the grounds for a compliance audit had been made out. If the test were as set out in Savage, their decision warrants considerable deference. It also strikes me that even if the appellant had what he considered reasonable grounds to ask for an audit, the Committee has considerably more information at their disposal. Having heard all the submissions and reviewed all the material before them, the Committee is in a better position than the appellant to determine whether, in fact, "reasonable grounds" do exist to proceed with an audit. It is the role of the Committee to weigh the evidence and to make determinations of what weight should be accorded to the representations before it.

24 There is a distinction in law between "credibly based probability" and "a prima facie case." A belief is founded on "reasonable grounds" where there is an objective basis for the belief that is based on "compelling and credible information." The standard is "reasonable probability," not proof beyond a reasonable doubt or a prima facie case: R. v. Lee (2006) 2006 BCCA 298 (CanLII), 210 C.C.C. (3d) 181 (BCCA) leaved to appeal to SCC refused, [2006] S.C.C.A. No. 280; Mugesera v. Canada (Minister of Citizenship and Immigration) (2005) 2005 SCC 40 (CanLII), 197 C.C.C. (3d) 233 (SCC) at para. 114. A "prima facie case" connotes a case containing evidence on all essential points of a charge which, if believed by the trier of fact and unanswered, would warrant a conviction: R. v. Mezzo 1986 CanLII 16 (SCC), 27 C.C.C. (3d) 97 (SCC). Black's Law Dictionary 6th ed at p. 1190 also indicates that "Prima facie evidence refers not only to evidence which would reasonably allow the conclusion which the plaintiff seeks, but also to evidence which would compel such a conclusion if the defendant produced no rebuttal evidence." As MacDonnell, Prov. Div. J. noted in R. v. Skorput (1992) 1992 CanLII 12799 (ON CJ), 72 C.C.C. (3d) 294 at pp. 296-297, the former use is permissive; the latter carries "a degree of cogency (that) ... might conveniently be described as "presumptive": Cross on Evidence 6th ed at pp. 60-61.

25 In my view, where the statute requires "a belief on reasonable grounds," the jurisprudence applicable in other contexts indicates that the standard to be applied is that of an objective belief based on compelling and credible information which raises the "reasonable probability" of a breach of the statute. The standard of "a prima facie case" in either its permissive or presumptive sense is too high a standard.

44In the case of Vaughan (City) v. Mastroguiseppe [2008] ONCJ 763 (CanLII 2), Justice Favret of the Ontario Court of Justice in that case, at paragraph 61, indicated the following:

61 I accept, as did Mr. Justice Culver in Chapman, supra at paragraph 41, that the definition of reasonable grounds was stated at page 10 of R. v. Sanchez 1994 CanLII 5271 (ON SC), 93 C.C.C. (3d) 357 by Mr. Justice Hill as follows:

" Section 487(1) of the Criminal Code requires reasonable grounds as the standard of persuasion to support issuance of a search warrant. Judicially interpreted, the standard is one of credibly based probability "

Mere suspicion, conjecture, hypotheses or "fishing expeditions" fall short of the minimally acceptable standard from both a common law and constitutional perspective. On the other hand, in addressing the requisite degree of certitude it must be recognised that reasonable grounds is not to be equated with proof beyond a reasonable doubt on a prima facie case ... The appropriate standard of reasonable or credibly based probability envisions a practical, non-technical and common sense probability as to the existence of the facts and influences asserted"

The above standard was applied by Justice Culver in Chapman, supra and is the standard to apply here.

45In Vaughan (City) v. Defrancesca et al, [2008] ONCJ 762 (CanLII2), Justice Chisvin at paragraph 8, defined the applicable test as follows:

8 The test then, is not if council believes there are reasonable grounds the Act has been contravened, but whether the elector had reasonable grounds to believe there had been a contravention. The obligation by council then is to determine if the elector is acting on mere conjecture or suspicion. Is this just a fishing expedition? If the elector is acting on conjecture, suspicion or merely proceeding on a fishing expedition, then that would not constitute reasonable grounds. On the other hand, reasonable grounds is not that high a burden of proof as is proof beyond a reasonable doubt. Thus it is clear that reasonable grounds to believe that the elections finance provisions of the Act have been violated is a low standard. It is not determinative of the outcome of the audit one way or another, nor is council's decision at this stage determinative. It is only a step to begin the investigative process and nothing more. It is not conclusory of any violation of the finance provisions of the Act at all. It is important to remember that this stage of the proceedings is merely to determine if an investigation should be started. It is a pre-investigatory stage. It is not a determination that the candidate has in any way actually violated the statute. Rather, what council must decide is, and what this court must decide is, does the elector have reasonable grounds to believe that the candidate contravened the Act. It would then be a function of an auditor to investigate the matter.

46Several important points emerge from the case law.

47First, the role of an Ontario Court Judge in an appeal under s. 81(3.3) of the Municipal Elections Act is limited. The judge's responsibility is to deal with the issue of reasonable grounds. It is the responsibility of other actors in the statutory framework, not the Ontario Court judge at this stage, to conduct the audit, evaluate the results, authorize a prosecution, carry it out and try the case. The doctrine of de minimis non curat lex is not to be considered at this stage of the proceedings.

48Second, it is the role of the committee and, in this case, the appeal court, as a result of the earlier ruling that this appeal would proceed by way of a de novo hearing, to do a limited weighing of the evidence and to make determinations regarding what weight should be accorded to the representations before it. Therefore, according to the Lyras v. Heaps decision, the committee and, in this case, the appeal court, proceeding by way of a de novo hearing, must consider the entire record and to a certain degree weigh the evidence.

49Third, when considering whether the applicant has a belief on reasonable grounds, the standard to be applied is that of an objective belief based on compelling and credible information which raises a reasonable probability of the breach of a statute. The standard is not proof beyond a reasonable doubt or a prima facie case however there is an objective component to the test. As noted the appropriate standard of reasonable or credibly based probability envisions a practical, non-technical and common sense probability as to the existence of the facts and inferences asserted.

50According to the applicant's affidavit material, she relies on four grounds for her reasonable belief that the candidate Kathryn Bateman-Olmstead received contributions from other persons which are not listed in her Form 4 Financial Statement. The first is the fact that the candidate received 3,568 votes and had a website asking for donations. The applicant submits that these facts, coupled with the fact that in 2006, Kathryn Bateman-Olmstead received $3,495 in contributions, makes it "inconceivable that no one donated to her campaign." Second, the candidate had a website that was operational some 10 days prior to her registering as a candidate on September 2, 2010 and the website was operational during the election campaign. The website requested donations to her campaign. Third, on or about October 26, 2010, the website had a posting thanking her team for financial support. Fourth, the candidate's income is noted at approximately $12,000 per annum and so the applicant asserts that her contributing the sum of $1,315 of her own funds toward her campaign also provides the applicant with reasonable grounds to believe that she received contributions from others. Fifth, the candidate, Kathryn Bateman-Olmstead, had a campaign website designed by Michael Scorcia. A similar campaign website for another candidate, Paul Marai, was valued at $700 in his Form 4 Financial Statement.

51The candidate in her responding affidavit material has indicated that she did not receive any contributions from other parties and detailed her reasons for not doing so. There is no explanation in her affidavit material as to why she requested donations or indicated a thank you for financial support for contributions that were neither wanted nor accepted. The candidate explained her dealings with Michael Scorcia Designs and the fact that she paid $175 for his services and listed those under Internet charges. I note that there is no evidence that anyone actually contributed to the candidate's campaign and, in fact, the evidence of the candidate and the affidavit from one of her supporters, Carolyn Spinney, indicates that she did not accept any contributions from other persons. There are also affidavits from three people who made financial contributions to the candidate's 2006 election campaign but who did not make a financial contribution to the candidate's 2010 election campaign.

52The grounds relied upon by the applicant in points one and four listed above are nothing more than conjecture and speculation and clearly does not amount to reasonable grounds.

53The second and third points raised by the applicant regarding the website with the request for donations and a thank you to supporters near the end of the campaign has to be considered in light of the candidate's reasonable response that she did not accept any other contributions as well as her reasons for not doing so. The corroborative aspect of the evidence provided by Carolyn Spinney, Laura Lynn Klemenchuk, John Gowing and Barb Gowing must also be considered in this regard. There is also no evidence that the candidate accepted any donations and the minimalist nature of her campaign does not suggest otherwise. There is no evidence of spending by her that was not in accordance with her election budget as depicted in her Form 4 Financial Statement. This evidence is insufficient to reach the standard of reasonable grounds considering that the test is that of an objective belief based on compelling and credible information which raises a reasonable probability of the breach of a statute.

54The fifth point raised by the applicant concerning the value of the website has been clearly explained by the candidate as to where that expense was noted on her Form 4 Financial Statement and it is backed up by a receipt in that regard. In addition, the fact that another candidate may have paid a different fee for a similar website is not determinative of the issue of reasonable grounds. As Justice Lane noted in Lyras v. Heaps, supra at page 9:

... The quality of the website is irrelevant, as is the fact that other candidates may have paid for similar services, or that the services may have had substantial market value if purchased on the market.

55Although not in her affidavit material the applicant added in submissions the allegation that if the phone and Internet charges are as specified by the candidate in her affidavit material regarding the charges listed there being for website services by Mr. Scorcia and internet domain name registration fees, then there are no charges for phone and ongoing Internet services. Considering the limited scale of the candidate Kathryn Bateman-Olmstead's campaign, the only rationale conclusion is that any phone or Internet usage was in fact her personal phone and Internet usage. I note that the candidate Paul Marai, whose Form 4 Financial Statement is included in the applicant's initial application record at Tab O, ran a considerably more expensive campaign in virtually all respects than the candidate Kathryn Bateman-Olmstead. I note that Mr. Marai has left blank phone and/or Internet charges, notwithstanding that he apparently paid Mr. Scorcia $700 for Internet services which he claimed and put under the advertising section. The point is that I do not accept that the campaign finance provisions of the Municipal Elections Act were directed and intended to have a compliance audit in circumstances where a candidate for school trustee, who runs a relatively minimalist campaign, must parse out what percentage of their home phone and home Internet was used during the campaign.

56The applicant also asserts and it is common ground that the candidate had a website stating her intention to be re-elected as a school trustee, and requesting donations, which was active possibly as early as August 24, 2010, some 11 days before she officially registered as a candidate on September 3, 2010. There was no evidence to show that she received any campaign contributions during this period of time or during the election campaign itself. When she was notified by the town clerk, Cathie Best, that she should not accept donations or incur expenses prior to being officially registered as a candidate, she immediately took steps to shut down this website. I accept that this website had the re-election request and the request for donations on it and was active by accident and, when notified, the candidate immediately corrected the situation. There is no indication that any contributions were made or expenses incurred between August 24th and September 3, 2010. The Word Press website was in fact a free website. There is no specific provision that indicates that the website with the notation to re-elect the candidate and the request for donations was in and of itself a violation of the Municipal Elections Act. There are no reasonable and probable grounds established to support the submission that the provisions of the Municipal Elections Act regarding campaign finances related to the incurring of expenses or the acceptance of contributions outside the campaign period were not complied with.

57The final reason that the applicant believes that the candidate's Form 4 Financial Statement is not accurate is that she believes that the candidate had over 250 signs and that her costs would have been more than $383.07 which she claimed in her Form 4 Financial Statement. The applicant couples the submission with the fact of what other persons have paid for signs. The candidate has explained in detail with respect to the number of signs that she had for the election, how some of the signs came from inventory, how those signs were valued, and how additional signs were purchased, to make up a total of 190 signs.

58In Lyras v. Heaps, supra, the court dealt with the issue of an applicant obtaining a quote for material that was different than the amount claimed by the candidate.

39 Mr Lyras submitted that Mr. Heaps did not accurately disclose the cost of an 11 inch by 17 inch flyer that was produced and distributed during the campaign. More specifically, he asserted that the receipt filed for obtaining 15,000 copies of this flyer from Meade Graphics Inc. for a cost of $2,494.32 was some $351 below the quote Mr. Lyras later obtained from Arco Graphics (operating at the same location) for printing a similar product, which quote did not include a graphic charge estimated at an additional $300-$500.

40 Mr. Heaps replied that he contracted only with Meade Graphics and the invoice he submitted was the total amount he was charged for the brochure. There was also evidence before the committee that Meade Graphics and Arco are not related companies, and that Meade used Arco "as a supplier for smaller projects." As against this concrete evidence of the invoice and a letter from the owner of Meade Graphics, a higher quote obtained by the appellant from an unrelated company after the fact is no more than speculation and conjecture, hardly compelling and credible information which raises the reasonable possibility that Mr. Heaps underreported the actual cost of the brochure. Again, I find the decision of the Committee reasonable and correct.

59First, it should be noted that the applicant and the affidavits of Catherine Duncan and Sharon Baroni provide estimates only regarding the number of signs that the candidate used during the election campaign, whereas the candidate is very specific in her response regarding the number of signs she had. Second, as in the Lyras case the higher quote for the production of signs obtained by the applicant is not compelling information which raises a reasonable possibility that the costs of the signs were under reported by the candidate.

60I note that the applicant had presented most of these grounds for her reasonable belief to the Halton District School Board Compliance Audit Committee and the Committee found that reasonable grounds did not exist for her to believe that there was a breach by the candidate of the Municipal Elections Act campaign finances. Some new information was provided when this matter was appealed and allowed by way of a de novo hearing, but the result is the same considering the test that has to be applied. Therefore, no compliance audit will be ordered regarding the Form 4 Financial Statement filed by the candidate Kathryn Bateman-Olmstead.

61Counsel may address the issue of costs, if they see fit, in court, by appointment made through the Halton Ontario Court of Justice Trial Co-ordinator.

Released: June 29, 2012

R. J. LeDressay

Signed: "Justice R.J. LeDressay"