Jafine v. Mortson

[Indexed as: Jafine v. Mortson]

52 O.R. (3d) 135

[2000] O.J. No. 5692

Court File No. 51585/99

Ontario Superior Court of Justice

Divisional Court

Matlow, Jennings and Lederman JJ.

May 2, 2000**

[Quicklaw note: In the paper version, the two decisions of the Divisional Court, dated May 2, 2000 and September 18, 2000 were published together at 52 O.R. (3d) 135. The two decisions have been separated in the online version to enable linking to citators. The September 18, 2000 ruling on costs begins at 2001 ONSC 32748, 52 O.R. (3d) 142. The following headnote was published on the combined case.]

*Note: A motion for leave to appeal to the Court of Appeal (Morden, Rosenberg and Simmons JJ.A. was dismissed on November 21, 2000.

**Note: This judgment was recently brought to the attention of the editors.

Municipal law--Councillors--Conflict of interest--Pecuniary interest--Member voting on resolution encouraging province to extend highway--Member owning property on possible route --Member having pecuniary interest--Member contravening Act --No sanction imposed because member's failure to declare conflict being error in judgment--Elector appealing and granted leave to file fresh evidence about member owning additional properties--Appellate court granting appeal and remitting case for trial judge to consider the fresh evidence--Normal test for use of fresh evidence modified by statute--Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50, s. 11(2).

By way of a cross-appeal, J, an elector in the Town of East Gwillimbury in the Regional Municipality of York, appealed a judgment granted in proceedings under the Municipal Conflict of Interest Act. In those proceedings, the respondent M, the mayor of East Gwillimbury, was found to have breached the Act for failing to disclose that he had a pecuniary interest. The breach arose because M owned a 100-acre property that was in proximity to a possible extension of Highway 404, which extension was the subject of votes at the June 11, 1998 meeting of the Regional Council and at the July 20, 1998 meeting of the Town Council. The trial judge, however, held that the failure to disclose was an error in judgment and, accordingly, no statutory consequence or sanction was imposed. M appealed but abandoned his appeal, and on cross-appeal, J applied for leave to tender fresh evidence. The fresh evidence indicated that M had interests in other properties in the area of the proposed extension of Highway 404.

Held, the appeal should be allowed and the matter should be remitted to the trial judge.

The test from the Ontario Court of Appeal's decision in Sengmueller v. Sengmueller (1994), 1994 ONCA 8711, 17 O.R. (3d) 208, that in order for fresh evidence to be used it must be credible, not obtainable by the exercise of reasonable diligence before the trial and likely to be conclusive of an issue, is modified because of s. 11(2) of the Municipal Conflict of Interest Act. This subsection uniquely provides the appellate court with the power to grant a new trial before the same judge for the purpose of taking additional evidence. This option is intended for circumstances where fresh evidence arises subsequent to a judgment, and that fresh evidence satisfies the first two parts of the Sengmueller test and, in addition, might well have affected the trial judge's initial disposition. The fresh evidence tendered in the immediate case satisfied this modified test and, accordingly, the trial judge should reconsider the initial judgment in light of the fresh evidence.

CROSS-APPEAL of a judgment of MacKinnon J. (1999), 1999 ONSC 14775, 43 O.R. (3d) 81, 50 M.P.L.R. (2d) 218 (Gen. Div.) under the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50.

Cases referred to Sengmueller v. Sengmueller (1994), 1994 ONCA 8711, 17 O.R. (3d) 208, 111 D.L.R. (4th) 19, 1 L.W.R. 46, 25 C.P.C. (3d) 61, 2 R.F.L. (4th) 232 (C.A.) Statutes referred to Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50, s. 10(2), 11(2)

Gavin J. Tighe, for cross-appellant. Barnet H. Kussner, for cross-respondent.

The judgment of the court was delivered by

[1] MATLOW J.: -- This cross-appeal is allowed. This application is remitted to the trial judge for the purpose of taking additional evidence in accordance with his discretion and for reconsideration of his judgment, including his disposition of costs. Counsel for the cross-appellant may make submissions regarding costs in writing directed to the president of this panel within 20 days upon providing a copy of such submissions to counsel for the cross-respondent, and counsel for the cross-respondent may make his submissions in a similar manner within 20 days thereafter. Further submissions may be made with leave.

[2] The essential issue raised on this cross-appeal involves the interpretation and application of s. 11(2) of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 (the "Act"), which reads as follows:

11(2) The Divisional Court may give any judgment that ought to have been pronounced, in which case its decision is final, or the Divisional Court may grant a new trial for the purpose of taking evidence or additional evidence and may remit the case to the trial judge or another judge and, subject to any directions of the Divisional Court, the case shall be proceeded with as if there had been no appeal.

[3] In particular, we are asked to admit fresh evidence tendered on behalf of Jafine for consideration by us on this cross-appeal and we are asked either to vary the judgment below or to grant a new trial for the purpose of allowing the trial judge to reconsider his judgment in light of this fresh evidence which Jafine proposes to tender also at the new trial.

[4] The cross-appellant, Maxine Jafine ("Jafine"), is an elector in the Town of East Gwillimbury in the Regional Municipality of York. The cross-respondent, Cecil James Mortson, Jr. ("Mortson") is the mayor of East Gwillimbury and a member of York Regional Council.

[5] The issue before us arises in the context of the following facts that were found by the trial judge. They are accurately summarized in the following paragraphs taken from Jafine's factum:

4. At a meeting of York Regional Council on June 11, 1998, Mortson seconded and voted on a motion to "support the extension of Highway 404 from its current point of termination at Davis Drive in the Town of Newmarket, to its proposed link with Highway 12 in Durham, provided that the most environmentally and operationally acceptable route is used and the Ministries of Environment and Transportation work with the Town of Georgina, Town of East Gwillimbury, Town of Newmarket and Regional Municipality of York so that any impact on surrounding residences continue[s] to be of the highest priority." The motion also urged the Ministry of Transportation to obtain approvals and proceed with construction as soon as possible.

5. Mortson also participated in a debate and voted at a meeting of the Town of East Gwillimbury on July 20, 1998, in which council resolved that "the Ministry of Transportation be required to prepare an Addendum to the Highway 404 Environmental Assessment Report, examining the route of the Highway 404 extension in the context of the Queensville Community Plan and Master Servicing Plan Process established in the Official Plan Amendment No. 89".

6. The northern extension of Highway 404 had been under active consideration by the Ministry of Transportation for many years. In December 1997, the Ministry submitted an exhaustive Route Planning Study and Environmental Assessment. It called for the technically preferred [route] for the further northbound Highway 404 extension (north of Green Lane) to pass over the most westerly portion of the property owned by Mortson.

7. At the time of the votes on June 11, 1998 and July 20, 1998, Mortson owned a 100-acre East Gwillimbury farm property. This property sat approximately five miles north of the currently announced future terminus of Highway 404 at Green Lane.

8. Mortson has been an elected official since 1985. In 1985, he was elected as a councillor. In 1988, he was re- elected. In 1991, Mortson was elected as Mayor. In 1994 and 1997, he was re-elected as Mayor.

9. Mortson knew at the time of the Votes that the currently proposed route, and the one that was technically preferred, was one that would pass over the most westerly portion of his farm property. Mortson was also aware that any future extension would have a major impact on urban form, traffic volume and urban development in the surrounding area and that absent a favourable endorsement for the extension from both East Gwillimbury and York Region, the Ministry of Transportation might push the entire project into uncertain status.

10. The Learned Judge of first instance held that in the circumstances Mortson had breached s. 5(1)(b) of the Municipal Conflict of Interest Act (the "Act") when he failed to declare his interest and voted on item 188 at York Region on June 11, 1998 and on item 26 at the Town of East Gwillimbury on July 20, 1998. There is no appeal from that finding.

11. Further, the Learned Judge of first instance was satisfied that Mortson had an interest which was immediate, particular and distinct from the public interest and that the steps taken by him could not be protected by s. 4(k) of the Act. There is no appeal from that finding.

12. The judge at first instance also determined that Mortson had not demonstrated the sufficient carelessness, negligence, inattention or ignorance of the law to engage the defence of inadvertence as provided under s. 10(2) of the Act.

13. The Learned Judge of first instance held, however, that Mortson had committed an error in judgment under s. 10(2) of the Act [at p. 91 O.R.]:

However, in all the circumstances I find Mayor Mortson's failure to declare a pecuniary interest on both June 11, 1998 at York Region and on July 20, 1998 at his municipal council were honest errors in judgment on his part and ones which warrant exoneration as "error in judgment" within the meaning of s. 10(2) of the Act. Subjectively viewed by the respondent [Mortson], there was not the close proximity of his lands to the present northern terminus of Highway 404, nor was there sufficient reasonable probability of imminent provincial approval. No route selection was involved in either vote. Mayor Mortson never made any secret of the fact that he owned, lived on and farmed that property for a number of years. There was no secretive indirect commercial connection to his property. In his evidence, he explained he simply did not see any interest or any real pecuniary interest that he had in the issues. He was not warned or put on his notice by the applicant or by anyone of his possible conflict under the Act. There is evidence that he at no time listed his property for sale, obtained appraisals, or voiced any intention of moving. I am of the view that Mayor Mortson's conduct was unwise and mistaken but, nevertheless, undertaken in good faith and an entirely understandable error in judgment.

14. Accordingly, no statutory consequence or sanction was imposed on Mortson.

[6] Mortson instituted an appeal from the judgment below following its release but shortly thereafter abandoned it. In the meantime Jafine instituted this cross-appeal and elected to proceed with it after Mortson's appeal was abandoned. As a result, only Jafine's cross-appeal was considered by this court.

[7] Although Jafine seeks leave to appeal the trial judge's disposition of costs, in light of our order remitting this application, the issue of costs remains alive and it would be inappropriate for us to address the issue at this stage in the proceeding.

[8] Accordingly, no issue is raised on this cross-appeal other than whether the trial judge (section 11(2) of the Act refers to the judge hearing the application as the "trial judge") erred in failing to impose the sanctions of declaring Mortson's seat vacant and disqualifying him from holding office by reason of his finding that Mortson's conduct was "an error in judgment" as provided for in section 10(2) of the Act, which reads as follows:

10(2) Where the judge determines that a member or a former member while he or she was a member has contravened subsection 5(1), (2) or (3), if the judge finds that the contravention was committed through inadvertence or by reason of an error in judgment, the member is not subject to having his or her seat declared vacant and the member or former member is not subject to being disqualified as a member, as provided by subsection (1).

[9] We are satisfied that, on the evidence before him, it was open to the trial judge to make this finding and to spare Mortson from the imposition of the statutory sanctions. In arriving at his decision, he correctly applied an objective standard to Mortson's conduct and we would not interfere with his discretion in reaching the conclusion that he did. If there were not more, this conclusion would effectively determine the result of this cross-appeal.

[10] However, at the commencement of the hearing of this appeal an application was made on behalf of Jafine for leave to tender fresh evidence for our consideration. The proposed evidence was contained in an affidavit sworn by Naomi Solomon, a member of the firm of solicitors representing Jafine, and to which was attached a copy of an affidavit sworn by one Peter Martin, a resident of East Gwillimbury, and a copy of a further affidavit sworn by John C. Hastings, who described himself therein as "a Councillor in the Township of Georgina in the Regional Municipality of York". Argument on whether or not the affidavit should be admitted proceeded, on consent, on the basis that the affidavit and both copies would be opened before this court.

[11] I pause to observe parenthetically that the practice of attaching copies of affidavits to an affidavit [to] support evidence in the affidavit based on information and belief is one that should be discouraged. If the originals of the copies are available, it is much better for the court and for the party tendering them to have those instead of copies.

[12] For reasons that will follow below, we are persuaded that the affidavit should be admitted into evidence before us but that its contents based upon the copy of the Hastings affidavit should be disregarded because it has only tenuous potential probative value.

[13] The essence of the evidence contained in the affidavit is that Martin attempted to examine the tax rolls of East Gwillimbury prior to the trial of this application on January 18, 1999, but could not gain access to them because they were unavailable for inspection. He then returned to the municipal office on or about May 27, 1999 and was then able to examine those records. His examination of the records at that time revealed that Mortson had interests in other properties in the area of the proposed extension of Highway 404.

[14] The affidavit also contains evidence that submissions were made at trial on behalf of Mortson that Mortson was merely a farmer who had an interest in only one relevant piece of land which he farmed and that at no time did he disclose his interests in the other nearby properties.

[15] In response, counsel for Mortson tendered the affidavit of Allan Evelyn which, under the circumstances, we admit as well. It contains evidence that the assessment rolls may reflect that the interests of Mortson in the other properties were as a tenant only, created to permit him to farm those properties and to permit the owners thereof to obtain a certain tax advantage.

[16] Counsel for Jafine urged us to admit the fresh evidence tendered because it was credible, it could not have been obtained by the exercise of reasonable diligence prior to the trial and it will likely be conclusive of an issue in the cross-appeal. This was said to be the test set out in the judgment of the Ontario Court of Appeal in Sengmueller v. Sengmueller (1994), 1994 ONCA 8711, 17 O.R. (3d) 208, 111 D.L.R. (4th) 19.

[17] Counsel for Mortson, on the other hand, submitted "that Jafine utterly fails to satisfy any one of the three tests applicable . . .".

[18] In our view, the Sengmueller test does not apply to this case as it would to an ordinary appeal. section 11(2) of the Act is very unusual, perhaps unique, in making express provision for this court to grant a new trial before the same trial judge for the purpose of taking additional evidence.

[19] The purpose of the third requirement of the test, that the fresh evidence likely be conclusive of an issue in the appeal, is to recognize the futility of an appeal court admitting fresh evidence unless, by doing so, it would likely be inclined either to alter the judgment pronounced below or to order a new trial. Both of these can be considered drastic measures.

[20] In this case, however, because of section 11(2) of the Act, we have the additional option referred to above, the option of remitting this case to the trial judge for the purpose of taking additional evidence. We believe that this option, a less drastic measure, is intended to be exercised when fresh evidence arises subsequent to judgment which meets the first two parts of the Sengmueller test and, in addition, might well have affected the trial judge's initial disposition had it been presented to him at trial. It need not necessarily be demonstrated that the fresh evidence will likely be conclusive of an issue on the cross-appeal.

[21] We are satisfied that the fresh evidence tendered satisfies this modified test. It is credible and it does not violate the rule against relitigating issues already decided on the basis of fresh evidence that was reasonably available before trial. As well, its references to Mortson's interests in other properties that could be affected by the extension of Highway 404 are matters which would certainly have been relevant to the trial judge's consideration of whether Mortson had committed an error in judgment. It may well be that the fresh evidence, in light of Evelyn's evidence, will be of no significance with respect to the ultimate result, but that is a matter best left to be determined by the trial judge.

[22] As stated above, the relief that we are granting to Jafine is not the drastic type of relief ordinarily available. We are not altering the judgment below and we are not ordering an entirely new trial before another judge. Although we do not mean to minimize the significance of our interference in this proceeding, it is important to bear in mind that the practical effect of our judgment will lead initially only to a reconsideration of his judgment by the trial judge in light of the fresh evidence. We are persuaded that this result is in accordance with the legislative intent which is reflected in the express provisions of the legislation.

Order accordingly.