Tuchenhagen v. Mondoux

107 O.R. (3d) 675

2011 ONSC 5398

Ontario Superior Court of Justice,

Divisional Court,

J. Wilson, Gordon and Lederer JJ.

October 26, 2011

Municipal law -- Conflict of interest -- Appeal -- Appeal under s. 11 of Municipal Conflict of Interest Act from declaration that city councillor contravened Act was hearing de novo -- Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50, s. 11.

Municipal law -- Conflict of interest -- "Pecuniary interest" -- Councillor's "pecuniary interest" in tax sale by city crystallizing when he first became interested in purchasing property and not when he submitted bid to purchase -- Councillor's pecuniary interest not "interest in common with electors generally" under s. 4(j) of Act -- Councillor required to disclose his interest at meetings of Committee of the Whole which took place after he expressed interest in acquiring property and before he submitted bid -- Saving provision in s. 10(2) of Act not applying as councillor did not contravene Act through inadvertence or by reason of error in judgment -- Penalty of four-year disqualification from membership in city council appropriate -- Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50, ss. 4(j), 10(2).

The appellant, then a member of the Thunder Bay City Council, became aware of a proposed tax sale by the City. He sent an e- mail asking for a copy of the advertisement for the property when it was produced and stating that he might be interested in bidding for the property. He made an appointment to view the property. He ultimately submitted a bid to purchase through a corporation that he owned. After submitting the bid, he disclosed his pecuniary interest in the sale as required by the Municipal Conflict of Interest Act. He did not disclose his interest in buying the property or the fact that he had made an appointment to view it at meetings of the Committee of the Whole which took place before he [page676] submitted the bid. The respondent, who submitted the only other bid, applied successfully for a declaration that the appellant had contravened the Act. The application judge found that the appellant had contravened s. 5 of the Act by not disclosing his pecuniary interest in the tax sale when that interest crystallized. The appellant was disqualified from being a member of City Council for four years. The appellant appealed.

Held, the appeal should be dismissed.

Per Lederer J. (Gordon J. concurring): An appeal under s. 11 of the Act from a declaration that a councillor contravened the Act is a hearing de novo.

The appellant's "pecuniary interest" crystallized as soon as he became interested in making a bid. From that moment, he was no longer looking at the sale only from the perspective of a member of Council, he was examining the situation to see how it could advantage his private interests. The appellant's pecuniary interest was not "an interest in common with electors generally under s. 4(j) of the Act". The appellant should have disclosed his pecuniary interest at the meetings of the Committee of the Whole that took place after he became interested in submitting a bid and before he actually did so. The saving provision in s. 10(2) of the Act did not apply as the appellant did not breach the Act through inadvertence or an error in judgment. The four-year disqualification for the breach of s. 5(1) of the Act was the minimum available if consequences were to flow to the appellant, who was no longer a member of Council at the time of the ruling.

Per J. Wilson J. (dissenting): An appeal from a declaration that a city councillor was in contravention of the Municipal Conflict of Interest Act is not a hearing de novo. While at first blush the wording of s. 11 of the Act appears to direct a hearing de novo, the wording is also consistent with the general appellate powers stipulated in s. 134 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

To be in a conflict of interest, one must have an interest that exists, that is more than a thought or idea, that may be affected by a decision taken by Council. "Indirect pecuniary interest" does not include an expression of interest by a member of council in a property that is in the process of being sold by public tender, or the making of an appointment to view the property. The appellant did not contravene the Act. Alternatively, if a broad interpretation of "indirect pecuniary interest" was adopted, the saving provision in s. 10(2) of the Act applied.

APPEAL from a declaration that the appellant contravened the Municipal Conflict of Interest Act.

Cases referred toCampbell v. Dowdall, [1992] O.J. No. 1841, 12 M.P.L.R. (2d) 27, 35 A.C.W.S. (3d) 477 (Gen. Div.); Fairbrass v. Hansma, [2010] B.C.J. No. 1242, 2010 BCCA 319, 5 B.C.L.R. (5th) 349, 71 M.P.L.R. (4th) 23, 289 B.C.A.C. 186; King v. Nanaimo (City), [2001] B.C.J. No. 2107, 2001 BCCA 610, 157 B.C.A.C. 307, 94 B.C.L.R. (3d) 51, 24 M.P.L.R. (3d) 1, 108 A.C.W.S. (3d) 905; Lovatt v. Glenwood (Rural Municipality), [2004] M.J. No. 36, 2004 MBCA 18, [2005] 6 W.W.R. 67, 184 Man. R. (2d) 18, 49 M.P.L.R. (3d) 283, 128 A.C.W.S. (3d) 1191, affg [2003] M.J. No. 157, 2003 MBQB 100, 174 Man. R. (2d) 97, 38 M.P.L.R. (3d) 224, 122 A.C.W.S. (3d) 1145; Ruffolo v. Jackson, [2010] O.J. No. 2840, 2010 ONCA 472, 267 O.A.C. 381, 71 M.P.L.R. (4th) 43, affg [2009] O.J. No. 4242, 2009 55363, 71 M.P.L.R. (4th) 40 (Div. Ct.), affg [2009] O.J. No. 1488, 59 M.P.L.R. (4th) 256, 176 A.C.W.S. (3d) 1161 (S.C.J.); Wainwright (Municipal District No. 61) v. Willerton, [2000] A.J. No. 950, 2000 ABQB 539, 269 A.R. 269, 13 M.P.L.R. (3d) 297, 103 A.C.W.S. (3d) 206, consd Other cases referred to Bowers v. Delegarde, [2005] O.J. No. 689, [2005] O.T.C. 138, 5 M.P.L.R. (4th) 157, 137 A.C.W.S. (3d) 634 (S.C.J.); [page677] Cowles v. Balac (2006), 2006 34916 (ON CA), 83 O.R. (3d) 660, [2006] O.J. No. 4177, 273 D.L.R. (4th) 596, 216 O.A.C. 268, 41 C.C.L.I. (4th) 227, 42 C.C.L.T. (3d) 161, 151 A.C.W.S. (3d) 1044 (C.A.); Edwards v. Wilson (1980), 1980 1583 (ON SC), 31 O.R. (2d) 442, [1980] O.J. No. 3873, 119 D.L.R. (3d) 129, 14 M.P.L.R. 128, 6 A.C.W.S. (2d) 335 (Div. Ct.); Ennismore (Township) (Re), [1996] O.J. No. 167, 31 M.P.L.R. (2d) 1, 60 A.C.W.S. (3d) 622 (Gen. Div.); Godfrey v. Bird, [2005] B.C.J. No. 1122, 2005 BCSC 626, 42 B.C.L.R. (4th) 90, 9 M.P.L.R. (4th) 207, 139 A.C.W.S. (3d) 773, [2005] B.C.T.C. 626; Graham v. McCallion (1982), 1982 2014 (ON SC), 39 O.R. (2d) 740, [1982] O.J. No. 3575, 139 D.L.R. (3d) 508, 20 M.P.L.R. 91, 16 A.C.W.S. (2d) 375 (Div. Ct.); Greene v. Borins (1985), 1985 2137 (ON SC), 50 O.R. (2d) 513, [1985] O.J. No. 2510, 18 D.L.R. (4th) 260, 8 O.A.C. 141, 28 M.P.L.R. 251, 30 A.C.W.S. (2d) 424 (Div. Ct.); Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, J.E. 2002-617, 219 Sask. R. 1, 10 C.C.L.T. (3d) 157, 30 M.P.L.R. (3d) 1, 112 A.C.W.S. (3d) 991; Jafine v. Mortson (2000), 2000 29036 (ON SCDC), 52 O.R. (3d) 135, [2000] O.J. No. 5692 (Div. Ct.), varg (1999), 1999 14775 (ON SC), 43 O.R. (3d) 81, [1999] O.J. No. 971, 93 O.T.C. 91, 50 M.P.L.R. (2d) 218, 87 A.C.W.S. (3d) 381 (C.J.); MacKinnon v. Grand River Hospital, [2009] O.J. No. 1255, 2009 ONCA 265, 247 O.A.C. 167, 64 C.C.L.T. (3d) 173, 176 A.C.W.S. (3d) 261; Mayne v. Clysdale, [1983] O.J. No. 1112 (Div. Ct.); Moll v. Fisher (1979), 1979 2020 (ON SC), 23 O.R. (2d) 609, [1979] O.J. No. 4113, 96 D.L.R. (3d) 506, 8 M.P.L.R. 266 (Div. Ct.); Mondoux v. Tuchenhagen, [2010] O.J. No. 5520, 2010 ONSC 6536, 79 M.P.L.R. (4th) 1; Orangeville (Town) v. Dufferin (County), [2010] O.J. No. 429, 2010 ONCA 83, 266 O.A.C. 207, 316 D.L.R. (4th) 451, 68 M.P.L.R. (4th) 25, 185 A.C.W.S. (3d) 222; R. v. Hasselwander (1993), 1993 90 (SCC), 14 O.R. (3d) 800, [1993] 2 S.C.R. 398, [1993] S.C.J. No. 57, 152 N.R. 247, J.E. 93-1006, 62 O.A.C. 285, 81 C.C.C. (3d) 471, 20 C.R. (4th) 277, 19 W.C.B. (2d) 544; R. v. M. (L.), [2008] 2 S.C.R. 163, [2008] S.C.J. No. 31, 2008 SCC 31, EYB 2008-133843, J.E. 2008-1117, 77 W.C.B. (2d) 463, 374 N.R. 351, 231 C.C.C. (3d) 310, 293 D.L.R. (4th) 1, 56 C.R. (6th) 278; R. v. Mann, [2004] 3 S.C.R. 59, [2004] S.C.J. No. 49, 2004 SCC 52, 241 D.L.R. (4th) 214, 324 N.R. 215, [2004] 11 W.W.R. 601, J.E. 2004-1495, 187 Man. R. (2d) 1, 185 C.C.C. (3d) 308, 21 C.R. (6th) 1, 122 C.R.R. (2d) 189, REJB 2004-68801, 62 W.C.B. (2d) 516; R. v. Mooney, [2005] N.J. No. 247, 2005 NLCA 49, 249 Nfld. & P.E.I.R. 68, 66 W.C.B. (2d) 296; R. v. Pham (2005), 2005 44671 (ON CA), 77 O.R. (3d) 401, [2005] O.J. No. 5127, 204 O.A.C. 299, 203 C.C.C. (3d) 326, 36 C.R. (6th) 200 (C.A.); Segal v. Segal, 2002 41960 (ON CA), [2002] O.J. No. 2564, 162 O.A.C. 119, 26 R.F.L. (5th) 433, 115 A.C.W.S. (3d) 274 (C.A.); Sharbern Holding Inc. v. Vancouver Airport Centre Ltd., [2011] 2 S.C.R. 175, [2011] S.C.J. No. 23, 2011 SCC 23, 306 B.C.A.C. 1, 82 C.C.L.T. (3d) 1, 416 N.R. 1, EYB 2011-190358, [2011] 7 W.W.R. 1, 2011EXP-1577, J.E. 2011-871, 331 D.L.R. (4th) 1, 18 B.C.L.R. (5th) 1, 5 R.P.R. (5th) 1, 81 B.L.R. (4th) 1; Sheehan v. Hart, [1993] O.J. No. 1726, 15 M.P.L.R. (2d) 311, 40 A.C.W.S. (3d) 770 (Gen. Div.); Universal Workers Union (Labourers' International Union of North America, Local 183 v. Ferreira (2009), 95 O.R. (3d) 118, [2009] O.J. No. 639, 2009 ONCA 155, 249 O.A.C. 181, [2009] CLLC Â220-044, 308 D.L.R. (4th) 261, 100 Admin. L.R. (4th) 59; Van de Perre v. Edwards, [2001] 2 S.C.R. 1014, [2001] S.C.J. No. 60, 2001 SCC 60, 204 D.L.R. (4th) 257, 275 N.R. 52, [2001] 11 W.W.R. 1, 156 B.C.A.C. 161, 94 B.C.L.R. (3d) 199, 19 R.F.L. (5th) 396, 108 A.C.W.S. (3d) 316, J.E. 2001-1799, REJB 2001-25876 Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134, (1) Municipal Act, R.S.O. 1990, c. M.45, s. 193 Municipal Act, 2001, S.O. 2001, c. 25, ss. 268 [rep. S.O. 2006, c. 32, Sch. A, s. 111], 270, 379 [as am.] Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 [as am.], ss. 1 [as am.], 2, 4(j), 5, (1), (2), (3), 10, (1), (a), (2), 11(2) Municipal Statute Law Amendment Act, 2006, S.O. 2006, c. 32, s. 457.1(1) [page678] Planning and Municipal Statute Law Amendment Act, S.O. 1994, c. 23 Authorities referred to Annibale, Quinto M., Municipal Lands Acquisition, Management and Disposition, looseleaf (Toronto: Canada Law Book, 2010)

Chantelle J. Bryson, for appellant/respondent. Sergiel Ettinger, for respondent/applicant.

LEDERER J. (GORDON J. concurring): -- Introduction

[1] During the month of July 2008, the City of Thunder Bay offered for sale, by public tender, the property located within its boundaries at 141 Hardisty Street North. The property was sold to the appellant, Robert Tuchenhagen, who was a member of the City Council. At a meeting of the Council, held on July 29, 2008, after his bid to purchase the land had been made, Robert Tuchenhagen disclosed his pecuniary interest in the sale as required by the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 (the "MCIA"). The respondent, Gilles Mondoux, who submitted the only other bid, believes that Robert Tuchenhagen waited too long before declaring his interest. He should have done so at an earlier meeting. In a decision, released on December 8, 2010 [[2010] O.J. No. 5520, 2010 ONSC 6536], Mr. Justice D.C. Shaw agreed. The judge determined that Robert Tuchenhagen had contravened s. 5 of the MCIA and ordered that Robert Tuchenhagen was disqualified from being a member of the Council of the City of Thunder Bay for a period of four years. This is an appeal of that decision. Background

[2] As a result of unpaid taxes, the City of Thunder Bay became the owner of 141 Hardisty Street North. Gilles Mondoux saw an opportunity. The property could be used as part of the business he operated on adjoining land. He offered to buy the property for $1. In response to the offer, staff of the City of Thunder Bay included reference to 141 Hardisty Street North in a report to City Council (see Report 2008 CLS.034). While it was unusual for the City to sell land in this way, recognizing the tax arrears that would have to be paid and the cost of making the property useful, the report recommended that the City accept the offer. The report was considered on June 23, 2008: [page679]

-- first, by a "Special Committee of the Whole" in closed session (5:00 p.m.);

-- second, by "Committee of the Whole" in open session (6:35 p.m.); and

-- third, by "City coucil" in open session (10:05 p.m.).

[3] The Minutes of these meetings do not reveal the substance of any discussion that took place or any decision that was made. The first Minutes (5:00 p.m.) indicates that the staff provided an overview, that the administration was to "proceed as directed" and that a resolution relative to the report would be presented later the same day to a meeting of the "Committee of the Whole". In the second Minutes (6:35 p.m.), the Committee of the Whole adopted a resolution that "recommends" that the administration "proceed as directed in Closed Session". The third Minutes, those which record the meetings of City Council (10:05 p.m.), "ratified" the resolution "previously adopted by Committee of the Whole".

[4] The parties to this proceeding do not agree as to what should be taken to be the result of these meetings. What is clear is that the recommendation of the staff, as to the offer made by Gilles Mondoux, was not accepted. The Committee of the Whole questioned the propriety of a direct sale to his corporation. It was the policy of the City to attempt to recover the most value for its surplus properties by providing the public an opportunity to bid on properties through, among other methods, open public tender. City staff was unable to say whether the property had been offered for sale to the general public. The staff advised that the administration would look into the matter and bring the information back at a later date. Counsel for Robert Tuchenhagen says that the Committee recommended that, in the event that the property had not been previously offered for public tender, this should be done forthwith. In the absence of access to a record of the discussions that took place, counsel for Gilles Mondoux will not go that far. In his view, the most that can be said is that the staff was required to report as to whether any attempt had previously been made to sell the property by public tender. As a result, the parties do not agree as to whether the decision was made to sell the property by public tender on June 23, 2008 or at a subsequent time.

[5] Robert Tuchenhagen was present at the three meetings which took place on June 23, 2008. The Minutes of the second (6:35 p.m.) and third (10:05 p.m.) meetings show that he seconded whatever resolution was adopted by the Committee of [page680] the Whole and ratified by City Council. Each of the three sets of Minutes demonstrates that the members of council who were present were asked to disclose any interest they had in any of the matters to be discussed. Robert Tuchenhagen did not declare such an interest, nor was it argued that he should have.

[6] On June 27, 2008, by memo, City staff reported that 141 Hardisty Street North had not been previously offered for sale through public tender. The report expressed the intention to advertise it for sale immediately. This could tend to confirm the results of the meeting of June 23, 2008, as suggested by counsel for Robert Tuchenhagen. Nonetheless, counsel for Gilles Mondoux submitted that the "formal resolution" to sell the land by public tender did not occur until later.

[7] On July 2, 2008, in response to the report from staff, dated June 27, 2008, Robert Tuchenhagen sent an e-mail to the staff member who had prepared the report. He said:

Could you send me a copy of the advertisement for the Hardisty Street property when it is produced.

I may be interested in bidding on this property.

Thank you,

Robert (Emphasis added)

[8] One of the issues to be considered in this appeal is whether this e-mail demonstrated an interest that would require a declaration of interest at any subsequent meeting of City Council or Committee of the Whole in order to satisfy the requirements of the MCIA.

[9] On July 5, 2008, an advertisement indicating the property was for sale appeared in the local newspaper and the tender package was issued. On July 7, 2008, Robert Tuchenhagen received a copy of an e-mail from the Realty Services Division to the communications officer, both of the administration of the City of Thunder Bay. It indicated that 141 Hardisty Street North had been advertised for sale on July 5, 2008, that it would be advertised again on July 9, 2008 and that this would be posted on the website of the city by the end of the day.

[10] On July 14, 2008, the Special Committee of the Whole met in closed session. It considered a further report which touched on the sale of 141 Hardisty Street North (see Report 2008 CLS.040). The Minutes of the meeting provide none of the substance of the discussion. As with the closed meeting of June 23, 2008, they reveal only that City staff provided an overview and that the administration was to "proceed as directed". In this case, a [page681] resolution relative to the report was to be presented a week later, at the July 21, 2008 open meeting of the Committee of the Whole. On July 14, 2008, Robert Tuchenhagen was not present. The record indicates that he was away on a family vacation.

[11] The report includes a recommendation that the five properties it reviewed, which included 141 Hardisty Street North, be declared surplus to the needs of the City. At the time this appeal was heard, counsel were unable to provide guidance to the court as to any policies of the City that would have required property it owned to be declared surplus before being sold. The City did not appear and was not represented. Counsel were asked to communicate with counsel for the City and seek whatever assistance could be provided and to make further submissions, in writing. Unhappily, the material that was subsequently filed was not as helpful as it could or should have been. The following appears to be the case. The Municipal Act, R.S.O. 1990, c. M.45, s. 193 (the "Old Act") set out the procedure to be followed by municipalities when disposing of surplus land. It provided that every municipality, with the authority to sell land, had to pass a by-law which established procedures governing the sale of real property. Bill 163, the Planning and Municipal Statute Law Amendment Act, S.O. 1994, c. 23 amended the Old Act. It received royal assent on December 1994. It required that municipal property be declared surplus, by Council, before any sale could take place. Accordingly, the Corporate Policy Manual for the City of Thunder Bay (By-law 203-1996) included as policies that

-- to declare a property surplus, a report is prepared for Council identifying the properties and requesting Council's authorization, in principle to sell these properties (Policy No. 09-04-42); and that

-- prior to disposing of any real property . . . to declare the real property to be surplus by by-law or resolution passed at a meeting open to the public (Policy No. 09-04-56).

[12] A new Municipal Act, 2001 was enacted in 2001 (S.O. 2001, c. 25). It re-enacted s. 193 as s. 268 with some "subtle changes". Thereafter, the provincial government passed the Municipal Statute Law Amendment Act, 2006, S.O. 2006, c. 32. It repealed s. 268, replaced it with s. 270 and provided new transition provisions with respect to by-laws enacted under the new s. 270. As a result, the detailed procedures relating to declarations that land was surplus were eliminated, but the existing [page682] by-laws were maintained. The amendments found in the 2006 Act contain a form of grandfathering provision (see Municipal Statute Law Amendment Act, 2006, at s. 457.1(1)) which preserves a by-law until the earlier of its repeal, expiration or December 20, 2009 (see Quinto M. Annibale: Municipal Lands Acquisition, Management and Disposition, looseleaf (Toronto: Canada Law Book, 2010), at p. 5-2). There is no evidence to suggest that the Corporate Policy Manual (By-law 203-1996) or the policies to which these reasons refer were repealed or expired prior to December 20, 2009. They remained in effect during June, July and August 2008. Counsel for Gilles Mondoux submitted that the report considered by the Special Committee of the Whole, on July 14, 2008, represented a request that the properties to which it referred, including 141 Hardisty Street North, be formally declared surplus. This would seem to support the position that the "formal resolution" to sell the land by public tender did not occur on June 23, 2008.

[13] Counsel for Robert Tuchenhagen referred to two other by- laws. She suggested that it is "unclear" how the Corporate Policy Manual for the City of Thunder Bay "is affected by the subsequent by-laws 27-2003 and 004-2005". It will be apparent that both of these by-laws were enacted before the passage of the Municipal Statute Law Amendment Act, 2006. Thus, the requirement to declare land surplus before offering it for sale remained in place. Moreover, on their face, these by-laws do nothing to detract from this direction. By-law 27-2003 makes clear that, before notice is given to the public of a proposed sale, the City Council must have "declared a Site to be Surplus in accordance with the [Municipal Act, 2001]" (see By-law 27-2003, art. 4). By-law 004-2005 indicates that, before the general manager of the Development Services Department exercises any of the authority delegated to him, by the by-law, with respect to the sale of land, "he or she shall ensure that . . . [c]ouncil has declared the property surplus to municipal needs" (see By-law 004-2005, art. 2.02). Counsel for Robert Tuchenhagen says that these by-laws only require that the Council declare that it does not require the property for City purposes and that no by-law was necessary. On this basis, counsel submitted that "it is more likely than not" that, on June 23, 2008, City Council decided both to declare the property surplus and that it be sold by public tender.

[14] On July 15, 2008, Gilles Mondoux submitted his confidential bid to purchase the property. He offered $100.

[15] On July 21, 2008, Robert Tuchenhagen made an appointment to view 141 Hardisty Street North. The Realty Services Department was unable to show him the property on [page683] that day. In an affidavit, he deposed that he "wanted to view the property to see if I may be interested in bidding on it . . .". He saw the property on the following day, July 22, 2008. One of the issues to be considered in this appeal is whether the appointment to view the land being offered for sale demonstrated an interest that would require a declaration of interest at any subsequent meeting of City Council or Committee of the Whole in order to satisfy the requirements of the MCIA.

[16] During the evening of July 21, 2008 (at 9:00 p.m.), the Committee of the Whole met in open session. Robert Tuchenhagen was present. No disclosure of interest was made by him. The report that included the recommendation that 141 Hardisty Street North be declared surplus to the needs of the City was considered (see Report 2008 CLS.040). A motion was made that recommended to City Council that the properties described in the report "be declared surplus to the City's requirements pursuant to the City's policies, and be disposed of in accordance with the method set out in this Report". The report recommended that 141 Hardisty Street North be sold by "Public Tender". The motion carried.

[17] Counsel for Robert Tuchenhagen says that nothing was decided on July 21, 2008. In her view, the resolution passed was nothing more than a reiteration of the determinations she believes were made on June 23, 2008 to declare the property surplus and to dispose of it by public tender. She posited that, if the motion had been defeated, the authority to sell 141 Hardisty Street North would have remained. According to counsel, since nothing was decided, there was no reason for Robert Tuchenhagen to declare an interest. To her, the issue is whether Robert Tuchenhagen had a pecuniary interest at the time the decisions were made. Counsel submitted that, on June 23, 2008, he had no pecuniary interest, as that term is applied by the MCIA.

[18] Counsel for Gilles Mondoux takes a very different view. He submitted that, prior to July 21, 2008, there was no formal decision to declare the property surplus and to sell it by public tender. The resolution was a necessary step before the property could be offered for sale. It is the view of counsel that, as a result of the e-mail Robert Tuchenhagen delivered on July 2, 2008 and, if that is not enough, then as of the appointment to visit the property made on July 21, 2008, Robert Tuchenhagen had a demonstrated pecuniary interest such that he was required to make a declaration of interest in respect of the meeting of the Committee of the Whole which took place on July 21, 2008. It is the view of counsel for Gilles Mondoux that, by failing to make this declaration, Robert Tuchenhagen was in breach of the MCIA. [page684]

[19] The resolution of the Committee of the Whole, adopted on July 21, 2008, stands as a recommendation to the Council. In the normal course, it would be anticipated that such a recommendation would be brought before City Council to be ratified or rejected. Counsel for Robert Tuchenhagen said that this did not happen. Counsel for Gilles Mondoux pointed out that, on July 29, 2008, City Council adopted the Minutes of the Committee of the Whole of July 21, 2008 and that this served to ratify the resolution.

[20] On July 23, 2008, through a corporation he owned and operated, Robert Tuchenhagen submitted a bid to purchase 141 Hardisty Street North for $5,790.

[21] City Council met on July 29, 2008. At that time, Robert Tuchenhagen disclosed an interest relative to the meetings of the Committee of the Whole of July 14, 2008 and July 21, 2008 which considered the sale of 141 Hardisty Street North. It was at this meeting that City Council adopted the Minutes of those two meetings. Counsel for Robert Tuchenhagen submitted that his pecuniary interest in the property only crystallized when he viewed it on July 22, 2008 and determined that he would submit a bid. According to counsel, it was only at that point that Robert Tuchenhagen was obliged to disclose his interest. The Parameters of this Appeal

[22] This is an appeal. It is authorized by the MCIA, s. 11, which says, in part:

11(1) An appeal lies from any order made under section 10 to the Divisional Court in accordance with the rules court.

(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. (Emphasis added)

[23] On its face, the italicized words would seem to suggest that the hearing undertaken by this court is to consider the application de novo (afresh or anew). On this basis, the case would be decided as if it was being considered for the first time ("at first instance"). The difficulty is that, more or less, the same words are used in Courts of Justice Act, R.S.O. 1990, c. C.43, at s. 134, which considers the general powers of a court on an appeal ("make any . . . decision that ought to or could have been made by the court . . . appealed from"). This apparent confusion was recognized in Moll v. Fisher (1979), 1979 2020 (ON SC), 23 O.R. (2d) 609, [1979] O.J. No. 4113 (Div. Ct.), [page685] where Mr. Justice Krever, in referring to the submission of one of the counsel, made the following comments [at p. 610 O.R.]:

We were obliged, in his submission, not simply to determine whether there was any evidentiary basis for the judgment appealed from. Mr. Scott relied on s-s. (2) of s. 6 [now s. 11 of the MCIA] which permits the Divisional Court to "give any judgment that ought to have been pronounced". As was pointed out by Mr. Justice J. Holland, during the course of the argument, that language is identical to the language in s. 30 of the Judicature Act R.S.O. 1970, c. 228, [now s. 134 of the Courts of Justice Act, supra] with respect to appeals to the Court of Appeal in ordinary cases. I am not sure that Mr. Scott's submission is right in the light of the similarity of the language on [sic] the two statutes. In any event, I can say that I approached this matter and our task, and I think I speak for both of my colleagues, as though the matter was before us as one of first instance.

[24] In the same case, Mr. Justice J. Holland made observations to the same effect [at p. 621 O.R.]:

I also agree with the comments of the president that regardless of what might be the true meaning of the appellate jurisdiction of this Court in s. 6 [now s. 11 of the MCIA] of the statute, I too have approached the problem as one in which the judgment given is one which I would have given as a Judge of first instance and, so saying, I do not wish to preclude the ordinary practice relating to appeals as being applicable to appeals under this statute.

[25] The MCIA is important legislation. It seeks to uphold a fundamental premise of our governmental regime. Those who are elected and, as a result, take part in the decision-making processes of government, should act, and be seen to act, in the public interest. This is not about acting dishonestly or for personal gain; it concerns transparency and the certainty that decisions are made by people who will not be influenced by any personal pecuniary interest in the matter at hand. It invokes the issue of whether we can be confident in the actions and decisions of those we elect to govern. The suggestion of a conflict runs to the core of the process of governmental decision-making. It challenges the integrity of the process. This being so, anything short of a complete review may leave some part of any challenge unresolved. This is not unlike an allegation of "bias" in an administrative decision-maker. In such a circumstance, the nature of the review is one that is not limited. There is no "standard of review". The court will not tolerate the possibility of leaving in place a decision infected by bias. Insofar as a consideration of whether the MCIA has been contravened is concerned, we can do no better than follow the guidance of the two judges we have quoted above. We have dealt with this appeal as we would have as judges in the first instance. [page686]

[26] The MCIA, s. 10 does provide for the penalties to be imposed if a member of council is found to have breached the legislation. The seat of the member is to be declared vacant, he or she may be disqualified from being a member for a period of time not exceeding seven years and, where the contravention has resulted in financial gain, ordered to pay restitution. As such, the MCIA is penal in nature. This does not mean that it should be interpreted narrowly, in favour of the member, in case of ambiguity. "Even with penal statutes, the real intention of the legislature must be sought, and the meaning compatible with its goals applied" (see R. v. Hasselwander (1993), 1993 90 (SCC), 14 O.R. (3d) 800, [1993] 2 S.C.R. 398, [1993] S.C.J. No. 57, at para. 30 as referred to in Ruffolo v. Jackson, [2010] O.J. No. 2840, 2010 ONCA 472, at para. 9).

[27] The intention of the MCIA has been described as follows [Moll v. Fisher, supra, at p. 612 O.R.]:

The obvious purpose of the Act is to prohibit members of councils and local boards from engaging in the decision- making process in respect to matters in which they have a personal economic interest. The scope of the Act is not limited by exception or proviso but applies to all situations in which the member has, or is deemed to have, any direct or indirect pecuniary interest. There is no need to find corruption on his part or actual loss on the part of the council or board. So long as the member fails to honour the standard of conduct prescribed by the statute, then, regardless of his good faith or the propriety of his motive, he is in contravention of the statute. . . .

This enactment, like all conflict-of-interest rules, is based on the moral principle, long embodied in our jurisprudence, that no man can serve two masters. It recognizes the fact that the judgment of even the most well- meaning men and women may be impaired when their personal financial interests are affected. Public office is a trust conferred by public authority for public purpose. And the Act, by its broad proscription, enjoins holders of public offices within its ambit from any participation in matters in which their economic self-interest may be in conflict with their public duty. The public's confidence in its elected representatives demands no less. See, also, Ruffolo v. Jackson, [2009] O.J. No. 1488, 59 M.P.L.R. (4th) 256 (S.C.J.), at para. 9; Lovatt v. Glenwood (Rural Municipality), [2003] M.J. No. 157, 2003 MBQB 100, at para. 11; Orangeville (Town) v. Dufferin (County), [2010] O.J. No. 429, 2010 ONCA 83, at paras. 22-26)

[28] The issue is whether Robert Tuchenhagen breached the requirements of the MCIA, not whether he acted out of any improper motive or lack of good faith. [page687] Analysis

Section 5 of the MCIA

[29] The obligation to disclose interest is found in the MCIA, s. 5(1), which states:

5(1) Where a member, either on his or her own behalf or while acting for, by, with or through another, has any pecuniary interest, direct or indirect in any matter and is present at a meeting of the Council or local board at which the matter is the subject of consideration, the member, (a) shall, prior to a consideration of the matter at the meeting, disclose the interest and the general nature thereof; (b) shall not take part in the discussion of, or vote on a question in respect of the matter; and (c) shall not attempt in any way whether before, during or after the meeting to influence the voting of any such question.

(2) Where the meeting referred to in subsection (1) is not open to the public, in addition to complying with the requirements of that subsection, the member shall forthwith leave the meeting or the part of the meeting during which the matter is under consideration.

(3) Where the interest of a member has not been disclosed as required by subsection (1) by reason of the member's absence from the meeting referred to therein, the member shall disclose the interest and otherwise comply with subsection (1) at the first meeting of the council or local board, as the case may be, attended by the member after the meeting referred to in subsection (1). (Emphasis added)

[30] The requirements of s. 5(1) of the MCIA and the submissions of counsel raise the following issues for the consideration of the court: (1) Did Robert Tuchhagen have a pecuniary interest on or before July 21, 2008? (2) If Robert Tuchenhagen had a pecuniary interest on or before July 21, 2008, is it one he shared with electors generally? (3) Were the considerations placed before the Committee of the Whole on July 14 and 21, 2008 a "matter"? (4) Was the "matter" considered at a meeting of the Council at which Robert Tuchenhagen was present? (5) What, if any, penalty should be imposed? [page688]

Did Robert Tuchenhagen have a pecuniary interest on or before July 21, 2008?

[31] "Pecuniary interest" is not defined by the MCIA. Generally, it is a financial interest, an interest related to or involving money. A decision to buy, or offer to buy, property is demonstrative of a pecuniary interest. Robert Tuchenhagen understood this. At the meeting of July 29, 2008, he disclosed that he had such an interest. The offer to purchase 141 Hardisty Street North was made by Superior Home Insulation Limited. Robert Tuchenhagen is, or was, the president and sole director of that company. He had an indirect pecuniary interest in the purchase of the property (see MCIA, s. 2). The issue is not whether there was a pecuniary interest, but when that interest began such that it required compliance with the MCIA.

[32] We do not agree with counsel for Robert Tuchenhagen that this interest crystallized only when he viewed the property and decided to make an offer. This presumes that any discussion at meetings of City Council or any resolution or by-law passed by City Council involving the sale or potential sale which took place as Robert Tuchenhagen was deciding whether to make an offer could not affect that private determination. This is not correct. Any decision of the members of Council could affect the price or whether the property would be sold at all. "The question that must be asked and answered is 'Does the matter to be voted upon have a potential to affect the pecuniary interest of the municipal councillor?'" (emphasis added) (see Greene v. Borins (1985), 1985 2137 (ON SC), 50 O.R. (2d) 513, [1985] O.J. No. 2510, 1985 CarswellOnt 666 (Div. Ct.), at para. 39). As soon as Robert Tuchenhagen saw himself as a potential buyer, he had become a person with a pecuniary interest. The e-mail he sent on July 2, 2008 indicated that he might be interested in bidding on the property. At that point, he was no longer looking at this only from the perspective of a member of Council with the public responsibilities that entails. From the moment he decided he might make a bid, he began examining the situation to see how it could advantage his private interests. He had acquired a pecuniary interest.

[33] Counsel for Robert Tuchenhagen relied on a number of cases to support her submission that it was only after the offer was made that her client had a pecuniary interest. These cases each respond to their own facts. They demonstrate that

-- where the council of a municipality determined to launch an action against an elector for breach of a settlement agreement, the mayor did not have a pecuniary interest in the decision as a result of the elector having previously sought [page689] to have the council order an audit of the mayor's campaign expenses (see Ruffolo v. Jackson, supra (S.C.J.); and [2009] O.J. No. 4242, 2009 55363 (Div. Ct.), where two notices of appeal were quashed by the Divisional Court and, supra (C.A.), upholding the decision of the Divisional Court);

-- the fact that a councillor received a campaign contribution was not enough to demonstrate a pecuniary interest when matters benefitting the donor came before council (see King v. Nanaimo (City), [2001] B.C.J. No. 2107, 2001 BCCA 610);

-- a mayor had no pecuniary interest in a decision to amend a by-law when it did not benefit land he owned and would only do so if a further unanticipated change to the applicable by-law was made allowing for the severance of smaller parcels and had no pecuniary interest when the same by-law benefitted lands owned by his sons when there was no evidence of any financial relationship between the sons and the father (the mayor) (see Fairbrass v. Hansma, [2010] B.C.J. No. 1242, 2010 BCCA 319);

-- a councillor who was not asked to and did not invest in a hog farm, and at the time had no funds to invest, has no pecuniary interest to declare when issues concerning the proposal for the farm came before council. His decision to invest was made after funds became available and after the meetings where the matter was reviewed (see Lovatt v. Glenwood (Rural Municipality), supra (Q.B.)). Ultimately, it was determined that there was no contentious issue on the agenda and nothing beyond the reception of information. Accordingly, there was no need for a disclosure of interest (see Lovatt v. Glenwood (Rural Municipality), [2004] M.J. No. 36, 2004 MBCA 18, at para. 19);

-- a member of council does not have a pecuniary interest in applications to re-designate, re-zone or sever lands simply because he was also a real estate agent, but without any connection to the affected lands (see Campbell v. Dowdall, [1992] O.J. No. 1841, 12 M.P.L.R. (2d) 27 (Gen. Div.)); and

-- a councillor, who voted on the capital budget of the municipality, had no pecuniary interest where the budget included the possibility of the purchase of golf carts, which he was in the business of supplying (see Wainwright (Municipal District No. 61) v. Willerton, [2000] A.J. No. 950, 2000 ABQB 539). [page690]

[34] These cases do not assist Robert Tuchenhagen. As discussed, they do not concern circumstances where a councillor indicated that he had an active, immediate and personal interest in examining whether to enter into a financial transaction with the municipality. Robert Tuchenhagen did this when he delivered his e-mail of July 2, 2008 and continued that interest when, on July 21, 2008, he arranged to visit the site to assist in deciding whether to submit a bid. This distinction is confirmed by the last two of the six cases just referred to.

[35] In Campbell v. Dowdall, supra, the court made the following observation [at para. 19]:

While it is difficult, if not impossible, to say with any certainty what monetary or money-related consequence the disposition of the topsoil removal application could have for Mr. Dowdall [the real estate agent], nevertheless, he has a connection to the land in question, and it is a money-related connection.

[36] Similarly, in this case, while it is difficult to define precisely the monetary consequences for Robert Tuchenhagen, it is clear that he had a personal monetary connection to the sale of 141 Hardisty Street North. He was considering a bid to purchase the land, presumably at a price that was beneficial to him. This was a direct conflict with the municipality (and the "electors generally"). Its and their general interest was to get as much for the property as it could. Contrary to the position taken by the counsel for Robert Tuchenhagen, this conflict was manifest and it was real.

[37] In Wainwright (Municipal District No. 61) v. Willerton, supra, the capital budget was dealt with by the council on June 1, 1999. On June 29, 1999, the municipality issued a request for tenders for the purchase of six golf carts. The company owned by the councillor submitted two tenders. At the time the tenders were opened, the councillor [at para. 28 [28d]] "spent a few moments", partly in response to questions, to clarify certain items as to the tender. He left the council chamber. He was gone for only a short time (three minutes) but, in the time he was absent, council passed a motion awarding the tender to his company. The court did not find that the councillor had a pecuniary interest in the provision of the golf carts, but considered the situation by assuming that he did. The court observed that the interest of the councillor in the business was well-known. He declared his pecuniary interest in the transaction, did not argue in favour of his proposal, did not discuss any matters of substance, absented himself from the discussion and did not vote on [page691] the tender itself. On this basis, the court concluded [at para. 28 [28e]] that it should exercise its discretion and relieve the councillor from "the full force of the law".

[38] In other words, the court found that the councillor acted as if he had a pecuniary interest. This does nothing to detract from the conclusion that, on July 21, 2008, Robert Tuchenhagen had a pecuniary interest in the sale of 141 Hardisty Street North. Rather, it suggests that he did and points out what he should have done and did not do.

If Robert Tuchenhagen had a pecuniary interest on or before July 21, 2008, is it one he shared with electors generally?

[39] Counsel for Robert Tuchenhagen submitted that, in the event that the court found that her client, on or before July 21, 2008, held a pecuniary interest, the MCIA provides that he would still not be required to disclose that interest to a meeting of the City Council. Section 4(j) would serve to exculpate him from that responsibility. Section 4(j) says:

4. Section 5 does not apply to a pecuniary interest in any matter that a member may have, . . . . . (j) by reason that the member having a pecuniary interest which is an interest in common with electors generally[.]

[40] Counsel for Robert Tuchenhagen argues that "electors generally" refers to something other than all electors. This is true. The circumstances in which all electors had a pecuniary interest in a matter would have to be a matter of concern across the entire community.

[41] In Bowers v. Delegarde, [2005] O.J. No. 689, [2005] O.T.C. 138 (S.C.J.), it was argued that a councillor had a pecuniary interest in the Internet access communication system which was run by the Township. The suggested interest arose because he was an employee and shareholder in Bell Canada, a company that had no interest in the system, but had a potential to compete with the Township. The court held that the councillor had no pecuniary interest but, in the alternative, observed that, if he did, the councillor did not breach his obligations under the MCIA, in part, by reason that his interest was not separate and distinct from that of electors generally. The case agrees that "electors generally" indicates not all electors, but suggests it includes "a significant number of them" (see Bowers v. Delegarde, supra, at para. 94). [page692]

[42] The meaning of the word "generally", as found in the MCIA, has been addressed with greater precision [Ennismore (Township) (Re), [1996] O.J. No. 167, 31 M.P.L.R. (2d) 1 (Gen. Div.)]:

The word "generally" used in Section 4(j) indicates to me that the electors to be regarded, when applying the section, are to be of a certain class or order. It is apparent to me that the authorities, together with the language and intended general purpose of the Municipal Conflict of Interest Act, establish that the class or order must be those electors in the area in question who are "affected" by the matter. It is those affected electors that are to be regarded when considering the issue of conflict of interest and not necessarily all the electors.

[43] In common usage, "generally" means "in most cases" or "widely" (see Concise Oxford English Dictionary, 11th ed., revised (Oxford University Press, 2006)). Understood in this way, "electors generally" cannot be taken to include only two electors, as suggested by counsel for Robert Tuchenhagen. To her, "electors generally" should be taken to mean only the electors interested in "viewing and potentially bidding on the property", meaning only Gilles Mondoux and Robert Tuchenhagen (see appellant's factum, paras. 67 and 68). It is not the nature of the interest, but the breadth of those who share the interest which defines whether s. 4(j) of the MCIA applies. In this case, Robert Tuchenhagen would share, with "electors generally", an interest in whether the municipality obtained the best price possible for its sale of 141 Hardisty Street North. The consideration of whether to make a bid was not an interest Robert Tuchenhagen held in common with "electors generally". This is an interest he, apparently, shared only with Gilles Mondoux. We say "apparently" because it is not possible to know whether anyone else might have been interested in making a bid.

[44] During the course of being cross-examined, Robert Tuchenhagen revealed that he determined the value of his bid by taking into account a "different purchaser of properties" he thought might bid and who, from past experience, he anticipated would bid $5,000 (see Transcript, Cross-Examination on Affidavit of Documents of Robert Tuchenhagen, on Tuesday, June 8, 2010, pp. 28-29). No such bid was made. It is not clear from the record whether either of the two reports provided to the councillors were made public. It does seem that the only place they were reviewed or discussed is in closed meetings of the Committee of the Whole. If they were not public, then no one, other than members of the Council and the City staff, knew the property was to be sold until the advertisement of July 5, 2008 was published and no else knew that the catalyst for the sale was an offer to purchase 141 Hardisty Street North for $1. It is not possible to know how this information, or hearing the discussion at the [page693] Committee of the Whole, to which Robert Tuchenhagen was privy, might have affected other potential purchasers.

[45] In Campbell v. Dowdall, supra, the court made the following observation [at para. 19]:

While it is difficult, if not impossible, to say with any certainty what monetary or money-related consequence the disposition of the topsoil removal application could have for Mr. Dowdall [the real estate agent], nevertheless, he has a connection to the land in question, and it is a money-related connection.

[46] Similarly, in this case, while it is difficult to define precisely the monetary consequences for Robert Tuchenhagen, it is clear that he had a personal monetary connection to the sale of 141 Hardisty Street North. He was considering a bid to purchase the land, presumably at a price that was beneficial to him. This was a direct conflict with the municipality (and the "electors generally"). Its and their general interest was to get as much for the property as it could. Contrary to the position taken by the counsel for Robert Tuchenhagen, this conflict was manifest and it was real.

[47] We find that Robert Tuchenhagen had a pecuniary interest in the sale of 141 Hardisty Street North, as of the delivery of his e-mail of July 2, 2008, indicating that he might be interested in bidding on the property.

Were the considerations placed before the Committee of the Whole on July 14 and 21, 2008 a "matter"?

[48] Counsel for Robert Tuchenhagen said that, in any event, the presence of a pecuniary interest held by Robert Tuchenhagen, on or before July 14, or 21, 2008, was not enough to determine the case before the court. She noted that s. 5(1) of the MCIA requires that a "pecuniary interest" be "in any matter". Insofar as s. 5 of the MCIA is concerned, "matter" has been said to mean [Lovatt v. Glenwood (Rural Municipality), supra (C.A.), at para. 17]:

"[A] matter" in the sense that those words are used in s. 5(1), means an issue upon which there can be some meaningful discussion or debate and the prospect of some decision being made. (Emphasis added)

[49] Counsel for Robert Tuchenhagen submitted that the issues placed before the Committee of the Whole, on July 14, 2008 and July 21, 2008, did not raise any "matter" that was capable of affecting the ability of Robert Tuchenhagen to bid on the property. Rather, what came before the Committee was nothing more than "further notification" of decisions already taken by the City Council on June 23, 2008 (see appellant's factum, at para. 56). The Minutes of the three meetings that took place on [page694] that day do not reveal the substance of any of the discussion that took place or of any resolution that was adopted. The staff did proceed, without further instruction, to advertise the property for sale. The report prepared by the staff of the City and considered by the Committee of the Whole on July 14, 2008 and July 21, 2008 (see Report 2008 CLS.040) recommended that 141 Hardisty Street North be declared surplus and be sold by public tender. It does not matter what happened on June 23, 2008. What is clear is that issues of substance were raised by this report to be reviewed and discussed at meetings of the Committee of the Whole with the expectation that the recommendations would be considered and voted on. These discussions, whatever their content, could have provided information of interest to anyone considering a bid to purchase the land. This would include a member of Council, such as Robert Tuchenhagen. To put this simply, there were issues on which there could be "meaningful discussion" and there was "the prospect of some decision being made". There is no basis to presume, as the submissions of counsel for Robert Tuchenhagen did, that if the Committee had failed to accept the recommendations, the City would, nonetheless, have continued with the sale (see Submission's [sic] of the Appellant Committee of the Whole Motion Re: Surplus and Method of Sale -- July 21, 2008, at para. 9).

[50] This is made all the more clear when it is understood that the by-laws and policies effective at the time required that any land owned by the City was required to be declared surplus before it could be sold. It may or may not be, as counsel for Robert Tuchenhagen suggested in the material filed after the hearing, that the failure to make the declaration would not invalidate any subsequent sale but, as we see it, this misses the point. The issue was raised by the report and discussed at the Committee of the Whole on July 14, 2008. The resolution passed at that time was ratified by the Committee on July 21, 2008. What this confirms is that there could be "meaningful discussion" and there was "the prospect of some decision being made".

[51] It is not without importance that, at the meeting of Council on July 29, 2008, Robert Tuchenhagen disclosed an interest relative to the Minutes of the Special Committee of the Whole (Closed Session) held on July 14, 2008 and the Committee of the Whole meeting held on July 21, 2008 relative to the report that recommended that 141 Hardisty Street North be declared surplus and be sold by public tender (see Report 2008 CLS.040). If the issues in the Report did not raise a "matter", there was no need for an interest to be disclosed at the meeting of July 29, 2008. Robert Tuchenhagen understood that the discussions that [page695] had taken place were demonstrative of "a matter" being reviewed by the Committee of the Whole. The only change was that it was not until July 23, 2008 that Robert Tuchenhagen delivered the offer made by his company to purchase the property. If Robert Tuchenhagen failed to declare an interest on July 21, 2008 because he believed that it was only when he decided to make the offer that he acquired a pecuniary interest in the sale, he was wrong.

[52] We find that there was "a matter", as that term is used in s. 5 of the MCIA, concerning the sale of 141 Hardisty Street North placed before the Committee of the Whole on July 14, 2008 and July 21, 2008 by which time the pecuniary interest of Robert Tuchenhagen in the sale of the property had been established.

Was the "matter" considered at a meeting of the Council at which Robert Tuchenhagen was present?

[53] It is accepted that Robert Tuchenhagen was not present at the meeting of the Committee of the Whole on July 14, 2008, but was in attendance at its meeting on July 21, 2008. Counsel for Robert Tuchenhagen pointed out that the resolution, passed on July 14, 2008 and returned for ratification at an open meeting on July 21, 2008, was never considered at a meeting of the City Council. Counsel said it is only at such a meeting that s. 5(1) of the MCIA (which refers to "meeting of the Council") applies and a pecuniary interest must be disclosed. This ignores the definition of "meeting", found at s. 1 of the MCIA, which says:

"meeting" includes any regular, special, committee or other meeting of a council or local board as the case may be. (Emphasis added)

[54] What this definition makes clear is that a council, meeting as a committee, is a meeting of the council. A Committee of the Whole is, as its name suggests, a Committee of the Whole of the Council. Thus, a meeting of a Committee of the Whole is a meeting of "a council". If it were otherwise, the MCIA could not succeed in its purpose. It is possible that the only substantive discussion of an issue may take place at a closed meeting of the Committee of the Whole. All that may follow is ratification: first, at an open meeting of the Committee of the Whole and, then, at a meeting of Council. This is what happened on June 23, 2008. If it is only at the meeting of City Council, sitting as the Council, that a declaration of interest must be made, the councillor involved is free to take part in any discussion that may take place before the Committee of the Whole with impunity. The [page696] member of council would be permitted to engage in the decision-making process in respect to matters in which he or she had a personal economic interest. A member of a council would be free to take part in the substantive discussion and withdraw only in respect of the vote that ratifies what had already happened.

[55] The understanding that a meeting of the Committee of the Whole is recognized to be a meeting of Council requiring a declaration of interest is confirmed by the fact that the Minutes of each of the meetings of the Committee of the Whole indicate that an opportunity was provided for the members of the Council to declare any interests they may have with respect to the items on the agenda.

[56] We find that the meetings of the Committee of the Whole, which took place on July 14, 2008 and July 21, 2008, were meetings of the Council for the purposes of s. 5(1) of the MCIA. As a result of having a pecuniary interest in the matter of the sale of 141 Hardisty Street North, Robert Tuchenhagen was required, by s. 5(1) of the MCIA, to disclose his interest at the meeting of July 21, 2008, which he attended. Given our determination that Robert Tuchenhagen demonstrated a pecuniary interest when he delivered his e-mail of July 2, 2008, it is also true that, at the meeting of July 21, 2008, he should also have revealed his interest as existing at the time of the meeting of the Special Committee of the Whole of July 14, 2008 at which he was not present (see s. 5(3) of the MCIA).

[57] That the motion considered by the Committee of the Whole in a closed session on July 14, 2008 and ratified by the same committee in an open meeting on July 21, 2008 was not placed before City Council, other than within the Minutes of the two earlier meetings, does not change the fact that it was considered in a meeting to which the MCIA applied and that Robert Tuchenhagen did not disclose a pecuniary interest when he was obligated by the MCIA to do so.

[58] It should be said that, although the Record does not refer to it, in the normal course, the acceptance of the Minutes of the City Council meeting on July 29, 2008 would stand as a ratification of the resolution or by-law adopted by the Committee of the Whole. This being the case, the matter was placed before the City Council. It was at this meeting that Robert Tuchenhagen declared his interest.

What, if any, penalty should be imposed?

[59] The MCIA, s. 10 provides the penalties that may be imposed where there has been a breach of s. 5(1), (2) or (3). Subsection 10(1) states: [page697]

10(1) Subject to subsection (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), the judge, (a) shall, in the case of a member, declare the seat of the member vacant; and (b) may disqualify the member or former member from being a member during a period thereafter of not more than seven years; and (c) may, where the contravention has resulted in personal financial gain, require the member or former member to make restitution to the party suffering the loss, or, where such party is not readily ascertainable, to the municipality or local board of which he or she is a member or former member.

[60] Before considering how this section should be applied, there is a question as to whether it should be applied at all. Section 10(2) is a "saving provision" that the court may rely on and not impose a penalty. This occurs where the judge finds that the breach of s. 5 of the MCIA was committed through inadvertence or an error in judgment. Section 10(2) states:

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).

[61] What is "inadvertence" in these circumstances?

[62] The following provides guidance [Ruffolo v. Jackson, supra (S.C.J.), at para. 39]:

The defence of inadvertence applies where the breach can be linked to an oversight of fact or law that was not reckless or wilfully blind (see: Benn v. Lozinsk, [1982] O.J. No. 3356 at paras. 33-34 (Co. Ct.) and Re: Blake and Watts et al, 1973 552 (ON SC), [1973] O.J. No. 2225 at paras. 23-31 (Co. Ct.))

[63] Robert Tuchenhagen had been a member of the City Council for almost 12 years. He should have been aware of the need to avoid placing himself in a position of conflict. It is difficult to understand how, when, on July 2, 2008, he advised the Realty Department that he might be interested in making a bid, he would not see that he was demonstrating a personal pecuniary interest that would conflict with that of the municipality and the electors he served. The municipality would seek to get the best price. His interest would be to pay as little as possible. At that time, he already knew more than others who might wish to purchase the property. He knew the decision to sell had been spurred by a $1 offer. He had taken an active role by seconding the motion that, contrary to the recommendation found in the staff report, [page698] the offer not be accepted, creating the possibility that the land would be available for other bids to be made. This was only exacerbated when, on July 21, 2008, he arranged to view the property as part of his consideration as to whether to make a bid and then, at the meeting of the Committee of the Whole that evening, failed to declare an interest. This is not inadvertence; it is fairly characterized as being wilfully blind or reckless.

[64] Could this be an error in judgment?

[65] The question has been addressed [Campbell v. Dowdall, supra, at p. 8 of 9 (QL)]:

In one sense, every contravention of a statute based on deliberate action can be said to involve an error of judgment. A criminal act, for example, involves a serious error in judgment. The purpose of this second branch of the saving provision in subsection 10(2) of the Act must be to exonerate some of the errors in judgment which underlie contraventions of the Act, but obviously not all of them. The Legislature must have intended that contraventions of s. 5 which result from honest and frank conduct, done in good faith albeit involving erroneous judgment, should lead to municipal council seats having to be vacated. Municipal councils require the dedicated efforts of good people who will give of their time and talent for the public good. What is expected and demanded of such public service is not perfection, but it is honesty, candour and complete good faith.

[66] Robert Tuchenhagen based his bid on what he expected another possible buyer that he was aware of might offer. Who can say what that potential bidder might have done if he or she had known what Robert Tuchenhagen knew about the circumstances leading to the property being offered for sale by public tender. As he seconded the motion requesting staff to check if 141 Hardisty Street North had been offered for sale by tender, as he took part in the considerations of the matter on July 21, 2008, Robert Tuchenhagen knew something the other councillors did not. He was considering a bid. In fact, he was going to visit the property the next day to continue his investigation of that possibility. This lacked the required candour and good faith. This was not an error in judgment, as that term must be understood in the context of a breach of the MCIA.

[67] Robert Tuchenhagen cannot rely on s. 10(2) of the MCIA.

[68] This leaves only the question of what penalty should be imposed.

[69] The determination of any penalty stands apart from the decision as to whether the MCIA has been breached. The decision of the judge on the application is a reflection of the values of the community. In respect of the penalty, some deference should be afforded to the decision he has made. This is not dissimilar from a sentence appeal in a criminal law context. There, appellate courts must show great deference in reviewing the decisions [page699] of trial judges (the judges of first instance). Appellate courts intervene only where the sentence is unreasonable or demonstrably unfit (see R. v. M. (L.), 2008 SCC 31, [2008] 2 S.C.R. 163, [2008] S.C.J. No. 31).

[70] Section 10(1)(a) of the MCIA requires that, where s. 5(1) has been breached, the seat of the member is to be declared vacant. Mr. Justice Shaw observed that, by the time his ruling was made, Robert Tuchenhagen was no longer a member of the City Council. This penalty was not available. His Honour analyzed the situation Mondoux v. Tuchenhagen, supra, at para. [80]:

Unlike subsection 10(1)(a), subsection 10(1)(b) is discretionary -- a member who has contravened subsection 5(1) may be disqualified from being a member for not more than seven years. The issue is, how serious was the contravention. There is no evidence that Mr. Tuchenhagen acted in bad faith. The City suffered no loss. There was no policy prohibiting Mr. Tuchenhagen from bidding on real estate declared surplus to the City's needs. There was no interference with the public tender process. Mr. Tuchenhagen has given the City 12 years of public service. However, because the municipal election has just been held, any disqualification of less than the four-year term of the present Council would result in no sanction. It was Mr. Tuchenhagen's choice not to run in the most recent election. The only meaningful sanction that I can impose, because I cannot declare his seat vacant, is to disqualify Mr. Tuchenhagen from running in the next election. If I had been required to declare Mr. Tuchenhagen's seat vacant, I would have been disposed to impose a shorter disqualification as was done by Killeen J. in Blake v. Watts, 1973 CarswellOnt 372 (Co. Ct.) where he declared vacant the seat on Council of the respondent members and imposed a nominal two week disqualification. In the present case, there must be some consequence flowing from the contravention. I hold that a disqualification of four years would be fair and just in this case.

[71] The penalty imposed was the minimum available if consequences were to flow to Robert Tuchenhagen. The considerations the judge applied are fair, complete, balanced and reasonable. We can do no better than defer to his judgment as to the appropriate penalty and adopt his reasons in this regard as our own. Conclusion

[72] The appeal is dismissed. Costs

[73] Costs of the appeal are payable by Robert Tuchenhagen to Gilles Mondoux in the amount of $9,612.31.

[74] J. WILSON J. (in dissent): -- I have read the comprehensive reasons of Lederer J. in this appeal. Respectfully, I reach a different conclusion about whether this appeal is a hearing de novo. As well, I disagree with the conclusions of Lederer J. that [page700] the appellant had an "indirect pecuniary interest" at the date of the meeting of the Committee of the Whole held on July 21, 2008 that he should have disclosed. Alternatively, if I am incorrect in concluding that the appellant did not have an indirect pecuniary interest, I conclude that, on the facts of this case, the application judge erred in failing to apply the savings provisions in s. 10(2) of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 (the "MCIA").

[75] Three issues must be addressed.

[76] The first issue for determination is the appropriate standard of review.

[77] Second, where a decision by council has been made to sell property by public tender, does an elected member of council have an "indirect pecuniary interest" within the meaning of the MCIA where he expresses interest by e-mail to perhaps put in an offer on the property, requests a copy of the public advertisement and sets up an appointment to view the property? Is this member in these circumstances required to declare a conflict of interest in a meeting when the issue of declaring the land surplus is considered?

[78] It is the position of the appellant that he did not have an indirect pecuniary interest until after he had visited the property and he had decided on July 23, 2008 that he would submit an offer in the public tender process. Once he decided to place a bid, the appellant acknowledges that he was in a conflict of interest. The appellant declared the conflict at the first meeting after July 23, 2008 at the meeting of City Council on July 29, 2008. He took the appropriate steps after he had made the bid to purchase the property and before he knew the results of the public tender procedure.

[79] Finally, if an indirect pecuniary interest is created by the expression of interest by the councillor, on the facts of this case, did the application judge err in failing to apply the saving provisions of s. 10(2) of the MCIA as the contravention was committed by inadvertence or by reason of an error of judgment? Standard of Review

[80] To determine the standard of review, I must consider the nature of the proceeding at hand: Is the Divisional Court hearing an appeal from a declaration that a city councillor was in contravention of the provisions of the MCIA a hearing de novo, as some of the cases indicate, or an appeal, in which the usual guidelines from Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31 apply?

[81] The case law on this issue is inconsistent. [page701]

[82] Clearly, the court in Moll v. Fisher (1979), 1979 2020 (ON SC), 23 O.R. (2d) 609, [1979] O.J. No. 4113 (Div. Ct.), at paras. 2 and 37, concluded that this court was to conduct a hearing de novo and this view is adopted by Lederer J. in his reasons.

[83] Other cases have been less definitive: Edwards v. Wilson (1980), 1980 1583 (ON SC), 31 O.R. (2d) 442, [1980] O.J. No. 3873 (Div. Ct.); Graham v. McCallion (1982), 1982 2014 (ON SC), 39 O.R. (2d) 740, [1982] O.J. No. 3575 (Div. Ct.), at para. 18; Mayne v. Clysdale, [1983] O.J. No. 1112 (Div. Ct.); Jafine v. Mortson (2000), 2000 29036 (ON SCDC), 52 O.R. (3d) 135, [2000] O.J. No. 5692 (Div. Ct.).

[84] The enabling provision is s. 11 of the MCIA, which provides:

11(1) An appeal lies from any order made under section 10 to the Divisional Court in accordance with the rules of court.

(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) Where the case is remitted to a judge under subsection (2), an appeal lies from the order of the judge to the Divisional Court in accordance with the provisions of this section.

[85] Although at first blush the wording of s. 11 appears to direct a hearing de novo, the wording is also consistent with the general appellate powers stipulated in s. 134 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Section 134(1) states:

134(1) Unless otherwise provided, a court to which an appeal is taken may, (a) make any order or decision that ought to or could have been made by the court or tribunal appealed from; (b) order a new trial; (c) make any other order or decision that is considered just.

[86] I agree with the comments of Lederer J. that the MCIA is important public interest legislation with penal consequences. However, I conclude that without a specific legislative direction, the role of an appeal court is not to conduct a hearing de novo. Given the very similar wording in s. 11(2) of the MCIA and s. 134 of the Courts of Justice Act, I am not persuaded why this appeal should be treated any differently or that it is more important than a regular appeal, which involves a rigourous review of many important issues that are guided by the principles enunciated in Housen v. Nikolaisen.

[87] The MCIA is penal in nature. However, the principles of Housen v. Nikolaisen apply to all appeals, including criminal cases: R. v. Pham (2005), 2005 44671 (ON CA), 77 O.R. (3d) 401, [2005] O.J. No. 5127 (C.A.), at para. 48; [page702] R. v. Mann, 2004 SCC 52, [2004] 3 S.C.R. 59, [2004] S.C.J. No. 49, at para. 49; R. v. Mooney, [2005] N.J. No. 247, 2005 NLCA 49, at para. 18.

[88] Those principles confirm [Housen, supra]

-- "the standard of review on a question of law is that of correctness" and an appellate court is free to substitute its own opinion for that of the trial judge (para. 8);

-- "[t]he standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a 'palpable and overriding error'" (para. 10);

-- The standard of review on questions of mixed law and fact "lie along a spectrum . . .Where the legal principle is not readily extricable, then the matter is one of 'mixed law and fact' and is subject to a more stringent standard . . . where the issue on appeal involves the trial judge's interpretation of the evidence as a whole, it should not be overturned absent palpable and overriding error" (para. 36).

[89] An appellate court should not intervene unless there is an error in principle, a serious misapprehension of the evidence or an error in a matter of general principle in law: Housen, at paras. 20, 36-37.

[90] I note that this matter proceeded on a two-day motion, with no viva voce evidence, but with a number of transcripts filed. I approach this dissent on the basis that Housen applies in considering the issues raised in this appeal.

[91] If I am wrong on my conclusions, and if this appeal should be treated as a hearing de novo, my substantive conclusions do not change. General Governing Principles

[92] Before considering the facts of this case, I start by emphasizing the importance of transparency and integrity for all politicians and particularly for local politicians known in the community. I agree with the concerns expressed by Lederer J. that upholding public confidence in politicians is crucial.

[93] The purpose of the MCIA is, as confirmed in Moll v. Fisher at para. [9], "to prohibit members of council and local boards from engaging in the decision-making process in respect to matters in which they have a personal economic interest".

[94] Section 5 of the MCIA provides: [page703]

5(1) Where a member, either on his or her own behalf or while acting for, by, with or through another, has any pecuniary interest, direct or indirect, in any matter and is present at a meeting of the council or local board at which the matter is the subject of consideration, the member, (a) shall, prior to any consideration of the matter at the meeting, disclose the interest and the general nature thereof; (b) shall not take part in the discussion of, or vote on any question in respect of the matter; and (c) shall not attempt in any way whether before, during or after the meeting to influence the voting on any such question.

(2) Where the meeting referred to in subsection (1) is not open to the public, in addition to complying with the requirements of that subsection, the member shall forthwith leave the meeting or the part of the meeting during which the matter is under consideration.

(3) Where the interest of a member has not been disclosed as required by subsection (1) by reason of the member's absence from the meeting referred to therein, the member shall disclose the interest and otherwise comply with subsection (1) at the first meeting of the council or local board, as the case may be, attended by the member after the meeting referred to in subsection (1). (Emphasis added)

[95] Contrary to the view expressed by Lederer J., I am of the view that, to be in a conflict of interest, one must have an interest that exists, that has crystallized, and that is more than a thought or idea, that may be potentially affected by a decision taken by Council. To affect an indirect pecuniary interest, it is clear that the meeting in question does not need to actually affect a pecuniary interest of the member in question. It is sufficient that the matter under consideration has the potential to affect the person's financial interest. The conflict is that the member of council has personally or indirectly through family or a corporation some sort of existing interest or right at the date of the meeting in question that may be affected (emphasis added).

[96] Holland J. in Greene v. Borins (1985), 1985 2137 (ON SC), 50 O.R. (2d) 513, [1985] O.J. No. 2510 (Div. Ct.) confirmed, at p. 522 O.R.:

The question which must be asked and answered is: "Does the matter to be voted upon have a potential to affect the pecuniary interest of the municipal counsellor?"

It is of no consequence, in my opinion, what the nature of the effect might be -- for his betterment or otherwise -- as long as it may be seen by the public to affect that pecuniary interest.

[97] I adopt the reasons of Holland J. and confirm that one whose pecuniary interest -- be it personal or indirect -- may potentially be affected by the matter to be considered and voted [page704] on must declare the conflict and abstain from voting to maintain public confidence.

[98] As far as I can determine, there is no case that has interpreted the meaning of an "indirect pecuniary interest" to include an expression of interest by a member of council in a property that is in the process of being sold by public tender. Indirect pecuniary interest refers to holding that exists held by corporations or other family members.

[99] There are competing interests at stake in a case such as this.

[100] There is obviously the public interest in maintaining transparency and fairness in public dealings by those elected by the public.

[101] On the other hand, it must be remembered that politics is not always fair play and that unfounded or tenuous allegations of a conflict of interest are grave and may stain a person involved in public office for life.

[102] A finding of whether or not there has been a contravention of the MCIA and whether s. 10(2) applies depends upon the facts of each case. I part company with my colleagues in this matter, based primarily upon an analysis of the facts and the application of the facts to the law. I conclude that to paint with too broad a brush in defining an "indirect pecuniary interest" to include an expression of interest in a property exceeds any principle enunciated in the case law considering the issue to date, and opens the door to speculation, uncertainty and potential abuse. The Facts of this Case

The basis of the decision

[103] The only two facts, relied upon by the respondent and accepted by the application judge, underpinning the conclusion that the appellant had "an indirect pecuniary interest" in the property, was an e-mail sent by the appellant on July 2, 2008 expressing interest in the property and an appointment made on July 21, 2008 to view the property on July 22, 2008.

[104] On July 2, 2008, after the decision had been made by the Council on June 27, 2008 to sell the land by public tender if it had not been offered for sale to the public before, the appellant sent an e-mail to the Realty Services of the Municipality asking for a copy of the public announcement of the sale to be placed in the newspaper and indicating that he may be interested in putting in an offer. The representative of the Realty Services sent the appellant a copy of the newspaper advertisement that was placed in the local newspaper on three occasions. [page705]

[105] The appellant simply received a copy of public advertisement and did not receive or ask for any information not available to the public.

[106] On July 21, 2008, the appellant made an appointment to view the property. The agent was not available to show the property on July 21, 2008, and therefore the appointment was made for the morning of July 22, 2008. On July 22, 2008, the other member of the public who had made an appointment to see the property along with the appellant did not show up for the appointment. The appellant viewed the property, and on July 23, 2008, he submitted a bid in the public tender process.

[107] Had the appellant viewed the property before the July 21, 2008 meeting and if he had decided to submit an offer, my view of the facts and whether a conflict arose would be consistent with the conclusions reached by the majority.

[108] I conclude, however, that until the appellant as a prospective purchaser has had an opportunity to view a property and determine whether or not there was interest in making a bid on the property, that there can be no "indirect pecuniary interest" that crystallizes.

[109] The appellant made a bid on the property on July 23, 2008.

[110] On July 29, 2008, at the first opportunity after the appellant considered that he had a potential "indirect pecuniary interest", the appellant declared that conflict of interest at a City Council meeting. On July 29, 2008, Council adopted the minutes of the meetings held on July 14, 2008 (where the appellant was not present as he was on vacation) and the meeting of the Committee of the Whole on July 21, 2008 (where the appellant was present). At the July 21, 2008 meeting, the report recommending that the property and other properties be declared surplus was considered and approved but not passed by Council until the July 29, 2009 meeting. The appellant properly did not participate in this aspect of the July 29, 2008 Council meeting.

Facts not considered by the application judge in the analysis

[111] The application judge recited accurately many of the facts, but conducted little or no analysis of the facts.

[112] I conclude that several important undisputed facts were not considered by the application judge in his decision that provide important context to the issues raised.

[113] It does not appear to be disputed that the decision to sell the building in question by way of public tender was made by the Committee of the Whole and endorsed by Council on June 27, 2008. The respondent in this proceeding had offered to [page706] purchase the property for $1. Concerns were raised on June 27, 2008 about the price and whether the building had ever been offered for sale to the public by way of public tender.

[114] Council decided on June 27, 2008 that if the building had never been offered for sale through a public tender, to proceed with a sale through public tender. All actions taken by the City staff after the June 27, 2008 meeting confirm that this decision had been made on June 27, 2008. I do not agree with a more uncertain view of the facts expressed by Lederer J.

[115] There is no criticism of any role that the appellant played in these decisions on June 27, 2008 and there is no allegation that, as of that date, the appellant had any conflict of interest. Clearly, the decision to offer the property to the public by way of a public tender was in the interests of both the municipality and the public.

[116] The appellant expressed interest in the property in an e-mail dated July 2, 2008, and asked for a copy of the public advertisement that was going to be placed in the newspaper.

[117] Ms. Lacey confirmed in her cross-examination that she verified with her superiors whether there was a conflict of interest in a member of council placing a bid in a public tender, and confirmed that there was no such conflict.

[118] The property was advertised for sale by public tender in the local newspaper on three occasions in early July 2008.

[119] The appellant was not in attendance at the July 14, 2008 the (Closed Session) meeting of the Special Committee of the Whole, as he was on vacation.

[120] The appellant, and another member of the public who had seen the advertisement made an appointment to attend the property of July 21, 2008, but could not see the property until July, 22, 2008.

[121] The appellant attended the meeting of the Committee of the Whole on July 21, 2008, when several issues were canvassed and when the property, along with other properties was recommended to be declared surplus.

[122] He did not declare a conflict of interest at this meeting, and this is the crux of the respondent's complaint.

[123] After viewing the property on July 22, 2008, the appellant submitted an offer for the purchase of the property on July 23, 2008. After the appellant had submitted the offer, but before knowing the results in the public tender process, at the City Council meeting of July 29, 2008, the appellant declared a conflict of interest in relation to the Minutes of the July 14, 2008 Special Committee of the Whole (Closed Session) meeting and the Committee of the Whole meeting of July 21, 2008 as the [page707] issue of declaring the property surplus had been considered in these two meetings.

[124] The appellant was of the view that after he decided to submit a bid on the property on behalf of his corporation, he was in a conflict of interest and had an indirect pecuniary interest in the property. It was his understanding that the July 29, 2008 meeting of City Council was his first opportunity to declare his interest in the property and a potential conflict of interest. After declaring the conflict, he did not participate in discussion or voting upon the adoption of the minutes of the July 14 and July 21, 2008 meetings.

[125] These important facts were outlined in a cursory way in the chronology by the application judge, but were not part of the analysis of whether there was a breach and, more importantly, whether the savings provisions in s. 10(2) of the MCIA should apply.

[126] The application judge did not consider in his analysis of the facts how, why and when this conflict of interest allegation arose.

[127] The allegations of conflict of interest were not pursued by a member of council or a neutral member of the public. The City was not represented in this application. This is conflict between neighbours who had difficulties as abutting land owners. This complaint was made by the respondent who was a clearly a disgruntled abutting property owner who was unsuccessful in the public tender bid for the property. The respondent had resubmitted his unsuccessful bid for the property for $1 and was obviously unhappy.

[128] In the year after the appellant's company acquired the property, he began making the required improvements stipulated by the municipality.

[129] It appears from the cross-examination of the appellant that as part of his obligations to bring the building to code, he was required to ensure the hydro and wiring were safe. The respondent was the abutting land owner with a common wall. In rectifying the hydro in the appellant's building, the technician working for the appellant inadvertently cut off hydro to the respondent's building.

[130] A verbal conflict arose as a result of this hydro incident, which was clearly not the fault of the appellant. This occurred months after the appellant had purchased the property through his corporation. It was during the hydro incident that words were exchanged and the allegation of a conflict of interest and this proceeding surfaced. This proceeding was initiated by the respondent following the hydro incident. The respondent sought large sums of money as compensation. All aspects of the respondent's exorbitant financial claims, the application judge astutely denied. [page708]

Ancillary factual concerns

[131] I have concerns about the procedure followed by the City of Thunder Bay in selling this property, as it appears that it did not abide by the governing by-laws to first declare land surplus before embarking in the public tender process. I also have concerns with the quality of the voluminous record as all of the facts are not known.

It appears that the City Council did not follow its own by- laws

[132] It appears that City Council did not follow its own by- laws, as the land was offered for sale by way of public tender by public advertisement as a result of the decision of Council taken on June 27, 2008 before the land was declared surplus by City Council on July 29, 2009, by adopting the minutes of the Committee of the Whole on July 21, 2008, which appears to be contrary to the applicable Thunder Bay by-law.

[133] The Municipal Act, 2001, S.O. 2001, c. 25, ss. 270 and 379 now in effect does not require land to be declared surplus as a prerequisite for sale by public tender, unless the applicable by-laws for the city require such a declaration. The City of Thunder Bay by-law does require such a declaration before land is sold by public tender.

[134] City of Thunder Bay By-law No. 004-2005 deals with the delegation to the City's general manager of the Development Services Department of Council's authority to acquire and dispose of land in certain circumstances. The relevant sections of this by-law are:

2.01 Land Sales and Easement Releases: The Manager is granted the authority to approve the method of sale of land, the sale of land, and the release of easements, and to execute all documentation to facilitate those land sales or easement releases, in accordance with the criteria set out in Section 2.02.

2.02 Criteria for Section 2.01: Before the Manager exercises the authority granted to him or her in Section 2.01, he or she shall ensure that: (a) With respect to a sale of land, Council has declared the subject property surplus to municipal needs[.]

[135] This by-law is clear that it requires that City Council declare land to be surplus before it may be sold under public tender. This did not happen. Steps were taken to sell the property by way of public tender before it had been declared surplus. [page709]

Concerns about the quality of the record

[136] I note from the reasons of Lederer J. that as detailed minutes were not kept of the various meetings that it cannot be said with certainty what transpired as this matter unfolded beginning on June 27, 2008.

[137] The record in this file was at times confusing about what specifically happened on specific dates. There were volumes of paper. At times, as outlined in the reasons of Lederer J., inferences had to be drawn. Part of the reason for the lack of certainty is that this proceeding was initiated by the respondent in many months after the appellant had purchased the building and after the hydro incident. Memories fade. As well, the minutes from the various meetings were less than complete.

[138] The respondent sought affidavits from a variety of individuals including those who expressed views when they had not been in attendance at the meeting in question. I have concerns about the reliably of some of the allegation of fact unless it is clearly specified in the documentation. No viva voce evidence was called to give the application judge the true sense of the evidence, the players and the dispute.

[139] As Lederer J. points out, this statute is penal in nature, which does not mean it should be interpreted narrowly. However, the accuracy of the record upon which a decision is made, particularly a decision with penal consequences, is important.

[140] This application was brought forward by a complaint of a private individual and was not supported by the City of Thunder Bay or its counsel. We found ourselves hampered during the oral arguments in this appeal, in two ways. First, it was difficult to reliably establish the sequence of the facts, and there were disputes between counsel as to the import of what occurred at the various meetings. Second, as the City was not involved in this dispute, there was no assistance or perspective available from those in the trenches as to where lines should be drawn in a case that appears to me not be one with bright lines.

Issue 1: Did the appellant have an indirect pecuniary interest that should have been disclosed prior to the July 29, 2008 meeting?

The findings of the application judge

[141] The application judge concluded, at para. 51 [[2010] O.J. No. 5520, 2010 ONSC 6536], that the council meeting of July 21, 2008 had the potential to affect the pecuniary interest of Mr. Tuchenhagen. The judge concluded, at paras. 52-54, that [page710] Mr. Tuchenhagen's expression of interest in the property to Ms. Lacey on July 2, 2008 and setting up an appointment on July 21, 2008 to view the property on July 22, 2008 raised a reasonable concern that he would be biased at the July 21, 2008 meeting.

The case law as to the meaning of an indirect pecuniary interest

[142] I conclude that the appellant did not have an indirect pecuniary interest until he made the decision that he was going to submit an offer for the property after viewing it.

[143] Based upon a review of the case law, an expression of interest cannot create or crystallize an indirect pecuniary interest. To interpret the intended breadth of the MCIA so broadly embarks in the realm of speculation, and may be open to abuse.

[144] The leading cases in this area are set out below.

[145] In Orangeville (Town) v. Dufferin (County), 2010 ONCA 83, [2010] O.J. No. 429, 316 D.L.R. (4th) 451 (C.A.), at paras. 22 and 23, Rouleau J.A. gave the following instructive comments on the overall approach to be taken to determining what constitutes a pecuniary interest under the MCIA:

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 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 1583 (ON SC), [1980] O.J. No. 3873 (Div. Crt.), at para. 20. There is no exhaustive guideline for its determination.

As noted, "body" is not defined in the MCIA. In keeping with the purpose and intent of the Act, the term should be given a broad interpretation, to ensure that all potential conflicts of interest are captured by it. However, it must also be noted that the MCIA is part of a broader legislative scheme that includes the Municipal Act, 2001, and, in the present case, the County of Dufferin Act. These statutes will be relevant in interpreting the provisions of the MCIA: Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed. (Markham: LexisNexis, 2008) at 413; Canada (Attorney General) v. Public Service Alliance of Canada, 1991 88 (SCC), [1991] 1 S.C.R. 614 at 531-532.

[146] At para. 30, Rouleau J.A. elaborated on the meaning of a pecuniary interest for the purposes of the MCIA:

Although I agree that pecuniary interests that are as clear and significant as exist in the present case will be infrequent, the pecuniary interests addressed by the MCIA are not only those that are clear and very significant but all pecuniary interests, unless of course they fall within one of the exceptions listed in s. 4. I do not, therefore, agree that the interpretation advanced by the respondent and accepted by the application judge will only rarely have an impact on the work of upper-tier municipalities. What constitutes a pecuniary interest is not to be narrowly confined or limited to clear and very significant pecuniary interests. [page711] (Emphasis added)

[147] In Godfrey v. Bird, 2005 BCSC 626, [2005] B.C.J. No. 1122, 139 A.C.W.S. (3d) 773 (S.C.), at paras. 104-20, Burnyeat J. provides a thorough review of cases where courts have found individuals to have direct or indirect pecuniary interests. At para. 103, Burnyeat J. notes "a trend towards a broader interpretation of the words 'direct or indirect pecuniary interest' as electors and Legislatures insist upon higher standards of objectivity for elected representatives in order to promote disinterested consideration of the questions that councillors are called upon to decide".

[148] However, Burnyeat J. also notes, at para. 103, that "[i]t is obvious that each case must be dealt with in accordance with the facts it presents because the nature of what may be a direct or indirect pecuniary interest can vary greatly".

[149] What constitutes a pecuniary interest has been considered in a number of cases within the context of municipal conflict of interest legislation.

[150] In Edwards, the Divisional Court held that several members of the Cobourg town council, who also owned or were associated with downtown businesses, had an indirect pecuniary interest in a proposal before Council to construct a mall in the town. The councillors were found to have an indirect pecuniary interest in avoiding competition from the mall and contravened the MCIA by failing to disclose this interest and voting against the mall project at two council meetings. The court, however, found that the councillors had committed a bona fide error in judgment and invoked the savings provisions under the MCIA.

[151] In Wainwright (Municipal District No. 61) v. Willerton, [2000] A.J. No. 950, 2000 ABQB 539, the court held that Mr. Willerton, a 50 per cent shareholder in a company that sold golf carts, had no pecuniary interest in relation to a budget vote creating a $30,000 line item expenditure for the purchase of new golf carts. Veit J. found that there was no indirect pecuniary interest and stated the following, at para. 28 [28c]:

The fact that he was a part owner of a business that might be interested in tendering, in the future, for the contract to supply the golf carts . . . does not mean that Mr. Willerton was prevented from voting on the budget.

[152] A Manitoba court considered the issue of the point at which a pecuniary interest arises in Lovatt v. Glenwood (Rural Municipality), [2003] M.J. No. 157, 2003 MBQB 100. In that case, the application judge found that there was no direct or indirect pecuniary interest in a hog operation until the councillor made a commitment to invest in the operation. The councillor had attended an initial investors' meeting in March 2002. At a regular Council meeting in April 2002, the company made an [page712] informal presentation about its intention to construct three new hog barns in the municipality. The matter was also discussed at another Council meeting in early May 2002. The councillor invested in the operation in late May 2002. He disclosed a personal interest in the operation at a July 2002 Council meeting and excused himself from discussing and voting on a related matter later in that meeting.

[153] At para. 15 of the Lovatt decision, the application judge stated:

I am satisfied that Mr. Betker had no direct or indirect pecuniary interest to declare in accordance with s. 5(1) of the Act at the time of the [April and May] council meetings. Mr. Betker was not in a conflict of interest until he made the commitment to invest in late May, 2002. At that time, he appropriately declared his conflict. His interest, viewed objectively prior to late May, was no more than an ordinary resident of the Glenwood area. (Emphasis added)

[154] Fairbrass v. Hansma, [2010] B.C.J. No. 1242, 2010 BCCA 319 involved allegations that the mayor of a small township had a direct or indirect pecuniary interest in a proposed amendment to the official community plan that would have facilitated subdivision of parcels of land of a certain size if requested by the owner. The mayor and his sons were owners of adjacent parcels of land in the township. The amendment would have affected the sons' land but not the mayor's. The court held that the mayor did not have a pecuniary interest of any kind in the proposed amendment. Saunders J.A. commented on the burden of proof placed on the petitioners, at paras. 22 and 23, and that speculative potential future effects do not engage the conflict provision:

The proposition that the person asserting a fact has the burden of proving it, is fundamental. Here the petitioners alleged a pecuniary interest, either direct or indirect. Yet they adduced no evidence to the effect that the bylaw, were it to pass, would make the respondent's four acre but still un-subdividable property more valuable. Whether the change in set-back requirements would have this effect is speculation. So too, as the judge said, is the possibility of the respondent acquiring land, thereby to subdivide the property. Even more speculative is the possibility of accretion making the four acre parcel more valuable now.

Likewise, the suggestion that a future bylaw may be proposed that permits lots smaller than 2.5 acres is too speculative to found a conclusion the respondent had a forbidden interest in the bylaw. I do not consider that any legislative proposal could be found to provide a direct or indirect pecuniary interest only on the basis the council may pass, in the future, further bylaws replacing the one in issue. (Emphasis added) [page713]

[155] From my review of the case law, there is no case where an expression of interest is found to constitute an indirect pecuniary interest triggering the conflict of interest provisions and the obligation to abstain from discussion or a vote.

[156] In all cases where there has been a finding that a public official had an indirect pecuniary interest, the interest was vested -- that is, an interest was in existence through a corporation, family member or personally, creating the conflict or potential conflict. Any contingent or potential conflict of interest in the case law imposing high obligations upon members of council was in relation to an interest in an existing business or property (see Edwards v. Wilson and Godfrey v. Bird).

[157] There is no case where a finding of a conflict of interest extends to a situation where a councillor has publicly and openly expressed an interest in perhaps submitting a bid in a property being sold through public tender, asked for a copy of a public advertisement and set up an appointment to view the property.

Standard of review for the interpretation of an indirect pecuniary interest

[158] The interpretation of the meaning of an "indirect pecuniary interest" is a question of mixed fact and law. It involves the interpretation of the legal term "indirect pecuniary interest" and then application of this term to the set of facts before me (Housen, at para. 26).

[159] The standard of review for questions of mixed fact and law lies upon a spectrum. To determine whether this case lies on the spectrum, it is necessary to consider whether the facts of the case are at issue and, if so, whether the legal principle can be extracted from the facts.

[160] Accordingly, the court in Housen stated, at para. 33:

Where, however, an erroneous finding of the trial judge can be traced to an error in his or her characterization of the legal standard, then this encroaches on the law-making role of an appellate court, and less deference is required, consistent with a "correctness" standard of review. This nuance was recognized by this Court in St-Jean v. Mercier, [2002] 1 S.C.R. 491, 2002 SCC 15, at paras. 48-49:

-- A question "about whether the facts satisfy the legal tests" is one of mixed law and fact. Stated differently, "whether the defendant satisfied the appropriate standard of care is a question of mixed law and fact" (Southam, at para. 35).

-- Generally, such a question, once the facts have been established without overriding and palpable error, is to be reviewed on a standard of correctness since the standard of care is normative and is a question of law within the normal purview of both the trial and appellate courts. (Emphasis added) [page714]

[161] The Housen court did caution appellate courts, at para. 36, against extracting legal principles in negligence cases and reviewing them for correctness:

Appellate courts must be cautious, however, in finding that a trial judge erred in law in his or her determination of negligence, as it is often difficult to extricate the legal questions from the factual. It is for this reason that these matters are referred to as questions of "mixed law and fact". Where the legal principle is not readily extricable, then the matter is one of "mixed law and fact" and is subject to a more stringent standard.

[162] However, appellate cases dealing with the interpretation of contracts and statutes have been much more willing to review trial level decisions for correctness. In Universal Workers Union (Labourers' International Union of North America, Local 183) v. Ferreira (2009), 2009 ONCA 155, 95 O.R. (3d) 118, [2009] O.J. No. 639, 308 D.L.R. (4th) 261 (C.A.), in which the Ontario Court of Appeal found that for questions of mixed fact and law, where facts are not at issue but the interpretation of legal principles in contracts and statutes are at issue, the standard of review is correctness. The court held, at para. 31:

In my view, a standard of review closer to the correctness end of the spectrum applies. The decision in question is based on the interpretation of a contract (the Local Constitution), and the Arbitration Act. Thus, it depends far more on the application of legal principles than on findings of fact based on evidence introduced by the parties. As I explain below, the errors made below are errors in principle. They include a failure to follow proper principles of contractual interpretation when construing the Local Constitution. In cases dealing with the interpretation of contracts, the failure to follow proper principles of contractual interpretation is an error of law subject to the standard of correctness: see MacDougall v. MacDougall (2005), 2005 44676 (ON CA), 262 D.L.R. (4th) 120 (Ont. C.A.), at para. 30.

[163] With these principles in mind, I find that this case lies closer to "correctness" on the standard of review spectrum. In this case, there is no dispute about the facts. All parties accept that Mr. Tuchenhagen expressed an interest in the property, requested a copy of the public advertisement and set up an appointment to view the property. Rather, the real question is whether this constitutes an "indirect pecuniary interest". Therefore, the interpretation of the legal term "indirect pecuniary interest" can be extracted from the facts of this case and should be reviewed on a standard of correctness (Housen, at paras. 27, 31).

[164] I am also guided by the principles that an appellate court should not intervene unless there is an error in principle, a serious misapprehension of the evidence or an error in a matter of general principle in law: Housen, at paras. 20, 36-37. [page715]

Conclusions on the interpretation of indirect pecuniary interest

[165] As outlined, I conclude based upon a review of the case law that the application judge's interpretation of the meaning of an indirect pecuniary interest was incorrect and cannot be upheld. I conclude that an expression of interest in submitting a bid for a property being sold through public tender and asking for a copy of a public advertisement, and making an appointment to view this property cannot crystallize an indirect pecuniary interest, and to interpret these two facts as constituting an indirect pecuniary interest is an error in principle or an error of general principle in law.

[166] I agree with my colleague Lederer J. that the legislation must be interpreted to be a protector of public values and requires high standards of integrity on the part of the elected members of government, be it municipal or otherwise. In my view, the interpretation of the application judge adopted by my colleagues so broadly casts the net of potential conflict of interest that it ventures into the realm of speculation, which creates uncertainty, and may be subject to abuse in the cut and thrust of politics, with no benefit to the public.

Issue 2: The saving provision

[167] The saving provision under subsection 10(2) of the MCIA provides the following:

10(2) Where the judge determines that a member or 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). [Emphasis added]

Conclusions reached by application judge concerning saving provision

[168] The application judge reached two conclusions with respect to the applicability of the saving provisions.

[169] First, the application judge concluded that the defence of inadvertence was not available to the appellant. The judge found, at para. 78, that by expressing an interest in the property by e-mail and making an appointment to view the property, the appellant was reckless or wilfully blind to the question of conflict. [page716]

[170] Second, the application judge concluded, at para. 78, that a reasonable and fair-minded member of the public knowing all of the facts would not accept the appellant's suggestion that the failure to declare a conflict was an error of judgment within the meaning of the MCIA.

Case law concerning failing to consider important undisputed evidence

[171] In my view, the conclusions of the trial judge with respect to the saving provision are not supported by the undisputed [evidence] that he did consider, and the undisputed evidence that he did not consider.

[172] An application judge is not required to consider every single piece of the evidence in his or her reasons but is required to consider the evidence as a whole in reaching conclusions: Housen, at para. 72; Cowles v. Balac (2006), 2006 34916 (ON CA), 83 O.R. (3d) 660, [2006] O.J. No. 4177 (C.A.), at para. 117; MacKinnon v. Grand River Hospital, [2009] O.J. No. 1255, 2009 ONCA 265, at para. 21.

[173] However, omissions in reasons for judgment amount to a material error if they give rise to the reasonable belief that the trial judge must have ignored or misconstrued the evidence in reaching conclusions. See Segal v. Segal, 2002 41960 (ON CA), [2002] O.J. No. 2564, 26 R.F.L. (5th) 433 (C.A.); Van de Perre v. Edwards, [2001] 2 S.C.R. 1014, [2001] S.C.J. No. 60, 2001 SCC 60, at para. 15; Housen, at para. 39; Sharbern Holding Inc. v. Vancouver Airport Centre Ltd., [2011] 2 S.C.R. 175, [2011] S.C.J. No. 23, 331 D.L.R. (4th) 1, 2011 SCC 23, at para. 71.

[174] In Sharbern Holding Inc. v. Vancouver Airport Centre Ltd., the Supreme Court of Canada noted, at para. 71, that it owed a high degree of deference to the trial judge but that this deference still allowed it to overturn a case where evidence was ignored or misconceived:

I am not unmindful that "[i]n reviewing the decisions of trial judges in all cases . . . it is important that the appellate court remind itself of the narrow scope of appellate review" with respect to factual matters (Van de Perre v. Edwards, 2001 SCC 60, [2001] 2 S.C.R. 1014, at para. 11; see also Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 46). When a question of mixed fact and law is at issue, the findings of a trial judge should be deferred to unless it is possible to extricate a legal error (Housen, at para. 37). Within this narrow scope of review, an appellate court may "reconsider the evidence" proffered at trial when there is a "reasoned belief that the trial judge must have forgotten, ignored or misconceived the evidence in a way that affected his [or her] conclusion" and thereby erred in law (Van de Perre, at para. 15). As I will now explain, Wedge J. ignored and misconceived evidence relevant to the question of materiality in a way that affected her conclusions. (Emphasis added) [page717]

[175] The court in Sharbern found that the trial judge failed to consider important factors in assessing whether the respondent developers had a conflict of interest relevant to a group of investors in a hotel. It stated, at para. 72:

The statutory disclosure requirements only oblige issuers to disclose certain prescribed information. Where the issuer's disclosure is challenged, the court must determine whether the omitted information was material in the context of the "total mix" of information made available to the investor. While Wedge J. considered some evidence in relation to materiality (i.e. the language and general circumstances surrounding the Hilton Disclosure Statement), she failed to consider other relevant evidence. For example, she rejected much of the evidence adduced by VAC as being irrelevant to the issue of the existence of a conflict of interest. There is no indication that she considered that evidence, as she was required to do, in assessing the materiality of the Compensation Differences. (Emphasis added)

[176] Similarly, in this case, as I will describe below, I conclude that the application judge's failure to consider relevant evidence constituted a palpable and overriding error.

Case law concerning the applicability of the saving provisions

[177] In Sheehan v. Hart, [1993] O.J. No. 1726, 15 M.P.L.R. (2d) 311 (Gen. Div.), after noting, at para. 11, that "[t] here is a very high standard on public officials to conduct official business in an unreproachable manner", Crane J. went on to state the following, at para. 14, that a councillor must act in utmost good faith, even if she or he commits an error:

In order to establish an error in judgment under this section it is necessary for the respondent to proceed with good faith as to that judgment. A Councillor must be honest, forthright and open, acting in complete good faith. However, the courts do not require perfection of conduct. The conduct is to be judged as exercised by a human being with the understanding that human beings, however honest and good intentioned, may err.

[178] MacKinnon J. in Jafine v. Mortson (1999), 1999 14775 (ON SC), 43 O.R. (3d) 81, [1999] O.J. No. 971 (C.J.) commented on the meaning of an "error in judgment" for the purpose of the MCIA, at para. 31, again requiring good faith:

By the legislature's use of the term "error in judgment" in the Act, I attribute to that phrase the collective meaning of honesty, done in good faith, without fraud or deceit or collusion and involving complete frankness.

[179] In Campbell v. Dowdall, [1992] O.J. No. 1841, 12 M.P.L.R. (2d) 27 (Gen. Div.), Rutherford J. again reiterates the [page718] theme of "honest frank conduct done in good faith" to be an error of judgment triggering the saving provisions, at pp. 10-11 (QL):

In one sense, every contravention of a statute based on deliberate action can be said to involve an error in judgment . . . The purpose of this second branch of the saving provision in subsection 10(2) of the Act must be to exonerate some of the errors in judgment which underlie contraventions of the Act, but obviously not all of them. The Legislature must have intended that contraventions of s. 5 which result from honest and frank conduct, done in good faith albeit involving erroneous judgment, should not lead to municipal council seats having to be vacated. Municipal councils require the dedicated efforts of good people who will give their time and talent for the public good. What is expected and demanded of such public servants is not perfection, but it is honesty candour and complete good faith. (Emphasis added)

[180] The case law makes it clear that the standard expected of our elected officials is high -- that is of honestly, candor and utmost good faith. However, the standard is not perfection if an error in failing to disclose a conflict of interest is made by inadvertence or by reason of an error in judgment.

Review of the relevant facts

[181] The application judge after reviewing the written record made certain findings of fact, which I agree with, having reviewed the same record. He stated:

-- "I accept that Mr. Tuchenhagen was open with Realty Services Division about his interest in the property" (para. 78).

-- "There is no evidence that Mr. Tuchenhagen acted in bad faith" (para. 80).

-- "The City suffered no loss" (para. 80).

-- "There was no public policy prohibiting Mr. Tuchenhagen from bidding on real estate declared surplus to the City's needs" (para. 80).

-- "There was no interference with the public tender process" (para. 80).

-- "Mr. Tuchenhagen has given the City 12 years of public service" (para. 80).

[182] Further, the application judge accepted the cross- examination of the appellant that he had obtained a letter several years ago from the City solicitor that Council members were not prohibited from participating in public tenders of real estate. [page719] The transcript of the cross-examination of the appellant confirms that his company had in the past participated and purchased property in tax sales. He had not before placed a bid on property sold by public tender.

[183] Notwithstanding these positive findings of fact, the application judge concluded that the defence of inadvertence was not available to the appellant and that by expressing an interest in the property by e-mail and making an appointment to view the property, the applicant was reckless or wilfully blind to the question of conflict.

[184] Respectfully, these conclusions do not appear consistent with his own findings of fact. As well, the application judge reached these conclusions, without considering what I consider to be relevant material undisputed evidence as to whether the saving provision should apply, including

-- The appellant did disclose a conflict of interest at the first opportunity when he perceived that he was in a position of a conflict of interest in the meeting of July 29, 2008. This conflict of interest was declared by the appellant in the first meeting after he had submitted a bid to purchase the property through his company in the public tender process and before he knew the results.

-- The application judge failed to consider the important context of this dispute as an unpleasant disagreement between adjoining property owners arising months after the sale of the property to the appellant's company. The appellant's worker inadvertently cut off hydro to the respondent's side of the building, resulting in a verbal standoff followed by these proceedings.

-- No City staff were pursuing this application as a breach of conflict of interest provisions. To the contrary, after receiving the e-mail of July 2, 2008, Ms. Lacey confirmed independently that there was no conflict of interest in a council member submitting a bid for the property being sold by public tender.

-- The record of what occurred at the various meetings was not complete and the City did not appear to follow its own by- law.

-- The respondent had initiated this proceeding for financial gain. [page720]

[185] If the appellant had an indirect pecuniary interest on July 21, 2008 (which is not my conclusion), then this extraordinarily broad interpretation of what constitutes an indirect pecuniary interest appears to be without precedent and takes the conflict provisions to new heights. This extremely broad, novel interpretation of the scope of the MCIA, which is a penal statute, should also be a factor in determining whether the saving provisions should apply.

Standard of review for the application of the savings provision

[186] The application of the savings provision to the facts of this case is a question of mixed law and fact which requires an interpretation of the evidence as a whole, as well as social and political context. Therefore, it ought to be reviewed on the standard in the standard of whether there is a palpable and overriding error is found in the application judge's reasons (Housen, at para. 36). As discussed above, failure to consider important evidence in reaching a conclusion may constitute a palpable and overriding error.

Conclusion for the application of the savings provision

[187] Respectfully, I conclude that the undisputed facts, including the facts that were not considered by the application judge, cannot support the conclusion that the appellant's conduct was reckless or wilfully blind to the question of conflict in the meeting of July 21, 2008.

[188] I also find that the conclusion that a reasonable and fair-minded member of the public knowing all of the facts would not accept the appellant's evidence that the failure to declare a conflict was an error of judgment within the meaning of the MCIA cannot be supported by the evidence.

[189] I conclude that if a broad interpretation of "indirect pecuniary interest" is adopted, as suggested by the application judge and the majority of this court, then in light of the application judge's failure to consider all of the undisputed facts of this case, his decision not to apply the savings provision constitutes an overriding and palpable error and should be reversed.

[190] In the undisputed facts of this case, the only possible reasonable conclusion was that the appellant's conduct was through inadvertence, or was an error in judgment. Therefore, I would apply s. 10(2) of the MCIA, and would set aside the penalty of preventing the appellant from seeking public office for the period of four years.

Appeal dismissed.