French v. Township of Springwater, 2018 ONSC 94

CITATION: French v. Township of Springwater, 2018 ONSC 94

DIVISIONAL COURT FILE NO.: DC-16-542-JR

DATE: 20180116

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

S. N. Lederman, A.M. Molloy and M.G. Quigley, JJ.

BETWEEN:

WILLIAM FRENCH

Applicant

– and –

TOWSHIP OF SPRINGWATER COMPLIANCE AUDIT COMMITTEE, THE COPORATION OF THE TOWN OF SPRING WATER and DANIEL McLEAN

Respondents

COUNSEL:

Renatta Austin, for the Applicant

Jack B. Siegel, for the Respondent Daniel McLean

Jody E. Johnson, for the Respondent Township of Springwater Compliance Audit Committee

Harold Elston, for the Township of Springwater

HEARD: December 18, 2017

MOLLOY J.

REASONS FOR DECISION

A. INTRODUCTION

[1] The applicant, William French is the Mayor of the Township of Springwater. He seeks judicial review of the October 23, 2015 decision of the Township of Springwater’s Compliance Audit Committee in relation to his election spending. In the subject decision, the Committee chose not to act on an audit report received from Grant Thornton LLP, and instead appointed Froese Forensic Partners Ltd. to conduct a second audit, which the Committee referred to as a forensic audit.

[2] Mr. French submits that the Committee acted outside its jurisdiction by refusing to consider the report of Grant Thornton LLP and lacked jurisdiction to order a second audit. Further, he submits that ordering a “forensic audit” is beyond the powers of the Committee as the legislation refers only to a “compliance” audit. Alternatively, Mr. French argues that if there was jurisdiction to make such orders, they should nevertheless be quashed as being unreasonable. Finally, Mr. French seeks a declaration that the term of the Committee has now expired and it lacks authority to do anything further, including in relation to the original Grant Thornton LLP audit report.

[3] Prior to the commencement of argument, this Panel advised the parties that they should address the issue of prematurity, which they did. However, we heard full argument on all issues raised. The Panel also raised questions with respect to standing, as referred to below. At the conclusion of argument, judgment was reserved.

[4] For the reasons that follow, this application is dismissed for prematurity. However, because some of the issues raised have implications going forward, they have been addressed in this decision – notably, the term of the Committee, whether the auditor can be a firm rather than an individual, and whether the audit ordered can be specified to be “forensic.”

B. LEGISLATIVE FRAMEWORK

[5] The Municipal Elections Act, 1996[^1] (“the Act”) governs many aspects of municipal elections, including limits on election spending and ensuring compliance with those limits. Municipal councils are required to establish an Election Compliance Audit Committee before October 1 of an election year.[^2] The committee is required to have not fewer than three and not more than seven members, and cannot include employees or officers of the municipality, members of the municipal council, or persons who are candidates in the election for which the committee was established.[^3] There are no other qualifications specified.

[6] The municipality in question is required to pay “all costs in relation to the committee’s operation and activities” and the clerk of the municipality is required to provide administrative support and to carry out anything necessary to implement decisions of the committee.[^4]

[7] A person who is elected to office during a regular election is required to file, by December 31 of the election year, prescribed forms setting out a financial statement as to election expenses and contributions and an auditor’s report.[^5]

[8] An elector may apply to the committee to have a compliance audit conducted of a successful candidate’s election spending. The relevant section provides:

81(1) An elector who is entitled to vote in an election and believes on reasonable grounds that a candidate has contravened a provision of this Act relating to election campaign finances may apply for a compliance audit of the candidate’s election campaign finances.

[9] The application is required to be in writing to the municipal clerk and to set out the grounds for believing there has been a contravention.[^6] There are various deadlines for filing the application depending on a number of variables, but essentially it must be filed within 90 days after the financial statements of the successful candidate are filed.[^7] The clerk is required to convey the application to the committee within 10 days of receipt and the committee is then required to consider the matter within 30 days.[^8]

[10] At the initial stage, the committee decides merely whether to grant or reject the application. Granting an application merely means that the committee appoints “an auditor to conduct a compliance audit of the candidate’s campaign finances.”[^9] Whatever decision the committee makes at this stage, grant or reject, is subject to a right of appeal. That appeal is now to a judge of the Superior Court, but at the time the matter came before the Springwater Committee in this case, the appeal was to a judge of the Ontario Court of Justice. The relevant provisions state:

81(5) Within 30 days after receiving the application, the committee shall consider the application and decide whether it should be granted or rejected.

(6) The decision of the committee may be appealed to the Ontario Court of Justice within 15 days after the decision is made and the court may make any decision the committee could have made.[^10]

[11] Only auditors licensed under the Public Accounting Act, 2004 or prescribed persons are eligible to be appointed.[^11] If the committee appoints an auditor, the auditor is “entitled to have access, at all reasonable hours, to all relevant books, papers, documents or things of the candidate and of the municipality” and has the powers of a commission under Part II of the Public Inquiries Act.[^12] Those broad powers include the power to summons witnesses to give evidence and produce documents, in default of which they may be found in contempt upon application to the courts.

[12] The Act stipulates that the auditor “shall promptly conduct an audit of the candidate’s election campaign finances to determine whether he or she has complied with the provisions of this Act relating to election campaign finances and shall prepare a report outlining any apparent contravention by the candidate.”[^13] The Act is silent as to the extent to which the auditor is required to consult or the nature and extent of the audit procedure other than that it is directed to a determination of whether there has been any apparent contravention. The report is required to be submitted to the municipal clerk, the candidate and the applicant.[^14]

[13] Upon receipt of the report, the committee is required to consider it within 30 days. The legislation in force at that time provided as follows at s. 81(14):

(14) The committee shall consider the report within 30 days after receiving it and may,

(a) if the report concludes that the candidate appears to have contravened a provision of this Act relating to election campaign finances, commence a legal proceeding against the candidate for the apparent contravention;

(b) if the report concludes that the candidate does not appear to have contravened a provision of this Act relating to election campaign finances, make a finding as to whether there were reasonable grounds for the application.

[14] The municipality is required to pay the costs of the audit. However, based on the Act as it existed at the time, if the report indicates that there was no apparent contravention and the committee finds that there were no reasonable grounds for the application, the council or local board is entitled to recover the auditor’s costs from the applicant.[^15] Subsequently, the legislation was amended to remove the power of the committee to find that there were no reasonable grounds for the application, thus triggering the applicant’s liability to recover the cost of the audit.

[15] The Act is silent as to any power in the committee to commence legal proceedings in the absence of any findings of contravention by the auditor. Likewise, there is no provision with respect to follow-up reports or what the committee may do if the first audit is thought to be unsatisfactory for some reason. Unlike the statutory right of appeal from a decision by the committee at the initial stage as to whether or not to order an audit, the Act provides for no appeal from a decision to commence legal proceedings, or to not do so. However, the Act specifically preserves the right of any person to bring proceedings in relation to a contravention of the election finance provisions of the Act. Section 81(17) states:

This section does not prevent a person from laying a charge or taking any other legal action, at any time, with respect to an alleged contravention of a provision of this Act relating to election campaign finances.

C. FACTUAL BACKGROUND

[16] On October 27, 2014, the applicant William French was elected Mayor of the Township of Springwater. As required by the legislation, he filed an audited financial statement as to his campaign finances. On June 24, 2015, within the prescribed period, the respondent Dan McLean filed an application seeking the appointment of an auditor to determine whether Mr. French had contravened the Act. The Application contained very specific allegations as to a number of suspected violations, the first one listed being the advantage Mr. French allegedly obtained from being a reporter with the Springwater News and favourable treatment he received from that newspaper with respect to free publication of letters of support, articles and letters to the editor, whereas other candidates had to pay for any space. Issues were also raised with respect to office rental, the cost of brochures/flyers, webpage/social media, travel costs, telephone/internet costs and contribution limits.

[17] The application was referred to the Committee that had been established under the Act. The Committee granted the application on July 21, 2015 and appointed Grant Thornton LLP to conduct a compliance audit. Neither party appealed from that decision.

[18] Grant Thornton prepared a draft Letter of Engagement and forwarded it to the Township. The letter was signed by the municipal clerk, on behalf of the Township on September 3, 2015. The Engagement letter was also signed by William French, under the heading “Acknowledged as at of the date first set forth above.”

[19] The Letter of Engagement set out the terms of the retainer, including specific reference to the financial statement filed by Mr. French and that the audit would be conducted under the terms of s. 81 of the Act. The letter stated, “Our audit will be conducted with the objective of our expressing an opinion on the [financial statement of Mr. French].” Immediately following that statement, was the following paragraph:

The audit will not be planned or conducted in contemplation of reliance by any third party or with respect to any specific transaction. Therefore, items of possible interest to a third party will not be specifically addressed and matters may exist that would be assessed differently by a third party, possibly in connection with a specific transaction.

[20] The Engagement Letter contained a section on the responsibilities of the auditor, including that the auditor would “perform the audit in accordance with Canadian generally accepted auditing standards.” There is no reference to interviewing third parties or obtaining documents from anyone other than the municipality and the candidate. Under the heading “Reporting,” the Letter stated, “Unless unanticipated difficulties are encountered, our report will be substantially in the following form.” This was followed by a seven-paragraph standard form type audit report, which included the statements that:

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In our opinion, the financial statement present (sic) fairly, in all material respects, the income and expenses of the candidate Bill French for the period March 3, 2014 to October 27, 2014, in accordance with the financial reporting provisions of Section 78 of the Municipal Elections Act.

[21] However, the Engagement Letter went on to note that the form and content of the ultimate report “may need to be amended in light of our audit findings” and that if the auditor found any apparent contraventions of the Act, details of those findings would be reported.

[22] The Engagement Letter was prepared as if it would be signed on behalf of Grant Thornton by Melanie Dugard, CPA, CA, Principal. However, the actual signature reads “Grant Thornton LLP.”

[23] The audit was conducted during the first few weeks of September 2015. In the course of the audit, Mr. French and his wife were interviewed. The auditor’s report was prepared, dated September 25, 2015. Mr. McLean was not consulted during this process. On Monday, September 28, 2015, the municipal clerk advised Mr. McLean that the report would be issued at the end of that week. On September 29, 2015, Mr. McLean’s counsel delivered written submissions to the auditor. On September 30, 2015, the auditor’s report was issued, dated September 25, 2015.

[24] The Audit Report was three pages long and was signed by “Grant Thornton LLP.” It is essentially in the same format as the draft report attached to the Engagement Letter, except that five instances of apparent non-compliance were found and were listed in Note 1 attached to the report. The instances of non-compliance were:

(i) Various campaign expenses paid by Mr. French’s spouse were properly shown on the financial statement, but were paid out of her bank account, rather than out of the campaign account itself as required by the Act.

(ii) A vendor contributed 10 hours of time on website management. The financial statement failed to record the value of this contribution, which would be $500 plus HST.

(iii) An expense of $300 plus HST for website hosting was not reported in the financial statement.

(iv) Somebody contributed 300 wooden stakes to hold up election signs. The financial statement failed to record their value, which was $375 plus HST.

(v) Contributions from a corporation were included in the financial statement, but placed incorrectly in Table 3, rather than Table 4 as required.

[25] Thus, there were two instances of irregularities that affected nothing of substance, and three expenses not reported, which totaled $1175 plus HST. The addition of those expenses did not put Mr. French above the spending limit for his campaign.

[26] The website issue was one of the matters raised in the initial application by Mr. McLean. The audit report does not specifically reference any of the other matters he raised then, or in the written submissions provided to the auditor.

[27] The Committee met on October 23, 2015 to consider the Grant Thornton report. The meeting was conducted in public. Written submissions were received as well as oral submissions by counsel for Mr. French and counsel for Mr. McLean. Melanie Dugard, a Principal of Grant Thornton with responsibility for the report, addressed the Committee. She advised the Committee that Grant Thornton’s “verification of income and expenses was limited to and reliant on the information provided by the election candidate.”[^16] She acknowledged that Grant Thornton received additional information after the report was completed and that they considered that information, but even if they had the information earlier, it would not have changed the report. She reviewed the items of non-compliance referred to in the report and then stated:

We were not required or asked to conduct a forensic audit, nor did we complete one. If the Committee would prefer a forensic audit be completed, we have a forensic team available that would be pleased to conduct an engagement of that type.

D. THE COMMITTEE DECISION UNDER REVIEW

[28] The Committee retired to consider its decision. Upon returning, the Committee advised that it would be appointing another auditor, and that this would be a forensic audit. The Committee Members expressed concerns about: (1) their expectation that the Grant Thornton audit would have reviewed all of the material that was presented to the Committee previously, on the basis of which the Committee had ordered the audit;[^17] (2) the fact that Grant Thornton prepared a draft report stating that they had sufficient evidence to provide a basis for an audit opinion before reviewing any evidence;[^18] the fact that Mr. French had signed the Engagement Letter, particularly in light of the requirements of fairness and transparency for a public body dealing with public individuals and the “optics” of the situation;[^19] and, the fact that the report was signed by Grant Thornton LLP rather than by an individual who is a licensed auditor.[^20]

[29] There was a tender process to choose a new auditor. On November 11, 2015, the Committee reported that it had appointed Froese Forensic Partners Ltd. to carry out a forensic audit of Mr. French’s election campaign finances.

E. HISTORY OF THIS PROCEEDING

[30] On November 12, 2015, upon receiving notice of the appointment of Froese Forensic Partners, counsel for Mr. French advised the Committee that her client took the position the Committee had no power to make such an appointment and that Mr. French would not be participating in a second audit without a court order directing him to do so.

[31] On October 23, 2015, Mr. French commenced the within application seeking to quash the decision of the Committee appointing a new auditor. The named respondents were the Committee, the Township of Springwater, and Dan McLean.

[32] On July 18, 2016, Mr. McLean commenced an application in this Court relating to the same matters and seeking, inter alia, to quash the report of Grant Thornton. The named respondents were the Committee, the Township of Springwater, William French, and Grant Thornton LLP.

[33] Counsel representing Grant Thornton LLP and the Township of Springwater brought a motion seeking to have the McLean Application dismissed as against Grant Thornton. That motion was argued before Kiteley J. on January 5, 2017 and was granted by her for written reasons issued January 31, 2017. Essentially, Kiteley J. found that Grant Thornton was not exercising a “statutory power of decision” within the meaning of the Judicial Review Procedure Act and was therefore not subject to judicial review by this Court. The unsuccessful party, Mr. McLean was ordered to pay costs of $15,000 to Grant Thornton and $1500 to Mr. French. Kiteley J. made no findings with respect to any other issues raised in the McLean Application.[^21]

[34] Thereafter, counsel for Mr. McLean advised all parties and the Court that the other positions he had taken in the McLean Application would simply be asserted in response to the within application brought by Mr. French. Accordingly, the balance of the McLean Application could simply be dismissed without costs.

F. PREMATURITY

General Principles

[35] Prior to commencement of the argument, the Panel alerted the parties to a concern about the appropriateness of this Court hearing the matters raised at this stage of the administrative tribunal process. This was not an issue raised by any of the parties in their materials, but they were well aware of the issue as the issue of prematurity had been raised before the Committee itself in 2015. We gave the parties an opportunity to reflect on the issue and to make submissions on this issue before us. However, we also heard full argument on the merits so as not to delay the proceeding even longer in the event we did not dismiss the application as being premature.

[36] Judicial review is a discretionary remedy and is rarely granted at an interlocutory or interim stage of a proceeding. The parties are not entitled to a remedy from this court merely because they have agreed to submit their arguments to the court for a decision. There are broader policy issues involved in permitting judicial review applications of interlocutory administrative decisions – issues that go beyond the interests of the particular parties in a particular case.

[37] As this court noted in Ackerman v. Ontario Provincial Police, the reluctance of the courts to intervene in administrative proceedings at a preliminary stage is “rooted in public policy, respect for Parliamentary intention, and deference to administrative tribunals.”[^22] This is not a recently developed principle. It flows from consistent precedent going back decades. One of the leading decisions on point is the 1979 decision of the Supreme Court of Canada in Harelkin v. University of Regina.[^23] In that case a university student had been expelled and his appeal from that decision was dismissed by the university council, after hearing only from the university. The student had a further right of appeal to the University Senate. Instead, he sought judicial review from the courts. Ultimately, the case was heard by the Supreme Court of Canada, which upheld the decision of the Saskatchewan Court of Appeal that judicial review remedies are discretionary and will not be granted where there is a convenient alternative remedy that the applicant failed to take.

[38] To similar effect is the 1988 Divisional Court decision in Roosma v. Ford Motor Company Co. of Canada Ltd. in which the court declined to hear appeals from interim rulings made by a human rights Board of Inquiry. In determining that the statutory right of appeal from a “decision or order” of a Board of Inquiry applied only to final decisions, Reid J. (under the subject heading “Delay is at odds with the rationale for the appointment of tribunals”) held:

The traditional rationale for the establishment of administrative tribunals is cheapness, expedition, and expertise. The objectives are freedom from what is popularly seen as the undue delay and cost of court proceedings and the inexpertise of judges trained in the law but not in matters of social improvement. Why then, would the legislature build into the procedure for an inquiry under the Ontario Human Rights Code, 1981, a stumbling block that could bring everything to a halt at any party's whim? If any party can appeal any ruling at any time, and freeze the inquiry until all appeals had been disposed of, the prospect of speedy and inexpensive resolution of human rights complaints becomes an illusion, if not a nightmare. I do not suggest that the appeals before us were launched simply for the purpose of achieving delay, but that has been their effect. The proposal of the union on this motion could have the effect of stultifying the Code. If one appeal failed a second could be launched when the, possibly forced, opportunity arose, and another thereafter, and so on. The result would be stalemate.[^24]

[39] Although that case involved the interpretation of appeal rights, Reid J. went on to state that the decision would be the same if the parties had sought judicial review rather than bringing an appeal, absent extraordinary circumstances such as a fatal jurisdictional error. He held:

Notwithstanding their reluctance to intervene in the proceedings of tribunals prior to their completion courts will do so in order to avoid wasting time and money. Thus, if it appears at the outset that a proceeding in a tribunal will be fatally flawed, a means exists by way of judicial review to challenge it. That is so even where an appeal is provided.[^25]

[40] I cite these two older decisions to demonstrate the extent to which these principles are well-established in our jurisprudence. These decisions have been cited by other courts over the years in scores of other cases. Indeed, the importance of refusing to hear premature applications is even more pronounced since the Supreme Court of Canada’s ground-breaking 2008 decision in Dunsmuir v. New Brunswick,[^26] emphasizing the critical role curial deference plays in the effective functioning of the administrative law system. That stance has not altered, and has perhaps even intensified, in subsequent decisions of that Court reinforcing the Dunsmuir principles.

[41] Counsel for Mr. French sought to distinguish the prematurity cases by arguing that issues of jurisdiction are an exception to the general rule and that this court should exercise its discretion in this case because the Committee acted outside its jurisdiction in ordering a second audit. I reject that argument for three reasons: (1) even for true questions of jurisdiction, the prematurity principle may still result in the court refusing to exercise its discretion to grant a remedy at an interlocutory stage; (2) the issue in this case is not a true question of jurisdiction; and (3) in any event, Mr. French also had an appeal right which he failed to exercise. I will deal with these points in the order I have listed them.

Jurisdictional errors are not automatic grounds for early judicial intervention

[42] First, there is dicta in some of the cases that exceptions may be made where the tribunal has committed a fatal error of jurisdiction.[^27] However, even in those circumstances, the court will not always grant a remedy at an early stage. This issue arose in Volochay v. College of Massage Therapists of Ontario,[^28] in which a massage therapist brought judicial review proceedings to quash decisions of his professional body’s complaints committee and executive committee ordering a full investigation into his practice after a complaint of sexual impropriety. At both stages the therapist was not given notice to which he was entitled in breach of principles of natural justice as well as the governing statute itself. The reviewing judge in first instance found this to be a true question of jurisdiction and quashed the decisions. On appeal, the Ontario Court of Appeal found that this was an error in principle and that the breach of natural justice was not a “true question of jurisdiction.” However, the Court then went on to find that even if there had been a true breach of jurisdiction, it was inappropriate for the court to intervene at this stage. Laskin J.A. held (at para. 63) that “neither a breach of natural justice nor a question of true jurisdiction entitles an aggrieved party to automatic access to the courts.” He then noted that earlier case law providing that questions of jurisdiction are a basis for intervention had been overtaken by subsequent Supreme Court of Canada decisions. He concluded this point by holding (at para. 67):

Even a true question of jurisdiction is not, by itself, an exceptional circumstance justifying judicial review before administrative proceedings are completed. A “jurisdictional” ground of review does not, standing alone, deprive a reviewing court of its discretion to refuse relief.

[43] The Ontario Court of Appeal in Volochay referred with approval to the decision of the Federal Court of Appeal in C. B. Powell Ltd. v. Canada (Border Services Agency) in which Stratas J. held (at para. 33):

Courts across Canada have enforced the general principle of non-interference with ongoing administrative processes vigorously. This is shown by the narrowness of the “exceptional circumstances” exception. Little need be said about this exception, as the parties in this appeal did not contend that there were any exceptional circumstances permitting early recourse to the courts. Suffice to say, the authorities show that very few circumstances qualify as “exceptional” and the threshold for exceptionality is high: see, generally, D.J.M. Brown and J.M. Evans, Judicial Review of Administrative Action in Canada (looseleaf) (Toronto: Canvasback Publishing, 2007) at 3:2200, 3:2300 and 3:4000 and David J. Mullan, Administrative Law (Toronto: Irwin Law, 2001) at pages 485-494. Exceptional circumstances are best illustrated by the very few modern cases where courts have granted prohibition or injunction against administrative decision-makers before or during their proceedings. Concerns about procedural fairness or bias, the presence of an important legal or constitutional issue, or the fact that all parties have consented to early recourse to the courts are not exceptional circumstances allowing parties to bypass an administrative process, as long as that process allows the issues to be raised and an effective remedy to be granted: see Harelkin, supra; Okwuobi, supra at paragraphs 38-55; University of Toronto v. C.U.E.W, Local 2 (1988), 1988 4757 (ON SC), 52 D.L.R. (4th) 128 (Ont. Div. Ct.). As I shall soon demonstrate, the presence of so-called jurisdictional issues is not an exceptional circumstance justifying early recourse to courts.

[Emphasis added]

And further, at paras 45-46:

It is not surprising, then, that courts all across Canada have repeatedly eschewed interference with intermediate or interlocutory administrative rulings and have forbidden interlocutory forays to court, even where the decision appears to be a so-called “jurisdictional” issue: see e.g., Matsqui Indian Band, supra; Greater Moncton International Airport Authority, supra at paragraph 1; Lorenz v. Air Canada, [2000] 1 F.C. 452 (T.D.) at paragraphs 12 and 13; Delmas, supra; Myers v. Law Society of Newfoundland (1998), 1998 18110 (NL CA), 163 D.L.R. (4th) 62 (Nfld. C.A.); Canadian National Railway Co. v. Winnipeg City Assessor (1998), 1998 5028 (MB CA), 131 Man. R. (2d) 310 (C.A.); Dowd v. New Brunswick Dental Society (1999), 1999 32830 (NB CA), 210 N.B.R. (2d) 386, 536 A.P.R. 386 (C.A.).

I conclude, then, that applying the “jurisdictional” label to the ruling of the President of the CBSA under subsection 60(1) of the Act in this case changes nothing. In particular, applying the “jurisdictional” label to the President’s ruling did not permit C.B. Powell to proceed to Federal Court, bypassing the remainder of the administrative process, namely the appeal to the CITT under subsection 67(1) of the Act.

[44] Thus, merely labelling the decision of the Committee in this case as a jurisdictional error does not provide a basis for this court exercising its jurisdiction to intervene. Even if this was a question of true jurisdiction, that, by itself, would not constitute exceptional circumstances warranting a remedy at this stage.

The issue here is not a true question of jurisdiction

[45] Applicants in judicial review proceedings frequently seek to characterize issues as jurisdictional, either to justify judicial intervention or to take advantage of a correctness standard of review. Courts however, particularly in the past two decades have become increasingly wary of labelling a question as going to jurisdiction. In C.U.P.E. v. N.B. Liquor Corporation, the Supreme Court of Canada (per Dickson J.) unanimously held, “The courts, in my view, should not be alert to brand as jurisdic­tional, and therefore subject to broader curial review, that which may be doubtfully so.”[^29]

[46] The Supreme Court of Canada in Dunsmuir again emphasized this point, stating:

Administrative bodies must also be correct in their determinations of true questions of jurisdiction or vires. We mention true questions of vires to distance ourselves from the extended definitions adopted before CUPE. It is important here to take a robust view of jurisdiction. We neither wish nor intend to return to the jurisdiction/preliminary question doctrine that plagued the jurisprudence in this area for many years. “Jurisdiction” is intended in the narrow sense of whether or not the tribunal had the authority to make the inquiry. In other words, true jurisdiction questions arise where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter. … We reiterate the caution of Dickson J. in CUPE that reviewing judges must not brand as jurisdictional issues that are doubtfully so.[^30]

[47] In cases subsequent to Dunsmuir, the Supreme Court clarified further what will constitute a true question of jurisdiction. In Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association,[^31] Rothstein J. (writing for the majority) held that “true questions” of jurisdiction would be extremely rare, noting that since Dunsmuir the Court had not identified a single case in which there had been one. He held as follows (at para. 34):

The direction that the category of true questions of jurisdiction should be interpreted narrowly takes on particular importance when the tribunal is interpreting its home statute. In one sense, anything a tribunal does that involves the interpretation of its home statute involves the determination of whether it has the authority or jurisdiction to do what is being challenged on judicial review. However, since Dunsmuir, this Court has departed from that definition of jurisdiction. Indeed, in view of recent jurisprudence, it may be that the time has come to reconsider whether, for purposes of judicial review, the category of true questions of jurisdiction exists and is necessary to identifying the appropriate standard of review. However, in the absence of argument on the point in this case, it is sufficient in these reasons to say that, unless the situation is exceptional, and we have not seen such a situation since Dunsmuir, the interpretation by the tribunal of “its own statute or statutes closely connected to its function, with which it will have particular familiarity” should be presumed to be a question of statutory interpretation subject to deference on judicial review.

[Emphasis added]

[48] In Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd.,[^32] a taxpayer challenged the City of Edmonton’s assessment that the property value of its shopping centre was $31 million, and applied to the Assessment Review Board to have it decreased to $22 million. In response, the City of Edmonton took the position that it had made a mistake in the assessment and that it should have been $45 million. The Assessment Review Board increased the assessment to $41 million. The taxpayer appealed, arguing that the Assessment Review Board only had jurisdiction to decrease the assessment or confirm it and therefore acted outside its jurisdiction by increasing it. A judge of the Court of Queen’s Bench ruled that this was a question of true jurisdiction, quashed the decision, and remitted it for a new hearing. On appeal, the Alberta Court of Appeal ruled that this was not a true question of jurisdiction, but that a correctness standard applied because there was a statutory right of appeal. It upheld the decision below. On further appeal, the Supreme Court of Canada agreed that this was not a true question of jurisdiction, but ruled a reasonableness standard applied, and that the decision was reasonable. On the issue of whether this was a true question of jurisdiction, Abella J. (writing for the majority) held at para. 26:

This category is “narrow” and these questions, assuming they indeed exist, are rare (Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015, SCC 57, [2015] 3 S.C.R. 615, at para. 39; Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654, at paras. 33-34). It is clear here that the Board may hear a complaint about a municipal assessment. The issue is simply one of interpreting the Board’s home statute in the course of carrying out its mandate of hearing and deciding assessment complaints. No true question of jurisdiction arises.

[49] True questions of jurisdiction can arise where there is an issue of competing jurisdiction as between two tribunals. That is not this case. In this case, the Committee was acting squarely within its own statute and considering whether to order a second audit on the grounds that it was not comfortable with the appearance of impartiality and the thoroughness of the first one. In doing so, it was interpreting its own statute and determining whether it had the authority to undertake the action it did. This is precisely within that category of questions determined by the Supreme Court of Canada in Alberta Teachers not to be a true question of jurisdiction. Likewise, the applicant here argues that the Committee had only two options under its enabling legislation and chose a third course of action outside its jurisdiction – precisely the issue found in Edmonton East Shopping Centres not to be a true question of jurisdiction.

[50] I conclude that the Committee in this case was interpreting its home statute in determining whether it would act on the Grant Thornton audit it had received, or whether it was within its mandate to order a new audit to be done as a forensic audit. Having heard submissions from counsel for the parties concerned and considered the matter, the Committee chose to order a second audit. That is a question squarely within its jurisdiction, and is entitled to deference. Also, the nature and extent of the audit is not a defined term in the Act. Grant Thornton were of the view that they were carrying out a standard corporate type audit and that they had not been requested to perform a forensic audit. It is clear from the powers given to an auditor in the Act, including the same powers to summons witnesses and documents as for an inquiry under the Public Inquiries Act, that the Act at least contemplates an investigative type audit, not limited by the materials provided by the candidate. It was open to the Committee to conclude that a forensic audit was appropriate and its determination to order one is a question within its authority and not an error in jurisdiction. Indeed, though not squarely on point, there is some judicial authority for the proposition that the nature of the compliance audit is investigatory.[^33]

[51] I note as well that counsel for the applicant fairly conceded in her written and oral submissions that the Committee must, by implication, have some jurisdiction to go beyond the two options listed in s. 81(14) of the Act, citing R. v. 974649 Ontario Inc., in which the Supreme Court of Canada held as follows:

It is well established that a statutory body enjoys not only the powers expressly conferred upon it, but also by implication all powers that are reasonably necessary to accomplish its mandate: Halsbury’s Laws of England (4th ed. 1995), vol. 44(1), at para. 1335. In other words, the powers of a statutory court or tribunal extend beyond the express language of its enabling legislation to the powers necessary to perform its intended functions: Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission), 1989 67 (SCC), [1989] 1 S.C.R. 1722.

Consequently, the function of a statutory body is of principal importance in assessing whether it is vested with an implied power to grant the remedy sought. Such implied powers are found only where they are required as a matter of practical necessity for the court or tribunal to accomplish its purpose: National Energy Board Act (Can.) (Re), 1986 4033 (FCA), [1986] 3 F.C. 275 (C.A.). While these powers need not be absolutely necessary for the court or tribunal to realize the objects of its statute, they must be necessary to effectively and efficiently carry out its purpose: Interprovincial Pipe Line Ltd. v. National Energy Board, 1977 3163 (FCA), [1978] 1 F.C. 601 (C.A.); Bell Canada, supra; Macaulay and Sprague, supra, vol. 4, at p. 29-2. This emphasis on the function of a court or tribunal, in discerning the powers with which the legislature impliedly endowed it, accords with the functional and structural approach to the Mills test set out above.[^34]

[52] Counsel for the applicant posited situations where the Committee’s appointment of a new auditor to conduct a second audit might fall within these implicit powers, including where an auditor fails to deliver a report, or does not observe common accounting standards in conducting the audit. I agree these are good examples of where the Committee would have not only a power but a duty to carry out its mandate by appointing a second auditor. However, with respect, there is a very short distance between a determination that an initial audit is not acceptable because it did not follow standard accounting standards and the determination here that the audit was not investigative as had been the intention of the Committee in the first place and that the “optics” were concerning given irregularities in the form of the Engagement Letter, which was not done with the oversight of the Committee. It is hard to see how the former is a necessary extension of jurisdiction and the latter is a complete absence of jurisdiction. The only difference between the two is one of degree. In each case, the Committee would be deciding whether the initial audit was acceptable and whether it was necessary to have a second audit in order to properly carry out its mandate under the Act.

[53] Accordingly, I find that the question upon which judicial review is now sought is one that is within the jurisdiction of the Committee, exercising its core functions. This does not constitute the kind of exceptional circumstances that would justify the premature intervention of this court at an interlocutory stage of the proceeding.

The existence of an adequate alternative remedy

[54] In this case there is an additional basis for refusing to intervene. The decision of the Committee to appoint an auditor is subject to an automatic right of appeal, at the time in question, to a judge of the Ontario Court of Justice.[^35] Mr. French could have taken that avenue, but failed to do so in a timely way, or at all. Instead he simply refused to cooperate with the audit, and then opted to seek relief in this court, a far more time-consuming process than the right of appeal in the statute. In my view, this is a bar to his application seeking relief in this court.[^36]

This is not an appropriate case in which to intervene

[55] In determining whether to exercise a discretion to intervene, it is relevant for the court to take into account the context and surrounding circumstances.[^37]

[56] The Election Compliance Audit Committee performs a vital role under the Act. It is required to be impartial and at arms-length from the municipality. The functions it performs protect the integrity of our electoral process, ensuring transparency and accountability of our elected officials in the election campaign process. The Act is a comprehensive scheme designed to operate efficiently and expeditiously, while at the same time maintaining public confidence in the system. Given the normal cycle of elections and terms in office, timeliness is of the utmost importance. In this context it is particularly important that the legislatively prescribed processes be permitted to run their course, before aggrieved parties seek the assistance of his court.

[57] It must also be noted that the Committee performs no adjudicative role. Rather, it is a gatekeeper. It may, for example decide not to commence legal proceedings for minor or trivial noncompliance with rules. However, it makes no determination as to right or wrong. In this situation, all the Committee did was request a second audit, to ensure that a thorough investigative process was undertaken, mindful that the first auditor did not consider its mandate to be an investigative or forensic one, aware that the first audit report did not address the concerns raised by the elector which were the basis for the auditor’s appointment, and concerned about public perceptions of fairness in light of irregularities. But for the refusal of Mr. French to cooperate and his application to this court, that audit would likely have been completed two years ago. The doctrine of prematurity was designed to avoid this very peril. Hearing the matter now on its merits would only serve to encourage those who seek to obfuscate and delay.

[58] In my view, it would be contrary to the interests of justice to exercise our discretion in hearing this judicial review proceeding. I would dismiss it as being premature. The process before the Committee should be permitted to run its course.

G. OTHER ISSUES RAISED

Standing

[59] This matter proceeded with four parties all filing factums on all of the substantive issues raised.

[60] In my view, the Corporation of the Township of Springwater was entitled to notice. However, it should have no partisan interest in the outcome, unless there was some issue such as excessive spending by the Committee that might have been of direct interest to the Township. No such issue was raised. Instead, the Township filed a factum allying itself with all of the positions taken by its mayor, Mr. French. I consider this to have been inappropriate. Even in the absence of the consent of the parties, I would have awarded no costs to the Township.

[61] The Committee is a proper party on judicial review. However, in my view, it misconceived its role before this court. It is perfectly appropriate for the Committee to take a position with respect to issues of jurisdiction, the interpretation of its home statute, the standard of review, and the like. However, except in exceptional circumstances, the Committee should not defend the merits of its own decision. Exceptional circumstances are typically found to exist where there is no opposing side (e.g. where an individual makes an application to a tribunal such as the Criminal Injuries Compensation Board and then seeks review of an unfavourable result), or where one of the parties is not represented by counsel and a key argument would otherwise not be made.

[62] Any analysis of this issue typically begins with the Supreme Court of Canada’s seminal decision in Northwestern Utilities Ltd. v. Edmonton (City), in which Estey J. held:

This appeal involves an adjudication of the Board's decision on two grounds both of which involve the legality of administrative action. One of the two appellants is the Board itself, which through counsel presented detailed and elaborate arguments in support of its decision in favour of the Company. Such active and even aggressive participation can have no other effect than to discredit the impartiality of an administrative tribunal either in the case where the matter is referred back to it, or in future proceedings involving similar interests and issues or the same parties. The Board is given a clear opportunity to make its point in its reasons for its decision, and it abuses one's notion of propriety to countenance its participation as a full-fledged litigant in this Court, in complete adversarial confrontation with one of the principals in the contest before the Board itself in the first instance.[^38]

[63] The stringency of this position has been relaxed somewhat over the years since 1978 when Northwestern was decided, largely in response to the increasing number and variety of administrative tribunals and the technical complexity of many of the areas in which they operate. However, the general principle remains that a tribunal ought not to compromise its neutrality and impartiality by taking an active position in opposition to one or more of the parties that appeared before it. Against that principle of tribunal impartiality, reviewing courts will balance the importance of having a fully informed adjudication of the issues before the court.[^39]

[64] The Supreme Court of Canada recently revisited this issue in Ontario (Energy Board) v. Ontario Power Generation Inc., holding as follows:

In accordance with the foregoing discussion of tribunal standing, where the statute does not clearly resolve the issue, the reviewing court must rely on its discretion to define the tribunal’s role on appeal. While not exhaustive, I would find the following factors, identified by the courts and academic commentators cited above, are relevant in informing the court’s exercise of this discretion:

(1) If an appeal or review were to be otherwise unopposed, a reviewing court may benefit by exercising its discretion to grant tribunal standing.

(2) If there are other parties available to oppose an appeal or review, and those parties have the necessary knowledge and expertise to fully make and respond to arguments on appeal or review, tribunal standing may be less important in ensuring just outcomes.

(3) Whether the tribunal adjudicates individual conflicts between two adversarial parties, or whether it instead serves a policy-making, regulatory or investigative role, or acts on behalf of the public interest, bears on the degree to which impartiality concerns are raised. Such concerns may weigh more heavily where the tribunal served an adjudicatory function in the proceeding that is the subject of the appeal, while a proceeding in which the tribunal adopts a more regulatory role may not raise such concerns.[^40]

[65] In my view, these factors do not support exercising our discretion to hear argument from the Committee on anything other than jurisdiction, the standard of review, and issues of interpretation of its home statute. The Committee is not a regulatory or highly specialized body, although it does have a public interest mandate. The Committee is a temporary one, serving only during the term of the municipal government elected during its mandate. There is no specified requirement of expertise, even though individual municipalities may decide to seek out members who are highly qualified. In any event, expertise and specialization attach to the tribunal itself, and not to any particular member who happens to occupy a position at any given time.[^41] The parties to this dispute, Mr. French and Mr. McLean, were represented by counsel well able to advance all relevant arguments. Depending on the result in this court, those parties would be back before the Committee for a decision on whether or not legal proceedings should be commenced.

[66] Accordingly, in the case before us, we did not permit the Committee to make any oral submissions on the reasonableness of its decision.

Auditor: Individual or Firm

[67] In his material and in argument before this court, counsel for Mr. McLean submitted that the audit report from Grant Thornton LLP was not a valid report because only a licensed individual and not an accounting firm can be appointed as auditor under the Act. Grant Thornton is a limited liability partnership of licensed individuals, but it is not, in its own right, licensed.

[68] Subsection 81(8) of the Act states that “Only auditors licensed under the Public Accounting Act, 2004 are eligible” to be appointed to conduct a compliance audit. The Public Accounting Act draws a distinction between an individual and a corporation in this regard. As a limited liability partnership, Grant Thornton LLP is neither. Section 3(1) of the Public Accounting Act, 2004 states:

3 (1) A person who is engaged in the practice of public accounting shall,

(a) in the case of an individual, be licensed in accordance with this Act; and

(b) in the case of a professional corporation, hold a certificate of authorization in accordance with this Act.

[69] It is instructive to compare the language used in the Election Finances Act (governing provincial elections rather than municipal) to the language used in the Act at issue in this case. Section 40(1) of the Election Finances Act states:

40 (1) Every candidate and leadership contestant at the time of appointment of his or her chief financial officer, and every registered party and registered constituency association, within thirty days after becoming registered under this Act, shall appoint an auditor licensed under the Public Accounting Act or a firm whose partners resident in Ontario are licensed under that Act and shall forthwith advise the Chief Electoral Officer of the name and address of such auditor or firm.

[70] Where the legislature addresses a similar issue in two related statutes and uses different language in one of them, that difference is presumed to be deliberate.[^42] It is not apparent why there would be a difference for the qualifications of an auditor in the provincial election context as opposed to in municipal elections. However, the fact remains that in the provincial context the legislation specifically contemplates the appointment of a partnership of licensed individuals, whereas the Act in this case does not.

[71] The argument advanced by Mr. McLean is a compelling one. I should not be taken to have ruled that the audit performed by Grant Thornton LLP was invalid merely because its licensed partner signed the report as “Grant Thornton” rather than in her personal name. At most, I would have thought this to be an irregularity easily corrected, provided that the work was actually overseen by a licensed individual, which would appear to be the case. However, the new auditor appointed by the Committee is also a firm and it would perhaps be wise to regularize that by appointing a licensed individual from the firm.

Term of the Committee

[72] Mr. French argued that the term of this Committee has now expired. I disagree. Mr. French cannot thwart the jurisdiction of the Committee by refusing to cooperate with the audit and bringing unwarranted court proceedings and then maintaining that the lapse of time he created has rendered the Committee defunct.

[73] In my view, the answer is to be found in s. 4.3 of the Statutory Powers Procedure Act [^43] which states:

4.3 If the term of office of a member of a tribunal who has participated in a hearing expires before a decision is given, the term shall be deemed to continue, but only for the purpose of participating in the decision and for no other purpose.

[74] This provision has been generously interpreted by the courts in order to prevent hearings being disrupted by the expiry of the term of a panel member. The term of the member (or members) is deemed to be extended so that the members can carry out their statutory mandate.

H. CONCLUSION AND ORDER

[75] In the result, this application is dismissed. As between Mr. French and Mr. McLean, counsel agreed that the successful party should have costs of $15,000 against the other. Accordingly, Mr. French shall pay to Mr. McLean costs in the amount of $15,000.

[76] As I have already indicated, the Township should have no costs because it was not a proper party, and indeed, the Township did not seek costs. If the Township’s involvement had resulted in anything more than trifling extra costs for the successful party, I would consider ordering costs against the Township. However, the Township’s written material essentially echoed Mr. French’s submissions, and we did not call on its counsel in oral argument, so the Township did not add in any measurable way to the costs.

[77] The Committee sought costs in the amount of $15,000 as against Mr. French. If unsuccessful in its position, the Committee left costs to the discretion of the court. As I stated above, the Committee was a proper party to the proceeding and did incur costs in that regard. However, its role should have been more circumscribed than it was. In the circumstances, I would order Mr. French to pay costs of $5000 to the Committee.

A.M. MOLLOY J.

I agree:______________________________

S. N. LEDERMAN J.

I agree:______________________________

MICHAEL G. QUIGLEY J.

Released: January 16, 2018

[^1]: The Municipal Elections Act, 1996, S.O. 1996, c. 32 (“the Act”). The Act has been amended many times. All references to section numbers are to the version in force at the time of the events involved in this case. [^2]: Ibid, s. 81.1(1) [^3]: Ibid, s. 81.1(2) [^4]: Ibid, ss. 81.1(5) and (4) [^5]: Ibid, s. 78(1)(a) [^6]: Ibid, s. 81(2) [^7]: Ibid, s. 81(3) [^8]: Ibid, ss. 81(4) and (5) [^9]: Ibid, s. 81(7) [^10]: The Act has since been amended to provide that the appeal is to a judge of the Ontario Superior Court of Justice. [^11]: Ibid, s. 81(8) [^12]: Ibid, s. 81(12) [^13]: Ibid, s. 81(9) [^14]: Ibid, s. 81(10) [^15]: Ibid, ss. 81(13) and (15). [^16]: Appendix 1 to the Minutes of the Committee, Transcript of Proceedings on October 23, 2015 at p. 100 of the Application Record [^17]: Minutes of the Committee meeting dated October 23, 2015, p. 95 of the Application Record [^18]: Ibid, p. 96 of the Application Record [^19]: Ibid [^20]: Ibid [^21]: McLean v. Township of Springwater, 2017 ONSC 520 [^22]: Ackerman v. Ontario Provincial Police, 2010 ONSC 910, 259 O.A.C. 163 (Div.Ct.) at para.11 and cases referred to therein. [^23]: Harelkin v. University of Regina, 1979 18 (SCC), [1979] 2 S.C.R. 561 [^24]: Roosma v. Ford Motor Co. of Canada Ltd., 1988 5633 (ON SCDC), 66 OR (2d) 18, at para. 26. [^25]: Ibid, at para 31. [^26]: Dunsmuir v. Law Society of New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, [^27]: See e.g. Roosma, at para. 31 Ackerman v. Ontario Provincial Police Service, 2010 ONSC 910, 259 O.A.C. 163 (Div. Ct.) at para. 15; C.B. Powell Ltd. v. Canada (Border Services Agency), 2010 FCA 61; C.B. Powell Ltd. v. Canada (Border Services Agency), 2010 FCA 61 [^28]: Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541, 111 O.R. (3d) 561. [^29]: C.U.P.E. v. N.B. Liquor Corporation, 1979 23 (SCC), [1979] 2 S.C.R. 227 at p. 233 [^30]: Dunsmuir, supra Note 26, at para. 59 [^31]: Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654 [^32]: Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd., 2016 SCC 47, [2016] 2 S.C.R. 293. [^33]: Jackson v. Vaughan (City of), (2009), 59 M.P.L.R. (4th) 55 (S.C.J.) at paras.61-74; affirmed, 2010 ONCA 118 [^34]: R. v. 974649 Ontario Inc., 2001 SCC 81, [2001] 3 S.C.R. 575 at paras. 70-71. [^35]: The Municipal Elections Act, 1996, supra Note 1, s. 81(6) [^36]: Harelkin, supra Note 24; Volochay, supra Note 29; C. B. Powell Ltd. v. Canada (Border Services Agency),supra Note 27; Canadian Pacific Ltd. v. Matsqui Indian Band, 1995 145 (SCC), [1995] 1 S.C.R. 3 [^37]: Canadian Pacific Ltd, supra Note 36, at para. 37. [^38]: Northwestern Utilities Ltd. v. Edmonton (City), 1978 17 (SCC), [1979] 1 S.C.R. 684 at p. 709. [^39]: Ontario (Children’s Lawyer) v. Ontario (Information and Privacy Commissioner) (2005), 2005 11786 (ON CA), 75 O.R. (3d) 309 (C.A.). [^40]: Ontario (Energy Board) v. Ontario Power Generation Inc., 2015 SCC 44, [2015] 2 S.C.R. 147 at para. 59. [^41]: I note in this regard that there are some decisions dealing with the standard of review which have, incorrectly in my view, found specialized expertise in the Committee based on the professional qualifications of the particular members of a particular committee. I do not necessarily take issue with a deferential standard of review of reasonableness for Committee decisions, but this particular criterion is not one of the factors supporting deference. [^42]: Sullivan, Ruth, Sullivan on the Construction of Statutes, 6th Ed. (LexisNexis, Canada, 2014) at §8.32-8.33 and §13.1 [^43]: Statutory Powers Procedure Act, R.S.O. 1990, c. S22, s. 4.3; Pillar v. Assn. of Land Surveyors (Ontario), 2002 44996 (ON CA), [2002] 160 O.A.C. 333 (C.A.) at paras. 42-53; Brooks v. Ontario Racing Commission, 2017 ONCA 833, at paras. 16-18