Ferri v. Her Majesty the Queen, as represented by the Ministry of the Attorney General

[Indexed as: Ferri v. Ontario (Attorney General)]

Ontario Reports

Court of Appeal for Ontario,

Cronk, Tulloch and Hourigan JJ.A.

October 8, 2015

127 O.R. (3d) 613 | 2015 ONCA 683

Case Summary

Municipal law — Councillors — Conflict of interest — Pecuniary interest — Councillor's son an associate with law firm that acted for party on appeal from aspect of official plan — Son working directly on appeal — Any deemed pecuniary interest which councillor had in appeal being so remote or insignificant that it fell within exception in s. 4(k) of Municipal Conflict of Interest Act — Councillor not fixed with same level of proximity and significance as son for purposes of s. 4(k) analysis — Reasonable elector apprised of all circumstances would not conclude that councillor's deemed interest in appeal would be likely to influence his participation in debate or voting — Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50, s. 4(k).

The appellant was a local and regional councillor. His son S was an associate with a law firm which was retained to appeal an aspect of the municipality's official plan. S worked directly on the appeal. Pursuant to s. 3 of the Municipal Conflict of Interest Act, the pecuniary interest of any parent, spouse or child of a councillor, if known to the councillor, is deemed to be the pecuniary interest of the councillor. Under s. 5 of the Act, where a councillor has a pecuniary interest in a matter that is under consideration at a meeting, the councillor shall declare his interest and is prohibited from voting or attempting to influence the vote. However, under s. 4(k) of the Act, s. 5 does not apply where the councillor's pecuniary interest is so remote or insignificant that it cannot reasonably be regarded as likely to influence the councillor. The appellant brought an application for a declaration that he did not have a pecuniary interest in the appeal within the meaning of the Act. The application judge dismissed the application, holding that S had a pecuniary interest in the appeal, that S's pecuniary interest was neither remote nor insignificant, and that a reasonable elector would likely conclude that the appellant's deemed interest was not so remote or insignificant in its nature that it could not reasonably be regarded as likely to influence him. The appellant appealed.

Held, the appeal should be allowed.

The application judge improperly imported into his s. 4(k) analysis his conclusions from his s. 3 analysis. The analysis of whether a councillor's pecuniary interest is too remote or insignificant to be reasonably regarded as likely to influence that councillor cannot be premised on the notion that, unless proven otherwise, the councillor is fixed with the same level of proximity and significance as his child. The s. 4(k) analysis must commence afresh and focus on the proximity and significance of the councillor's pecuniary interest in the context of all the circumstances. The application judge compounded that error in his consideration of the factors relevant to the analysis required under s. 4(k). He expressly questioned whether the motive of a councillor is an appropriate consideration. A councillor's motive is relevant to the application of the "reasonable elector" test. The evidence established that the appellant had many years of faithful service to the municipality, that he was acting in good faith, that his desire to participate in the issues related to the plan was not motivated by a potential pecuniary benefit, [page614] that he had been extremely vigilant and conscientious in declaring conflicts of interest under the Act, that the matters related to the plan were of major public interest to his constituents, that he received no benefit from S's compensation, and that S's compensation and employment did not depend on the outcome of the appeal or any decision of council. A reasonable elector, apprised of these circumstances, would not conclude that the appellant's deemed interest in the appeal would be likely to influence his participation in debate or voting on the matter before counsel.

Amaral v. Kennedy, [2012] O.J. No. 3766, 2012 ONSC 1334, 96 M.P.L.R. (4th) 49, 214 A.C.W.S. (3d) 452 (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.), consd

Other cases referred to

Aurora (Town) v. Ontario, [2013] O.J. No. 4794, 2013 ONSC 6020, 17 M.P.L.R. (5th) 188, 235 A.C.W.S. (3d) 538 (S.C.J.); 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.); Craig v. Ontario (Attorney General), [2013] O.J. No. 3753, 2013 ONSC 5349, 61 Admin. L.R. (5th) 105, 15 M.P.L.R. (5th) 23, 232 A.C.W.S. (3d) 516 (S.C.J.); Hazineh v. McCallion, [2013] O.J. No. 2696, 2013 ONSC 2164, 11 M.P.L.R. (5th) 18 (S.C.J.); Lastman v. Ontario (2000), 2000 22627 (ON SC), 47 O.R. (3d) 177, [2000] O.J. No. 269, 183 D.L.R. (4th) 546, 94 A.C.W.S. (3d) 569 (S.C.J.); Lorello v. Meffe, [2010] O.J. No. 6261, 2010 ONSC 1976, 99 M.P.L.R. (4th) 107 (S.C.J.); Magder v. Ford (2013), 113 O.R. (3d) 241, [2013] O.J. No. 299, 2013 ONSC 263, 302 O.A.C. 333, 7 M.P.L.R. (5th) 1, 355 D.L.R. (4th) 142, 52 Admin. L.R. (5th) 127, 223 A.C.W.S. (3d) 1047 (Div. Ct.) [Leave to appeal to S.C.C. refused [2013] S.C.C.A. No. 117, 326 O.A.C. 400n]; Mondoux v. Tuchenhagen (2011), 107 O.R. (3d) 675, [2011] O.J. No. 4801, 2011 ONSC 5398, 284 O.A.C. 324, 88 M.P.L.R. (4th) 234 (Div. Ct.); 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; Tolnai v. Downey, [2003] O.J. No. 1578, [2003] O.T.C. 351, 40 M.P.L.R. (3d) 243, 122 A.C.W.S. (3d) 573 (S.C.J.); Whiteley v. Schnurr, [1999] O.J. No. 2575, 99 O.T.C. 301, 4 M.P.L.R. (3d) 309, 89 A.C.W.S. (3d) 1061 (S.C.J.)

Statutes referred to

Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50, ss. 2, 3 [as am.], 4(k), 5

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 14.05(3)

APPEAL from the order of Charney J., [2015] O.J. No. 4207 (S.C.J.) dismissing an application for a declaration that the appellant did not have a pecuniary interest.

Paul J. Pape and Andrea M. Bolieiro, for appellant.

Tom Schreiter, for respondent.

The judgment of the court was delivered by

[1] HOURIGAN J.A.: — Mario Ferri appeals the order dismissing his application under rule 14.05(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for a declaration that he does not [page615] have a pecuniary interest within the meaning of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 ("MCIA") in relation to an appeal currently before the Ontario Municipal Board (the "OMB") commenced by Antonio Di Benedetto (the "Di Benedetto appeal") and related matters.

[2] At the conclusion of oral argument, this court allowed the appeal, for reasons to follow. These are those reasons.

A. Background in Brief

[3] The facts giving rise to the application are simply stated. The appellant is a local and regional councillor for the City of Vaughan. His son, Steven Ferri, is an associate with the law firm Loopstra Nixon LLP, practising in the areas of municipal, development and land use planning law. Following the adoption of the Vaughan Official Plan 2010 (the "plan") by Vaughan City Council, Loopstra Nixon was retained by Antonio Di Benedetto to appeal an aspect of the plan to the OMB. Steven Ferri works directly on the Di Benedetto appeal, under the supervision of a partner of Loopstra Nixon.

[4] Pursuant to s. 3 of the MCIA, the pecuniary interest of any parent, spouse or child of a councillor, if known to the councillor, is deemed to be the pecuniary interest of the councillor. Under s. 5 of the MCIA, where a councillor has a pecuniary interest, direct or indirect, in any matter that is under consideration at a meeting, that member shall declare his interest, and is prohibited from, among other things, discussing or voting in respect of the matter or attempting to influence the vote. However, pursuant to s. 4(k) of the MCIA, where the pecuniary interest of the councillor is "so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence" the councillor, s. 5 does not apply.

[5] Given that the pecuniary interest of his son is deemed to be also his pecuniary interest, the appellant adopted, out of an abundance of caution, the practice of disclosing and declaring an interest under s. 5 of the MCIA with respect to any matter in which he knew that Loopstra Nixon was retained. However, given the importance of the matters related to the plan, the appellant brought an application to determine whether he could participate in council proceedings with respect to the Di Benedetto appeal without breaching the MCIA.

B. Application Judge's Decision

[6] The application judge dismissed the application, holding that Steven Ferri had a pecuniary interest in the Di Benedetto appeal, that Steven Ferri's pecuniary interest was neither [page616] remote nor insignificant, and that a reasonable elector would likely conclude that the appellant's deemed interest was not "so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member".

C. Issues

[7] On appeal, the appellant argues that the application judge erred in dismissing his application by (i) applying an overly broad definition of the term "pecuniary interest" under the MCIA; (ii) conflating the analyses required under ss. 3 and 4(k) of the MCIA; and (iii) disregarding factors relevant to the analysis required under s. 4(k) of the MCIA.

[8] For the following reasons, I would allow the appeal.

D. Discussion

[9] Turning first to the appellant's argument that the application judge erred by applying an overly broad definition of "pecuniary interest" under the MCIA, I note that "pecuniary interest" is not a defined term in the MCIA. The case law establishes that a "pecuniary interest" under the MCIA is restricted to a financial, monetary or economic interest: see Mondoux v. Tuchenhagen (2011), 107 O.R. (3d) 675, [2011] O.J. No. 4801, 2011 ONSC 5398 (Div. Ct.), at para. 31; Magder v. Ford (2013), 113 O.R. (3d) 241, [2013] O.J. No. 299, 2013 ONSC 263 (Div. Ct.), at para. 6, leave to appeal to S.C.C. refused [2013] S.C.C.A. No. 117, 326 O.A.C. 400n.

[10] This court has held that, given the purpose of the MCIA, "what constitutes a pecuniary interest sufficient to trigger the provisions of the MCIA is not to be narrowly confined": Orangeville (Town) v. Dufferin (County), [2010] O.J. No. 429, 2010 ONCA 83, 266 O.A.C. 207, at para. 22. The competing policy imperative is that "pecuniary interest" must not be construed so broadly that it captures almost any financial or economic interest such that it risks needlessly disqualifying municipal councillors, and others captured under the ambit of the MCIA, from participating in local matters of importance to their constituents. Section 4(k) of the MCIA operates to respond to this concern and ameliorate the potentially harsh effects of a broad definition of pecuniary interest by ensuring that pecuniary interests that are truly remote or insignificant are not caught under s. 5.

[11] The application judge found [at para. 18] as a fact that Steven Ferri's "salary, bonus and ongoing employment do not depend on the outcome of the Di Benedetto appeal or any decision by the City or the Regional council with respect to these [page617] matters". However, the application judge nonetheless held [at para. 30] that Steven Ferri's pecuniary interest was neither remote nor insignificant on the basis that it "ignores reality to suggest that success goes unrewarded in the legal profession". The appellant submits that this finding was entirely speculative.

[12] In the present case, it is unnecessary to determine whether the appellant has a pecuniary interest in the Di Benedetto appeal because the appellant conceded on the application that Steven Ferri has an indirect pecuniary interest in the outcome of the Di Benedetto appeal. An indirect interest is defined in s. 2 of the MCIA and includes a matter in which the councillor is "a partner of a person or is in the employment of a person or body that has a pecuniary interest in the matter".

[13] Having made this concession on the application, the appellant cannot resile from it on this appeal. Although the application judge did not explicitly rely on the concession in reaching his conclusion that Steven Ferri has a pecuniary interest, his analysis was conducted in the context of the concession. In any event, for the reasons discussed below, I am of the view that any pecuniary interest is so remote or insignificant that it falls within the exception in s. 4(k) and that, consequently, the appellant is not required to comply with the requirements of s. 5.

[14] The appellant's next submission is that the application judge conflated the analyses required under ss. 3 and 4(k). Specifically, the appellant argues that the application judge improperly imported into his s. 4(k) analysis his conclusions from his s. 3 analysis. I agree.

[15] The application judge stated [at para. 29] that, "[i]f the interest of the child is proximate and significant, then, unless there is some reason to conclude otherwise, so too is the deemed interest of the member". The application judge erred in reaching this conclusion. The analysis of whether a councillor's pecuniary interest is too remote or insignificant to be reasonably regarded as likely to influence that councillor cannot be premised on the notion that, unless proven otherwise, the councillor is fixed with the same level of proximity and significance as his child. The s. 4(k) analysis must commence afresh and focus on the proximity and significance of the councillor's pecuniary interest in the context of all the circumstances. In my view, the application judge erred in his approach to s. 4(k) by reading in a rebuttable presumption.

[16] The application judge compounded this error in his consideration of the factors relevant to the analysis required under s. 4(k) of the MCIA. The test to be applied under s. 4(k) is well [page618] established, and asks, "[w]ould a reasonable elector, being apprised of all the circumstances, be more likely than not to regard the interest of the councillor as likely to influence that councillor's action and decision on the question?": Whiteley v. Schnurr, [1999] O.J. No. 2575, 4 M.P.L.R. (3d) 309 (S.C.J.), at p. 313 M.P.L.R.; Lastman v. Ontario (2000), 2000 22330 (ON SC), 47 O.R. (3d) 177, [2000] O.J. No. 269 (S.C.J.), at para. 14; Tolnai v. Downey, 2000 22525 (ON SC), [2000] O.J. No. 1578, 40 M.P.L.R. (3d) 243 (S.C.J.), at p. 252 M.P.L.R.; Bowers v. Delegarde, [2005] O.J. No. 689, 5 M.P.L.R. (4th) 157 (S.C.J.), at p. 180 M.P.L.R.; Lorello v. Meffe, [2010] O.J. No. 6261, 2010 ONSC 1976, 99 M.P.L.R. (4th) 107 (S.C.J.), at para. 80; Amaral v. Kennedy, [2012] O.J. No. 3766, 2012 ONSC 1334, 96 M.P.L.R. (4th) 49 (Div. Ct.), at para. 17; Hazineh v. McCallion, [2013] O.J. No. 2696, 2013 ONSC 2164, 11 M.P.L.R. (5th) 18 (S.C.J.), at para. 99; Craig v. Ontario (Attorney General), [2013] O.J. No. 3753, 2013 ONSC 5349, 15 M.P.L.R. (5th) 23 (S.C.J.), at para. 34; Aurora (Town) v. Ontario, [2013] O.J. No. 4794, 2013 ONSC 6020, 17 M.P.L.R. (5th) 188 (S.C.J.), at para. 38.

[17] That test requires a court to consider all the circumstances: Amaral, at paras. 38-44; Craig, at para. 35. The application judge accepted that the same factors relevant to the Divisional Court's analysis in Amaral were present in the appellant's case. In Amaral, at para. 41, these relevant factors included the lack of bad faith of the trustee, the number of years of faithful service of the trustee, the trustee's long career of public service, and evidence that the trustee "was there for her constituents and not for her sons".

[18] However, in his reasons, the application judge expressly questioned whether the motive of a councillor, identified as relevant to the application of the "reasonable elector" test by the Divisional Court in Amaral, was appropriate to be considered in the analysis. The application judge stated that in this regard Amaral was inconsistent with the earlier Divisional Court decision of Moll v. Fisher (1979), 1979 2020 (ON SC), 23 O.R. (2d) 609, [1979] O.J. No. 4113 (Div. Ct.), where the court held that a councillor's motive was not a relevant consideration.

[19] There is no inconsistency between Amaral and Moll. In Moll, the court was considering an earlier version of the MCIA that provided that the remoteness or insignificance of a pecuniary interest was a mitigating factor in determining the penal consequences of a breach of the statute. Therefore, under that version of the MCIA the court concluded that motive was not relevant to determining if a pecuniary interest was present. In contrast, under the current version of the legislation, good [page619] faith and motive are relevant to the question of whether a pecuniary interest is likely to influence the councillor, which lies at the heart of the analysis of whether a pecuniary interest is remote or insignificant under s. 4(k).

[20] The application judge erred in concluding that Amaral and Moll are inconsistent. While the application judge indicated that he "nonetheless" took the factors identified in Amaral into account in his application of the s. 4(k) test, his lack of analysis of these and other relevant factors in his reasons precludes meaningful appellate review.

[21] In these circumstances, it falls to this court to conduct the required analysis under s. 4(k). In my view, applying the relevant test, it is necessary to consider all the following circumstances that were established in the evidence:

the appellant has many years of faithful service to the municipality;

the appellant was acting in good faith and his motivation to participate in the issues related to the plan are not motivated by a potential pecuniary benefit;

the appellant has been extremely vigilant and conscientious in declaring conflicts of interest under the MCIA, including 16 times when Loopstra Nixon was retained on a matter, even if his son was not on the file;

the matters related to the plan are of major public interest to his constituents;

the appellant receives no benefit from his son's

compensation; and

Steven Ferri's compensation and employment do not depend on the outcome of the Di Benedetto appeal or any decision of council respecting these matters.

[22] In my view, a reasonable elector apprised of all these circumstances would not conclude that the appellant's deemed interest in the Di Benedetto appeal would be likely to influence his participation in debate or voting on the matter before council.

E. Disposition

[23] I would allow the appeal, set aside the order of the application judge, and grant the appellant an order declaring that his deemed pecuniary interest in the Di Benedetto appeal and related matters is sufficiently remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence [page620] the appellant. I note that this decision applies only to the Di Benedetto appeal and related matters and does not affect the right of any person under the MCIA to raise other potential conflicts of interest related to other matters, including other matters where Loopstra Nixon or Steven Ferri are retained.

[24] Since this matter was unopposed, the respondent taking no position and filing no materials, the issue of the costs of this appeal does not arise.

Appeal allowed.

End of Document