Court File and Parties

Court File No.: Halton 3158/11 Date: 2012-04-16 Ontario Court of Justice

Between:

Wendy Gunn, Applicant

— And —

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

Before: Justice R.J. LeDressay

Heard on: March 30, 2012

Reasons for Ruling released on: April 16, 2012

Counsel

Novalea Jarvis — for the applicant

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

Raivo Uukkivi — for the respondent Kathryn Bateman-Olmstead

LeDRESSAY J.:

THE ISSUE

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

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

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

[4] The applicant has filed affidavit material in support of her appeal. Some of the applicant's affidavit material consists of the information that was before the Halton District School Board Compliance Audit Committee and so was considered by them. However, there is additional affidavit material filed, which is in support of her application for the compliance audit being ordered, on the appeal. This further affidavit material contains information which was not placed before the Halton District School Board Compliance Audit Committee for them to consider.

[5] The respondents submit that the court adjudicating the appeal should not consider the additional affidavit material that was not before the Halton District School Board Compliance Audit Committee when they decided the applicant's application for an audit.

[6] This ruling, therefore, will address the issue of what evidence the court will consider in the appeal being heard pursuant to s. 81(6) of the Municipal Elections Act.

OTHER RELEVANT BACKGROUND FACTS

[7] The other relevant background facts pertaining to this matter are as follows.

[8] On September 3, 2010, Kathryn Bateman-Olmstead registered as a candidate for Trustee for the Halton District School Board, Ward 4. There were two other candidates for this position.

[9] The election was held on October 25, 2010 and Kathryn Bateman-Olmstead was elected Trustee with 3,568 votes.

[10] On March 18, 2011, Kathryn Bateman-Olmstead filed her Form 4 Financial Statement as required by the Municipal Elections Act.

[11] On March 28, 2011, the applicant contacted Gail Gortmaker, who she believed at the time was the secretary of the Halton District School Board, to inquire about the relevant administrative policies that were applicable to an application made pursuant to s. 81(1) of the Municipal Elections Act. Gail Gortmaker was in fact the Manager, Director's Office of the Halton District School Board. The applicant was told by Gail Gortmaker that there were no administrative policies applicable and that the applicant would have to "make it up as she went along."

[12] Sometime between March 18, 2011 and April 15, 2011, the applicant contacted Cathie Best, who is the Town Clerk for the Town of Oakville and advised her that she wanted to pursue an application to the Halton District School Board Compliance Audit Committee. Cathie Best provided the applicant with the Town of Oakville Rules of Procedure for the Municipal Election Compliance Audit Committee. Cathie Best also advised the applicant to inquire with the Secretary of the local board as to what its procedure was with regard to its Compliance Audit Committee. The applicant informed Cathie Best that the applicant could not find any administrative procedures on the Halton District School Board website and that the Halton District School Board had advised that it had no practices or procedures as it related to filing an application or attendance before the Compliance Audit Committee.

[13] On April 15, 2011 the applicant, Wendy Gunn, applied for a compliance audit of the candidate, Kathryn Bateman-Olmstead's election campaign finances pursuant to s. 81(1) of the Municipal Elections Act.

[14] In the written material that was filed by the applicant, she outlined the three bases for her reasonable grounds to believe that Kathryn Bateman-Olmstead had contravened a provision of the Municipal Elections Act relating to election campaign finances.

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

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

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

[18] On May 10, 2011, the applicant wrote to Gail Gortmaker asking if the applicant would be invited to meet with the Compliance Audit Committee with regards to her complaint.

[19] The Halton District School Board Compliance Audit Committee met on May 10, 2011. The Committee met for 35 minutes. The Minutes of the meeting are available but contain very little information of substance. The Minutes of the meeting indicate that the Halton District School Board Compliance Audit Committee met to discuss the process for dealing with the applicant's application, to seek clarification and a response from the candidate, Kathryn Bateman-Olmstead, on the allegations in the application, and to decide whether the application should be granted or rejected. It is clear from the Minutes that Kathryn Bateman-Olmstead joined the Committee for a 10 minute period during which the Committee asked her questions about her Form 4, Financial Statement. The Minutes are silent regarding the responses provided by Kathryn Bateman-Olmstead but the Committee concluded that "the candidate accurately and in good faith completed Form 4." The Minutes are found at tab F of the Application Record.

[20] The applicant was not notified as to the date of this meeting, nor was she invited to attend, and so the applicant was not present when the Committee met on May 10, 2011.

[21] On May 11, 2011, the day after the Halton District School Board Compliance Audit Committee had met and considered her application, the applicant received an email response from Ms. Gortmaker to the inquiry the applicant had made on May 10, 2011. Ms. Gortmaker's response indicated that it was Ms. Gortmaker's understanding that the applicant's application was the applicant's presentation to the Compliance Audit Committee and that the applicant would receive a copy of the Compliance Audit Committee's decision. This is found at tab D of the Application Record.

[22] On May 17, 2011, the applicant was advised that the Halton District School Board Compliance Audit Committee had met on May 10, 2011 to consider her application. The applicant received a letter containing the two paragraph decision of the Halton District School Board Compliance Audit Committee regarding her application. The reasons provided shed little, if any, light on the process used by the Committee, what evidence was considered by them, or the underlying reason for the Committee rejecting the applicant's application. The letter is found at tab E of the Application Record.

[23] On May 27, 2011, the applicant asked the Halton District School Board for a copy of the rules and regulations (administrative procedures) governing the Halton District School Board Compliance Audit Committee. The reply the applicant received on May 31, 2011 from Gail Gortmaker advised that the Halton District School Board Compliance Audit Committee was governed by the Halton District School Board's By-law on Committees of the Board.

[24] On June 1, 2011, the applicant, as per her request, received the minutes of the Compliance Audit Committee.

[25] On June 14, 2011, the applicant asked for a copy of the Compliance Audit Committee's decision and she was informed that the only records were the minutes and the letter that was sent to her on May 17, 2011.

[26] The applicant then appealed this matter to the Ontario Court of Justice pursuant to s. 81(6) of the Municipal Elections Act.

THE POSITION OF THE PARTIES

[27] Further affidavit material has been filed in the appeal proceedings in support of the applicant's request for an audit. This further material consists of additional information from the applicant, and two other persons, Catherine Duncan and Sharon Baroni. There are two significant additional allegations. The first relates to Kathryn Bateman-Olmstead's campaign website. The additional information concerns the person who produced this website and the fact that it is not noted as a contribution or an expense. The second relates to information which may contradict information provided by Kathryn Bateman-Olmstead to the Halton District School Board Compliance Audit Committee, regarding when her website was operational and requesting donations for her campaign, when she was questioned by them on May 10, 2011.

[28] It is the position of the Halton District School Board, the Halton District School Board Compliance Audit Committee and of Kathryn Bateman-Olmstead that the only material that should be considered by the court on the appeal is the material supplied by Ms. Gunn, the applicant, in her application for the compliance audit of Kathryn Bateman-Olmstead. Their collective submission is that the additional affidavit material does not meet the traditional test used to decide whether fresh evidence should be allowed on an appeal as the new evidence submitted on appeal could, through due diligence, have been put before the Committee as part of the applicant's original application.

[29] Mr. Uukkivi, on behalf of Ms. Bateman-Olmstead, conceded that the Minutes indicated that his client had attended at the meeting and provided some explanation but that the Minutes were silent in terms of what his client's position had been before the Compliance Audit Committee. He was prepared to have the appeal argued without the court knowing what explanation his client provided to the Compliance Audit Committee and without any explanation or evidence being given by his client to the appeal court.

[30] In addition, the respondents argue that the Halton District School Board Compliance Audit Committee should be granted significant deference concerning the procedure followed by the Committee in considering the applicant's application. Their position is that the procedure followed by the Halton District School Board Compliance Audit Committee was appropriate and that the appeal should be decided upon the existing record, which is essentially the information contained in the applicant's original application to the Halton District School Board Compliance Audit Committee.

[31] The applicant, Ms. Gunn's, position essentially was that she was not given a fair opportunity to participate in the process before the Compliance Audit Committee and that the further affidavit material that she wishes the court to consider on the appeal is material that would have been presented to the Compliance Audit Committee had she been given a fair opportunity to do so. She takes the position that she had been duly diligent in attempting to find out the process that the Compliance Audit Committee would follow. She argues that there are a number of procedural irregularities with the Compliance Audit Committee's decision, such that the court on appeal should now proceed by way of a de novo hearing and that the additional affidavit material filed should be considered by the court when hearing her appeal.

ANALYSIS

[32] Section 81.1(4) of the Municipal Elections Act indicates:

The clerk of the municipality or the secretary of the local board, as the case may be, shall establish administrative practices and procedures for the committee and shall carry out any other duties required under the Act to implement the committee's decisions.

[33] In this case, the applicant was diligent in attempting to find out the administrative practices and procedures that should be followed. Prior to filing her application, the applicant spoke with Cathie Best, the Clerk for the Town of Oakville who provided her with the administrative practices and procedures for the Town of Oakville Compliance Audit Committee. The applicant also made inquiries with the Halton District School Board regarding administrative practices. She was told by Ms. Gortmaker that there were no administrative practices and that she would "have to make it up as she went along."

[34] After her application was denied, the applicant made further inquiries. On May 31, 2011, the applicant was informed by Ms. Gortmaker that there were no independent administrative practices specific to the Halton District School Board Compliance Audit Committee and that the Compliance Audit Committee was governed by the Halton District School Board By-law on Committees of the Board. This is found at tab H of the Application Record.

[35] However, the By-law referred to conflicts in several respects with the specific provisions of the Municipal Elections Act. In addition, there is nothing in the By-law concerning administrative practices and procedures for the Halton District School Board Compliance Audit Committee to follow. Finally, although a small point, there was no indication of a chair or vice-chair being identified in the Minutes of the Compliance Audit Committee meeting from May 10, 2011 as required by the above noted By-law.

[36] It should be noted that this is in stark contrast to various examples provided by the applicant in her affidavit material concerning administrative practices and procedures for the Town of Oakville Municipal Election Compliance Audit Committee, the District School Board of Niagara Compliance Audit Committee and the Cities of Belleville and Quinte West, the County of Prince Edward, Hastings and Prince Edward District School Board and Algonquin and Lakeshore Catholic District School Board Joint Compliance Audit Committee.

[37] The only inference that can be drawn from the totality of these circumstances is that the Halton District School Board Compliance Audit Committee did not have any established administrative practices and procedures clearly and transparently in place when considering the applicant's application, notwithstanding the mandatory provisions of s. 81.1(4) of the Municipal Election Act.

[38] The respondents argue that the Halton District School Board Compliance Audit Committee's choice of process is entitled to a great deal of deference and that, in the absence of an established written policy, the Committee was entitled to rely on the process set out in ss. 81(1) – 81(5) of the Municipal Elections Act. Further, it is argued that s. 81(5) states that "the committee shall consider the application and decide whether it should be granted or rejected." There is therefore no requirement for a "hearing" because if that was the intention of the legislature, then that specific language would have been used as it is used in other parts of the Municipal Elections Act and in other statutes.

[39] The respondents' argument has some merit based on the statute and the case law. However, there are several significant aspects of the particular process followed in this case which cause concern regarding the fundamental issues of fair procedure and transparency.

[40] First, the Municipal Elections Act in s. 81.1(4) mandates that the secretary of the local board "shall establish administrative practices and procedures for the committee." As noted previously, that was either not done in this case or it was done in an inadequate manner as the general By-law on Committees previously referred to is not helpful regarding administrative practices and procedures. The weight of the evidence establishes that there was no established and readily ascertainable procedure in place to determine the validity of an application to the Halton District School Board Compliance Audit Committee when the applicant filed her application with the Halton District School Board.

[41] Second, as there was no established procedure in place, there was no clear notice to the applicant regarding the process that the Halton District School Board Compliance Audit Committee would follow. This was the case notwithstanding that the applicant made every effort to find out in advance how the process worked. The Halton District School Board representative did not know the process when she was questioned about it by the applicant. It appears from the Minutes of May 10, 2011 that the Halton District School Board Compliance Audit Committee did not have any previously established process in place, as the first item on the agenda was to "discuss the process for dealing with the application by W. Gunn." If the administrative practice of the Halton District School Board Compliance Audit Committee was to have no procedure other than the statutory framework set out in ss. 81(1) – (5), then that should have been clearly established beforehand so that all parties would be aware of their rights and responsibilities in regard to how the Halton District School Board Compliance Audit Committee would exercise its authority under s. 81 of the Municipal Elections Act.

[42] Third, no actual notice was given to the applicant as to the date of the meeting of the Halton District School Board Compliance Audit Committee when her application would be considered by them. The applicant was therefore not given the opportunity to be present at the meeting, to participate in the process, or to hear the candidate's position with respect to the applicant's application. The applicant did not have an opportunity to respond to any material provided by Ms. Bateman-Olmstead or to make submissions or to even witness the proceedings. All of these procedural opportunities are available under each of the administrative practices and procedures submitted as examples from other compliance audit committees in the province.

[43] Fourth, if the Halton District School Board Compliance Audit Committee was using the statutory framework set out in ss. 81 (1) – (5), then the issue arises as to their basis to seek input from the candidate. It is not a consideration that is stipulated in the sections referred to. It is certainly fair for a Compliance Audit Committee to consider input from a candidate who is named in an application made pursuant to s. 81(1) of the Municipal Elections Act. It is the part of the procedure in every example that has been provided in the affidavit material from other jurisdictions. However, fairness and transparency demand that all parties are properly notified beforehand how an application is going to be determined by the Compliance Audit Committee.

[44] Fifth, the record of the proceedings before the Halton District School Board Compliance Audit Committee is sparse. The Minutes of the meeting of May 10, 2011 are extremely brief and contain little substance in terms of what specific information the Compliance Audit Committee considered in deciding that the applicant did not have reasonable grounds for an audit. There is an indication that the Compliance Audit Committee spoke with the candidate, Kathryn Bateman-Olmstead, for approximately 10 minutes and asked her questions, but the record is completely silent in terms of what Ms. Bateman-Olmstead's input to the Compliance Audit Committee was. However, it is clear from the very brief reasons that they did consider what Ms. Bateman-Olmstead indicated to them and that they accepted her explanation. To add to the complexity of the issue, the applicant has filed some affidavit material which clearly contests the single aspect of the candidate's explanation which is referred to by the Halton District School Board Compliance Audit Committee in their brief reasons. As already noted, the applicant was not notified of the meeting, was not asked to attend the meeting and was therefore not privy to any explanation provided by Ms. Bateman-Olmstead to the Compliance Audit Committee.

[45] There are only very brief conclusionary reasons provided by the Compliance Audit Committee. Although reasons are not necessarily required according to the case law, the reasons may have shed light on what was considered by the Compliance Audit Committee in this case, but they did not.

[46] Therefore, the applicant and, for that matter, any interested member of the public would not be able to discern, based on the existing record, what exactly the Halton District School Board Compliance Audit Committee considered in coming to their decision. Therefore, transparency, which is vital to a fair process, is non-existent in this case.

[47] In addition, the record of these proceedings is therefore insufficient in that there is a significant gap in the record which leaves out vital information which appears to have been given weight by the Halton District School Board Compliance Audit Committee in reaching their conclusion. The existing record therefore does not allow an appeal court under s. 81(6) of the Municipal Elections Act to make a proper assessment.

[48] The Supreme Court of Canada has commented extensively on the doctrine of procedural fairness in Canada (Attorney General) v. Mavi [2011] SCC 30 at paragraphs 38 through 44. The court makes clear that the doctrine of procedural fairness is a fundamental component of Canadian administrative law and that in the administrative field there is a general duty of fairness. The court noted that the observance of fair procedures is central to the notion of the 'just' exercise of power. The court also noted that the content of procedural fairness depends on the legislative and administrative context and that the appropriate balance must be struck to meet the competing interests of cost and expediency, versus a public perception that the administrative body has acted unfairly or otherwise exercised it's judgment in an erroneous manner.

[49] In the case of Lyras v. Heaps (2008), 2008 ONCJ 524, 51 M.P.L.R. (4th) 277 (Ont. C.J.) Lane J., in addressing the issue of the standard of review applicable to s. 81(6) Municipal Elections Act appeals, found that considerable deference must be shown to the Committee in circumstances where the Committee had adopted Rules of Procedure, the applicant and the candidate had full opportunity to present their respective positions to the Committee and the process of considering the application was open and transparent. Lane J. noted that the circumstances in her case were different than the circumstances noted by Duncan J. in the case of Savage v. Niagara Falls (City) [2005] O.J. No. 5694 (Ont. C.J.). In the latter case where the Committee's decision was made in camera, with no record and no reasons given, Duncan J. found that there was nothing to show deference to. These two cases illustrate that deference is clearly linked to the perceived fairness and transparency of the process.

[50] In the case of an application to a Compliance Audit Committee, it is fundamental to a fair procedure to give fair notice to the parties regarding the procedure that will be followed by the Compliance Audit Committee in considering applications made pursuant to s. 81(1) of the Municipal Elections Act. While there is some discretion to be exercised regarding what specific procedure will be followed by a Compliance Audit Committee, the clear intent of s. 81.1(4) is for administrative practices and procedures to be established by the secretary of the local board. Fair notice should be given to the parties regarding what will be considered by the Compliance Audit Committee, including evidence and submissions, if any. If evidence and submissions are a part of the established procedure, then all parties should have an opportunity to be informed of all the evidence and submissions. Finally, a fair procedure demands a transparent and complete record of what was in fact before the Compliance Audit Committee so that appropriate consideration can be given to the Compliance Audit Committee's decision when reviewed on appeal pursuant to s. 81(6) of the Municipal Elections Act.

[51] The other issue that must be addressed in the applicant's submission is that two members of the Halton District School Board Compliance Audit Committee were biased and that they should have declared a conflict of interest and recused themselves. This submission is based on the apparent fact that these two members of the Halton District School Board Compliance Audit Committee also serve on the Audit Committee for the Halton District School Board and that Kathryn Bateman-Olmstead was also on the Audit Committee for the Halton District School Board for a period of time and/or these two members reported to Kathryn Bateman-Olmstead as a Trustee of the Board.

[52] The Audit Committee for the Halton District School Board has a different purpose and structure from the Halton District School Board Compliance Audit Committee. The Audit Committee for the Halton District School Board is responsible for "providing a good communication link between the auditors and the Board." The two members of the Compliance Audit Committee referred to are not excluded by reason of s. 81.1(2) of the Municipal Elections Act. They are both Chartered Accountants with extensive and relevant experience who are eminently qualified to serve on the Halton District School Board Compliance Audit Committee. There is no evidence to suggest any lack of independence or any lack of impartiality on the part of these two members with respect to Kathryn Bateman-Olmstead. It is speculative to submit that these two members are biased based on the evidence presented by the applicant. I am therefore not persuaded that the applicant's submission that the two specified members of the Compliance Audit Committee should have recused themselves for bias.

[53] If the normal test for fresh evidence were to be strictly applied, I would not be inclined to allow the fresh evidence in, as it has not been established that the fresh evidence was not available at the time the initial application was heard before the Compliance Audit Committee. If the Halton District School Board Compliance Audit Committee had established a clear administrative practice and procedure prior to considering the applicant's application or if the Halton District School Board Compliance Audit Committee had provided a full opportunity for both parties to submit material for the Compliance Audit Committee to consider and for both parties to have made submissions on that material and if there was a clear record of what the Compliance Audit Committee considered in coming to their decision, I would be following the law set out by Schneider J. in the case of Ford v. Toronto (City) Compliance Audit Committee [2012] O.J. No. 794 and base the appeal decision strictly on the record that was before the Compliance Audit Committee. In either of these illustrations procedural fairness in the context of this type of application would have been accomplished and there would be a sufficient degree of transparency in the process for both the applicant and any other interested member of the public. However, in the totality of the specific circumstances of this case, the only fair and transparent way of dealing with this matter at the present time is to have a de novo hearing on the appeal being heard by the court pursuant to s. 81(6) of the Municipal Elections Act.

[54] I understood from Ms. Jarvis' submissions on behalf of the applicant that all the material that the applicant wishes to be considered, vis a vis her application for a compliance audit, is now before the court. The Halton District School Board, the Halton District School Board Compliance Audit Committee and Ms. Bateman-Olmstead have 14 days from the date of this decision to file responding material on the appeal if they choose to do so. Submissions will then be heard on the return date concerning whether the applicant has reasonable grounds for a compliance audit to be ordered.

[55] The issue of costs is also reserved until the completion of the appeal in this matter.

Released: April 16, 2012

R. J. LeDressay

Signed: "Justice R.J. LeDressay"