Court File and Parties

Court: 2111 - St. Catharines Date: 2012-02-09 Ontario Court of Justice

In the Matter of an Application for a Compliance Audit of Brian Dorsey, Matthew Harris, Mathew Siscoe and Len Stack's Election Campaign Finances Pursuant to Section 81 of the Municipal Elections Act, 1996, S.O. 1996, C.32, Sched.

Between:

Eleanor Lancaster Appellant

— and —

Compliance Audit Committee of the Corporation of the City of St. Catharines Respondent

— and —

Matthew Harris, Mathew Siscoe, Len Stack, Brian Dorsey Added Parties

Before: Justice D.A. Harris

Heard: November 24, 2011

Decision: February 9, 2012

Counsel:

• L. De Lisio, for the Appellant, Eleanor Lancaster
• N. Auty, for the Respondent, Compliance Audit Committee
• T.A. Richardson and J.P. Maloney, for Added Parties, Matthew Harris, Mathew Siscoe and Len Stack
• Brian Dorsey, Added Party in Person

Reasons for Decision

HARRIS J.:

[1] The Appellant applied to the Compliance Audit Committee of the Corporation of the City of St. Catharines (hereinafter referred to as the "Committee") pursuant to section 81 of the Municipal Elections Act, 1996 (the "Act") for a compliance audit of the campaign finances of candidates Brian Dorsey, Matthew Harris, Mathew Siscoe and Len Stack.

[2] The Committee dismissed that application on July 19, 2011.

[3] The Appellant has appealed to the Ontario Court of Justice requesting that the decision of the Committee be set aside and that the Committee be directed to appoint an auditor to conduct a complete compliance audit of the campaign finances of the four named candidates.

[4] The Notice of Appeal was served on all four candidates and I granted all of them status as added parties.

[5] In this appeal, the following issues are to be addressed:

1. What is the appropriate standard for review on this appeal? Is the decision of the Committee entitled to deference such that a standard of reasonableness should apply or should I undertake my own analysis of the issues and apply a correctness standard?

2. What is the test of "reasonable grounds" under the Act?

3. On the material before the Committee, were there reasonable grounds to believe that any of the named candidates had contravened any provision of the Act?

Standard of Review

[6] In Dunsmuir v. New Brunswick, 2008 SCC 9, the Supreme Court of Canada revisited the standard of review of such administrative decisions and concluded that there ought to be two standards of review, being correctness and reasonableness.

[7] Counsel for the Appellant relied on two decisions of the Ontario Court of Justice which decided that correctness was the appropriate standard of review when determining appeals pursuant to section 81 of the Act.[1]

[8] However, both decisions predate Dunsmuir. Even more importantly, the facts in both cases are very different from those here. More precisely, the decisions appealed from in both Chapman and Mastroguiseppe were made by the City Council rather than by a Compliance Audit Committee. Culver J. and Favret J. both held that City Council was not entitled to any deference. The members of City Council had no special expertise. Rather, "municipal councillors are elected to further a political platform"[2] and "as opposed to administrative tribunals, council decisions are more often by-products of the local political milieu than a considered attempt to follow legal or institutional precedent".[3]

[9] The Act was amended in 2009 in order to take these decisions away from municipal councils and to have them decided instead by Compliance Audit Committees. The decision appealed from in this case was made by a Compliance Audit Committee. The membership of this Committee is such that, collectively, it clearly does possess the necessary expertise to decide the initial application and is free from political influence. The materials put before me reveal that one member of the Committee is a Professional Engineer with experience in accounting, legal and audit activities as a result of being President of a Charitable Organization and consulting company. The second member has a B.Comm. degree and experience with audit and compliance experience in the insurance industry. The third has a B.A. and is a Certified General Accountant with experience in the audit division of the Canada Revenue Agency.[4]

[10] Those materials go on to say that the Committee members "received an educational and training session presented by the Ministry of Municipal Affairs and Housing".[5]

[11] The Committee heard evidence and submissions from all interested parties before making its decision.

[12] In light of these facts, the Committee is, in my view, entitled to deference.

[13] This is very important in my determination of the appropriate standard of review here.

[14] At para. 47 in Dunsmuir, supra, the Supreme Court of Canada elaborated on the standard of reasonableness stating that:

Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.

[15] Applying this to the case before me, I find that the appropriate standard of review here is one of reasonableness. In that regard I agree with the reasoning of Lane J. in Lyras v. Heaps, [2008] O.J. No. 4243 (O.C.J.).

Reasonable Grounds

[16] The relevant provisions of section 81 of the Act read as follows:

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.

(4) Within 10 days after receiving the application, the clerk of the municipality or the secretary of the local board, as the case may be, shall forward the application to the compliance audit committee established under section 81.1 and provide a copy of the application to the council or local board.

(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.

(7) If the committee decides under subsection (5) to grant the application, it shall appoint an auditor to conduct a compliance audit of the candidate's election campaign finances.

[17] Counsel for the Appellant argued that the test to be applied by the Committee and by me is whether the elector, in this case the Appellant, "believes on reasonable grounds that a candidate has contravened a provision of this Act relating to election campaign finances".

[18] Counsel for the Respondent and counsel for the Added Parties argued that this subjective test applies only to the commencement of this process and that the test to be applied by the Committee was whether the Committee believed on reasonable grounds that a candidate had contravened a provision of the Act relating to election campaign finances.

[19] I agree with the latter argument. The Committee was clearly in a better position to make the necessary determination of whether reasonable grounds exist. The Committee could be expected to be more objective than the Appellant. In addition, as Lane J. stated at para. 23 in Lyras, supra:

even if the appellant had what he considered reasonable grounds to ask for an audit, the Committee has considerably more information at their disposal. Having heard all the submissions and reviewed all the material before them, the Committee is in a better position than the appellant to determine whether, in fact, "reasonable grounds" do exist to proceed with an audit. It is the role of the Committee to weigh the evidence and to make determinations of what weight should be accorded to the representations before it.

[20] I find therefore that the test to be applied by the Committee was whether the Committee believed on reasonable grounds that a candidate had contravened a provision of the Act relating to election campaign finances.

[21] As to the meaning to be given to the words "reasonable grounds", at para. 41 in Chapman, supra, Culver J. adopted the standard of persuasion articulated by Hill J. with respect to the issuance of a search warrant in R. v. Sanchez, [1994] O.J. No. 2260 (Ont. S.C.J.). In that decision, Hill J. stated at para. 28 that "the standard is one of credibly based probability". Hill J. then went on to state in para. 29 that:

Mere suspicion, conjecture, hypothesis or "fishing expeditions" fall short of the minimally acceptable standard from both a common law and constitutional perspective. On the other hand, in addressing the requisite degree of certitude, it must be recognized that reasonable grounds is not to be equated with proof beyond a reasonable doubt or a prima facie case. The appropriate standard of reasonable or credibly-based probability envisions a practical, non-technical and common-sense probability as to the existence of the facts and inferences asserted. [Citations omitted.]

[22] In Lyras, supra, Lane J. reached a similar conclusion stating at para. 25 that:

In my view, where the statute requires "a belief on reasonable grounds," the jurisprudence applicable in other contexts indicates that the standard to be applied is that of an objective belief based on compelling and credible information which raises the "reasonable probability" of a breach of the statute. The standard of "a prima facie case" in either its permissive or presumptive sense is too high a standard.

[23] I agree.

The Alleged Contraventions of the Act

[24] The Appellant alleged that the various candidates were guilty of a number of different contraventions of the Act. I propose to deal with these by type of contravention rather than by candidate.

Contributions from Associated Companies

[25] The Appellant alleged that all four candidates received contributions exceeding $750.00 from associated corporations. All four candidates agreed that this happened.

[26] Associated corporations Lakewood Beach Properties Limited and York Bancroft Corp. each contributed $750.00 to the campaign of Mr. Dorsey.

[27] Associated corporations York Bancroft Corp. and Copper Cliff Properties Inc. each contributed $750.00 to the campaign of Mr. Harris.

[28] Associated corporations York Bancroft Corp. and Copper Cliff Properties Inc. and Port Dalhousie Management Corp. contributed $500.00, $500.00 and $750.00, respectively, to the campaign of Mr. Siscoe.

[29] Associated corporations York Bancroft Corp. and Lakewood Beach Properties Inc. and Port Dalhousie Management Corp. each contributed $750.00 to the campaign of Mr. Stack.

[30] Information put before the Committee established that when they became aware of this situation each of the candidates had refunded the money that had been contributed to the campaign in contravention of the Act. The Affidavit from Mr. Dorsey established that he had previously refunded money to another corporate contributor because he was aware then that it was from an associated corporation.

[31] Counsel for the Appellant argued that the candidates contravened the Act simply by receiving campaign contributions in excess of $750.00 from associated corporations.

[32] I disagree.

[33] Section 71(1) of the Act says that "A contributor shall not make contributions exceeding a total of $750.00 to any one candidate in an election".

[34] Section 72 of the Act says that "For the purposes of sections 66 to 82, corporations that are associated with one another under section 256 of the Income Tax Act (Canada) shall be deemed to be a single corporation".

[35] A combination of those sections makes it a clear contravention of the Act by the associated corporations to contribute more than $750.00 between them to the campaign of a single candidate.

[36] The obligation on the candidate is different however.

[37] Section 69(1)(m) of the Act says:

69. (1) A candidate shall ensure that,

(m) a contribution of money made or received in contravention of this Act is returned to the contributor as soon as possible after the candidate becomes aware of the contravention.

[38] The obligation on the candidate is simply to return a contribution of money made in contravention of the Act "as soon as possible after the candidate becomes aware of the contravention". If he does that, the candidate is not contravening the Act.

[39] Culver J. reached the same conclusion in Chapman, supra, where he stated at para. 40 that:

The Appellant argues that a candidate who accepts contributions from individual contributors in excess of $750.00 is in violation of the Act. The Act makes it clear in section 71(1) that a contributor cannot make any contributions in excess of a total of $750.00. There is no corresponding statement with that level of clarity as it relates to the obligation of a candidate not to accept such donations. The Appellant argues that section 69(1)(m) which refers to "a contribution of money made or received in contravention of this Act" creates an obligation on the candidate not to accept donations in total worth more than $750.00 from any one contributor. With respect, I disagree. If Parliament wished to create an obligation not to accept contributions of more than $750.00 it had the clear opportunity to do so. It would not, in my view, be appropriate to torture the wording of section 69(1)(m) to create an obligation which is not clearly present. Section 69(1)(m) only requires a candidate to return to the contributor any contribution exceeding a total of $750.00, or any other contribution received in contravention of the Act as soon as possible.

[40] Had the Committee based its decision solely on the information set out in the Financial Statements and Auditors Reports filed by the four candidates, there might well have been a basis to believe on reasonable grounds that the candidates had contravened a provision of this Act relating to election campaign finances. The Committee however heard and accepted the uncontradicted evidence to the effect that each candidate had returned the excess money contributed in contravention of the Act as soon as possible after the candidate had become aware of the contravention. In those circumstances, the only reasonable conclusion that the Committee could have reached was that there were not reasonable grounds to believe that the candidates had contravened the Act.

Contributions Listed Erroneously Under Contributions from Individuals as Opposed to Contributions from Corporations

[41] Mr. Stack and Mr. Dorsey both listed contributions that had been made by corporations as well as contributions that had been made by individuals in the section of the form that was intended to contain only information regarding contributions from individuals. Both left blank the section of the form intended to contain information regarding contributions from corporations.

[42] Both provided an explanation to the Committee and to me.

[43] Mr. Stack stated that he had mistakenly included all contributions, both corporate and individual, in the same section. He stated that the form used following this election was different from the form used following the 2006 election. More particularly, the 2006 form did not require him to break down the contributors in the way that the 2010 form did. He stated further that he did become aware of the mistake before the filing deadline and that he attempted to file a corrected document but he was not permitted to file it.

[44] Mr. Dorsey also stated that he had made a mistake. He apologized for this saying:

I feel terrible because of the over contribution that I did not catch and was not aware of, and for using the bottom half of page four to list the contributions instead of the top half of page five. These innocent mistakes are embarrassing, unpleasant, trying, and troublesome and were non-intentional. I did not knowingly make the mistakes, and was not intending to do something wrong to knowingly influence the outcome of the election.[6]

[45] What am I to make of these mistakes?

[46] Counsel for the Appellant argued that these are clear contraventions of the Act.

[47] The Committee decided otherwise.

[48] I note the comments of Wood J. at para. 12 in Braid v. Georgian Bay (Township), [2011] O.J. No. 2818 (Ont. S.C.J.). He said:

The Municipal Election Act governs the conduct of Municipal election campaigns. All counsel stressed and I agree that one very important component of the Act is to control the election expenses of the candidates. The Act does this by limiting the amounts candidates can spend, providing penalties for overspending or improper spending, and requiring audited statements of receipts and disbursements available to the public for review in a timely fashion. The important public policy behind these provisions is the levelling of the playing field to prevent a candidate backed by deep pockets from outspending his or her opponents and thus potentially skewing the results of the election.

[49] He then went on to say in paras. 28 and 29 that:

28 In my opinion this dichotomy between a strict liability for complete failure to file and a more lenient approach where the document is filed but incorrect in some way, is entirely consistent with the aims of the Act. Failure to file leaves the public no ability to examine the expenses of a candidate. Such a failure leaves the interested person whether rival candidate, or member of the public, with no starting point from which to begin an examination. It strikes at the very heart of the Act's purpose.

29 Filing a document that is flawed in some way is quite a different proposition. In contractual language there has been substantial compliance. Even a flawed financial statement provides a starting point for an examination of the candidate's expenses. The direction to the Court in subsection 92(6), that the draconian penalty of forfeiture does not apply where a candidate has made a mistake while acting in good faith, is a recognition that mistakes happen and that the will of the electorate should not be frustrated by the removal from office of the successful candidate in such circumstances.

[50] In this election, the spending limit for each of the four candidates was more than $19,000.00.

[51] Mr. Stack spent $6,230.24. He listed nine contributors (three individuals and six corporations) who contributed $100.00 or more. These contributions totalled $5,450.00, including the $1,500.00 that he later paid back. Contributions totalling $100.00 or less accounted for a further $548.00 and he contributed $232.24 of his own money.

[52] Mr. Dorsey spent $7,389.22. Mr. Dorsey's list of contributors reveals four corporate contributors who contributed a total of $1,700.00, including the $750.00 that he later paid back. He contributed $5,689.22 of his own money to finance his campaign.

[53] I set out these figures to emphasize that the information set out in the forms filed by the candidates was neither extensive nor particularly complicated. It should be readily apparent to anyone reviewing the form completed by Mr. Stack that he had included corporate contributors in the same section where he included his individual contributors.

Failure to List President or Business Manager or Cheque Signatory

[54] Both Mr. Stack and Mr. Dorsey failed to do this too. This mistake flows naturally from the previous one. The section for individual contributors does not include a space requesting the names of a president or a business manager or a cheque signatory.

[55] Mr. Siscoe also failed to list the name of a president or business manager for any of the three corporate contributors. However, Mr. Dan Rasetta is listed as cheque signatory for two contributions and his wife Mrs. Janice Rasetta for the third.

[56] Mr. Siscoe spent $6,976.57 during the election. He listed two individuals and three corporations who contributed $100.00 or more. The contributions by individuals totalled $275.00. The contributions by corporations totalled $1,750.00, including the $1,000.00 that he later paid back. Contributions totalling $100.00 or less accounted for a further $867.00 and he contributed $4,084.57 of his own money.

[57] In the interest of completeness, I point out that Mr. Harris spent $8,341.74. He listed six individuals and seven corporations who contributed $100.00 or more. The contributions by individuals totalled $1,500.00. The contributions by corporations totalled $3,150.00, including the $750.00 that he later paid back. Contributions totalling $100.00 or less accounted for a further $25.00 and he contributed $3,766.74 of his own money to finance his campaign.

[58] Logic tells me that one reason for the requirement that a candidate must include an address for each corporation and the name of each cheque signatory and the name of either the president or the business manager for each corporation is to make it easier for anyone reviewing the form to detect corporations that are likely associated. In the case of Mr. Siscoe it was very evident from the information he provided that all three corporations were associated since all three corporations had the same address and all three signatories had the same family name. In addition, the decision of the Committee made it clear that they were satisfied that Mr. Siscoe's failure to provide the name of either the corporate president or the business manager was unintentional and that he was not trying to conceal anything.

[59] The decision of the Committee also made it clear that the Committee accepted that the failure on the part of Mr. Dorsey and Mr. Stack to list their corporate contributors in the part of the form designated for that purpose and to provide further information as to the cheque signatory and either the company president or business manager was unintentional and that neither candidate was trying to conceal anything.

[60] I find no reason to interfere with the decision of the Committee that the above mistakes by Mr. Stack and Mr. Dorsey and Mr. Siscoe did not constitute a contravention of the Act by any of them.

Failure to Record Value of Inventory of Campaign Materials Retained

[61] Mr. Harris did not record any inventory of campaign materials retained following the election as required pursuant to the Act. Mr. Stack showed only $200.00 in inventory of campaign materials retained.

[62] Mr. Harris informed the Committee that he had not retained any campaign signs since the signs he had used had contained the date and the year of the election. Mr. Stack informed the Committee that he had retained only 50 campaign signs (having a value of $200.00) because the others were unsuitable for future use and had been discarded following the election.

[63] The minutes of the meeting of the Committee make it clear that at that meeting, "The Chair asked Ms. Lancaster if she was satisfied that the inventory of signs was resolved. Ms. Lancaster concurred."

[64] Counsel for the Appellant advised me during his submissions that the Appellant was abandoning this ground of appeal.

Conclusion

[65] I find no reason to interfere in any way with the decision of the Committee.

[66] The Appeal is dismissed.

[67] Counsel may address the issue of costs, if they see fit, in court, by appointment.

Released: February 9, 2012

Signed: "Justice D.A. Harris"

Justice D.A. Harris

Footnotes

[1] Chapman v. Hamilton (City), [2005] O.J. No. 1943 (O.C.J.) per Culver J.; Mastroguiseppe v. Vaughan (City), [2008] O.J. No. 5734 (O.C.J.) per Favret J.

[2] Nanaimo (City) v. Rascal Trucking Ltd., 2000 SCC 13, [2000] 1 S.C.R. 342, quoted in Chapman, supra, para. 27.

[3] Ibid.

[4] Affidavit of Susan Dodds filed by Respondent Compliance Audit Committee, para. 5.

[5] Ibid., para. 6.

[6] Affidavit of Brian Dorsey, para. 7.