ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 12-33900
DATE: 2012-04-12
IN THE MATTER OF an Application by Michael Ecker, a candidate for election, pursuant to Section 92.(6) of the Municipal Elections Act, 1996, for an Order setting aside the penalties described in Section 80(2) of the Municipal Elections Act, 1996.
B E T W E E N:
MICHAEL ECKER
Colin Geoffrey Millar, for the Applicant
Applicant
- and -
HAMILTON-WENTWORTH CATHOLIC DISTRICT SCHOOL BOARD and CITY OF HAMILTON
Peter Sullivan, for the H.-W.C.D.S.B.
Byrdena MacNeil, for the City of Hamilton
Respondents
HEARD: at Hamilton on April 3, 2012
CAVARZAN J.
REASONS FOR DECISION
[ 1 ] This application was heard on April 3, 2012, at the conclusion of which I announced that in accordance with written reasons to follow, the application is dismissed. These are those reasons.
[ 2 ] The matter comes before this court pursuant to subrule 14.05(3)(d) of the Rules of Civil Procedure as a proceeding involving the determination of rights that depend on the interpretation of a statute. In particular, the applicant invokes subsection 92(6) of the Municipal Elections Act , 1996, S.O. 1996, Chapter 32 (MEA) which authorizes “the presiding judge” to relieve against penalties described in subsection 80(2) of the MEA in certain circumstances.
[ 3 ] In addition, the applicant invokes section 98 of the Courts of Justice Act , R.S.O. 1990, c. C43 (CJA) which provides that a court may grant relief against penalties or forfeitures on such terms as to compensation or otherwise, as are considered just.
Background
[ 4 ] Michael Ecker was an unsuccessful candidate for the office of trustee with the respondent, the Hamilton-Wentworth Catholic District School Board, in the municipal elections held on October 25, 2010. He asserts that he inadvertently failed to file a Form 4 Financial Statement setting out his campaign finances by the deadline imposed by section 78 of the MEA
[ 5 ] The MEA contains a comprehensive scheme to regulate campaign financing, including reporting requirements designed to ensure compliance by candidates for election with those requirements. Penalties are imposed for failure to comply. For example:
80.(1) A candidate is subject to the penalties listed in subsection (2), in addition to any other penalty that may be imposed under this Act,
(a) if he or she fails to file a document as required under section 78 or 79.1 by the relevant date;
(2) In the case of a default described in subsection (1),
(a) the candidate forfeits any office to which he or she was elected and the office is deemed to be vacant; and
(b) until the next regular election has taken place, the candidate is ineligible to be elected or appointed to any office to which this Act applies.
[ 6 ] The successful candidate for the trustee seat has since resigned for health reasons. Mr. Ecker, who ran a close second in the 2010 election, is now precluded either from being appointed to fill the vacancy or from running as a candidate should a by-election be held.
[ 7 ] The City administration conducted a candidate information session on September 20, 2010, to inform all candidates of the requirements of the MEA including the financial reporting requirements. All candidates were notified by telephone about this session.
[ 8 ] On November 22, 2010, as required by subsection 78(6), the City Clerk sent to Mr. Ecker by registered mail a “Notice to candidates of filing requirements” describing the financial reporting requirements and attaching the prescribed Financial Statement reporting form along with excerpts from the Act relating to election campaign financing, penalties and offences. The notice advised that the deadline for filing that form was March 25, 2011.
[ 9 ] Mr. Ecker had five months to prepare and file the form. His Form 4 Financial Statement, filed as part of his application record, simply records his spending limit of $14,593.95 and his actual campaign expenditures amounting to $252.55.
[ 10 ] Quite apart from other considerations in determining the outcome of this application, it is difficult to credit Mr. Ecker’s assertion that his failure to file was inadvertent due to a family emergency or to pressures and deadlines at his place of employment.
[ 11 ] Subsection 80(4) of the Act provides an opportunity to a candidate who cannot meet the section 78 deadline for filing a financial statement, to avoid the penalties prescribed by section 80 by applying to the Ontario Court of Justice before the last day for filing (March 25, 2011) for an extension of that deadline for a period of up to 90 days. Mr. Ecker made no such application and has never filed his financial statement.
[ 12 ] Four days after the filing deadline, the City Clerk’s office sent to Mr. Ecker by registered mail, the requisite notice of default. The City administration was scrupulous in doing everything required of it by the MEA, and more, to assist candidates in satisfying the requirements of the Act.
[ 13 ] In my view, assuming it was open to me to exercise the power conferred upon “the presiding judge” by subsection 92(6) of the MEA, I would find that the applicant’s conduct bespeaks indifference to the necessity of complying with campaign financing rules rather than acting in good faith. I would find indifference rather than inadvertence in all of the circumstances here. Error in judgment was not suggested, nor would the material filed support such a claim if advanced.
Election Campaign Finance Offences
[ 14 ] Section 92 of the Act creates offences and prescribes penalties, including fines and those in subsection 80(2), as follows:
- (3) If the expenses incurred by or on behalf of a candidate exceed the amount determined for the office under section 76, the candidate is liable for a fine equal to the excess, in addition to any other penalty provided for in the Act.
(5) A candidate is guilty of an offence and, on conviction, in addition to any other penalty that may be imposed under this Act, is subject to the penalties described in subsection 80(2), if he or she,
(a) files a document under section 78 or 79.1 that is incorrect or otherwise does not comply with that section; or
(b) incurs expenses that exceed what is permitted under section 76.
(6) However, if the presiding judge finds that the candidate, acting in good faith, committed the offence inadvertently or because of an error in judgment the penalties described in subsection 80(2) do not apply.
[ 15 ] The relief available through subsection 92(6) is referrable to the offences mentioned in subsection 92(5). Since failure to file is not one of those offences, that relief is not available to the applicant. This difference was explained by the court in Braid v. Georgian Bay (Township) , [2011] O.J. No. 2818 at paras. 27 and 28 :
Failure to file an audited financial statement on time as required by section 78(1) will trigger forfeiture of office under section 80(2). However, filing a financial statement which is on time but which is “incorrect or otherwise does not comply with that section” as set out in section 92(5) creates an offence under that section which attracts the same forfeiture penalty under section 80(2) unless the Court finds that the offence was committed inadvertently by a candidate acting in good faith.
...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.
[ 16 ] Cited in the Braid decision, supra, is a recent decision by J.R. Henderson J. in Iorfida v. Diodati , 2011 ONSC 2180 , [2011] O.J. No. 1635 . Diodati was elected to the office of Mayor of the City of Niagara Falls in the municipal election of October 25, 2010. He had filed before the deadline of March 25, 2010, the requisite financial statement which, as it turned out, erroneously showed campaign overspending of $72.74.
[ 17 ] At para. 6 of his reasons J.R. Henderson J. states that:
- …I find that the original financial documents that were filed on March 24, 2011 clearly triggered the operation of s. 80(1) and (2) of the MEA. Therefore, on a strict reading of s. 80(2) of the MEA, Diodati forfeits the office of Mayor and the office is deemed vacant.
[ 18 ] J.R. Henderson J. went on, however, to grant relief from forfeiture both pursuant to section 98 of the CJA and, in the alternative, pursuant to subsection 92(6) of the MEA. It should be noted that it was a “friendly” application in the Diodati case, the applicant being the City Clerk and the respondent being the newly-elected Mayor. There is no reference in the reasons to argument suggesting that there is no jurisdiction in the Superior Court of exercise the power granted in subsection 92(6). The court in Diodati appears to have proceeded on the assumption that there was such jurisdiction.
[ 19 ] In the Braid decision, supra, T.M. Wood J. granted relief from forfeiture so that the elected Mayor of the Township of Georgian Bay could retain his post, even though he had failed to file an auditor’s report in the correct form by the deadline set out in the MEA. In assuming jurisdiction to grant the relief sought, he reasoned as follows in paras. 30 to 32:
…The applicant did not fail to file an audited financial statement, he filed a flawed one. In doing so he committed an offence under subsection 92(5)(a) of the Act. That subsection pre-supposes a prosecution of the offending candidate as it requires the registration of a conviction before either the forfeiture of office under subsection 80(2) or its non applicability apply.
Where the municipality has chosen not to prosecute as in this case that would appear to be the end of the matter as a conviction must be registered before any penalty including forfeiture under subsection 80(2) would apply. However the applicant has properly sought a declaration from this Court to clarify the situation. Where the possibility of prosecution exists, the applicant cannot meaningfully participate as a member of council. Therefore some determination of his status is required.
I believe that the correct approach to be taken to this task is to follow the reasoning process and make the findings that would have been required of the judge presiding over a prosecution under section 92 of the Act.
[ 20 ] In other words, even though the Legislature of Ontario has conferred jurisdiction specifically on a judge of the Ontario Court of Justice only if a prosecution is launched, the Superior Court of Justice finds, nevertheless, that it can exercise the jurisdiction itself even in the absence of a prosecution. With respect, this cannot be the case.
The Presiding Judge
[ 21 ] Section 1.1 of the MEA defines “presiding judge” to mean “a judge or a justice of the peace” a definition which is somewhat circular. The MEA is, however, a provincial statute which creates provincial offences.
[ 22 ] The Provincial Offences Act , R.S.O. 1990, Chapter P. 33 (POA) contains the following relevant definitions in section 1, the interpretation section:
1.(1) In this Act,
“court” means the Ontario Court of Justice;
“judge” means a provincial judge;
“justice” means a provincial judge or a justice of the peace;
“offence” means an offence under an Act of the Legislature …
[ 23 ] The purpose of the POA is set forth in section 2 as follows:
2.(1) The purpose of this Act is to replace the summary conviction procedure for the prosecution of provincial offences, including the provisions adopted by reference to the Criminal Code (Canada), with a procedure that reflects the distinction between provincial offences and criminal offences.
[ 24 ] In the MEA, the Legislature has chosen to confer jurisdiction on the Superior Court for certain purposes and on the Ontario Court for others. Thus, the Superior Court was chosen to resolve disputes concerning the validity of elections:
Subsection 58.(1) provides for application to the Superior Court for an order that the clerk hold a recount.
Subsection 63.(1) provides for application to the Superior Court for a judicial recount of disputed ballots.
Subsection 83.(1) provides for applications to the Superior Court for determinations as to the validity of the election in general, a candidate’s election in particular, whether another person was validly elected or is entitled to an office, and whether a by-election should be held.
[ 25 ] In contrast, the Ontario Court is referred to explicitly in relation to election campaign finances:
Subsection 80.(4) states that a candidate may apply to the Ontario Court to extend the time for filing a document under sections 78 or 79.1.
Subsection 81.(6) permits an appeal of an audit committee decision to the Ontario Court and authorizes the Ontario Court to make every decision the committee could have made.
[ 26 ] Subsection 92.(6) concerns the matter of campaign finances; it follows that “the presiding judge” referred to therein is a judge of the Ontario Court.
[ 27 ] The interdependence between the MEA and the POA is affirmed in the following statement by the Court of Appeal in para. 27 of its reasons in Audziss v. Santa , [2003] O.J. No. 9 :
- The general right of a private person to lay an information in respect of an offence created by a provincial statute is found in s. 23(1) of the POA reproduced earlier . The MEA is a provincial statute and it creates a number of offences. There is no express restriction or limitation in the MEA on an individual’s right to lay an information in respect of any offences contained in that statute. The question that arises is whether it is implicit that the Legislature intended to reserve that right to the council or local board of a municipality in respect of election campaign finances when it enacted s. 81(10). As set out above, that section authorizes the council or local board, following the conduct of a compliance audit, to “commence a legal proceeding against the candidate for any apparent contravention of a provision of this Act relating to election campaign finances.”
[ 28 ] The Court of Appeal concluded that the Legislature did not intend that an elector could simply by-pass the whole process and lay a private information. The court’s analysis does support the view that jurisdiction in campaign financing matters lies exclusively with the Ontario Court.
Section 28 of the CJA
[ 29 ] The alternative claim for relief is based on section 98 of the CJA :
- A court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.
[ 30 ] In Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co. , 1994 100 (SCC) , [1994] 2 S.C.R. 490 (S.C.C.) at para. 32 , the Supreme Court of Canada specified the criteria governing the application of s. 98 :
- The power to grant relief against forfeiture is an equitable remedy and is purely discretionary. The factors to be considered by the Court in the exercise of its discretion are the conduct of the applicant, the gravity of the breaches, and the disparity between the value of the property forfeited and the damage caused by the breach: (citations omitted).
[ 31 ] As noted earlier, the applicant’s conduct was unreasonable and it cannot be said that he acted in good faith. In the circumstances, the failure to file a financial statement cannot be said to be inadvertent.
[ 32 ] I agree with the submission by counsel for the City of Hamilton that Mr. Ecker’s breach was very grave indeed in that it rendered it impossible for any elector to inquire into the appropriateness of his campaign finances. The actual amounts involved are not a relevant consideration in the circumstances. To relieve the applicant from the consequences imposed by subsection 80(2) of the Act would defeat the primary purpose of the financial filing requirements.
[ 33 ] In Diodati , supra, J.R. Henderson J. considered the above factors and was satisfied that he should exercise his discretion in favour of granting the relief sought. In the circumstances here, consideration of those factors leads to the opposite conclusion.
Summary
[ 34 ] The exception in subsection 92(6) of the MEA applies only in the context of a prosecution for offences mentioned in subsection 92(5).
[ 35 ] “Presiding judge” referred to in subsection 92(6) means a judge of the Ontario Court of Justice. No authority is conferred on the Superior Court by that provision.
[ 36 ] In the circumstances, there is no basis for granting the relief sought by exercise of the court’s discretion pursuant to section 98 of the Courts of Justice Act .
[ 37 ] For these reasons, this application is dismissed.
CAVARZAN J.
Released: April 12, 2012
COURT FILE NO.: 12-33900
DATE: 2012-04-12
ONTARIO SUPERIOR COURT OF JUSTICE
IN THE MATTER OF an Application by Michael Ecker, a candidate for election, pursuant to Section 92.(6) of the Municipal Elections Act, 1996, for an Order setting aside the penalties described in Section 80(2) of the Municipal Elections Act, 1996.
B E T W E E N:
MICHAEL ECKER
Applicant
- and –
HAMILTON-WENTWORTH CATHOLIC DISTRICT SCHOOL BOARD and CITY OF HAMILTON
Respondents
REASONS FOR DECISION
Cavarzan J.
JC:mg
Released: April 12, 2012