COURT FILE NO.: C-427-13
DATE: 2013-08-16
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
DOUG CRAIG Applicant
– and –
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AS REPRESENTED BY THE MINISTRY OF THE ATTORNEY GENERAL Respondent
Counsel: Douglas P. O’Toole, for Applicant Jacqueline Wall and Abel Fok, for the Respondent
HEARD: August 8, 2013
THE HONOURABLE Mr. JUSTICE d.a. bROAD
REASONS FOR JUDGMENT
Nature of the Application
[1] The Applicant is the Mayor of the City of Cambridge and is a member of the Council of the Regional Municipality of Waterloo (the “Region”). He has brought an Application pursuant to Rules 14.05(3)(d) and (g) of the Rules of Civil Procedure for a Declaration that a pecuniary interest that he is deemed to possess under the Municipal Conflict of Interest Act R.S.O. 1990, c. M.50 (the “MCIA”) is so remote or insignificant in its nature as to provide an exemption from the duties he would otherwise be subject to under section 5(1) of the MCIA.
Background
[2] The Applicant’s deemed pecuniary interest relates to any plans for changes to the mass transit system within a geographic area of the Region designated as the Central Transit Corridor, and derives from the Applicant’s son’s ownership interest in a property in close proximity to a proposed transit station in the Central Transit Corridor. Pursuant to s. 3 of the MCIA, a pecuniary interest, direct or indirect, of a child of a member of council, shall, if known to the member, be deemed to be also the pecuniary interest of the member.
[3] The involvement of Regional Council, of which the Applicant was and remains a member, in the mass transit issue goes back to at least June 2003 when it approved a report of finalizing the Region's Regional Growth Management Strategy. In 2005 Regional Council authorized the undertaking of an individual environmental assessment (“EA”) for the development of a new rapid transit system to be located within the Central Transit Corridor. As might be expected, the rapid transit project in the Region would call for the potential expenditure of hundreds of millions of dollars with contributions from the federal government, the provincial government as well as the Region, and is a matter of great importance to the Region having very long-lasting effects on its residents and ratepayers.
[4] As part of the EA process a study called a Multiple Account Evaluation (“MEA”) was carried out by a consulting firm retained by the Region which subsequently submitted a report dated June 1, 2009 (the “MEA Report”). The MEA Report suggested that, in the opinion of its authors, that properties within a 600 m radius of proposed rapid transit stations would experience a one-time increase in value. The report described the increase in value of properties in proximity to transit stations as “Land Value Uplift.”
[5] In February 2011 in the Applicant’s son Michael Craig became the owner, in joint tenancy with his fiancée, of a residential property across the street from the main transit terminal in Cambridge and thus within the 600 m radius of the terminal identified by the MEA Report as potentially benefiting from the Land Value Uplift. The Applicant deposed in his affidavit in support of the Application that he is deemed, by section 3 of the MCIA, to possess any pecuniary interest, direct or indirect, that his son Michael possesses. He therefore disclosed a pecuniary interest as soon as the property was purchased by his son, and since that time he has not participated in any debates, discussions, or votes pertaining to the rapid transit project.
[6] The Applicant states in his supporting affidavit that he brings the Application to obtain clarification as to whether he is legally entitled to fulfill the duties of his offices in respect of the rapid transit project and to represent and advocate for the interests of his constituents in the issue without violating the prohibition in the MCIA. It is his position that his deemed pecuniary interest respecting mass public transit issues in the Region is so insignificant and so remote that it cannot reasonably be regarded as likely to influence his participation in discussions, debates or votes at Regional Council on those issues. He points to a the exception to the application of the duties under section 5(1) of the MCIA at paragraph 4(k) which provides as follows:
Section 5 does not apply to a pecuniary interest in any matter that a member may have:
(k) by reason only of an interest of the member which is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member.
[7] As indicated, the Applicant complied with the requirements of the MCIA immediately upon the deemed pecuniary interest coming into existence by declaring it and refraining from participation in any debates discussions or votes relating to the rapid transit project and now applies for a declaration that the exemption in s. 4(k) applies which would permit him to resume such participation.
Procedural Issues
[8] It is noted that there is no express provision in the MCIA for a member of council to bring an application to court for a declaration that he or she does not have a conflict of interest caught by the MCIA or that he or she is not subject to the prohibitions prescribed by it. The scheme of the MCIA is rather to effectively require council and board members to police themselves having regard to the requirements of the MCIA or face the prospect of being subject to an application brought by an "elector" for determination of the question of whether the member has contravened subsections 5(1), (2) or (3) pursuant to subsection 9(1).
[9] Pursuant to s. 10(1) of the MCIA, the consequences of a finding that a member has a contravened the MCIA are very onerous, involving a mandatory removal of the member from office, and the possibility of disqualifying him or her from being a member for up to seven years, as well as an order for restitution where the contravention has resulted in personal financial gain.
[10] Notwithstanding the fact that the MCIA does not contemplate a member prospectively applying for a ruling on whether he or she is subject to its requirements, the Court has entertained applications for such declaratory relief on numerous occasions under the authority of Rule 14.05(3)(d),(g) and (h) of the Rules of Civil Procedure which provide, in summary, that a proceeding may be brought by application where the relief claimed is the determination of rights that depend upon an interpretation of a statute, a declaration when ancillary to relief claimed in a proceeding properly commenced by a notice of application, or in respect of any matter where it is unlikely that there will be any material facts in dispute.
[11] Ontario courts have entertained applications for such prospective declaratory relief on application by the affected council member in the cases of Halton Hills (Town) v. Equity Waste Management of Canada (1995) 30 M.P.L.R. (2d) 232 (Ont. Ct.(Gen. Div.)) and Lastman v. Ontario 2000 CanLII 22330 (ON SC), 47 O.R. (3d) 177 (SCJ) and by the municipality involved in the cases of Re Ennismore Township (1996) 31 M.P.L.R. (2d) 1 (Ont. Ct. (Gen. Div.)) and Orangeville (Town) v. Dufferin (County)(2009) 68 M.P.L.R. (4th) 20 (SCJ) appeal allowed 2010 ONCA 83.
[12] No case was cited by counsel by which an application for prospective declaratory relief respecting the application of the MCIA was dismissed on the basis that the MCIA does not provide for such relief, or that the Court lacks jurisdiction to deal with it. Indeed, Justice LaForme in Ennismore described the prospective application approach as reasonable and appropriate (see para. 1) and Justice Belleghem in Halton Hills commented that the applicant mayor in that case showed wisdom and prudence in raising the issue (see para. 16). Justice Winkler in Lastman, while acknowledging that the jurisdiction of the Court to make a declaration on matters which will arise in the future is to be exercised sparingly, the determination of whether the applicant mayor in that case was subject to the prohibitions in the MCIA was of such practical importance, and the circumstances were such, that the jurisdiction of the Court should be exercised (see para. 10).
[13] The Respondent did not take issue with the jurisdiction of the Court to deal with the Application pursuant to Rule 14.03 and did not argue that the circumstances were such that the Court should decline to exercise such jurisdiction. I am satisfied, on the basis suggested by Justice Winkler in Lastman, that a determination of the question presented by the Application in this case is of such practical importance that the jurisdiction of the Court under Rule 14.03 should be exercised. The coming into existence of the deemed pecuniary interest affecting Mayor Craig, by virtue of his son having acquired an interest in property within a short distance of a proposed transit station, has resulted in the his being prevented from exercising his office and representing his constituents on a matter of great importance to them and to the Region pending a determination of the issue of the remoteness or in significance of the deemed conflict.
Position of Her Majesty the Queen in right of Ontario as represented by the Ministry of the Attorney General as the Named Respondent
[14] The Respondent has submitted that the Application should be dismissed as against it on the basis that it was not properly named as a respondent. It argues that there is no lis (i.e. a dispute or controversy) between the Applicant and Her Majesty the Queen in right of Ontario (“Ontario”) and Ontario has no direct or indirect interest in the local municipal governance issue of whether the Applicant is exempted from the application of section 5 of the MCIA in respect of the rapid transit initiative.
[15] The issue of whether Ontario was properly named as a respondent was argued as a preliminary matter. Following argument, I denied the request of the Respondent for dismissal of the Application on the basis that it was improperly named, giving the preliminary oral reasons, subject to written reasons to follow. The following are my fuller reasons in that respect.
[16] As indicated above, the Court has jurisdiction under Rule 14.03 of the Rules of Civil Procedure to entertain an application brought, either by a council member himself or herself, or by a municipality or board, for a prospective declaration respecting whether a member is subject to the prohibitions under the MCIA.
[17] In this case, the nature of the suggested conflict of interest is not such as to affect the interests of any particular person or group of persons within the Region, but rather the question of whether the deemed pecuniary interest of the Applicant is too remote or insignificant is a question of broad general public interest. Accordingly there are no specific persons who are appropriate to be named as respondents. It is noted in this regard that the fact that the Applicant would be bringing this Application has received wide public exposure in the community through print and internet media and no one has come forward with a request to participate in the proceeding.
[18] Rule 5.03(1) of the Rules of Civil Procedure provides that every person whose presence is necessary to enable the court to adjudicate effectively and completely on the issues in a proceeding shall be joined as a party to the proceeding. In my view, this is in keeping with the principle that the court has inherent jurisdiction to control its own process and in particular it is to determine the parties who should be before the court to permit it to adjudicate properly on the issues.
[19] It was observed by Justice McLachlin, as she then was, in the case of Stein v. Gonzales (1984) 58 B.C.L.R. 100 (BC SC) at para. 17 albeit in a different context, that the Crown, as represented by the Attorney General, is entrusted and charged with the duty of enforcing public rights.
[20] It is acknowledged, as observed above, that the MCIA does not contemplate a role for the Crown to regulate or supervise the conduct of members of the municipal councils or boards. However, this is not an application under the MCIA, but rather is an application authorized by Rule 14.03. There is nothing in the MCIA, nor in the Rules of Civil Procedure, specifically preventing the Crown from participating in an application of this nature, either by being named as a respondent, or by applying to intervene. The question of whether it is a proper party in a particular case is therefore to be determined by the Court in the exercise of its inherent jurisdiction to determine its own process and by Rule 5.03.
[21] There is precedent for the Crown to be named as a respondent in an application of this nature represented by the Lastman case. It is evident from reading the report of that case that the Crown was represented by counsel and participated in the hearing. No question was raised with respect to the propriety of it being named as a respondent. Counsel for Ontario in this proceeding was unable to shed any light on the circumstances relating to the Ministry of the Attorney-General’s participation in the Lastman case.
[22] As indicated above, the right of the Applicant to bring the Application is not disputed. It appears that there is no identifiable person or group of persons who would be directly or uniquely affected by the issues in the application but rather the broad general public interest is engaged. Counsel have not been able to identify any other persons who should have been named as respondents. There is no other party in a position to represent the general public interest other than the Crown, as represented by the Ministry of the Attorney General. The right of the Crown to represent the general public interest in a matter of this nature appears to have been tacitly acknowledged by the Ministry and by the Court in the Lastman case.
[23] It is noted that the Crown filed no material which would disclose the existence of any policy directives within the Ministry addressing the circumstances under which the Ministry would take a position and participate in an application of this nature as it evidently did in Lastman, or alternatively, would decline to do so, as it has in this case. The apparent inconsistency between the approach taken by the Ministry in Lastman and the approach taken in this case has not been explained.
[24] In my view, the Applicant was prudent and correct in following Lastman by naming Ontario as the Respondent in this proceeding as the appropriate representative and steward of the general public interest. Under Rule 5.03 it was similarly appropriate for it to be joined as a party in order to permit the court to adjudicate effectively on the issues.
[25] This is not to say that the Crown must always be named as a respondent on an application of this nature. Whether it is a properly joined depends upon the particular circumstances of each case, including whether there is a specific person or groups of persons with identifiable interests in the issues under consideration.
[26] It was acknowledged by the Applicant that there is no authority for the proposition that the Crown is obliged to take a position in response to the Application. I accept the submission of counsel for Ontario that the Crown has an unfettered discretion to determine whether or not it should take a position on a matter before the Court on behalf of the public interest.
[27] However, the fact that the Crown has the unfettered right to decide whether to take a position does not necessarily give rise to a right to have the Application dismissed as against it on that basis. It appears to be well settled that a lis between the parties to a proceeding is not required to found a declaratory action (see Cheslatta Carrier Nation v. British Columbia 2000 BCCA 539 (BC CA) leave to appeal denied [2000] S.C.C.A. No. 625, at para. 11, and the cases therein referred to.)
[28] In order to respect the Crown's unfettered right to decline to take a position on the central issue in the Application, it is not necessary to dismiss the Application has against it. It is sufficient for the Crown to simply advise the Court that it takes no position.
[29] As Justice Sopinka observed in Borowski v. Canada (Attorney-General) (1989), 47 C.C.C. (3) 1 (SCC) at para. 9 "the requirement of an adversarial context is a fundamental tenet of our legal system and helps guarantee that issues are well and fully argued by parties to have a stake in the outcome.”
[30] Although it might have been preferable for the Crown to take a position in response to the Application in keeping with the principle enunciated by Justice Sopinka, the Court has no power to compel it to do so. However, having the Crown, as represented by the Ministry of the Attorney General, before the Court in circumstances such as these, even if it does decline to participate, is useful in giving the Court some measure of comfort that if there are overriding public interest considerations raised by the Application there is a party before the Court which has the power to raise them.
[31] The request of Ontario for dismissal of the Application on the ground that it was improperly named as the Respondent is therefore denied.
Remoteness and Insignificance of the Deemed Pecuniary Interest
[32] As indicated above, Mayor Craig has complied fully with his obligations under the MCIA that by declaring a conflict as soon as the deemed pecuniary interest involving his son came into existence. The issue for determination is whether the deemed pecuniary interest “is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence” the Applicant, as provided in s. 4(k) of the MCIA. If it is, a Declaration should issue to that effect which would free the Applicant to participate fully in, and to vote on, matters coming before Regional Council respecting the rapid transit initiative.
[33] It is noted that the terms ‘remote” and “insignificant” are not defined in the MCIA. In interpreting those words it is therefore important to do so having regard to the purpose and objectives of the MCIA. As Price, J. observed in the recent case of Gammie v. Turner 2013 ONSC 4563 (SCJ) at para. 20:
The words of the MCIA are to be read in their ordinary sense in the context of the Legislature's objective in enacting that statute. The objective that the MCIA embodies is transparency in municipal decision-making, to be achieved by requiring a councillor to declare a conflict when he or she has a pecuniary interest that may affect his or her vote, and by preventing the conflict of interest that would result if a councillor were to vote when he or she could benefit financially from the outcome.
[34] In the case of Whiteley v Schnurr, 1999 CarswellOnt 2123 (SCJ) at para. 10 McKenzie, J. recast the enquiry under s. 4(k) as follows:
Would 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?
[35] In the case of Amaral v. Kennedy 2012 ONSC 1334 (Div. Ct.) the need for the Court to take into account all of the circumstances, in applying the test in Whiteley, was emphasized. In that case the finding of the application judge that the exception under s. 4(k) respecting remoteness and insignificance was not available to the councillor was reversed by the Divisional Court because she had not taken into account all of the relevant circumstances, including the lack of any bad faith on the part of the councillor, her long and distinguished public service on, in that case, the school board, and evidence of her motivation while sitting on the board, namely that she was "there for her constituents" and not to advance her family's interests (see paras. 41 to 44).
[36] As indicated above, the deemed pecuniary interest of the Applicant derives from an opinion expressed by the authors of the MEA report that properties located within a reasonable walking distance (assumed to be 600 m) of transit stations would experience a "land value uplift." This effect could result in some increase in value to the residence co-owned by the Applicant’s son Michael. According to the MEA report, the presence of rapid transit is assumed to generate increased demand for lands within walking distance of transit stations. The authors of the report described their methodology in calculating "value uplift potential" with factors drawn from a broad survey of studies of land value uplift surrounding rapid transit stations. The authors described the methodology as "quite course" but stated that it represents a reasonable assessment of the order of magnitude of land value increases. However the authors pointed out certain important cautions which should be considered when referencing land value uplift, including, firstly that the calculation of the amount is subject to very broad assumptions about the actual dollar impact of transit on land-use, and secondly that land value uplift is a benefit that does not recur.
[37] The Applicant deposed in his Affidavit that, as the MAE Report did not specify the precise magnitude of the "percentage uplift factors" used to calculate "land uplift values,” he requested Thomas Schmidt, the Commissioner of Transportation and Environmental Services for the Region of Waterloo, to review the MAE Report to determine the percentage of value uplift that was used to calculate the total amount of uplift value. Mr. Schmidt provided various conclusions following his review of the MEA Report, including that the range of land value uplift varies from approximately 0% to 15%, that land uplift value may vary considerably when the rapid transit system is implemented, and that he would expect that the uplift for a residential condominium would be around 10% and with a bus rapid transit solution, as opposed to light rail transit, the uplift would be less than 10%.
[38] The affidavit material indicates that the condominium property was acquired by Michael Craig and his fiancée for $240,000 in February 2011. Based upon no appreciable increase in value since the date of acquisition, and the based upon the observations and opinions expressed in the MEA Report, the total "land value uplift" that the property would experience as result of changes to the mass transit system would be between zero ($0) (0% land value uplift) and $36,000 (15% land value uplift), with Michael Craig's share of the potential "land value uplift" being between zero ($0) and $18,000.
[39] Michael Craig deposed in his affidavit that, at the time the condominium was acquired, he did not turn his mind to the fact that changes to the mass transit system in Waterloo Region could impact its value. He stated further that he and his fiancée did not consider the purchase as a financial investment aside from an understanding that, in general, real estate increases in value over time. They always considered the condominium to be a starter home and not something that they would retain in the long-term as it is not well-suited to the raising of children, as a four-story home with multiple staircases. They have no plans to retain the condominium as an investment property when they look for a more permanent home to raise a family.
[40] The Applicant Mayor Craig deposed in his affidavit of July 17, 2013 that he has lived in the City of Cambridge for over 39 years with his family, and that his experience as an elected official dates back nearly to the time he first moved to Cambridge, serving as an Alderman from 1976 until 1980, City and Regional counselor from 1991 until 2000, and from 2000 as the Mayor of Cambridge and a Regional Councillor. While serving as an elected official he has served on numerous committees, working groups and studies, and during the time he has served as an elected official in any capacity he has never been accused of, let alone found liable for, breaching any ethical guideline policy, responsibility or statute including the MCIA. He deposed that he brought the Application because he considers the issue of potential changes to mass transit to be of central importance to the electors of the Region, and more particularly, to the citizens of the City of Cambridge whom he was elected to represent, and he is motivated solely by the desire to represent the interests of his constituents. He stated that his desire to participate in discussions, debates and votes concerning changes to mass transit systems is not, in any manner, motivated by the fact that his son owns property in proximity to the Ainslee Street Transit Station in Cambridge.
[41] In the context of determining whether a reasonable elector would regard the deemed interest of Mayor Craig as likely to influence his actions and decisions on the mass transit issues, it is noted that the meaning of the terms "remote" and "insignificant"in the Oxford English Dictionary include “having very little connection with or relationship to” and “lacking in importance” respectively.
[42] In my view, a reasonable elector, apprised of all the circumstances, would regard the deemed pecuniary interest of Mayor Craig, by virtue of his son’s ownership interest in the condominium in proximity to a transit station, to be unlikely to influence his actions or decisions on mass transit issues in his role as a Regional councillor. These circumstances include:
(i) the potential for a "land value uplift" to the subject property and the amount of any such uplift is uncertain, and subject to various qualifications and contingencies, and may not be realized;
(ii) it is probable that the condominium property will not be retained by the Applicant's son on a long-term basis, and it may be sold before any value uplift is realized;
(iii) any potential benefit derived from a "land value uplift" to the condominium property will not be shared by the Applicant;
(iv) the Applicant has a long and distinguished record of community service as an elected official, without any previous accusations or findings of liability for breach of any ethical guidelines, policies or statutes including the MCIA;
(v) the Applicant acted appropriately in declaring a conflict immediately upon the deemed pecuniary interest came into existence, and in making this Application for determination of his responsibilities under the MCIA;
(vi) the Applicant's motivation in bringing this Application is a desire to represent the interests of his constituents on an important issue of public policy in the Region; and
(vii) the Applicant’s desire to participate in discussions, debates and votes on the mass transit issue is not motivated, in any manner, by the fact that his son owns property in proximity to a transit station in the City of Cambridge.
Disposition
[43] For the foregoing reasons, the Application is granted and it is hereby declared as follows:
The pecuniary interest that the Applicant is deemed to have, by operation of section 3 of the Municipal Conflict of Interest Act, in the implementation of rapid transit systems or any other changes to mass public transit within the Central Transit Corridor as designated by the Regional Municipality of Waterloo (the “Region”), in the Regional Growth Management Strategy adopted by the Region, by virtue of real property, legally described as Unti 64 Level 1, Waterloo Standard Condominium Plan 344, bearing municipal address 39 Wellington South, Cambridge Ontario, being owned by the Applicant’s son, Michael Craig, in joint tenancy with Nicole Kameka, is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the Applicant.
[44] There shall be no order as to costs, as the Applicant is indicated that no costs are sought as against the Respondent.
D. A. Broad J.
Released: August 16, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DOUG CRAIG Applicant
– and –
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AS REPRESENTED BY THE MINISTRY OF THE ATTORNEY GENERAL Respondent
REASONS FOR JUDGMENT
D. A. Broad J.
Released: August 16, 2016