CITATION: Ferri v. Her Majesty the Queen, 2015 ONSC 3892
NEWMARKET COURT FILE NO.: CV-15-122862-00
DATE: 20150616
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mario Ferri Applicant
– and –
Her Majesty the Queen, as represented by the Ministry of the Attorney General Respondent
John Ritchie and Effie Lidakis, for the Applicant
No One Appearing, for the Respondent
HEARD: June 11, 2015
RULING ON MOTION
CHARNEY J.:
Overview
[1] This application is brought by Mario Ferri, a local and regional councillor for the City of Vaughan (the “City”), most recently elected on October 27, 2014. By virtue of his position as a local and regional councillor for the City, he is a member of the council of the Regional Municipality of York Region (the “Region”). Mr. Ferri brings this application under Rule 14.05(3)(d) and (g) of the Rules of Civil Procedure, RRO 1990, Reg 194, for a declaration that he does not have a pecuniary interest within the meaning of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M50 (the “MCIA”) in relation to an appeal to the Ontario Municipal Board (OMB) in which his son, Steven C. Ferri, is one of the lawyers who acts for the appellant.
[2] The primary issue in this case is whether the applicant’s deemed pecuniary interest under the MCIA precludes him from participating in matters which are relevant to the OMB appeal referred to above, or whether this deemed pecuniary interest is exempted under s.5 of the MCIA.
[3] A preliminary issue that arises is whether appropriate notice of this application has been provided to potentially interested parties. While the applicant has followed the procedure endorsed by this court in previous cases, I am not satisfied, on the fact of this case, that appropriate notice has been given and I have concluded that the court should decline to hear this application in the absence of such notice. Municipal conflict of interest is a serious matter, and the court should decline to consider “pre-emptive” applications such as this unless it is satisfied that persons with an interest in the outcome have had proper notice of the proceeding. Otherwise, these proceedings run the risk of becoming judicial rubber stamps based on one-sided arguments.
Background
Legal Background
[4] The MCIA establishes a comprehensive statutory scheme (s.13) which regulates the participation of members of municipal councils or local boards in matters in which they may have a pecuniary interest. Section 5 of the MCIA provides that,
…where a member… has any pecuniary interest, direct or indirect, in any matter and is present at a meeting of the council or local board at which the matter is the subject of consideration, the member,
(a) shall, prior to any consideration of the matter at the meeting, disclose the interest and the general nature thereof;
(b) shall not take part in the discussion of, or vote on any question in respect of the matter; and
(c) shall not attempt in any way whether before, during or after the meeting to influence the voting on any such question.
[5] A member who is found by a court to have deliberately violated s.5 must have his seat declared vacant and may be disqualified from being a member for a period of not more than seven years, in addition to paying restitution for any personal financial gain made as a result of the conflict of interest (s.10).
[6] A “pecuniary interest” is broadly defined to include the direct or indirect pecuniary interest of certain family members. Section 4 of the MCIA provides that “the pecuniary interest, direct or indirect, of a parent or the spouse or any child of the member shall, if known to the member, be deemed to be also the pecuniary interest of the member.”
[7] Section 4 of the MCIA provides that the requirements and prohibitions in s.5 do not apply to eleven “exceptions”, the relevant one in this case being subsection 4(k) which provides that s.5 does not apply to a pecuniary interest that a member may have “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.”
[8] The MCIA provides an enforcement mechanism in sections 8 to 10. Section 9 provides that “an elector may, within six weeks after the fact comes to his or her knowledge that a member may have contravened subsection 5 (1), (2) or (3), apply to the judge for a determination of the question of whether the member has contravened” those provisions.
Procedural Background
[9] The MCIA does not provide any mechanism by which an elected member may seek a court ruling in advance of participating or voting on an issue where there is some uncertainty regarding the proper interpretation or application of the Act. Given the serious consequences of infringing s.5 of the MCIA, this is a real concern to conscientious municipal councillors who want to fulfil their duties to their constituents by participating in as many matters as possible, but do not want to risk infringing the MCIA (See: Craig v. Her Majesty the Queen in Right of Ontario, 2013 ONSC 5349, at paras. 8 and 9). Accordingly, the practice has developed whereby members who wish to resolve any uncertainty in this regard bring applications under rule 14.05 (3)(d) which authorizes a proceeding to be brought by application “where the relief claimed is the determination of rights that depend on… the interpretation of a statute…” and subsection (g), which permits the court to grant a “declaration ancillary to relief claimed in a proceeding properly commenced by notice of application.” (See: Craig, supra; Lastman v. Ontario, (2000), 2000 CanLII 22627 (ON SC), 183 DLR (4th) 546; Re: Enismore (Township), [1996] O.J. no. 167). I agree that this approach is reasonable and appropriate, subject to my concerns below about proper notice being given to the municipal council or other parties who may be interested in the issue.
Factual Background
[10] The applicant is a local and regional councillor for the City and a member of the council of the Region. He has served in this position from 1997 to 2010 and since 2014.
[11] On September 7, 2010, City council adopted Vaughan Official Plan (VOP) 2010, which was endorsed by the Region on June 28, 2012, following the 180 day decision period prescribed by the Planning Act, RSO 1990, c P.13. More than 140 appeals of the VOP 2010 have been filed pursuant to the Planning Act. One of those appeals was brought by Antonio Di Benedetto, who owns approximately .4743 hectares of land in Vaughan. The appeal was filed on December 21, 2011.
[12] On May 25, 2015, Di Benedetto made a settlement offer to the City, which contemplates the sale of the subject property to the City. City council will likely consider and may vote on this offer at the next council meeting on June 23, 2015. It is likely that the settlement offer and the Di Benedetto appeal will also be considered and voted on by the Regional council at some point in the future. Appeals of the VOP 2010 are matters of major public interest and importance to the applicant’s constituents.
[13] The applicant’s son, Steven C. Ferri, is a lawyer who works for a law firm that represents Di Benedetto in his appeal to the OMB. Steven C. Ferri was called to the bar in 2010 and is a salaried employee (associate) of the firm, which has approximately 31 lawyers. Steven C. Ferri practices in the area of planning, development and municipal law, and was the referral lawyer for, and works directly on, the Di Benedetto appeal for the law firm under the direction of one of the partners of the firm. His salary, bonus and ongoing employment do not depend on the outcome of the Di Benedetto appeal or the any decision by the City or the Regional council with respect to these matters. Other than this work as an associate, Steven C. Ferri has no other direct or indirect pecuniary interest in the Di Benedetto appeal.
[14] The applicant’s position is that he is not personally affected, either beneficially or detrimentally, or directly or indirectly, from his son’s employment at the law firm or from remuneration of any sort received by his son from his work at the firm, including his work on the Di Benedetto appeal.
[15] Out of “an abundance of caution” the applicant has disclosed and declared an interest pursuant to s.5 of the MCIA with respect to any discussions, debates or votes by council on matters relating to the Di Benedetto appeal. He has also declared an interest in any matter in which he knows that his son’s law firm is retained by a party involved, even if his son is not involved in the particular matter. In total, he has declared a conflict on sixteen occasions due to his son’s employment at the law firm. To his credit, the applicant has been extremely vigilant and conscientious with regard to this issue, asking his son to review City council agendas ahead of meetings and advise of any matters where his firm represents clients that may have an interest in a matter going before the City council. Due to issues of solicitor/client privilege it is impossible for the applicant to know all of the matters in which the law firm that employs his son may represent a client, although s.3 of the MCIA only applies if the child’s interest is “known to the member.”
[16] The applicant states that he is “not personally affected, either beneficially or detrimentally, and whether directly or indirectly” from his son’s employment with the law firm or from remuneration of any sort received by his son from that firm. He argues that any interest he may have by virtue of his son’s employment, including his involvement in the Di Benedetto appeal, falls squarely within the exception of s.4(k) of the MCIA as being “so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member.” Accordingly, he has brought this application to obtain clarification as to whether he is legally entitled to fulfill the duties of his office and represent his constituents in respect of these and “substantially similar matters” without breaching the provisions of the MCIA.
Analysis
[17] When this application commenced, my first question to Mr. Ritchie, counsel for the applicant, was why the respondent was Her Majesty the Queen as represented by the Ministry of the Attorney General (“HMQ”), and not the City of Vaughan and/or the Regional Municipality of York, both of which would appear to have a more direct interest in the legal question posed by the applicant than HMQ. Mr. Ritchie pointed out, quite correctly, that he was following the process implicitly endorsed by Justice Winkler (as he then was) in the Lastman case, supra, and expressly endorsed by Justice Broad in the Craig case, supra.
[18] In Lastman, then Toronto Mayor Lastman made an application under rule 14.05(3)(d) for a declaration that s.5 of the MCIA did not apply to his deemed pecuniary interest in a dispute and related litigation between the City of Toronto and the Toronto Police Association concerning the Association’s fund raising campaign known as the “True Blue Campaign.” The deemed pecuniary interest arose by virtue of the fact that Mayor Lastman’s son was a partner in a law firm that had been retained to represent the Toronto Police Association. The decision does not indicate whether Mayor Lastman’s son was actually involved in the case, although the inference is that he was not.
[19] Justice Winkler first decided that he could proceed to hear the case under rule 14.05(3). While recognizing that issuing a declaration with respect to “matters which will arise in the future is to be exercised sparingly” (quoting from Laidlaw J.A. in J.E. Gibson Holdings Ltd. V. Principal Investments Ltd. [1962] 2 O.R. 507 at 510), he concluded that the facts of this case justified the exercise of that jurisdiction because (at para. 11):
The failure to do so may result in the Mayor continuing to perform his duties and responsibilities and in so doing assume the risk of a subsequent challenge by an elector pursuant to the Act. Alternatively, the Mayor may elect to discontinue any involvement he may have in the matter in order to avoid this risk…I am persuaded that this is a matter of public interest, is not academic, and has serious practical implications to Mel Lastman in his role as Mayor. This is one of those rare and unusual circumstances where the Court out to exercise its jurisdiction under rule 14.05(3).
[20] Justice Winkler concluded that the exception in s.4(k) applied to the facts of the Lastman case. He stated (at paras. 14 to 16):
The applicable test is set out in respect of section 4(k) by MacKenzie J. in Whiteley v. Schnurr, [1999] O.J. No. 2575 (QL) [now reported 4 M.P.L.R. (3d) 309 (Ont.S.C.J.)] at paragraph 10:
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? In answering the question set out in such test, such elector might consider whether there was any present or prospective financial benefit or detriment, financial or otherwise, that could result depending on the manner in which the member disposed of the subject matter before him or her.
Applying the test stated above the question is whether a reasonable elector apprised of these circumstances would be more likely than not to regard the interest of either Mel Lastman or his son as likely to influence Mel Lastman’s actions or decisions regarding the True Blue Campaign. I am satisfied that a reasonable elector would not come to this conclusion. The pecuniary interest is so separate and distinct as to be insignificant.
[21] The respondent in the Lastman case was “The Queen in Right of Ontario.” This appears to be the first case in which the Attorney General was named as the respondent in an application relating to the MCIA. Justice Winkler does not comment on this aspect of the case. Counsel for the Attorney General of Ontario did appear in the case, although Justice Winkler makes no reference to his position. I assume that the Crown was named as the respondent in the Lastman case because the case was seen as one of “public interest” that involved the interpretation of a provincial statute. There is no indication whether the City of Toronto was given notice of the proceeding, although I think it likely that, given the notoriety of both Mayor Lastman and the “True Blue Campaign”, the case was widely known.
[22] In the next case, Craig v. HMQ in Right of Ontario as Represented by the Attorney General of Ontario, supra, the Attorney General of Ontario did raise as a preliminary objection the appropriateness of its being named as the respondent on the grounds that “Ontario had no direct or indirect interest in the local municipal governance issue of whether the Applicant is exempted from the application of s. 5 of the MCIA in respect of the rapid transit initiative.”
[23] Justice Broad denied the request to dismiss the application as against the Attorney General, on the following basis (paras. 17 to 25):
[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.
[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.
[24] Accordingly, the request of Ontario for dismissal of the application on the grounds that it was improperly named as the respondent was denied. In making this assessment, Justice Broad noted (at paras. 26 to 28) that the Crown had the unfettered right to decline to take a position on the issue in the application, but noted that it would have been preferable if the Crown had taken a position given the importance of having a lis inter partes in our adversarial system (at para 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 who have a stake in the outcome”.
[25] The Attorney General of Ontario did not appeal the Craig decision.
[26] In the present case, the Attorney General did not renew its prior objection to being named as a Respondent, but simply wrote to Mr Ritchie to advise that “we have determined that the application relates to purely local issues and does not engage the interest of the Crown in Right of Ontario. As a result, the Crown does not take any position on the application, and will not be filing a Notice of Appearance as contemplated by Rule 38 or appearing at the return of the application.”
[27] Given that the Attorney General has not objected to being named as the respondent in this matter, I will say no more about that, except to make the following observation. While these MCIA cases certainly raise issues of public interest, I would note sections 2 and 8 of the Municipal Act 2001, SO 2001, c. 25, which provide as follows:
- Municipalities are created by the Province of Ontario to be responsible and accountable governments with respect to matters within their jurisdiction and each municipality is given powers and duties under this Act and many other Acts for the purpose of providing good government with respect to those matters.
8.(1) The powers of a municipality under this or any other Act shall be interpreted broadly so as to confer broad authority on the municipality to enable the municipality to govern its affairs as it considers appropriate and to enhance the municipality’s ability to respond to municipal issues.
[28] It would seem to me that municipalities, as “responsible and accountable governments” expected to provide for “good government” and to govern their affairs to “enhance the municipality’s ability to respond to municipal issues”, are better positioned than the Ontario government to respond to the public interest aspects raised in applications such as this. In addition, the relevant municipality would be in a better position to know whether all of the relevant facts have been disclosed by the applicant. It strikes me as inconsistent with the purposes of the 2001 amendments to the Municipal Act to ignore the relevant municipality when an issue of the interpretation and application of the MCIA to a specific municipal issue is raised. Given the understandable reluctance of the Ontario Attorney General to involve itself in “purely local issues” of which it is likely to have little if any knowledge, and given that these applications are not as “rare and unusual” as Justice Winkler expected, I would think that the “adversarial context” referred to by Justice Broad might be better served if the relevant municipal government were named as the respondent in future cases.
[29] I would also note, parenthetically, that if an action or application is brought for a declaration in relation to the interpretation or validity of a statute, the correct respondent is “The Attorney General of Ontario”, not “Her Majesty the Queen in Right of Ontario” or “Her Majesty the Queen as represented by the Attorney General of Ontario”. Actions for declarations in relation to the interpretation or validity of legislation were available against the Attorney General long before the availability of actions against the Crown (see: Dyson v. Attorney General, [1911] K.B. 410 (C.A.) and Peter W. Hogg, Patrick J. Monahan & Wade K. Wright, Liability of the Crown, 4th ed. (Toronto: Thomson Reuters, 2011) at 38-39.). Actions against the Crown required royal fiat or petition of right until the enactment of the Proceedings Against the Crown Act, S.O. 1962-63, c. 109, which eliminated the common law Crown immunity from civil suit. The designation “Her Majesty the Queen in Right of Ontario” is used when proceedings are commenced under the Proceedings Against the Crown Act, RSO 1990 c. P. 27, s.9. Even if an application for a declaration may now be brought against the Crown, it would appear to me that the applicant would still have to comply with the sixty day notice requirement in s.7 of the Proceedings Against the Crown Act. Proceeding with a Dyson-type application against the Attorney General, where it is available, would still have the advantage of not requiring compliance with s.7 of the Proceedings Against the Crown Act.
[30] This brings me to the question of whether I should decide this application in the absence of a “lis inter partes”, or at least notice being given to the City of Vaughan and the Regional Municipality of York, which may then seek leave to intervene in this proceeding. In this regard I am particularly influenced by the following considerations.
[31] In the Lastman case the applicant’s son, while a partner in the law firm, was apparently not personally acting on behalf of the party who was involved in legal proceedings against the city. The fact that Mr. Ferri’s son was the referral lawyer for, and works directly on, the Di Benedetto appeal for the law firm arguably places this case in a greyer area. If this case were exactly like the Lastman case, I might be inclined to simply follow Justice Winkler’s lead and grant the declaration sought. Indeed, if this case were exactly like the Lastman case, the applicant could simply rely on that decision and govern himself accordingly. Given the distinction between the cases, I believe that the relevant municipal councils should be given notice and have an opportunity to participate in this proceeding if they wish.
[32] In Craig, the court noted (at para. 17) “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”. In the present application, I do not know whether the municipal councils involved are aware of this proceeding. The notice of application was issued just over two weeks before it was heard, and the Respondent indicated its intention not to participate just two days before the Application was heard. In these circumstances I cannot be certain that interested members of the council or community have had an opportunity to know about or participate in this proceeding.
[33] Proceedings brought by electors under s.9 of the MCIA are necessarily adversarial proceedings. I am mindful of the Divisional Court’s admonition in Tuchenhagen v. Mondoux, 2011 ONSC 5398, 107 O.R. (3d) 675, at para. 25, that, when dealing with the MCIA, “anything less than a complete review may leave some part of any challenge unresolved.” In my opinion, the court must exercise some caution with respect to non-adversarial proceedings that may present something less than a complete review of the facts and arguments. It is incumbent on the court to ensure that when applications such as the present one are brought, and the named respondent is a party that purports to have no interest in the case and certainly would have no knowledge of the relevant facts, that other interested parties have notice of the proceeding and a reasonable opportunity to participate before any decision is made.
[34] It may well be that the applicant is correct and no one will come forward to challenge his interpretation of the MCIA. We will know that with certainty only if notice of this proceeding is given to the relevant municipal governments.
Conclusion
[35] Accordingly, I have declined to decide this application, and order that the applicant serve the City of Vaughan and the Regional Municipality of York Region with his notice of application and factum. The application can be rescheduled not less than seven days after service. I am not seized of this application.
Mr. Justice R.E. Charney
Released: June 16, 2015