SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: C-618-15

DATE: 2015/07/31

RE: SANDY SHANTZ, Applicant

AND:

THE CLERK OF THE TOWNSHIP OF WOOLWICH and THE CORPORATION OF THE TOWNSHIP OF WOOLWICH, Respondents

BEFORE: The Honourable Justice D.A. Broad

COUNSEL:
James H. Bennett, for the Applicant

Donald G. Kidd and Kevin Thompson, for the Respondants

Alan Marshall, Intervener – Self-Represented

HEARD: July 23, 2015

ENDORSEMENT

Background

[1] The applicant is the Mayor of the Township of Woolwich (the “Township”), having been elected as such in the municipal election held on October 27, 2014.

[2] The applicant applies for relief from forfeiture of her position as Mayor under s. 80(2) of the Municipal Elections Act, 1996 S.O. 1996, c. 32 (the “Act”) for failure to file a financial statement and auditor’s report respecting her election campaign finances in accordance with the Act, and for associated relief, including an Order extending the time for her to file a financial statement and auditor’s report.

[3] Subsection 80(2) of the Act provides that a candidate who fails to comply with the filing requirements set forth in the Act forfeits any office to which he or she was elected and is ineligible to be elected or appointed to any office to which the Act applies until the next regular election takes place.

[4] Ironically, although a candidate who is charged and convicted under the Act for failure to comply with the filing requirements may be relieved from the penalties in subsection 80(2) if the presiding judge finds that the candidate, acting in good faith, committed the offence inadvertently or because of an error in judgment, no such relief from the penalties is available under the Act for a candidate who is not charged but who similarly acted in good faith and breached the Act inadvertently. The applicant in this case was not charged with any offence under the Act and therefore brings the present application in reliance upon s. 98 of the Courts of Justice Act , R.S.O. 1990, c. 43 (the “CJA”), which provides that “a court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.”

[5] The respondents, the Clerk of the Township and the Township itself, were represented by the same counsel who advised the Court that neither respondent had any information or evidence to offer in opposition to the application or had any reason to oppose the application. The respondents therefore took no position with respect to the application.

[6] Mr. Alan Marshall, a resident and elector in the Township, appeared and requested leave to intervene pursuant to Rule 13.02 of the Rules of Civil Procedure as a friend of the Court for the purpose of rendering assistance to the Court by way of argument. According to the affidavit of the applicant, Mr. Marshall brought an application to the Clerk of the Township for a compliance audit of the applicant’s campaign finances by reason of alleged contraventions by the applicant under the Act, which led to the applicant learning of her non-compliance.

[7] The applicant opposed Mr. Marshall’s request for leave, and, following submissions and for oral reasons entered on the record, I granted intervener status to Mr. Marshall as a friend of the Court for the purpose of rendering assistance by way of argument. I directed Mr. Marshall to avoid any attempt to introduce facts or evidence, but rather to restrict his submissions to argument.

[8] After hearing submissions from counsel for the applicant and from Mr. Marshall, I granted the relief sought on the application, with reasons to follow, and signed the draft Judgment prepared by counsel for the applicant which was issued and entered on July 23, 2015. Following are those reasons for granting the application.

Analysis

[9] The affidavit evidence of the applicant disclosed, inter alia, the following:

(a) following the election, on February 2, 2015 the applicant submitted her Financial Statement-Auditor’s Report - Form 4 pursuant to the Act, without professional assistance;

(b) on her form she calculated her expenses to be $9,475.39;

(c) the applicant’s total contributions, including her personal contribution of $5,500, totalled $11,858, which created a surplus over her expenses;

(d) The applicant was aware that the Act allowed a surplus to be refunded to a candidate if it is less than his orher total personal contribution and accordingly she both deducted the surplus of $2,382.61 from her income listed on the form, and refunded the amount to herself. She then recorded her income as $9,475.39 and her surplus as $0.00;

(e) the applicant followed what she believed to be the proper accounting method to record her statement of campaign income and expenses. Based upon her calculation, and after the deduction of her surplus, she recorded her total expenses at $9,475.39 and her contributions at the same amount, thereby not exceeding the $10,000 threshold pursuant to the Act for having her financial statement audited and to include an Auditor’s Report with her Financial Statement submission to the clerk. This was an error as the Act required the applicant’s Financial Statement to be audited, even though the permitted refund of the surplus to herself reduced the net contributions below $10,000;

(f) following the filing of the application by Mr. Marshall, the applicant retained the services of an accountant to prepare an audit of her financial statement prior to any decision being made about a compliance audit, as she wished to address the statements made by Mr. Marshall in his application as soon as possible;

(g) at its meeting on July 2, 2015, the Municipal Election Compliance Audit Committee of the Township dismissed Mr. Marshall’s application. Comments by members of the committee overwhelmingly suggested that, although the applicant had clearly not been in compliance with requirements of the Act, it was felt that there was nothing to gain by requiring a compliance audit when the applicant had already completed an audit herself;

(h) the Clerk of the Township notified the applicant on July 8, 2015 that she was in default under the Act and was subject to penalties under it including that she forfeit the office of mayor to which she was elected and it be deemed to be vacant and that she is ineligible to be elected or appointed to any office to which the Act applies, until the next election has taken place; and

(i) the applicant deposed that, all material times, she had acted with good faith and with the honest belief that her filing of the form pursuant to the Act was properly done and that her failure to have her financial statement audited was as a result of that belief, and in no way related to disregard for the processes under the Act.

[10] In the case of Niagara Falls v. Diodati 2011 ONSC 2180 (S.C.J.), Henderson, J. held that section 98 of the CJA gives the Court a wide discretion to grant relief from forfeiture in order to bring fairness and justice to the parties, even where the forfeiture is mandated by a statute including the Act. Justice Henderson applied the test in exercising the court’s discretion under section 98 of the CJA in the case of Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co. 1994 100 (SCC), [1994] 2 S.C.R. 490 at para. 32, as follows:

The power to grant relief against forfeiture is an equitable remedy it 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.

[11] Regarding the gravity of the breach in the instant case, similar to the situation in Niagara Falls, I find the breach in question to be trivial. The full extent of the contributions to the applicant’s campaign, including her personal contributions, was fully disclosed on her Financial Statement. The breach was technical in that it resulted from the deduction by the applicant from her expenses the amount of the surplus which she was entitled to repay to herself from the surplus of contributions over expenses. This resulted in the applicant wrongly, although understandably, concluding that the threshold for the provision of an auditor’s statement had not been crossed in respect of her contributions and expenses.

[12] I would also find that the property forfeited, namely the office of the Mayor of the Township and the loss of the applicant’s right to participate in the next municipal election, far outweighs her error in not filing an auditor’s statement on time, particularly since the applicant’s contributions and expenses were fully disclosed on her Financial Statement which was filed on time.

[13] I also find that there was no damage caused by the late filing of the auditor’s report and that the applicant acted in good faith and committed the error in not filing an Auditor’s Report within the time prescribed by the Act inadvertently.

[14] It was therefore appropriate to grant relief pursuant to s. 98 of the CJA to the applicant from forfeiture of the office of Mayor of the Township and from the application of s. 8(2) of the Act.

[15] I also endorse the reasoning of Henderson , J. in Niagara Falls at paragraphs 30-32 that s.92(6) of the Act must be interpreted to permit the court to exercise the discretion to relieve a candidate, who is acted in good faith and who has failed to comply with a technical requirement of the Act, from the penalties described in subsection 80(2) of the Act, even where the candidate has not been charged and convicted of an offence under the Act. This interpretation is necessary in order to avoid an absurdity whereby the applicant would be forced to encourage the Township to prosecute her for an offence under the Act, even where a charge is not warranted, in order to obtain relief from forfeiture from the presiding judge.

[16] Although Mr. Marshall was granted intervener status on the application, I did so in the hope that he could render assistance to the Court by way of argument related to the public interest, in light of the fact that the respondents were taking no position on the application. As it transpired, Mr. Marshall’s submissions focused almost exclusively on the date of March 23, 2015 which appeared on the Financial Statement-Auditor’s Report Form 4 attached to the applicant’s letter of June 29, 2015 to the Municipal Election Compliance Audit Committee. I had difficulty following the argument related to the significance of that date, but Mr. Marshall appeared to be suggesting that the date on the form suggests that the applicant had knowledge of her error but did not take a proper and legal steps to file an auditor’s report on time. By this, he sought to call the applicant’s good faith into question.

[17] I find that Mr. Marshall did not confine himself to the purpose for which he was granted intervener status, namely to make argument that might be of assistance to the court, and in particular, with respect to the appropriate test to be applied on an application of this nature. He was not granted intervener status in order to bring forth facts to refute the applicant’s assertion of good faith set forth in her affidavit. With the greatest of respect to Mr. Marshall, I did not find his argument to be of assistance within the purpose of Rule 13.02.

[18] On the basis of the foregoing, I granted the relief sought by the applicant as set out on the issued and entered Judgment.

[19] As I was not provided with an address for Mr. Marshall I would request that counsel for the Respondent Township send a copy of this Endorsement to him by ordinary mail to his address on the rolls of the Township.

D.A. Broad

Date: July 31, 2015