Davidson v. Christopher, 2017 ONSC 4047

COURT FILE NO.: CV-17-26-00 DATE: 2017-07-05 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

GARY DAVIDSON Applicant – and – TASO CHRISTOPHER Respondent

COUNSEL: Tony E. Fleming, for the Applicant. John Mascarin, for the Respondent.

HEARD: June 30, 2017 at Kingston.

RAY, J

Introduction

[1] The respondent is the Mayor of Belleville, was a town councillor for 8 years, and then Mayor since 2014. He also owns half the shares (along with his brother) and is a director of 1576275 Ontario Inc. (the “company”). The company owns vacant property on Farnham Road which will need to be acquired in order to permit a municipal highway improvement roundabout to be constructed at the intersection of Farnham Road and Maitland Drive in the City of Belleville (the “Project”).

[2] The applicant is a resident of the City of Belleville and seeks a declaration that the respondent breached the Municipal Conflict of Interest Act, (the “Act”) on October 26, 2016 by participating in a council debate and voting on the project, in which he had a pecuniary interest; and should be removed from office as provided in the statute. [1]

Facts

[3] The Project included the reconstruction of Maitland Drive, including widening for a two-way shared centre left turn lane, street lighting and sidewalks. It also included the construction of a roundabout at the intersection of Maitland Drive and Farnham Road. In order to construct the roundabout, the City must purchase property, including a portion of the company’s property.

[4] The Project was one of over twenty capital Improvement projects underway in the City under the “Build Belleville” umbrella. The Respondent had been actively involved in the Build Belleville projects through his participation in the Mayor’s Implementation Team (“MIT”), a committee approved by Council consisting of the respondent and three council members as well as senior engineering staff. The purpose of the MIT was to expedite the projects by reviewing them, supporting them and forwarding them to Council for approval or discussion.

[5] According to the respondent, the Project, was needed in order to facilitate the growth planned for the Cannifton Secondary Plan area which is an area of approximately three or four square kilometres containing approximately a thousand residential lots. The parties are in agreement that the Project would not only benefit the Maitland Drive/Farnham Road area, but also the Cannifton Secondary Plan and the City as a whole.

[6] Council initially approved the capital budget for the design phase of the Project in February 2013.

[7] When the Project first came before council on March 29, 2016, the respondent declared a pecuniary interest in “Item #3: In Camera Report DCS-2016-04 regarding potential land acquisition”, due to the fact that he was a director of the company which owns the property; and the potential for a portion of the property to be acquired by the City in order to construct the roundabout. The respondent’s evidence was that this was the first time he had been aware his property would be required by the City for the Project.

[8] On August 8, 2016, Council considered “Item #3: In Camera Report DCS-2016-18 regarding potential land acquisition”. At that meeting, the respondent declared his pecuniary interest in this matter for the same reasons.

[9] On October 13, 2016, city staff provided a summary of a draft report on the Project (including the roundabout) showing an increase of $1.75 million in the estimated cost to complete it as designed. The minutes of that meeting record that the respondent “expressed concern at the length of time it took for environmental assessments to be made, resulting in potential cost increases.” Although the respondent was present, he acknowledged in his affidavit that he did not declare a pecuniary interest at that meeting. The report was subsequently presented to council. The respondent objects to inclusion of this meeting as part of the record on the ground that while it was referenced in the applicant’s affidavit, it was not referenced in the Notice of Application. I don’t accept that objection. It is clearly a relevant fact. The affidavit is limited to facts that are relevant to the issues in the Notice of Application. Had the respondent considered it to be irrelevant then he should have brought a motion to have the reference expunged from the affidavit. Not only did he fail to bring such a motion, he actually responded to the assertion in his responding affidavit by acknowledging the meeting.

[10] On October 25, 2016, a Special Meeting was called In order to discuss the 2017 capital budget, including among other matters, the potential increase in the Project’s budget. The respondent was the Chair of this meeting until he left the chair and sat in the public gallery. The records of the meeting show that the Respondent introduced Item 8.a.3, the “Mineral Road and Maitland Drive Reconstruction and Servicing Extensions – Project Budget Estimate”. That item included discussion of a report from City staff showing an increase of $1.75 million in the estimated cost to complete the Project as designed. Councillor Carr proceeded to ask a number of questions of a City staff member, Ray Ford, Manager of Engineering/Deputy Director Engineering, about the roundabout and staff’s opinion on traffic flows with respect to it. The Respondent was in the Chair throughout this discussion. Following is a recorded portion of the meeting:

Councillor Panciuk: Thanks Mayor Christopher. I actually have a number of questions on the roundabout and I know that previously you’ve declared a pecuniary interest both in open and closed sessions. So I can give you an opportunity if you want to excuse yourself. Mayor Christopher: On…On what item? On the roundabout? Councillor Panciuk: The roundabout on Farnham Road and Maitland Drive. Mayor Christopher: So there’ll be only the questions on the roundabout? Councillor Panciuk: I have a number of questions on the roundabout, yes. Mayor Christopher: Okay, yep, done. So I’ll let Councillor Miller take the chair. Councillor Panciuk: Thank you.

[11] The respondent left the chair but sat in the public gallery while the discussion continued. It included exchanges between Councillor Panciuk and Mr. Ford, the City manager of Engineering/Deputy Director Engineering about the difference in cost between the roundabout versus a signalized intersection. Mr. Ford estimated that the roundabout would cost about twice as much, including property acquisition costs, as a signalized intersection. Mr. Panciuk stated he would like a more accurate estimate on the construction and any other costs for the roundabout, including property acquisition costs, before he could support it. Mr. Ford confirmed that the budget estimate included property acquisition costs, including costs related to the roundabout. The Special Council Meeting was recessed, not adjourned, and scheduled to continue the next day.

[12] On October 26, 2016, the Special Council Meeting reconvened. The respondent, as Chair of the meeting, remained at the council table throughout the discussion of the Project and cast his vote in favour of approving the Capital Budget Issue No. 1.007, to increase the Project budget by $1,750,000. The transcript of the respondent’s cross-examination show that the respondent was aware at the time that the budget included property acquisition costs for the roundabout, and that by passing the motion City staff were instructed to proceed with construction of the roundabout, including property acquisition. The discussions during the meeting made it clear that the additional cost of the roundabout, including property acquisition was $750,000. There were those at the meeting that opposed the roundabout construction because of the increased cost. The vote was 6-2 in favour.

[13] The respondent expressed confidence that he had been fully aware of his obligations under the Act, that he had taken seminars and attended conferences explaining the Act; and had previously declared his interest. He acknowledged during cross-examination that he understood it was his personal obligation to comply with the provisions of the Act. He also stated that at the time he did not consider it necessary to seek advice.

Positions of the Parties

[14] The respondent’s position is that firstly, property acquisition was not discussed at the October 25 and October 26 meeting, only the project budget. Secondly, that if the respondent had a pecuniary interest, it is a shared interest “with other electors generally”, and his interest is “the same as any other elector who owns property in the vicinity of the Road Improvement Project”, and therefore is exempt. [2] He contends that the respondent’s pecuniary interest is indirect and is so remote or insignificant in its nature that It cannot be regarded as likely to influence the respondent and is therefore exempted pursuant to section 4(k) of the Act. Alternatively, the respondent contends that any error committed by the respondent was committed through an honest error in judgement or by reason of inadvertence pursuant to subsection 10(2) of the Act.

Analysis

[15] The purpose of the Act is to foster and maintain confidence in local government. Municipal government is vitally important to our everyday lives through offering, constructing, regulating and budgeting for essential services such as policing, fire, roads, refuse collection, planning, building, water and sewer. These are the kinds of services that affect all of us every single day. These services are financed, for the most part through local taxation, a very highly visible cost paid by the public. As a consequence, local residents are vitally affected by virtually all decisions made by municipal government. Confidence that decisions by elected officials are made solely in the interests of the residents is therefore essential. The Act therefore plays an important role in ensuring confidence that decisions made by elected officials are made candidly, honestly, and in good faith.

Pecuniary Interest

[16] The relevant portions of the Act are as follows:

Where a member, either on his or her own behalf or while acting for, by, with or through another, 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. [3]

[17] “Pecuniary interest” is not defined in the Act, but it has been held to be a financial, monetary or economic interest; and is not to be narrowly defined. [4] The matter to be voted on must have the potential to affect the pecuniary interest of the respondent. [5] The pecuniary interest must be a “real one”. Because of the severity of the penalty that follows a breach, “it is appropriate to strictly interpret the pecuniary interest threshold”. [6]

[18] The matters before the council/committee meetings on October 13, 25, and 26, 2016 included the Project but not the acquisition of property for the Project. It is clear, and it was apparently understood that property would have to be acquired for the roundabout if the Project went forward, and that the acquisition of the respondent’s property would have been affected by the successful approval of the Project. However, that was not the subject of the meeting. In fact it was neither discussed nor was it part of the decisions explicitly reached. The only reference was when Councillor Panciuk reminded the respondent at the October 25 meeting that he had earlier declared his interest. Interestingly, the respondent left the Chair and ceased participation without declaring an interest. However the official Minutes of the Meeting indicate the respondent declared an interest based on his property, and recused himself.

[19] I find the respondent to be in breach of section 5 (1) of the Act when he spoke and voted on a matter in which he had a pecuniary interest at the Special Council Meeting of October 26, 2016. He had recused himself the previous day, but only after being reminded by another council member that he had recused himself previously on the same subject matter. The meeting on October 26 was a continuation of the meeting from the previous day, not a new meeting. Had the roundabout been voted down, then his property would not have had to be acquired by the City. He was aware of that. He was also aware from the debate that the additional cost of the roundabout was concerning to some councillors. When he cast his vote in favour of the budget, he knew this was approving the Project budget which in turn was direction to the Municipal staff to move forward with the project, including the acquisition of the respondent’s property. [7]

Exemptions - sections 4 (j) and (k)

[20] Exemptions to section 5(1), raised by the respondent are contained in sections 4(j) and (k) as follows:

4 (j) by reason of the member having a pecuniary Interest which is an interest in common with electors generally .

4 (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 .

[21] The section 4 (j) exemption “an interest in common with electors generally” is defined as “means a pecuniary interest in common with the electors within the area of jurisdiction and, where the matter under consideration affects only part of the area of jurisdiction, means a pecuniary interest in common with the electors within that part”. [8]

[22] The respondent contends that there are approximately 145 unique property owners who own lands within the vicinity of the Project. He argues that the respondent’s interest in the design and engineering aspects of the Project are the same as the other 145 property owners. The respondent relies on Ennismore (Township), Re , [9] for an analogy. However in that case, the issue was whether the owner of property/councillor could vote on a communal water system that affected him as well as a large number of other residents in the vicinity. Here there is no common pecuniary interest, only a common interest in the Project since they are affected.

[23] For the section 4 (k) exemption to apply, the pecuniary interest must be so insignificant that the reasonable person would conclude that it would not likely have influenced the respondent. The test is “[w]ould 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? ” [10]

[24] The respondent contends that the discussion at the meetings of October 25 and 26, 2016 concerning a change from the roundabout design to traffic signals to save money would have required a reopening of the environmental process thereby causing further delays which he opposed. The respondent’s justification for participation because it was the right thing to do for the Project and for the City is a relevant consideration. [11]

[25] The value of the Property acquisition is in the range of $5,000. The respondent’s position is that exchanging money for land, as in an expropriation, is a substitution of equivalent values with no benefit to the respondent. In oral argument the respondent argued that he did not have a pecuniary interest because it was the company, not him that owned the land. I do not accept either proposition. On its face, the sale of a commodity constitutes a benefit. The real estate market exists because of the financial and economic benefits.

[26] While it does not appear from the evidence that the respondent was motivated to participate in the discussion and vote on October 26, 2016 by his pecuniary interest, it may not be the same for a ‘reasonable elector’. Had a reasonable elector been apprised of the circumstances as follows:

• the respondent had declared his interest on two previous occasions when the subject of land acquisition was before council,
• he left the chair and participation in the meeting on October 25, 2016 when prompted by another councillor because of the discussion of the Project,
• for the Project to go forward with a roundabout the respondent’s land would be acquired,
• if the Project went forward with traffic signals the respondent’s property would not have to be acquired,
• there were those on council who were opposed to the Project with the roundabout because it would cost more than having signals;

he or she would in my judgement have been more likely than not to regard the interest of the councillor as likely to influence that councillor’s action and decision on the question.

[27] I do not consider the section 4(j) exemption to be relevant in this case. The exemption must relate to the pecuniary interest, not the interest in the Project generally, such as its design and engineering as maintained by the respondent.

[28] I do not consider the respondent’s pecuniary interest to be have been so insignificant as to trigger the section 4(k) exemption.

Saving Provision – Inadvertence/Error in Judgement

[29] The Act contains a saving provision that would be applicable if I were to find the respondent had breached section 5(1) through inadvertence or error in judgement:

10 (2) Where the judge determines that a member or a former member while he or she was a member has contravened subsection 5 (1), (2) or (3), if the judge finds that the contravention was committed through inadvertence or by reason of an error in judgment, the member is not subject to having his or her seat declared vacant and the member or former member is not subject to being disqualified as a member, as provided by subsection (1). [12]

[30] The defence of inadvertence applies where the breach can be linked to an oversight of fact or law that was not reckless or willfully blind. [13] A finding of inadvertence must be grounded on the evidence of the respondent. The position taken by the respondent supported by his evidence is that there was nothing inadvertent about his participation and vote on October 26, 2016. The authorities relied upon by the respondent show the councillor in that case to have sworn in evidence, which was accepted, that his vote was inadvertent. [14] That was not the respondent’s evidence here. That defence does not apply.

[31] In order to establish an error in judgment under Section 10(2) of the Act, it is necessary for the elected municipal official to have proceeded with “good faith as to that error of judgment. He or she must be honest, forthright and open, acting in complete good faith. The courts do not require perfection of conduct. However, good intentions and a complete lack of deceit and collusion are required”. [15]

[32] The evidence supports the conclusion that while the respondent had participated in and voted on a matter that affected his pecuniary interest by approving a Project that involved the purchase of property in which he had an interest, he had earlier declared his interest, and withdrawn from the meeting as required by the Act when the question of land acquisition was before Council. His position is that since the meetings of October 13, 25, and 26, 2016 did not deal with property acquisition that he did not believe he ought to have declared his interest. He was an experienced councillor, and as mayor chaired meetings and played an important role in dealing with policy issues affecting the City as a whole. It is quite understandable that he viewed the meetings of October 13, 25, and 26 as critical for the overall projects for the benefit of the City as a whole. The applicant’s counsel in his submissions acknowledged the respondent’s good intentions

[33] The evidence demonstrates that he had participated in various seminars and conferences which discussed the importance of the Act. He had reviewed a document prepared for and circulated to all elected municipal officials that explained the Act. Specifically, it explained compliance with the Act as follows:

Every issue of compliance with the Municipal Conflict of Interest Act must be considered in the context of the nature of the specific ‘”matter” that is the subject of consideration by the council. In each case, it is necessary to ascertain the precise nature of the pecuniary interest, direct or indirect, that the member (or another whose interest is attributed to a member), has in the particular matter at that point in time. It is only where the pecuniary interest exists in the particular matter being considered by the council, that section 5 of the Act imposes positive and negative obligations on the member. [16]

[34] He was sufficiently aware of the provisions of the Act, that he had previously, without prompting, declared an interest. To succeed under this saving provision, the respondent must prove not only that he had an honest belief that the (Act) did not apply; he must also show that his belief was not arbitrary, and that he had taken some reasonable steps to inquire into his legal obligations [17] . I am satisfied that the respondent was aware of the Act and its provisions through training and education courses that he had taken. He had demonstrated that previously. There is no hint of bad faith. I am satisfied the respondent’s explanation to be his honestly held belief that the meetings in question did not affect his pecuniary interest since property acquisition was not discussed and was not on the agenda. He was in error, but it was an error in judgement.

Conclusion

[35] I find the respondent to have breached section 5 (1) of the Act when he participated in and voted on October 26, 2016 for the Project to go forward. He clearly had a pecuniary interest in the matter since the Project as approved required acquisition of his property. He ought to have declared his interest, left the Chair, and withdrawn from the meeting. However I am satisfied that at the time, he committed an error in judgement, and therefore he ought not to be removed from office by having his position declared vacant.

[36] If the parties cannot agree on costs, they may make written submissions of two pages or less within 30 days with a right of reply within a further 15 days, addressed to the trial coordinator in Kingston.

Honourable Justice Timothy Ray

Released: July 5, 2017

COURT FILE NO.: CV-17-26-00 DATE: 2017-07-05 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: GARY DAVIDSON Applicant – and – TASO CHRISTOPHER Respondent REASONS FOR JUDGEMENT Honourable Justice Timothy Ray Released: July 5, 2017

Footnotes

[1] Municipal Conflict of Interest Act, R.S.O. 1990, c.M.50, as amended, section 5(1). [2] Section 4(j), Note1. [3] Section 5 (1), Note 1 [4] Ferri v. Ontario (Ministry of Attorney General ), 2015 ONCA 683 , 2015 CarswellOnt 15240, paras 9 , 10.(ONCA) [5] Magder v. Ford , 2013 ONSC 263 , 2013 CarswellOnt 387, para 6 (Ont. Divisional Court) [6] Magder v. Ford , supra, paras 42 and 43 . [7] Transcript of the respondent’s cross-examination , April 24, 2017, pages 42 and 43 [8] Section 1, note 1. [9] [1996] O.J. No. 167, 31 M.P.L.R. (2d) 1 (Ont. Gen Div) [10] Ferri v. Ontario (Ministry of Attorney General ), supra, para 16 (ONCA) [11] Ferri v. Ontario (Ministry of Attorney General ), supra, para 19 (ONCA) [12] R.S.O. 1990, c. M.50, s. 10 (2) . [13] Baillargeon v. Carroll , 2010 ONSC 3806, 56 M.P.LR. (4 th ) 161, 2009 CarswellOnt 633 para 82 (ONSC) [14] Mino v. D’Arcey , 1991 CarswellOnt 485, [1991] O.J. No. 411, 2 O.R. (3d) 678, 4 M.P.L.R. (2d) 26 paragraphs 33 to 36 . [15] Sheehan v. Harte , [1993] O.J. No. 1726, 15 M.P.L.R. (2d) 311, at para. 15 (Ont. Gen. Div.) , [16] Ontario’s Municipal Conflict of Interest Act, A Handbook , O’Connor and Rust-D’Eye, Municipal World, 2017 edition. ( I assume the version the respondent had reviewed in 2014 was an earlier but identical version of the version reproduced in his Book of Authorities ). [17] Magder v. Ford , supra, para 90 .