Court File and Parties

COURT FILE NO.: CV-15-23114 DATE: 20180705 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Matthew Raymond Ford and Ian Shalapata Applicants – and – The Corporation of the City of Windsor Respondent

Counsel: Matthew Raymond Ford, acting in person Raymond G. Colautti, for the Applicant, Ian Shalapata, on the issue of costs David Reiter and Jody E. Johnson, for the Respondent

HEARD: December 18 and 29, 2015; January 8, 15, March 16, April 27, June 15, August 16 and August 30, 2016; February 8, 2017 and February 23, 2018

Ruling on costs

Pomerance J.:

[1] In 2014, a municipal election was held in Windsor, Ontario. Matthew Ford and Ian Shalapata (the applicants) took issue with the outcome, alleging wrongdoing on the part of various officials. Mr. Ford was himself an unsuccessful candidate in the electoral race.

[2] The applicants initially shared their complaints with the police. The Windsor Police Service investigated but concluded that there was no basis for charges. Unhappy with the police investigation, the applicants set out to lay charges themselves. They swore a private information before a justice of the peace, who held a hearing, but declined to issue process. The justice, like the police, found there to be no basis for charges. Mr. Ford has now commenced a civil action against the City and others, seeking damages in the amount of $9 million in connection with his allegations of wrongdoing. The civil action is a separate proceeding, beyond the scope of this ruling. I mention it because it is relevant to the ongoing narrative.

[3] I must determine whether the applicants should pay costs to the City of Windsor, arising out of proceedings initiated in the Superior Court of Justice.

[4] The private information was sworn in the Ontario Court of Justice. However, the applicants brought an application in the Superior Court for an injunction to prevent destruction of election records. The records were required to be destroyed under s. 88(1) of the Municipal Elections Act, R.S.O. 1990, c. M.53. The applicants claimed that the records contained evidence of wrongdoing and should be preserved pending the outcome of the private information.

[5] The injunction application marked the beginning of protracted and highly contentious litigation in this court, which spanned more than two years, involved 11 appearances and saw the filing of hundreds of documents. All of it was predicated on the applicants’ assertion that they had evidence of wrongdoing to present to a justice. We now know that the applicants’ evidence did not warrant the commencement of a prosecution.

[6] The City of Windsor seeks costs from the applicants on a substantial indemnity scale in the amount of $176,001.85. Alternatively, the City seeks costs on a partial indemnity basis, in the amount of $121,892.42. These costs were incurred exclusively in connection with proceedings in the Superior Court of Justice. The applicants, who were self-represented for most of this process, argue that they should not be liable for costs. Mr. Shalapata argues that he should be paid costs in the amount of $10,000.

[7] I find that the applicants are liable for costs in this case. The allegations made by the applicants were very serious, striking at the core of the democratic process. The applicants challenged the integrity of the election, and the status of duly elected officials, without cause. The nature of the allegations justifies a significant costs award, as does the conduct of the applicants during the course of the litigation. I reject the notion that the applicants are public interest litigants. Mr. Ford, in particular, has a direct personal and financial interest in these matters.

[8] I will elaborate on my conclusions in the reasons that follow.

Summary of the Proceedings

[9] The process for laying a charge is set out in the Criminal Code, R.S.C. 1985, c. C-46. It begins with an information that is sworn before, and received by, a justice of the Ontario Court of Justice. Informations are most often sworn by peace officers but they may be sworn by private citizens. When a private citizen swears an information before a justice of the peace, the justice must hold a hearing into the matter – “a pre-enquete” – to determine whether a case has been made out for the issuance of process. If process does issue, in the form of a summons or a warrant, this marks the formal commencement of a prosecution. The Crown Attorney may intervene to assume carriage of the prosecution, may stay the prosecution, or may leave the matter to be prosecuted by the private informant. If process does not issue, it is as though the information was never laid. There are no charges; there is no prosecution, and the matter is at an end. [1]

[10] The Superior Court of Justice does not have jurisdiction in such matters, though it may be asked to review a justice’s decision to issue or not issue process.

[11] This case had an unusual feature. Pursuant to s. 88(1) of the Municipal Elections Act, election records are to be destroyed 120 days after the results of the election are declared. Pursuant to s. 88(3), destruction is not required if a court orders that the documents be retained. The applicants came to the Superior Court seeking an injunction that would prevent the City of Windsor from destroying the election records. The applicants argued that the documents should be retained as potential evidence of wrongdoing.

[12] The City opposed the request, initially because the application was vague and lacked particulars, and later, because there was no foundation for the allegation of wrongdoing. The City relied on the three part test for injunctive relief, which asks:

1. Is there a serious issue to be tried?
2. Would the applicant suffer irreparable harm if the application were refused? and
3. Which party would suffer greater harm from the granting or refusal of the remedy?

[13] The City argued that there was no serious issue to be tried because the allegations were devoid of merit. On this basis, it forcefully argued for dismissal of the injunction application.

[14] I was reluctant to assess the merits of the proposed charges at that stage. The merits of a private information are to be assessed by a justice of the Ontario Court of Justice. I was concerned that, if I adjudicated on the proposed charges, I would usurp the function of that court, on a matter quintessentially within its jurisdiction. Therefore, I ruled that full argument on the injunction application be adjourned pending completion of proceedings in the Ontario Court of Justice.

[15] I directed that, in the meantime, the status quo should be preserved. Destruction of the documents could result in irreparable harm and the balance of convenience favoured retention. The burden on the City was minimal, requiring nothing more than storage of the material for an interim period. By contrast, if proceedings were instituted, the destruction of potential evidence could adversely affect the administration of justice. Therefore, I ordered that the documents be retained during the period of the adjournment. This order relieved the City of its statutory obligation to destroy the records.

[16] As time went on, there were many delays, and the adjournment continued for far longer than was anticipated. The parties came back to the court from time to time to address the status of proceedings in the OCJ, and to address other issues. Throughout that period, I extended my order prohibiting destruction of the documents.

[17] The order evolved over time. At the request of the City, I directed that the documents not be available for inspection by the applicants or other members of the public during the retention period. To make the documents available would go further than was necessary or appropriate. The point of the exercise was simply to ensure that the documents would be available if and when the applicants independently made out a case for a prosecution.

[18] At one point, the applicants wanted access to the documents so that they could look for evidence of wrongdoing. I refused this request on the basis that it put the cart before the horse and raised the specter of a fishing expedition. The applicants either had a case or they did not. If they did have a case, the documents would be preserved as potential evidence. If they did not have a case, they could not go looking for one in the documents.

[19] I also directed that the proceedings in the Superior Court be held in camera, and that documents filed be sealed from public view. When a private information is laid in the Ontario Court of Justice, the proceedings are held in camera. The public is excluded from the proceedings. Unless and until process issues, there is no charge and no prosecution. These safeguards would be meaningless if the matters were publicly aired in another court. I also ordered a publication ban. The applicants and their supporters had occasionally published details of the proceedings on social media and the publication ban was intended to prevent a recurrence.

[20] The publication bans and sealing orders were later set aside on the consent of all parties.

[21] The decision of the justice on the pre-enquete was released on January 26, 2017. The court declined to issue process, signaling that the proceedings in the OCJ were at an end. There were no charges. Pursuant to s. 507.1, the effect of this is to treat the information as if it was never laid.

[22] The decision of the justice was dispositive of the injunction application. There was no case to be tried, and therefore no basis on which to grant injunctive relief. When the matter came back before me on February 8, 2017, I dismissed the application for injunctive relief.

Conduct of the City

[23] Viewed through a narrow lens, this case was about preserving documents pending outcome of a judicial proceeding. The City was being asked to store documents for a period of time rather than destroy those documents as required by statute. This was a modest burden. The City asked the court to assess the merits of the charges. As explained above, I declined to do so, reserving that decision for the OCJ.

[24] On a broader view, this case was about much more than preserving documents. I understand that, from the City’s perspective, the request for injunction was inextricably bound up with the allegations of wrongdoing. These were serious accusations. They struck at the core of the democratic process. They were calculated to undermine public confidence in duly elected officials. The City of Windsor did not wish to be seen as acknowledging any merit in the applicants’ claims. I accept that the City had a responsibility, in the public interest, to vigorously defend against scurrilous allegations that cast a shadow on elected officials.

[25] Ultimately, the City’s position was vindicated. No charges of wrongdoing have been laid against anyone in connection with the 2014 election.

[26] Counsel for the City acted throughout in a professional and collaborative fashion, offering assistance to the self-represented applicants and helping to move the matter forward to completion. The City asked the court to revisit its ruling as delays mounted, but it acted throughout with professionalism and courtesy. The City sought unsuccessfully to intervene on the pre-enquete but does not seek any costs in relation to that proceeding.

[27] The City acted reasonably. It took responsible positions on important issues. It was ultimately successful on the application and is entitled to costs.

Conduct of the Applicants

[28] I propose to deal with four aspects of the applicants’ conduct:

1. The applicants were not successful;
2. The nature of the allegations calls for a significant costs award;
3. The applicants engaged in frivolous and vexatious tactics that prolonged the proceedings; and
4. The applicants are not public interest litigants.

[29] I will deal with each of these in turn.

1. The applicants were not successful

[30] The applicants assert that they were successful in the Superior Court because the court ordered that the records be retained. However, this was a temporary order made without any assessment of merit. Ultimately, it was found by the justice in the OCJ that there was no merit to the charges. It is therefore incorrect to assert that the applicants were successful. They won an early battle but most decidedly lost the war. The principle of indemnity supports an award of costs to the City.

2. The nature of the allegations

[31] The City argues that substantial indemnity costs should be ordered, given the nature of the allegations made by the applicants. The applicants alleged fraud, conspiracy, criminal intent, and breach of statutory duty on the part of statutory officers, employees, officers of the court, and elected officials. Unfounded allegations of fraud, dishonesty or other impropriety will usually attract significant cost consequences. A groundless attack on the character or integrity of an individual or entity can cause harm to reputation and other prejudice. Such allegations should not be made recklessly. One way to deter frivolous attacks is to impose substantial costs sanctions when serious allegations are not made out.

[32] Here, the concern goes beyond the level of individual harm. The applicants attacked the integrity of the municipal election. This is a matter of enormous public interest, affecting all citizens of the City of Windsor. To challenge the status of duly elected officials without cause is to invite significant cost consequences.

[33] The applicants had to reasonably expect that they might face a substantial costs award. At the outset of the proceedings, the City put the applicants on notice that: 1) the City would vigorously defend against the allegations and; 2) the City would seek significant costs if the applicants were unsuccessful. Despite this caution, the applicants forged ahead. They knew that there was a risk of costs and they knowingly bore that risk.

3. Other conduct relevant to costs

[34] From time to time, the applicants took positions that were of dubious merit. They tried to obstruct or halt the process, or deny its very existence when it seemed in their interests to do so. This prolonged the proceedings. It also increased the costs borne by the City who had to respond to these positions. Much of the correspondence passing between the applicants and City counsel was filed on the costs hearing.

[35] To cite one relatively benign example, the applicants refused to approve an order, only to do so at the last moment when the parties were in court.

[36] Other examples are less benign.

[37] Mr. Shalapata participated in the proceedings as a party. Over the course of the many appearances in Superior Court, he made submissions in court, alongside Mr. Ford. At the first appearance, in December 2015, Mr. Shalapata was advised that he could not represent the interests of others in court. He could only participate if he himself was a named applicant. Counsel for the City put him on notice that becoming an applicant could attract cost consequences. This did not deter Mr. Shalapata, who was quick to join Mr Ford as a co-applicant in the proceedings. This is evident from the following exchange, which took place after the City stated its position:

THE COURT: All right. So Mr. Shalapata, I don’t know if you understood the full extent of that exchange, but it will have to be your application, you can’t represent the interest of someone else.

MR SHALAPATA: I understand the implications Your Honour and I’m more than happy to put my name on the application.

[38] Mr. Shalapata later took the position that he was not, and had never been, an applicant. It is perhaps no coincidence that he took this position after the pre-enquete was completed and it was apparent that costs might be ordered against him. The matter was brought before me on September 25, 2017, at which time I ruled that Mr. Shalapata was an applicant, having voluntarily assumed that status at the outset of the proceedings. That same day, I ruled that both applicants were restrained from bringing any motion in the proceeding prior to the completion of the argument on costs, unless leave was obtained from the court. That appearance was the subject of a separate costs order. I mention it here because it reflects the tenor of the litigation and sets the background for events to follow.

[39] Despite the court’s ruling on September 25, 2017, Mr. Shalapata continued to tell the City that he was not an applicant. In an e-mail sent on October 6, 2017 to counsel for the City, he wrote: “I am not an applicant, never was an applicant, and cannot exercise any rights of an applicant”. Mr. Shalapata wrote to City counsel on November 10, 2017 to say: “I cannot reply to a request of any kind related to an application to which I have no knowledge, or insufficient knowledge, of in whole or in part, in any regard”.

[40] During this time, Mr. Ford began denying that there was any outstanding issue of costs. He began insisting that the matter had been completed and all costs orders dealt with. He expressed his refusal to attend court to deal with the issue. For example, when served with the City’s costs motion, Mr. Ford sent an electronic message: “I will not be attending as of now. My lawyer dealt with costs and they have concluded. The transcripts were not needed. As of a ban on my documents I have no knowledge of this”. Later that day, Mr. Ford sent another message denying that any application was filed. On December 28 and 29, Mr. Ford wrote to say that he had no knowledge of the application in the within matter, that he would not be attending at the motion, and that: “all issues were settled by my lawyer in August/September”.

[41] The applicants failed to serve the transcripts of the proceedings on the City, despite the court order requiring that they do so. Both applicants asserted in correspondence with the City that the matter had come to an end on September 25, 2017, that it was not an application and that there was no outstanding argument to be made on costs.

[42] Ultimately, both Mr. Ford and Mr. Shalapata attended at the costs hearing and made submissions. Mr. Shalapata was on that occasion represented by counsel. Suffice to say, there could be little doubt about the existence of the application, Mr. Shalapata’s status as an applicant, and the fact that the costs issue was outstanding. I can only infer that the applicants’ denial of reality was a last ditch effort to avoid cost consequences. This is conduct that added to costs and should be sanctioned accordingly.

4. The applicants are not public interest litigants

[43] The applicants assert that they should be shielded from costs because they are public interest litigants. I disagree.

[44] The conventional view is that a public interest litigant will generally have little to gain financially from participating in the litigation, though a monetary interest does not necessarily foreclose a finding that the litigation was in the public interest: see Incredible Electronics Inc. v. Canada (Attorney General), 2006 ONSC 17939, 2006 O.J. No.2155 (S.C.J.); St. James Preservation Society v. Toronto (City), 2007 ONCA 601.

[45] The applicants argue that it was in the public interest to expose wrongdoing by public officials in connection with the election. They characterize their litigation as a selfless exercise in the pursuit of democracy.

[46] There is evidence to rebut this portrayal, particularly as it relates to Mr. Ford.

[47] I mentioned at the outset of these reasons that Mr. Ford has commenced a civil action against the City and various public officials, in which he is seeking $9 million in damages. The civil suit would suggest that personal financial motives are at play, though this alone might not be dispositive. What is dispositive, to my mind, is the offer to settle served by Mr. Ford on the City. Ordinarily, this material would be protected by settlement privilege. However, I accepted the City’s position that the privilege should be pierced in order to rebut assertions made by the applicants on the costs hearing. The offer to settle was relevant to Mr. Ford’s characterization of himself as a public interest litigant. In one of the offers to settle, dated June 18, 2017, Mr. Ford advised that, if he was personally paid $1.5 million, he would abandon all discussion about election irregularities, and divest himself of all documents and/or other evidence in his possession. In other words, Mr. Ford was willing to remain silent about his allegations if he was paid in excess of $1 million.

[48] It was argued by the applicants that the civil suit is irrelevant. I do not agree. The offer to settle discloses a financial incentive that is irreconcilable with the notion of a public interest litigant. It is not just that Mr. Ford is seeking millions of dollars in damages; it is that he is willing to suppress his allegations and keep them from the public if he is paid enough money.

[49] The applicants are also disentitled to public interest status because they had no case to present. Calling government officials to account is in the public interest; launching unfounded allegations against government officials is not.

[50] In this case, it was the City that acted in the public interest, by defending the integrity of the democratic process. It was in the public interest that the City of Windsor defend against the allegations of wrongdoing. This was not just for the benefit of city officials – it was for the purpose of maintaining public confidence in the process by which the municipal government was elected. The City of Windsor is not a private corporation. It is funded by taxpayers who live in this community. The costs of defending against the accusations of wrongdoing – found to have no merit – should not be borne by the citizens of Windsor.

The Quantum of Costs

[51] As noted above, the City of Windsor seeks costs on a substantial indemnity basis. While I am sympathetic to the City’s request, I conclude that partial indemnity costs are more appropriate in the circumstances of this case. I say that because the allegations were aired in a pre-enquete – an in camera hearing – and did not result in the same type of harm as would flow from a public proceeding. I am also mindful of the fact that citizens have a right to swear private informations alleging offences: see R. v. Dowson, [1983] 2 S.C.R. 144. Had the applicants not commenced proceedings in the Superior Court, they would not likely face cost consequences for their failed attempt to lay charges.

[52] Thus, while the applicants must take responsibility for initiating and driving the litigation in the Superior Court, it is appropriate that costs be awarded on a scale of partial, rather than substantial indemnity.

[53] I therefore order that the applicants, Matthew Ford and Ian Shalapata, pay costs, on a joint and several basis, to the City of Windsor in the fixed amount of $121,892 inclusive of disbursements and HST.

Original signed by Justice Renee M. Pomerance

Renee M. Pomerance Justice

Released: July 5, 2018

Footnotes

[1] 507.1 (1) A justice who receives an information laid under section 504, other than an information referred to in subsection 507(1), shall refer it to a provincial court judge or, in Quebec, a judge of the Court of Quebec, or to a designated justice, to consider whether to compel the appearance of the accused on the information.

Marginal note: Summons or warrant

(2) A judge or designated justice to whom an information is referred under subsection (1) and who considers that a case for doing so is made out shall issue either a summons or warrant for the arrest of the accused to compel him or her to attend before a justice to answer to a charge of the offence charged in the information.

Marginal note: Conditions for issuance

(3) The judge or designated justice may issue a summons or warrant only if he or she o (a) has heard and considered the allegations of the informant and the evidence of witnesses; o (b) is satisfied that the Attorney General has received a copy of the information; o (c) is satisfied that the Attorney General has received reasonable notice of the hearing under paragraph (a); and o (d) has given the Attorney General an opportunity to attend the hearing under paragraph (a) and to cross-examine and call witnesses and to present any relevant evidence at the hearing.

Marginal note: Appearance of Attorney General

(4) The Attorney General may appear at the hearing held under paragraph (3)(a) without being deemed to intervene in the proceeding.

Marginal note: Information deemed not to have been laid

(5) If the judge or designated justice does not issue a summons or warrant under subsection (2), he or she shall endorse the information with a statement to that effect. Unless the informant, not later than six months after the endorsement, commences proceedings to compel the judge or designated justice to issue a summons or warrant, the information is deemed never to have been laid.

Marginal note: Information deemed not to have been laid — proceedings commenced

(6) If proceedings are commenced under subsection (5) and a summons or warrant is not issued as a result of those proceedings, the information is deemed never to have been laid.

Marginal note: New evidence required for new hearing

(7) If a hearing in respect of an offence has been held under paragraph (3)(a) and the judge or designated justice has not issued a summons or a warrant, no other hearings may be held under that paragraph with respect to the offence or an included offence unless there is new evidence in support of the allegation in respect of which the hearing is sought to be held.