2018 ONSC 5306

Court File and Parties

NEWMARKET COURT FILE NO.: CV-18-00136208-00 DATE: 20180911 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Justin Altmann Applicant – and – The Corporation of the Town of Whitchurch-Stouffville Respondent

Counsel: M. Marchioni and A. Marchioni, for the Applicant J.R. Hart, for the Respondent

HEARD: August 28, 2018

Ruling on Application to Quash By-Law

sutherland J.:

Introduction

[1] The applicant brings an application pursuant to section 273 of the Municipal Act, 2001, S.O. 2001, c. 25 (the Act) for:

(a) A declaration that the Corporation of the Town of Whitchurch-Stouffville (the Town) By-Law No. 2018-036-MS (the By-Law) or parts therein are ultra vires and of no force and effect;

(b) An order quashing the By-Law;

(c) A declaration that the By-Law violates s. 7 of the Canadian Charter of Rights and Freedoms (the Charter) and this violation is not saved under section 1 of the Charter;

(d) Costs for the application.

[2] The parties agreed that the first stage of submission will only deal with whether the By-Law or parts of it are ultra vires and of no force and effect. If the court determines that the By-Law is valid then the parties will re-attend at a later date to provide submission on section 7 of the Charter. If re-attendance is required to present submission on section 7 of the Charter, the applicant will serve the Attorney General of Ontario with all the material dealing with section 7 of the Charter.

[3] The respondent opposes the application. The respondent’s position is that the By-Law in its entirety is within the jurisdiction and authority of Municipal Council of the Town (Council) and the application should be dismissed with costs.

[4] For the reasons below, I find that parts of the By-Law are ultra vires and beyond the jurisdiction and authority of the Town and quash those parts of the By-Law.

Background

[5] The applicant is the duly elected Mayor of the Town. He was elected on December 2, 2014 to a four year term. The next municipal election is in October 2018. The applicant is running for re-election.

[6] The Council is composed of the mayor and six councillors, with each councillor representing one of the six municipal wards.

[7] On February 7, 2017, Council, through a resolution, adopted a Code of Conduct (the Code) and appointed Suzanne Craig as Integrity Commissioner for the Town (Integrity Commissioner).

[8] The Integrity Commissioner received a complaint against the applicant. The complaint alleged that the applicant had breached the Town’s Code.

[9] The Integrity Commissioner determined that the complaint raised the following issues:

(i) An allegation of workplace violence or workplace harassment of employees of the Town in breach of Rule 14 of the Code (Harassment);

(ii) An allegation that the applicant undertook actions that intimated, threatened and attempted to influence staff in breach of Rule 16 of the Code (Conduct Respecting Staff); and

(iii) An allegation that the applicant conducted himself in such a way that brought disrepute to the Office of the Mayor and breached Rule 15 of the Code (Discreditable Conduct).

[10] The Integrity Commissioner investigated the complaint and rendered a Report which was presented to Council on September 26, 2017 (September Report). In that Report, the Integrity Commissioner recommended that Council:

(a) As sanctions:

(i) Issue a formal reprimand, including an admonition to interact respectfully with staff and use Town office and facilities appropriately; and

(ii) Suspend the applicant’s remuneration for 30 days.

(b) As “corrective actions”:

(i) Request that the applicant issue “an apology, in open session of council, for having created the Wall in the Office of the Mayor’s washroom which was then viewed by Staff, which was vexatious and disturbing to staff and amounted to a serious incident of workplace harassment.”

[11] The Integrity Commissioner further recommended that evidence of compliance with the sanctions and corrective actions be provided within 90 days from receipt of the September Report.

[12] On September 27, 2017, Council adopted the findings and recommendations of the September Report. Council passed a resolution that imposed the sanctions and corrective actions recommended in the September Report.

[13] The applicant did not comply with the corrective action of providing an apology.

[14] Consequently, another complaint was registered with the Integrity Commissioner. The Integrity Commissioner investigated the complaint on non-compliance of Council’s September 26, 2017 By-Law.

[15] The Integrity Commissioner provided another report to Council on March 18, 2018 (March Report) which contained numerous recommendations. The recommendations read:

In the face of the Respondent’s conduct in refusing to issue an apology as requested by the Council resolution on September 26, 2017, I recommend that Council impose the sanctions below. The Municipal Act permits Council to impose sanctions, including a reprimand and suspension of remuneration for up to 90 days. The Code of Conduct gives the Integrity Commissioner the authority to recommend either or both of the statutory sanctions, in addition to recommending that Council impose remedial measures.

I recommend that the Town of Whitchurch-Stouffville Council:

i) Issue a formal Reprimand to Mayor Justin Altmann in relation to his refusal to issue an apology in accordance with the Council decision of September 26, 2017;

ii) Suspend the remuneration paid to Mayor Justin Altmann in respect of his role as Mayor for a period of up to 90 days.

iii) Other remedial action as deemed appropriate by Council under its statutory authority, which may include any or all of the following:

1. Removal from membership of a committee;
2. Removal as Chair of a committee;
3. Writing a new job description for the Executive to the Mayor to clarify her reporting relationship in respect of support to Council Members
4. Apart from during Council Meetings, communicate with municipal staff solely by email to an email address to be provided. No other form of communication shall be permitted nor responded to;
5. Immediately return his keys and Access Card to the municipal offices;
6. Barring access the municipal offices except to attend at the Front Desk to pick up his Council packages or make bill payments and to attend Council Chambers for Council meetings.

[16] Council, on the basis of the March Report passed the By-Law, by a 5-1 vote which, inter alia, dealt with the recommendations of the Integrity Commissioner. The By-Law as enacted stated the following concerning the March Report:

Report of the Integrity Commissioner on a Complaint that Mayor Justin Altmann Violated the Code of Conduct by Defying the Direction of Council of the Town of Whitchurch-Stouffville

Moved by Councillor Kroon Seconded by Councillor Lovatt

1. That Council endorse the following:

i) Issue a formal Reprimand to Mayor Justin Altmann in relation to his refusal to issue an apology in accordance with the Council decision of September 26, 2017; and

ii) Suspend the remuneration paid to Mayor Justin Altmann in respect of his role as Mayor for a period of 90 days; and

iii) Removal of the Mayor from membership of all committees including ex-officio appointments for the duration of Council term; and

iv) Apart from during Council Meetings, communicate with municipal staff solely by email to an email address to be provided. No other form of communication shall be permitted nor responded to for the duration of Council term, with exceptions as authorized by the CAO; and

v) The Mayor shall immediately return his keys and access card to the municipal offices or facilities for the duration of Council term; and

vi) The Mayor shall have no access to municipal facilities except Town Hall during business hours to attend at the front desk or public areas to pick up Council packages, sign documents, meeting with constituents or make bill payments and to attend Council meetings, for the duration of Council term.

[17] After the passing of the By-Law and effective March 2018, the Town, through its Chief Administrative Officer (CAO), enacted Administrative Procedures (AP) numbers 74 and 75. AP74 outlined the procedure to “All Individuals Accessing Town Facilities” and explained the definition of “municipal premises” and “unacceptable behaviour” along with the procedure against individuals who trespass as in the Trespass to Property Act, R.S.O. 1990, c. T.21, and the ability to call the police against anyone who is trespassing. AP75 deals with the Mayor’s sanctions as passed by Council on March 6, 2018. AP75 describes the sanctions imposed by Council, the meaning of the sanctions and the procedure for staff to follow in enforcing the sanctions imposed.

[18] The applicant disagrees with the findings of the March Report but as of the hearing of the Application has not commenced a judicial review of the findings or recommendations of that Report.

[19] The applicant did commence this application challenging Council’s jurisdiction and authority to pass resolution terms contained in the By-Law.

Position of the Parties

[20] The applicant submits that the portions of the resolution terms passed by Council is beyond the jurisdiction of Council pursuant to the provision of the Act. The applicant argues that terms of the resolution passed were not based on the September Report but on the March Report which was a complaint that the applicant breached the Town’s Code of Conduct for not issuing an apology. The applicant submits that the terms of the resolution, namely items iv, v and vi were that of a penalty not sanctioned by the Act. Section 223.4 of the Act authorizes Council to impose only two specific types of penalties: a reprimand or a suspension of remuneration paid to a member of Council for a period up to 90 days. The terms of the resolution included penalties that did not fall within the two penalties authorized by the Act. Thus, paragraphs iv, v and vi of the resolution (the offending terms) are not authorized and exceed the jurisdiction and authority of Council. The offending terms are ultra vires and thus, those terms of the By-Law should be quashed.

[21] The respondent argues that the resolution in its entirety is authorized by the Act and does not exceed the jurisdiction or authority of Council. The respondent contends that Council has the jurisdiction and authority to pass By-Laws with “other actions”. The offending terms are exactly Council using “other actions” to deal with a difficult situation; serious harassment complaints against the applicant. The harassment was against employees and staff of the Town. The applicant’s conduct was serious and significant. The findings of the Integrity Commissioner are clear as to the seriousness and extent of the harassing conduct of the applicant. Council had an obligation to rectify the situation caused by the applicant given the unchallenged findings and recommendations of the Integrity Commissioner.

Legislative Framework

[22] The Town and Council are creatures of statute. The Province of Ontario has created the Town and its Council through legislation. As such, the jurisdiction and authority of Council is created and governed by provincial legislation: the Act.

[23] Section 8 of the Act deals with scope of powers and states:

Scope of powers

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. 2006, c. 32, Sched. A, s. 8.

Ambiguity

(2) In the event of ambiguity in whether or not a municipality has the authority under this or any other Act to pass a by-law or to take any other action, the ambiguity shall be resolved so as to include, rather than exclude, powers the municipality had on the day before this Act came into force. 2006, c. 32, Sched. A, s. 8.

Scope of by-law making power

(3) Without limiting the generality of subsections (1) and (2), a by-law under sections 10 and 11 respecting a matter may,

(a) regulate or prohibit respecting the matter;

(b) require persons to do things respecting the matter;

c) provide for a system of licences respecting the matter. 2006, c. 32, Sched. A, s. 8.

Scope of by-laws generally

(4) Without limiting the generality of subsections (1), (2) and (3) and except as otherwise, a by-law under this Act may be general or specific in its application and may differentiate in any way and on any basis a municipality considers appropriate. 2006, c. 32, Sched. A, s. 8.

[24] Section 14 indicates that a By-Law is without effect if it conflicts with a provincial or federal statute or regulation under that statute.

[25] Part V.1 of the Act is titled Accountability and Transparency. Section 232.2 authorizes municipalities to “establish codes of conduct for members of the council of the municipality.”

[26] Section 223.4 describes penalties a municipality may impose on a member. Section 223.4 (5) reads:

Penalties

(5) The municipality may impose either of the following penalties on a member of council or of a local board if the Commissioner reports to the municipality that, in his or her opinion, the member has contravened the code of conduct:

1. A reprimand.
2. Suspension of the remuneration paid to the member in respect of his or her services as a member of council or of the local board, as the case may be, for a period of up to 90 days. 2006, c. 32, Sched. A, s. 98.

[27] The Town’s Code, Rule 20, describes the actions Council may take if a member of Council has violated the Code. Rule 20.1 essentially mimics section 223.4 of the Act. Rule 20.2 indicates:

The Integrity Commissioner may also recommend that Council take the following actions:

f. Removal from the membership of a committee. g. Removal as Chair of a committee. h. Repayment or reimbursement of moneys received. i. Return of property or reimbursement of its value. j. A written and/or verbal request for an apology to Council, the complainant or both.

[28] Sections 272 and 273 of the Act indicate that a By-Law passed in “good faith” shall not be quashed whole or in part and that a Superior Court Judge may quash a By-Law whole or in part for illegality.

[29] The question for this court to answer is: are the offending terms of the resolution that form part of the By-Law authorized by the Act or are they illegal?

Analysis

[30] I wish to begin my analysis by indicating that I make no comment concerning the contents and findings of the Integrity Commissioner’s two reports, the September Report and March Report. The comments and findings set out in the two Reports speak for themselves.

[31] It is not an issue in this application on the findings and substance of the two Reports. The applicant has not challenged in court by way of a judicial review or any other legal proceeding challenging the findings and content of the two Reports.

[32] The issue for this court, as already described, is the legality of the offending terms in the By-Law. I will turn to that issue.

[33] There was no objection by the parties and I do agree that in interpreting municipal power, including general welfare powers, the court is to do so “broadly and generously within their context and statutory limits, to achieve the legitimate interests of the municipality and its inhabitants.” Croplife Canada v. Toronto (City), at para. 37; 12898417 Ontario Ltd. v. Lakeshore (Town), 2014 ONCA 802, at paras. 77 and 78.

[34] There is also no objection by the parties that the onus is on the applicant to show that the By-Law is an illegality. As R.A. Blair JA. stated in Grosvenor v. East Luther Grand Valley (Township), 2017 ONCA 55, illegality is a generic term that encompasses by-laws that are passed in bad faith and the onus of establishing bad faith is on the person attacking the by-law. Grosvenor v. East Luther Grand Valley (Township), 2017 ONCA 55, at paras. 27 and 28. Also see: 2386240 Ontario Inc. v. The City of Mississauga, 2018 ONSC 3162.

[35] The Ontario Divisional Court in Magder v. Ford, 2013 ONSC 263 (Div. Ct.) examined the finding of conflict of interest and the penalty imposed against the then councillor and later Toronto Mayor. The issue involved the Toronto Mayor’s private charitable foundation where he solicited funds using municipal resources such as the letterhead. The Integrity Commissioner found that the Toronto Mayor was in violation of the City of Toronto’s Code of Conduct. Upon receipt of the Report the Council passed a resolution ordering the Toronto Mayor to personally reimburse all donations obtained by way of fundraising activities said to have violated the Code of Conduct.

[36] The Toronto Mayor refused to comply. The Integrity Commissioner advised Council of the Toronto Mayor’s ongoing decision to not comply with the resolution. A motion was brought before council to rescind the resolution. The Chair at Council advised the Toronto Mayor that he may be in a conflict of interest but the Toronto Mayor chose to vote on the resolution. A municipal resident brought the application for an order declaring that the Toronto Mayor was in violation of s. 5(1) of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 and for an order declaring the Toronto Mayor’s council seat vacant. The application was granted. The Toronto Mayor appealed to the Divisional Court.

[37] The Divisional Court reviewed the Act, the Code of Conduct of the City and the Municipal Conflict of Interest Act and allowed the appeal.

[38] In doing so, the Divisional Court reviewed whether the August 25, 2010 resolution of Council was a nullity. The Court agreed that as mandated by the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, section 6(1), that the powers of the City “shall be interpreted broadly so as to confer broad authority on the City to enable the City to govern its affairs as it considers appropriate and to enhance the City’s ability to respond to municipal issues.” Magder v. Ford, 2013 ONSC 263 (Div. Ct.), at para. 61.

[39] The Divisional Court in Magder reviewed the Supreme Court of Canada’s decisions in Montreal (Ville) v. 2952-1366 Quebec Inc., 2005 SCC 62, [2005] 3 S.C.R. 141 and 114957 Canada Ltee (Spraytech, Societe d’arrosage v. Hudson (Ville)), 2001 SCC 40, [2001] 2 S.C.R. 241 and stated, at paragraphs 66 and 67:

66. Subsection 160(5) of the COTA states that City council may impose “either of the following penalties” if the Integrity Commission reports that a member has contravened the Code. The French version of the COTA provides that Council “peut infliger... l'une ou l'autre des sanctions suivantes”. The literal reading of both versions of the provision is that there are only two sanctions or penalties that council can impose for a breach of the Code.

67. That is not to say that the COTA precludes other remedial measures to carry out the objectives of a Code. For example, the Toronto Code permits the Integrity Commissioner to recommend "Other Actions". Those "Other Actions" include a request for an apology. Such a request is not in and of itself a penalty or sanction. In some cases, an apology would be a reasonable and efficacious way to deal with an infraction of the Code, rather than to penalize with a reprimand or suspension. Similarly, a request to return City property if someone used it improperly may be a remedial measure. We agree with the application judge that a generous reading of the City's power to pass a code of conduct, in accordance with s. 6(1) of the COTA, would support the validity of including remedial measures in such a code. We need not determine the precise ambit of permissible remedial measures in this appeal.

[40] The Divisional Court therefore concluded at paragraph 70:

70. In addition, Decision CC 52.1 went beyond the “Other Actions” contemplated by the Code, because it required Mr. Ford to reimburse funds which he never received personally. The “Other Actions” set out in the Code include reimbursement of monies “received”. Here, the evidence is clear that Mr. Ford never personally received any of the money donated for the football foundation. All funds were received by an arms’ length entity, the Toronto Community Foundation. Therefore, the sanction was not authorized by the Code nor by the COTA. Magder v. Ford, 2013 ONSC 263 (Div. Ct.).

[41] I am also cognizant of the submissions of the Town that a by-law should be given deference by this court. By-Laws, as stated by Daley R.S.J in 2386240 Ontario Inc. v. The City of Mississauga, 2018 ONSC 3162, “must be presumed to have been enacted in good faith unless the contrary can be proven. If there are lawful grounds upon which the municipal council can be found to have acted, the court should not presume that the council acted beyond its authority or that it intended to do so.” 2386240 Ontario Inc. v. The City of Mississauga, 2018 ONSC 3162, at para. 48 (citation omitted).

[42] In the circumstances of this case, having reviewed the cases cited above, the legislation and the Code, I find that the offending terms of the resolution contained in the By-Law exceed the authority of the Council and are an illegality.

[43] As in Magder v. Ford, 2013 ONSC 263 (Div. Ct.), the offending terms are not authorized by the Act nor the Code. I cannot reconcile the submission of the Town that the offending terms are “other actions” that Council have the authority to impose. The offending terms I see nothing but a sanction or penalty against the applicant. The offending terms follow from the March Report which investigated a complaint that arose from the applicant not providing a public apology, and not from the original complaint on the conduct of the applicant with Town staff and employees.

[44] The offending terms encompass the applicant: restricting the applicant’s right to communicate with staff by email only with exceptions authorized by the CAO, that he return his access keys and cards to the municipal facilities and shall have no access to municipal facilities except to pick up Council packages, meetings with constituents, make bill payments, attend council meetings or rent facilities for municipal election purposes. In effect, the offending terms have limited the applicant’s ability to be the mayor of the Town and a private citizen of the Town with access to municipal facilities, events and benefits. He is not permitted to attend the library or municipal community centre to take his family swimming, attend a book reading, a blood drive or attend a private party at the municipal building or utilize a municipal building for a private purpose. There are no remedial characteristics in the offending terms. The offending terms do not remedy the failure of the applicant to provide an apology. The offending terms do not remedy the relationship between the applicant and the Town’s staff and employees. The offending terms do not provide a remedial path to find a solution to end the applicant’s inappropriate conduct to Town staff and employees.

[45] The offending terms, I find, are sanctions or penalties imposed by Council against the applicant. These are sanctions or penalties imposed flowing from the applicant not providing the apology, as imposed by Council in the September Report. In addition, the offending terms and the enactment of AP74 shortly after the By-Law, in my opinion, further show that the offending terms are a means to penalize and sanction the applicant.

[46] I do not find the offending terms are “other actions” as contemplated by the Act or the Code. Nor are the offending terms remedial measures to address the actions of the applicant and the effect of those actions upon Town staff and employees. I thus find that the offending terms of the By-Law are illegal.

[47] Moreover, the offending terms are not explicitly permitted by either the two sanctions permitted by the Act or the sanctions permitted by the Code. There is nothing in the Act or the Code that authorizes the Council to impose the sanctions set out in the offending terms.

[48] The Act permits a reprimand or sanction of no remuneration for up to 90 days. The Code permits Council to impose: removal from membership of a committee; removal as Chair of a committee; impose repayment or reimbursement of moneys received; return of property or reimbursement of its value or a written or verbal request for an apology to Council, the complainant or both.

[49] There is no statutory authority permitting Council to impose the sanction as set out in the offending terms. I adopt the reasoning of the Divisional Court in Magder v. Ford, 2013 ONSC 263 (Div. Ct.) and conclude, as the Divisional Court did, the sanctions set out in the offending terms are not authorized by the Act or the Code.

[50] I therefore conclude that the offending terms imposed by the By-Law are illegal and a nullity.

A Stay

[51] After hearing submissions, the respondent requested that the court impose a 7 days stay on the imposition of the decision of the court, if the decision is to find some or all of the By-Law are illegal. The respondent indicated that the Town may require the stay to permit Council time to pass another By-Law after the court’s decision is released. In effect, the Town requests time to, perhaps, pass a further By-Law to impose actions against the applicant.

[52] I do not agree that the rationale of the Town justifies a stay on the imposition of the court’s decision. I accordingly refuse to grant the 7 days stay, as requested by the Town.

Disposition

[53] As already described in my endorsement of September 9, 2018, I accordingly order:

(i) A declaration that the offending terms in the Corporation of the Town of Whitchurch-Stouffville By-Law No. 2018-036-MS (the By-Law), being items iv, v, and vi of the resolution passed by Council on March 6, 2018 are ultra vires and of no force and effect;

(ii) That the offending terms described in paragraph i above of the By-Law are hereby quashed.

[54] If the parties cannot agree on costs, then the applicant to serve and file his written submissions for costs within thirty days from the date of this decision, and the respondent will have thirty days thereafter to serve and file his submissions. There is no right for any reply submissions. The submissions to be no more than three pages, double spaced, exclusive of any cost outline, case law and offers to settle. Submissions are to be filed with the court. If no submissions are received within the time period set out herein, an order will be made that there will be no costs.

Justice P.W. Sutherland Released: September 11, 2018