COURT FILE NO.: CV-17-073
DATE: August 13, 2019
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DAVID J. WINFIELD
Self-represented
- and -
JOHN HOYLE (acting in his capacity as Councillor Ward 4, Laurentian Hills)
Ian Kuehl, counsel for the respondent
HEARD: May 23, 2019
REASONS FOR DECISION
JAMES, J.
INTRODUCTION
[1] This is an application brought pursuant to the Municipal Conflict of Interest Act, RSO 1990, as amended, hereinafter referred to as the "Act".
[2] The applicant is a resident and an elector in the Town of Laurentian Hills which includes the community of Chalk River.
[3] The respondent is a member of the municipal council for the Town of Laurentian Hills. He is also employed by Canadian Nuclear Laboratories ("CNL") as a nuclear response force corporal. This is a unionized position. It is not clear what his duties involve.
[4] CNL operates a nuclear science and technology facility called the Chalk River Laboratories on federally-owned Crown land adjacent to the municipality. The site was previously occupied by Atomic Energy Canada Limited ("AECL"), a Crown corporation. Nuclear science activities have been conducted at this site for several decades.
[5] CNL is a private corporation that has a contract to manage and operate certain nuclear sites, facilities, and assets owned by AECL. CNL is the proponent for a new Near Surface Disposal Facility ("NSDF") proposed to be built at the Chalk River location for the storage of low and intermediate level waste.
[6] The Canadian Nuclear Safety Commission ("CNSC") is an independent tribunal that regulates many aspects of the nuclear industry in Canada. It is responsible for approving and licensing the proposed NSDF.
[7] In 2017 CNL requested area municipalities, including the Town of Laurentian Hills, to pass a motion of support for CNL's application to develop the NSDF. On June 21, 2017 this request was considered by the municipal council for the Town of Laurentian Hills. This resulted in the passing of Resolution 137-17 whereby the municipality "endorsed" CNL's request. The respondent was the seconder for the motion and voted in favour of the resolution.
[8] The applicant contends that the respondent should not have participated in the discussion or the vote because as an employee of CNL, he has an indirect pecuniary interest in whether the NSDF gets constructed or not. The Act prohibits members from voting on matters where they have a direct or indirect pecuniary interest.
POST-HEARING DEVELOPMENTS
[9] On June 20, 2019, about a month after the parties made their submissions to the court, the respondent delivered a supplementary affidavit purporting to correct an error in a previous affidavit relating to the date of a discussion with Sherry Batten, CAO and clerk of the municipality.
[10] Litigants have an obligation to correct misinformation provided to the court as soon as it becomes known, usually in consultation with the other parties involved in the proceeding. In this case the affidavit contained additional editorializing which went beyond what was necessary to correct the purported error and will be disregarded.
[11] The delivery of this affidavit prompted a response from the applicant challenging the veracity of the supplementary affidavit and requesting an opportunity to respond "using the appropriate procedure".
[12] The application has been argued and the evidentiary record, as it exists, is complete and will not be re-opened. Further evidence will not be permitted. In any event, the disputed information is irrelevant to the factors which I have taken into account in making my determination.
ISSUES
[13] The issues are:
a) Does CNL have a pecuniary interest in whether the NSDF gets developed or not?
b) If it does, is the indirect pecuniary interest attributable to the respondent by reason of his employment with CNL so remote and insignificant that it cannot reasonably be regarded as likely to have influenced him?
DISCUSSION AND ANALYSIS
i. Legislative Overview
[14] The Municipal Conflict of Interest Act was enacted to promote integrity, independence, and accountability in local government decision-making and to provide guidance in reconciling the public duties and pecuniary interest of members of council ("members").
[15] The Act focuses on whether a member has a direct or indirect pecuniary interest in the outcome of any matter under consideration.
[16] An indirect pecuniary interest is defined to include a member of council who is employed by an entity that has a pecuniary interest in the matter in question. Accordingly, if it is determined that CNL has a pecuniary interest in its proposal to establish the NSDF, the respondent, as a CNL employee, has an indirect pecuniary interest (section 2(b)).
[17] There is an exception in the Act for any pecuniary interest which is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence a member (section 4(k)).
[18] Where a member has a direct or indirect pecuniary interest in any matter and is present at the meeting where the matter is being considered, the member must disclose the general nature of his pecuniary interest, must not take part in the discussion or vote, and must not attempt to influence the voting (section 5(1)).
[19] The Act should not be narrowly construed. Accordingly, although the vote in question was whether the municipality should support CNL's proposal and therefore does not directly engage financial issues, the broader issue is whether CNL stands to gain financially if the regulator approves the project. If so, the applicant submits that the respondent, as an employee of CNL, ought not to have participated in the discussion or the vote.
[20] An elector may apply to a judge of the Superior Court of Justice for a determination of whether a member has contravened the Act (section 8(1)).
[21] Several important changes to the legislation were enacted in March, 2019. These changes include an expansion of available remedies in the event a member is found to have contravened the Act. Previously, a contravention meant that the member lost his or her position on council. Now, the list of sanctions includes a suspension, a reprimand, or disqualification in addition to the possible loss of one's position on council (section 9(1)).
[22] In this case both the applicant and the respondent requested that the new provisions of the Municipal Conflict of Interest Act be applied in this case. They also requested that the court not impose any sanctions in the event that a contravention is found to have occurred. The parties are seeking declaratory relief only.
ii. Does CNL have a pecuniary interest in relation to the NSDF proposal?
[23] The applicant says that when all the surrounding circumstances are examined, the preponderance of evidence supports a common-sense inference that CNL has a pecuniary interest in whether the NSDF is developed or not.
[24] The respondent says there is no evidence that CNL has a real financial interest in the project. The suggestion that CNL has a pecuniary interest in the proposal is speculative.
[25] The evidentiary record available to me on this application indicates that CNL provides management and operational services to AECL but provides little insight into CNL's financial connections with the proposed NSDF. Similarly, on a more general level, the basis of CNL's remuneration for the services it provides to AECL and/or the federal government is also unclear. There is a reference in the evidence to a 1,089 page contract between AECL and CNL dated September 13, 2015 and three pages extracted from the contract are included in the applicant's Supplementary Record but there is insufficient information to draw meaningful conclusions regarding CNL's remuneration.
[26] The applicant points to various factors that he says are indicative of a pecuniary interest in favour of CNL. For example, he says, "CNL is incentivized by profit through performance measures, schedules and budgets. A failure of the large NSDF project could obviously influence these, hence emphasizing CNL's pecuniary interest in the NSDF." (emphasis added). No specifics are provided. Another example: CNL commissioned a preliminary Environmental Assessment for the project (although there is some doubt as to who may have ultimately borne the cost of the report).
[27] The unknowns respecting whether CNL has a pecuniary interest in the NSDF include:
a. Is CNL's remuneration performance-based and if so, what are the criteria, particularly in relation to the NSDF?
b. Is CNL paid on a cost-plus basis such that the more that it spends, the greater the management fees that it earns?
c. Does CNL bear any financial risk in relation to the NSDF? Who is responsible for cost overruns?
d. If the NSDF is approved, will CNL get a bonus? Will its management fees be increased? Will its contract be extended? If it is not approved, will CNL suffer a penalty or financial loss?
e. Is CNL going to own any portion of the NSDF?
f. Has or will CNL spend any of its own money on the project?
g. Is there a revenue-generating aspect of the NSDF and if so, who benefits from the receipt of such revenue?
[28] On the evidence presented, I am unable to conclude on a balance of probabilities that CNL has a pecuniary interest in the NSDF. A pecuniary interest in its favour cannot be assumed.
[29] There is no indication that the applicant sought to examine representatives of CNL or AECL to obtain financial details of their arrangements or to determine the extent, if any, of CNL's financial involvement in the NSDF.
[30] In my view, the applicant has failed to establish that CNL has a pecuniary interest in the NSDF. As a result of this determination, it is unnecessary to consider whether a potential indirect pecuniary interest in favour of the respondent is so remote and insignificant that it cannot reasonably be regarded as likely to influence him.
DISPOSITION
[31] This application is dismissed.
[32] On the issue of costs, both parties were requested to provide a preliminary outline of their positions on costs prior to the release of the court's decision. The applicant submitted a claim for about $30,000. The respondent requests a payment of about $14,000.
[33] The parties were advised that they would have a further opportunity to make costs submissions if they wish to do so. Accordingly, the respondent shall have 15 days to file any further information he wishes to submit (not to exceed 10 pages) and the applicant shall have 15 days to respond (not to exceed 10 pages).
Mr. Justice Martin James
Released: August 13, 2019
COURT FILE NO.: CV-17-073
DATE: August 13, 2019
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DAVID J. WINFIELD
– and –
JOHN HOYLE (acting in his capacity as Councillor Ward 4, Laurentian Hills)
REASONS FOR DECISION
Mr. Justice Martin James
Released: August 13, 2019