COURT FILE NO.: CV-23-00002467-0000 DATE: 2024-12-05

SUPERIOR COURT OF JUSTICE – ONTARIO 491 Steeles Avenue East, Milton ON L9T 1Y6

RE: Navjot Nanda, Appellant AND: Joint Compliance Audit Committee for the Town of Oakville and Gobinder Randhawa, Respondents

BEFORE: Justice Kurz

COUNSEL: Rahul Agarwal, and Amethyst Haighton, for the Appellant John George Pappas, for the Respondents

HEARD: October 28, 2024, by video conference

Endorsement

[1] This is an appeal by Navjot Nanda (“Nanda”), a town and regional councillor for the Town of Oakville, of a decision by the Respondent, Joint Compliance Audit Committee for the Town of Oakville (the “Committee”), dated August 2, 2023. That decision granted the application of the Respondent, Gobinder Randhawa (“Randhawa”), to authorize the appointment of an auditor to conduct a compliance audit of Nanda’s campaign finances. That authorization was granted by the Committee pursuant to s. 88.33 of the Municipal Elections Act, 1996, S.O. 1996, c 32 Sched (the “Act”).

[2] Nanda argues that the Committee erred in granting the application because Randhawa lacked standing to bring his application. He was not a resident of Ward 7 of the Town of Oakville, the ward in which Nanda successfully ran. Nanda argues that for elections to the Town of Oakville Council, s. 88.33 of the Act is restricted to electors who are entitled to vote in the ward whose candidate is subject to the application.

[3] Since the financial compliance terms of the Act are complaint driven, Nanda argues that the Committee lacked the jurisdiction to engage in a compliance audit of her campaign finances. She further argues that the Committee’s overbroad interpretation of the provision would give licence to officious intermeddlers, with no stake in a local ward election, to abuse the compliance audit process for their own purposes. That would cause great aggravation to the candidate and increase the expenditures of time and money by the municipalities, which will be called upon to consider and pay for a likely expanded pool of applications for compliance audits.

[4] The Committee argues that Nanda engages in too restrictive a reading of s. 88.33. It says that the right to bring a s. 88.33 challenge is open to any entitled voter in all of the Municipality of Oakville, whether or not they reside in Nanda’s ward. Any more restrictive a reading would violate the modern principle of statutory interpretation and ignore the Legislature’s intention of creating an effective mechanism to enforce campaign finance laws.

[5] Both sides agree that the standard of review in this appeal is correctness: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, at para. 37, citing Housen v. Nikolaisen, 2002 SCC 33, at para. 8.

[6] Both sides agree that the sole issue is whether the Committee’s decision, that Randhawa had standing to make his application, is correct.

Background

[7] Nanda successfully ran for the office of Oakville Ward 7 Town and Regional Councillor in the October 2022 municipal election. She assumed her seat as a member of both the Oakville Town Council and the Regional Municipality of Halton Council in November 2022.

[8] Nanda’s sole opponent in the election was the incumbent councillor, Pavan Parmar. Ms. Parmar’s campaign manager and major donor was Randhawa’s spouse, Jagandeep Randhawa.

[9] On June 29, 2022, Randhawa applied to the Committee for the appointment of an auditor to conduct a compliance audit of the election campaign finances of Nanda. He cited six alleged campaign finance violations by Nanda.

[10] The Committee met on August 1, 2022. At that time, Nanda raised, as a preliminary objection, the issue of Randhawa’s standing. She pointed out that Randhawa was not a resident of Ward 7 and hence, in the words of s. 88.33, not “an elector entitled to vote in an election” that she had run in.

[11] On August 2, 2022, the Committee granted Randhawa’s application and appointed an auditor despite Nanda’s objection.

[12] In its decision, the Committee found that:

4. With a view to the plain and ordinary meaning of subsection 88.33(1), read in its entire context, and noting the important public purpose underlying the Municipal Elections Act, 1996 interpretation cannot be accepted.
5. Subsection 88.33(1) of the Municipal Elections Act, 1996 n elector who is entitled to vote in an election make an application for a compliance audit. defined; however Municipal Elections Act, 1996 deals with the qualifications of a person to be an elector. Section 17 primarily requires that the person must either reside in or be the owner or tenant of land in a municipality in order to be an elector. Section 17 does not speak to wards. In addition, subsection 88.33(1) does not contain any language which refers to a specific race in a municipal election. It uses the general language the specific language “the election”, or the election for a specific office on the council.
6. The Candidate’s suggested interpretation would also undermine the important public purpose of the compliance audit regime, which is to ensure transparency and public scrutiny of those who run for public office, and provide a mechanism for the public to hold candidates accountable for their campaign finances.
7. The Committee is of the opinion that subsection 88.33(1) should be interpreted as allowing an elector of the municipality to pursue an application, and that there is no limitation on which ward the elector must reside in. As such, the Committee finds that the Applicant is an eligible elector of the Town of Oakville and had standing to make the Application.

[13] The Committee then determined that there were “reasonable grounds to believe that” one of Randhawa’s grounds, regarding the reporting of the costs of website hosting for Nanda’s campaign, were valid. Therefore, it ordered a compliance audit of all of Nanda’s campaign expenses.

[14] From the submissions of counsel, I understand that the audit has not taken place, pending the determination of this appeal.

[15] This appeal does not deal with the propriety of that decision, other than in regard to the issue of standing.

Relevant Statutory Provisions

[16] The issue raised in this appeal does not appear to have been litigated before in Ontario. Being a matter of first impression, it is important to start with the relevant statutory provisions, which must be interpreted within the bounds of what is known as the modern approach to statutory interpretation.

[17] Section 88.33(1) of the Act is the central statutory provision in this appeal. It reads as follows:

Compliance audit of candidates’ campaign finances

Application by elector

88.33 (1) An elector who is entitled to vote in an election and believes on reasonable grounds that a candidate has contravened a provision of this Act relating to election campaign finances may apply for a compliance audit of the candidate’s election campaign finances, even if the candidate has not filed a financial statement under section 88.25.

[Emphasis added]

[18] The key issue raised by this provision is which elector s. 88.33(1) is referring to when the provision is applied to the election of a councillor for a particular ward of a municipality divided into wards. For a municipal/regional election, is it just a voter in the particular ward in which the candidate in question is running, as Nanda says or is it the entire municipality as the Committee says? Or is it something else? Nothing in the Act defines either word, “elector” or “election”.

[19] Section 17(2) and (3) of the Act defines who is and is not entitled to be an elector in a municipal election. It states:

Qualifications

(2) A person is entitled to be an elector at an election held in a local municipality if, on voting day, he or she,

(a) resides in the local municipality or is the owner or tenant of land there, or the spouse of such owner or tenant;

(b) is a Canadian citizen;

(c) is at least 18 years old; and

(d) is not prohibited from voting under subsection (3) or otherwise by law.

Persons prohibited from voting

(3) The following are prohibited from voting:

1. A person who is serving a sentence of imprisonment in a penal or correctional institution.
2. A corporation.
3. A person acting as executor or trustee or in any other representative capacity, except as a voting proxy in accordance with section 44.
4. A person who was convicted of the corrupt practice described in subsection 90 (3), if voting day in the current election is less than five years after voting day in the election in respect of which he or she was convicted.

[20] But while s. 17(2) broadly refers to “an elector at an election held in a local municipality”, s. 19(7) limits the entitlement of voters in municipal elections to vote only in their wards. It states:

(7) For greater certainty, if a municipality is divided into wards, an elector is entitled to vote only in the ward where he or she resides, even if the elector resides in one ward and is the owner or tenant of land in a different ward or is the spouse of an owner or tenant of land in a different ward.

[Emphasis added]

[21] Under s. 88.24(3)(2), when a person “is a candidate, at different times in the same election, for more than one office on the same council or local board … Each candidate for an office for which the election is conducted by ward is a separate campaign.”

[22] The right of municipalities to set the wards for which elections take place is found in the Municipal Act, 2001, S.O. 2002, c. 25, s. 222.

[23] The Committee points out that the Act covers a number of different elections. They include what it described as “a competition between candidates,” such as election to an office. But as s. 3 demonstrates, the Act covers other types of elections as well. It states:

3 This Act applies to:

1. An election to an office on: i. the council of a local municipality, ii. the council of an upper-tier municipality, if the holder of the office is required to be elected by the electors of one or more local municipalities, iii. a local board, if the holder of the office is required to be elected in the same manner as members of the council of a local municipality.

2. An election to obtain the assent of electors to a by-law as required or authorized by law.

3. An election to obtain the opinion of the electors on any question as required or authorized by law.

[Emphasis added.]

[24] In addition, there are also by-elections to fill vacant offices: ss. 37(4)(2) and 65 of the Act and s. 263(1)(b) of the Municipal Act.

The “Modern Principle” of Statutory Interpretation

[25] At para. 117 of Vavilov, the court set out the “modern principle” of statutory interpretation that it first laid out 26 years ago in Rizzo & Rizzo Shoes Ltd. (Re), cited below. It stated that:

117 A court interpreting a statutory provision does so by applying the "modern principle" of statutory interpretation, that is, that the words of a statute must be read "in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament": Rizzo & Rizzo Shoes Ltd. (Re), , [1998] 1 S.C.R. 27, at para. 21, and Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26, both quoting E. Driedger, Construction of Statutes (2nd ed. 1983), at p. 87. Parliament and the provincial legislatures have also provided guidance by way of statutory rules that explicitly govern the interpretation of statutes and regulations: see, e.g., Interpretation Act, R.S.C. 1985, c. I-21.

[26] That approach was adopted “because legislative intent can be understood only by reading the language chosen by the legislature in light of the purpose of the provision and the entire relevant context”: para. 118.

[27] The administrative decision maker must interpret a statute in that manner. Its responsibility “is to discern meaning and legislative intent, not to ‘reverse-engineer’ a desired outcome”: para. 121.

Policy Underpinnings of the Act

[28] Each side offers valid policy considerations for its preferred interpretation of the Act. Nanda does not appear to contest the Committee’s view that the purpose of the compliance audit process “is to ensure transparency and public scrutiny of those who run for public office, and provide a mechanism for the public to hold candidates accountable for their campaign finances”.

[29] However, Nanda argues that an overly broad interpretation of s. 88.33(1) can result in applications for compliance audits from “officious intermeddlers with no direct or vested interest in a local election to intervene”. The direct interests of a resident of the ward in which a particular ward candidate election is taking place are clear. The election of a candidate has direct consequences for the elector as the candidate’s role is to represent that elector’s interests in municipal decision-making. On the other hand, the interests of an elector living outside the candidate’s ward are less clear or direct. Allowing such electors to apply for an election audit of a candidate that does not represent them opens the door to abuse of the process.

[30] Such broad standing rules would lead to an increase in applications, leading to a drain on public resources. As Nanda states in her factum, “[i]t takes significant resources, time and costs to hear an initial application, conduct a audit, consider the results of the audit, and make a decision. The Committee’s decision can then be appealed to this Court, resulting in the further use of judicial resources.”

[31] For its part, the Committee argues that the Legislature’s “design choices” in the Act’s compliance process support a broad interpretation of standing to apply for a compliance audit. That is because the Act imposes strict limits on campaign financing to level the playing field in local elections. Those limits are enforced in two ways. First, there is the disclosure of campaign finances through a publicly available financial statement form. A candidate can be guilty of an offence for a violation of the campaign finance rules or the filing of an inaccurate financial statement: s. 92(1)(a) and (b), 93 – 94 of the Act.

[32] Second, the Act allows for “electors” to bring a complaint of campaign financing impropriety forward in the form of an application for a compliance audit. That process could lead to the appointment of an auditor and ultimately a prosecution under the Act. This process is intended to be expeditious; hence a series of strict timelines for various steps of the process under s. 88.33.

[33] Importantly, there must be a complaint. The Committee itself lacks the power to authorize an investigation on its own volition.

[34] The Committee contends that restrictive standing requirements would be discordant with the complaint-based legislative scheme. It would prevent the Committee from hearing “potentially highly relevant complaints”. The Committee further asserts that the history of the statute demonstrates that the Legislature sought to make it easier, not more difficult to hold a candidate accountable for financial irregularities.

[35] The Committee points out that there were no election finance controls until 1980. But the Municipal Elections Act, S.O. 1980, c 308, s. 121 allowed municipalities to pass their own by-laws, which impose campaign financing restrictions. With the Municipal Elections Amendment Act, 1992 (No. 2), S.O. 1982, c 37, a breach of a municipal campaign financing by-law could be prosecuted as a “corrupt practice.” But the prosecution must have been conducted by an elector rather than a public authority: Municipal Elections Act, s. 106 (3), Municipal Elections Act, s. 25, adding s. 121(5) to the Municipal Elections Act.

[36] Section 81(1) of the Municipalities Act, 1996 allowed an “elector who is entitled to vote in an election” to apply for a compliance audit if they believe that a candidate had contravened a provision of that act. But the elector still had to bring the application, which was made to the local municipal council. With the Good Government Act, 2009, S.O. 2009, c. 33 Sched. 21, s. 8(44), each municipal council was required to establish a compliance committee.

[37] The Committee summarizes its argument on policy grounds, following this historical review of statutory election spending limit compliance by stating:

The core purpose of effective enforcement is incongruent with the Candidate’s suggested interpretation of subsection 88.33(1), which fails to give any consideration to the purpose of this regime. Preventing individuals with valid complaints from raising them solely based on their ward residency hinders the Committee’s ability to fulfill this objective of the [Act].

Analysis

[38] Both parties offer valid policy reasons for their interpretation of the Act. It is hard to argue that the risk of officious intermeddling sounds as important as ensuring fair elections under financing rules that apply to all through a transparent audit process. But it is a valid policy concern for both councillors who were pulled into a difficult and time-consuming audit process and for councils who have to foot the bill and devote time and resources to the process.

[39] Saying that though, I add that it is not for this court to inject its policy preferences to a statute to give it a reading that is not supported by its wording. Policy and context are important, but only to understand the meaning of that wording. If that wording is torqued to meet a particular judge’s views and priorities, then the judiciary will have usurped the role of the Legislature.

[40] Here, the wording, “an elector who is entitled to vote in an election” is an amorphous and undefined term in the Act. As the Committee argues, it was open to the Legislature to clearly specify that it was referring only to the voters in an election for a councillor in particular ward. But it was also open to the Legislature to explicitly word the statute to offer the reading suggested by the Committee.

[41] If, based on the policy considerations the Committee wishes to guide the court’s interpretation of s.88.33, “an elector who is entitled to vote is an election” covers the entire municipality, why limit it there? Why not every elector entitled to vote in the Region? After all, Nanda was also elected to sit on Halton Regional Council.

[42] Moreover, taking it a step further, if maximum transparency and citizen participation in ensuring fair elections is the lens with which to interpret the Act, why is standing limited to even those voters? Why not all of the electors entitled to vote in an election in Ontario, or even Canada? The plain words set out above support those potential interpretations and the broad standing rules suggested by the Committee would support it.

[43] Surely, both Nanda and the Committee agree that there must be a limit in order to avoid the harms that too broad a standing rule would impose on councillors and municipal councils. They just don’t agree in what it should be.

[44] Returning to the text of the Act, the place where judges are required to start, there is a provision that is helpful in interpreting where the line for standing must be drawn. Section 19(7), cited above, offers the best understanding of the Legislature’s intention regarding which elector is entitled to standing to challenge the spending of a candidate for election in a ward in a municipal election. Again, it says:

(7) For greater certainty, if a municipality is divided into wards, an elector is entitled to vote only in the ward where he or she resides, even if the elector resides in one ward and is the owner or tenant of land in a different ward or is the spouse of an owner or tenant of land in a different ward.

[Emphasis added]

[45] The Committee says that this provision is found in a broader section of the Act, s. 19, dealing with preliminary voting lists. That does not diminish the Act’s limitation on the term, “elector” in s. 19(7). In that provision, an elector is someone entitled to vote only in the ward in which they reside in a municipal election that includes wards.

[46] Considered within the context of the Presumption of Consistent Expression [1], the term “elector” must be understood to refer to a voter entitled to vote for the particular election in question. For a municipal election for a ward councillor, it means a person entitled to vote for a candidate in that ward.

[47] That interpretation does not diminish the Act’s focus on election integrity and transparency. Rather it offers a proportional process for dealing with complaints about a candidate’s spending. It limits those complaints or applications to someone with “skin in the game” or a direct interest in the result. Thus, it also deals with the concern that election audits are not an open-ended free-for-all process in which anyone within a broad area can impose a costly and time-consuming process on municipal councils and councillors. It is a proportional remedy that the Legislature has crafted to deal with a concern without creating even more concerns.

[48] It is true, as the Committee says, that some sufficiently determined complainant can simply arrange for a “straw man” to issue the complaint. There are always ways that a clever and unscrupulous individual can find to game the system. That would be true with the Committee’s limitation on standing as well. As both parties would likely say, that does not mean that anything goes regarding standing or that the concerns set out above should be ignored.

Conclusion

[49] For the reasons set out above, I find that Randhawa lacked standing to bring his application. Thus the Committee erred in ordering the compliance audit of Nanda. Accordingly, I set aside the Committee’s decision to order a compliance audit of Nanda.

[50] As the parties have agreed that no costs will be payable regardless of the result, no costs are ordered.

Marvin Kurz J. Released: December 5, 2024

[1] See Ruth Sullivan, The Construction of Statutes, 7th ed, Toronto, LexisNexis Canada Inc., 2022 (online), ss 8.03[1], citing R. v. Zeolkowski, , [1989] 1 S.C.R. 1378, [1989] S.C.J. No. 50, at 1387 (S.C.C.).