POLITICS

Excerpts from court ruling that orders Toronto mayor out of office

11/26/2012 05:06 EST | Updated 01/26/2013 05:12 EST
TORONTO - Excerpts from Ontario Superior Court Justice Charles Hackland's ruling in the case against Toronto Mayor Rob Ford (Respondent) filed by Toronto resident Paul Magder (Applicant).

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"This is an application brought by a municipal voter, Paul Magder, under s. 9 of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 [MCIA] against the respondent, Robert Ford, the current Mayor of Toronto. At a meeting of Toronto City Council on February 7, 2012, the respondent spoke to and voted on a matter in which he allegedly had a pecuniary interest. By so doing, it is alleged that he contravened s. 5(1) of the MCIA and, accordingly, an order is sought under s. 10(1) of the MCIA declaring his seat on Toronto City Council vacant.

— The respondent defends this application on the basis that (1) the MCIA does not apply to violations of Toronto’s Code of Conduct for Members of Council [Code of Conduct] and (2) the initial City Council Resolution requiring him to reimburse $3,150.00 to donors who had contributed to his charitable foundation was ultra vires Council’s powers granted by the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, and was, therefore, a nullity. In the alternative, the respondent submits that s. 5 of the MCIA does not apply because the amount involved is so insignificant that it cannot be regarded as likely to influence his actions (MCIA, s. 4(k)) and, in the further alternative, his contravention of the MCIA was committed through inadvertence or by reason of an error in judgment so that his seat on Council should not be declared vacant (MCIA, s. 10(2))...."

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ANALYSIS

(a) Does s. 5 (1) of the MCIA apply to a City of Toronto Code of Conduct Violation?

— The applicant’s position is that s. 5 of the MCIA required the respondent, at the City Council meeting of February 7, 2012, to refrain from taking part in the discussion of, and from voting on a matter in which he had a pecuniary interest. As previously noted, that matter (the original motion and the motion to rescind), involved the issue of whether Council would require the respondent to personally reimburse the sum of $3,150.00 to persons who had donated to his charitable foundation. The Mayor spoke on the original motion and voted on the motion to rescind. Section 5(1) of the MCIA provides:

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.

— Council was being asked to approve the Integrity Commissioner’s recommendation that the respondent furnish proof, within a short time frame, that he had personally repaid $3,150.00 to donors who had been asked by him to make donations to the Rob Ford Football Foundation. Obviously, as a result of the personal repayment requirement, the respondent had a pecuniary interest in that matter and, if applicable, s. 5(1) of the MCIA required that he neither take part in a discussion of nor vote on any question in respect of the matter. That would, of course, also apply to the motion to rescind Council’s decision of August 25, 2010.

— Importantly, the matter in which the respondent had a pecuniary interest arose from the sanction recommended by the Integrity Commissioner; and adopted by Council on August 25, 2010 that is, personal reimbursement of $3,150.00. It is not suggested that the respondent’s contraventions of the Code of Conduct involving his fundraising for the Rob Ford Foundation engaged his personal pecuniary interests. Rather, the issue arose from the recommended sanction.

— The significance of s. 5(1) of the MCIA applying to a Code of Conduct violation is that any member of council faced with a finding of a Code of Conduct violation is, when the matter is discussed at Council, disqualified from speaking or voting on the matter. This is because under the Code of Conduct, Council has the power to levy a financial sanction, thereby engaging s. 5(1) of the MCIA. This is not necessarily dependent on what the Integrity Commissioner has recommended by way of penalty, or whether or not there is a penalty recommendation, because under the Code of Conduct, pecuniary sanctions are available and it is for City Council to decide what sanction, if any, to impose. The law is well settled that a potential pecuniary interest in a matter is sufficient to engage s. 5(1) of the MCIA (see Tuchenhagen v. Mondoux, 2011 ONSC 5398, 107 O.R. (3d) 675 (Div. Ct.)). The applicant’s position is that the Integrity Commissioner’s recommendation that the respondent personally reimburse the donations engaged s. 5(1) of the MCIA, but that even in the absence of a recommended pecuniary sanction, any consideration by Council of a Code of Conduct violation would have similar effect because of the potential pecuniary sanctions which Council could impose on the member."

— The respondent argues that the inability of a member of Council to speak to Code of Conduct matters, when a sanction for the member’s own conduct is being considered, is draconian. He argues that a councillor who is named and targeted by a proposed sanctioning resolution must have an opportunity to speak to the matter before Council determines whether to accept the Integrity Commissioner’s recommendations. Otherwise, it is argued, he is denied natural justice and fairness and has no opportunity to offer explanations, address mitigating circumstances or to provide other relevant information for Council’s consideration...."

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"In summary, it is the respondent’s position that as a matter of policy and statutory interpretation, a Council member’s pecuniary interest in a matter, sufficient to engage s. 5(1) of the MCIA, must mean a personal pecuniary benefit arising from a city commercial or business matter before council. It is submitted that s. 5(1) cannot be interpreted to apply, as in the present case, to a situation in which a member of council is simply speaking about a potential pecuniary sanction he or she may be facing.

— I am, however, of the opinion that the applicant’s position is correct, that s. 5(1) of the MCIA means what it clearly says and that there is no interpretive basis for excluding the operation of s. 5(1) from municipal Code of Conduct matters. Section 5 of the MCIA clearly and broadly states that where a member, “has any pecuniary interest … in any matter,” and is present at a meeting of council, he or she is to disclose his or her interest and must neither take part in the discussion of nor vote on the matter. There is no basis on which the court can restrict or read down the meaning of “any matter” to exclude potential financial sanctions arising from Code of Conduct violations. I note parenthetically that reading down the operation of statutory provisions otherwise applicable is a constitutional remedy and no Charter issues have been raised by the parties in this proceeding. Furthermore, there is no authority for implying a right to be heard in the face of a statutory provision (such as s. 5(1) of the MCIA), which specifically denies such a right.

— As learned commentators have noted, there may be a procedural fairness deficiency if councillors are precluded, at council meetings, from discussing potential findings or pecuniary sanctions which may be levied against them. I would regard these considerations as requiring study and possibly law reform, but they cannot provide a basis for restricting clear statutory provisions. In any event, audi alteram partem does not have anything to do with and cannot provide a justification for voting (rather than speaking) on a matter, as the respondent chose to do in this case. As previously outlined, at the February 7, 2012 Council meeting, the respondent spoke on a motion to receive the Integrity Commissioner’s Report, but that motion did not come to a vote. Later in that meeting, the respondent voted (but did not speak) on a motion to rescind.

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"The applicant observes, correctly in my view, that there is no authority in the case law to support the proposition that the MCIA is restricted to business or commercial matters of the municipality or is inapplicable when there are no transparency concerns. The MCIA is cast in broad terms to protect the integrity of government decision-making at the municipal level. I respectfully adopt the observations of the Divisional Court in the recent case of Tuchenhagen, in which Lederer J. stated, at para. 25:

The MCIA is important legislation. It seeks to uphold a fundamental premise of our governmental regime. Those who are elected and, as a result, take part in the decision-making processes of government, should act, and be seen to act, in the public interest. This is not about acting dishonestly or for personal gain; it concerns transparency and the certainty that decisions are made by people who will not be influenced by any personal pecuniary interest in the matter at hand. It invokes the issue of whether we can be confident in the actions and decisions of those we elect to govern. The suggestion of a conflict runs to the core of the process of governmental decision-making. It challenges the integrity of the process.

— I accept the applicant’s submission that, whereas the MCIA usually deals with cases where the municipality has financial interests and, in contrast, the Code of Conduct is primarily aimed at councillor integrity, nevertheless, those criteria do not define the application of the two regimes. Both are aimed at ensuring integrity in the decision-making of municipal councillors...."

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"I also accept the applicant’s submission that the record before this court supports the inference that the respondent appreciated or was at least aware that the MCIA prevented him from speaking or voting on Code of Conduct violations involving himself. In May 2010, City Council considered a report in which the Integrity Commissioner found, in a report entitled, “Report on Violation of Code of Conduct by Councillor Ford”, that the respondent had improperly disclosed confidential information. At the relevant council meeting, the respondent recused himself, stating, “it’s a conflict of interest so I have to remove myself from the Chamber.” In his evidence at the present hearing, the respondent was unable to explain why he disqualified himself on that occasion, while speaking and voting on the present matter before Council on February 7, 2012.

— In summary, I am satisfied that the MCIA does apply to Code of Conduct violations, with the result that the respondent violated s. 5(1) of the MCIA when he spoke and voted on a matter in which he had a pecuniary interest at the City Council meeting of February 7, 2012...."

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"The issue posed by s. 4(k) of the MCIA is whether the respondent’s pecuniary interest in the matter before Council – whether he should be required to furnish proof of repayment of $3,150.00 to donors – involved such an insignificant amount that it was unlikely to influence him in his consideration of that matter. While s. 4(k) appears to provide for an objective standard of reasonableness, I am respectfully of the view that the respondent has taken himself outside of the potential application of the exemption by asserting in his remarks to City Council that personal repayment of $3,150.00 is precisely the issue that he objects to and delivering this message was his clear reason for speaking and voting as he did at the Council meeting. The respondent stated, in his remarks at the Council meeting, `[A]nd if it wasn’t for this foundation, these kids would not have had a chance. And then to ask for me to pay it out of my own pocket personally, there is just, there is no sense to this. The money is gone, the money has been spent on football equipment….'

— In view of the respondent’s remarks to City Council, I find that his pecuniary interest in the recommended repayment of $3,150.00 was of significance to him. Therefore the exemption in s. 4(k) of the MCIA does not apply.

— Was s. 5 (1) of the MCIA Contravened through Inadvertence or an Error in Judgment?

— Under s. 10(1) of the MCIA, where the court determines that a member of Council has contravened s. 5 of the MCIA, by speaking or voting on a matter in which the member has a pecuniary interest, the Act requires that the judge:

(a) Shall, in the case of a member, declare the seat of the member vacant.

There is, however, a saving provision at s. 10(2) of the MCIA, in which removal from office is not required; i.e., “if the judge finds that the contravention was committed through inadvertence or by reason of an error in judgment….”

[46] The mandatory removal from office for contravening s. 5(1) of the MCIA is a very blunt instrument and has attracted justified criticism and calls for legislative reform. Professor David Mullan, Toronto’s former Integrity Commissioner, described this provision as a “sledgehammer” in the course of his observations in a report to City Council, dated September 21, 2006:

Even more importantly, the City should make every endeavour to persuade the provincial government to either modernize the Municipal Conflict of Interest Act or confer on the City of Toronto authority to create its own conflict of interest regime in place of or supplementary to that Act. Aside from the fact that the existing Act places legal impediments in the way of the City extending the concept of conflict of interest beyond the formulation in that Act, it is simply Byzantine to have a regime under which the only way of dealing legally with conflict of interest in a municipal setting is by way of an elector making an application to a judge and where the principal and mandatory penalty (save in the case of inadvertence) is the sledgehammer of an order that the member’s office is vacated.

— The problem presented by s. 5(1) of the MCIA is that it does not allow for appropriately broad consideration of the seriousness of the contravention or of the circumstances surrounding the contravention, unless the member’s actions in speaking or voting on a matter occurred through inadvertence or by reason of an error in judgment. These are narrow concepts as interpreted in the case law. Commissioner Cunningham in the Mississauga Inquiry made the following very helpful recommendation, at p. 172, of his Report:

I recommend that the existing sanctions in the Municipal Conflict of Interest Act (MCIA) remain in place. However, none should be mandatory, and lesser sanctions should be made available...."

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"I recognize that the circumstances of this case demonstrate that there was absolutely no issue of corruption or pecuniary gain on the respondent’s part. His contraventions of the municipal Code of Conduct involved a modest amount of money which he endeavoured to raise for a legitimate charity (his football foundation), which is administered at arm’s length through the Community Foundation of Toronto...."

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"In any event, while the respondent’s conduct in speaking and voting at the February 7, 2012 City Council meeting was far from the most serious breach of s. 5(1) of the MCIA, removal from office is mandatory unless the respondent’s contravention of the MCIA was committed through inadvertence or by reason of an error in judgment. The burden of proof is on the respondent to establish this.

— I find that the respondent’s conduct in speaking and voting on the matter involving his repayment obligation did not occur through inadvertence. Inadvertence involves oversight, inattention or carelessness. On the contrary, the respondent’s participation was a deliberate choice. He testified in this proceeding that he appreciated that the resolution before Council impacted him financially because it required him to repay funds he believed he did not owe. He received the Council agenda a week prior to the meeting, considered the matter, planned his comments, which were designed to “clear the air,” and came to the meeting with the intention of speaking. He admitted that he sought no advice, legal or otherwise, as to whether he should be involved in the debate...."

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"The respondent submits that his conduct falls within the “error in judgment” saving provision. He submits that he had an honest belief that he was entitled to speak and vote on the Code of Conduct issues before Council. His decision to speak and vote on these matters involving his pecuniary interest was indeed an error in judgment in the broad sense that all contraventions of the law can be viewed as errors in judgment. However, the case law has necessarily given the concept of an error in judgment a much more restricted meaning. Rutherford J. addressed this issue in Campbell v. Dowdall, 1992 CarswellOnt 499, 12 M.P.L.R. (2d) 27 (Gen. Div.), at para. 36:

In one sense, every contravention of a statute based on deliberate action can be said to involve an error in judgment. A criminal act, for example, involves a serious error in judgment. The purpose of this second branch of this saving provision in subs. 10 (2) of the Act must be to exonerate some errors in judgment which underlie contraventions of the Act, but obviously not all of them. The Legislature must have intended that contraventions of s. 5 which result from honest and frank conduct, done in good faith albeit involving erroneous judgment, should not lead to municipal council seats having to be vacated. Municipal councils require the dedicated efforts of good people who will give of their time and talent for the public good. What is expected and demanded of such public service is not perfection, but it is honesty, candour and complete good faith.

— The case law confirms that an error in judgment, in order to come within the saving provision in s. 10(2) of the MCIA, must have occurred honestly and in good faith. In this context, good faith involves such considerations as whether a reasonable explanation is offered for the respondent’s conduct in speaking or voting on the resolution involving his pecuniary interest. There must be some diligence on the respondent’s part; that is, some effort to understand and appreciate his obligations. Outright ignorance of the law will not suffice, nor will wilful blindness as to one’s obligations.

— Several cases were cited in argument, in which the error in judgment saving provision was successfully relied on. These arise in situations involving reasonable mistakes of fact about whether the matter at hand engaged the elected official’s pecuniary interests and cases of novice elected officials relying on erroneous legal advice. In contrast, this respondent has served on City Council for 12 years, the last two years as Mayor. He acknowledged, in cross-examination, that prior to this proceeding, he had never read or familiarized himself with the MCIA. Moreover, the respondent admitted that he never sought out legal advice as to his entitlement to speak or vote on the Code of Conduct issues before Council on February 7, 2012, or indeed with respect to several previous conflicts with the Office of the Integrity Commissioner. He stated that he did not see the need to attend briefing sessions offered by the MCIA to newly elected councillors, or to read the councillor’s handbook which addresses conflicts of interest.

— On my view of the evidence, the respondent gave little or no consideration to whether he was lawfully entitled to speak or vote on the motions before Council on February 7, 2012, that involved his financial interests. I also find that he was well aware that he may have been in a conflict situation because Speaker Bussin had specifically warned him that he was in a conflict when he voted on a motion concerning these same issues (i.e., the recommended repayment to donors) when the matter first came before Council on August 25, 2010. The respondent emphasized that the City solicitor did not speak up at the Council meeting of February 7, 2012, to warn him of a conflict, while acknowledging that identifying conflicts is not the responsibility of the City solicitor. He acknowledged that no member of his staff is tasked with screening matters for possible conflicts and no protocol exists within his office for that purpose.

— It is apparent that the respondent was and remains focused on the nature of his football foundation and the good work that it does. He stated in evidence that this was his own “personal issue” that did not involve the financial interests of the City. He, therefore, felt that he was entitled to “clear the air” as he said, by speaking against the Integrity Commissioner’s report, or at least her recommendation that he personally reimburse the funds he had solicited from donors. The Integrity Commissioner’s report, itself, details a confrontational relationship with the respondent and a stubborn reluctance on the respondent’s part to accept that his activities concerning his football foundation are properly subject to the Code of Conduct. It would appear that the respondent’s actions at the February 7, 2012 Council Meeting, in speaking and voting on resolutions concerning the Integrity Commissioner’s factual findings in her report and her recommended sanction, was one last protest against the Integrity Commissioner’s position that he profoundly disagreed with...."

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"In assessing errors in judgment, just as it may be relevant to consider the position of a novice elected councillor with limited experience with conflict of interest issues, it is also appropriate to consider the responsibilities of the respondent as a long-serving councillor and Mayor. In my opinion, a high standard must be expected from an elected official in a position of leadership and responsibility...."

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"In summary, I find that the respondent has failed in his burden to show that his contraventions of the MCIA were the result of a good faith error in judgment.

Disposition:

— For the reasons set out above, I have concluded that the respondent contravened s. 5 of the MCIA when he spoke and voted on a matter in which he had a pecuniary interest at the meeting of Toronto City Council on February 7, 2012, and that his actions were not done by reason of inadvertence or a good faith error in judgment. I am, therefore, required by s. 10(1)(a) of the MCIA to declare the respondent’s seat vacant. In view of the significant mitigating circumstances surrounding the respondent’s actions, as set out in paragraph 48 of these reasons, I decline to impose any further disqualification from holding office beyond the current term.

— Accordingly, I declare the seat of the respondent, Robert Ford, on Toronto City Council, vacant.

— Recognizing that this decision will necessitate administrative changes in the City of Toronto, the operation of this declaration shall be suspended for a period of 14 days from the release of these reasons.

— The applicant is to provide the court with his written costs submissions within four weeks of the release of these reasons, with the respondent providing his written submissions within four weeks of receipt of the applicant’s submissions. The applicant will then have a further two weeks to reply."