But the man seeking to oust Katz, Joe Chan, may face an uphill battle in convincing Queen's Bench Justice Brenda Keyser that the $3,034.35 party violated a broadly worded section of a provincial conflict-of-interest law.
The mayor's lawyer has filed two motions asking that the case be thrown out and Keyser herself wondered Tuesday whether some of the language Chan uses in his lawsuit might be "a little over the top."
"We pay the taxes to maintain the streets. We don't pay the taxes to maintain (Katz's) pocket," Chan said outside court.
The dispute stems from a December 2010 party Katz threw for councillors and some city staff at an Asian restaurant he owned. Chan, who owns another Asian restaurant, is asking the judge to declare that Katz violated the Municipal Council Conflict of Interest Act.
Section 16 of the law forbids council members from communicating with other councillors or staff "for the purpose of influencing the municipality to enter into any contract or other transaction, or to confer any benefit, in which the councillor or any of his dependants has a direct or indirect pecuniary interest."
Chan's lawyer, David Matas, argues Katz broke that law by inviting fellow councillors and staff to a restaurant from which the mayor profits. Matas told court that even a relatively small dollar amount should not be treated lightly. He pointed to the penalties under the law, which include removal from office.
"The issue of conflict of interest is ... extremely important — so important that a small sum can lead to a loss of office. The legislation is strong — no conflict of interest. That's its intent."
Katz's lawyer, Robert Tapper, said the law is aimed at preventing councillors and mayors from trying to influence other councillors' votes on municipal decisions that might benefit them.
"It was a Christmas party. It's not the swaying of the decision-making process," Tapper told court.
"It's trivial. It's a Christmas party for crying out loud."
Keyser, who reserved her decision until Friday afternoon, may not even rule on the merits of the case, because Tapper has filed two motions to have the case thrown out. One alleges Matas wrongly held a court hearing ex-parte — without Tapper's presence or consent. The other alleges Chan violated court rules by telling media outlets in recent months about a settlement offer he had received from Katz.
"Mr. Chan's conduct in this case is ... nothing short of disgusting," Tapper said.
Matas explained Chan is not familiar with court rules and only spoke about the offer after being confronted by the media.
That drew what seemed like a rebuke from the judge.
"All he had to do ... is say, 'Sorry, I can't talk about it,'" Keyser told Matas.
Katz is not the first mayor to face legal trouble over a conflict-of- interest accusation.
Last October, an Ontario Superior Court justice ordered Toronto Mayor Rob Ford out of office for taking part in a council vote on whether he should repay $3,150 raised for his private football foundation.
Ford appealed and the ruling was overturned.
If Keyser rules that Katz knowingly broke the law, the mandatory penalty is dismissal from office. If she finds Katz broke the law inadvertently, Katz will not be ousted but he may be ordered to repay the money.
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