Municipal & Planning Law Reports

MUNICIPAL & PLANNING LAW REPORTS Fifth Series/Cinqui`eme s´erie Recueil de jurisprudence en droit municipal

VOLUME 5 (Cited 5 M.P.L.R. (5th))

EDITOR-IN-CHIEF/REDACTEUR´ EN CHEF John Mascarin, M.A., LL.B. Aird & Berlis LLP Toronto, Ontario

QUEBEC EDITOR/REDACTEUR´ POUR LE QUEBEC´ Vincent Piazza, LL.B. Partner, De Grandpré Chait LLP/s.e.n.c.r.l. Montréal, Québec

CARSWELL EDITORIAL STAFF/REDACTION´ DE CARSWELL Cheryl L. McPherson, B.A.(HONS.) Director, Primary Content Operations Todd Pinsky, B.SC. (HONS.), LL.B. (Acting) Product Development Manager Nicole Ross, B.A., LL.B. Sharon Yale, LL.B., M.A. (Acting) Supervisor, Legal Writing Supervisor, Legal Writing Peter Bondy, B.A.(HONS.), LL.B. Lisa Rao, B.SC., LL.B. Lead Legal Writer Senior Legal Writer Anne Simpson, B.A., M.L.S., LL.B. Bridget Mak, B.A.(HONS.), LL.B. Senior Legal Writer Legal Writer Eden Nameri, B.A., LL.B. Martin-Fran¸cois Parent, LL.B., Legal Writer LL.M., DEA (PARIS II) Bilingual Legal Writer Jackie Bowman Content Editor MUNICIPAL AND PLANNING LAW REPORTS, a national series of topi- Recueil de jurisprudence en droit municipal, une série nationale de cal law reports, is published 12 times per year. Subscription rate $409.00 per recueils de jurisprudence spécialisée est publié 12 fois par année. bound volume including parts. Indexed: Carswell’s Index to Canadian Legal L’abonnement est de 409 $ par volume relié incluant les fascicules. Indexa- Literature. tion: Index a` la documentation juridique au Canada de Carswell.

Editorial Offices are also located at the following address: 430 rue St. Pierre, Le bureau de la rédaction est situé a` Montréal — 430, rue St. Pierre, Mon- Montréal, Québec, H2Y 2M5. tréal, Québec, H2Y 2M5.

NOTICE AND DISCLAIMER: All rights reserved. No part of this publica- MISE EN GARDE ET AVIS D’EXONERATION´ DE RESPON- tion may be reproduced, stored in a retrieval system, or transmitted, in any SABILITE´ : Tous droits réservés. Il est interdit de reproduire, mémoriser sur form or by any means, electronic, mechanical, photocopying, recording or un système d’extraction de données ou de transmettre, sous quelque forme ou otherwise, without the prior written consent of the publisher (Carswell). par quelque moyen que ce soit, electronique´ ou mécanique, photocopie, enre- gistrement ou autre, tout ou partie de la présente publication, a` moins d’en avoir préalablement obtenu l’autorisation ecrite´ de l’éditeur, Carswell. A licence, however, is hereby given by the publisher: Cependant, l’éditeur concède, par le présent document, une licence :

(a) to a lawyer to make a copy of any part of this publication to give to a a) a ` un avocat, pour reproduire quelque partie de cette publication pour judge or other presiding officer or to other parties in making legal submis- remettre a` un juge ou un autre officier-pr´esident ou aux autres parties dans sions in judicial proceedings; une instance judiciaire;

b) a` un juge ou un autre officier-président, pour produire quelque partie de (b) to a judge or other presiding officer to produce any part of this publication cette publication dans une instance judiciaire; ou in judicial proceedings; or c) a` quiconque, pour reproduire quelque partie de cette publication dans le cadre de délibérations parlementaires. (c) to anyone to reproduce any part of this publication for the purposes of « Instance judiciaire » comprend une instance devant une cour, un tribunal ou parliamentary proceedings. une personne ayant l’autorité de décider sur toute chose affectant les droits ou les responsabilitiés d’une personne. “Judicial proceedings” include proceedings before any court, tribunal or per- Ni Carswell ni aucune des autres personnes ayant participé a` la réalisation et son having authority to decide any matter affecting a person’s legal rights or a` la distribution de la présente publication ne fournissent quelque garantie liabilities. que ce soit relativement a` l’exactitude ou au caractère actuel de celle-ci. Il est entendu que la présente publication est offerte sous la réserve expresse que ni Carswell and all persons involved in the preparation and sale of this publica- Carswell, ni le ou les auteurs de cette publication, ni aucune des autres per- tion disclaim any warranty as to accuracy or currency of the publication. This sonnes ayant participé a` son elaboration´ n’assument quelque responsabilité publication is provided on the understanding and basis that none of Carswell, que ce soit relativement a` l’exactitude ou au caractère actuel de son contenu the author/s or other persons involved in the creation of this publication shall ou au résultat de toute action prise sur la foi de l’information qu’elle be responsible for the accuracy or currency of the contents, or for the results renferme, ou ne peuvent etreˆ tenus responsables de toute erreur qui pourrait of any action taken on the basis of the information contained in this publica- s’y etreˆ glissée ou de toute omission. tion, or for any errors or omissions contained herein. La participation d’une personne a` la présente publication ne peut en aucun cas etreˆ considérée comme constituant la formulation, par celle-ci, d’un avis No one involved in this publication is attempting herein to render legal, ac- juridique ou comptable ou de tout autre avis professionnel. Si vous avez counting, or other professional advice. If legal advice or other expert assis- besoin d’un avis juridique ou d’un autre avis professionnel, vous devez tance is required, the services of a competent professional should be sought. retenir les services d’un avocat ou d’un autre professionnel. Les analyses The analysis contained herein should in no way be construed as being either comprises dans les présentes ne doivent etreˆ interprétées d’aucune fa¸con official or unofficial policy of any governmental body. comme etant´ des politiques officielles ou non officielles de quelque organ- isme gouvernemental que ce soit.

8 The paper used in this publication meets the minimum requirements of 8 Le papier utilis´e dans cette publication satisfait aux exigences minimales American National Standard for Information Sciences — Permanence of Pa- de l’American National Standard for Information Sciences — Permanence of per for Printed Library Materials, ANSI Z39.48-1984. Paper for Printed Library Materials, ANSI Z39.48-1984.

ISSN 0702-7206 ISBN 978-0-7798-4761-7 Printed in Canada by Thomson Reuters

CARSWELL, A DIVISION OF THOMSON REUTERS CANADA LIMITED One Corporate Plaza Customer Relations 2075 Kennedy Road Toronto 1-416-609-3800 Toronto, Ontario Elsewhere in Canada/U.S. 1-800-387-5164 M1T 3V4 Fax 1-416-298-5082 www.carswell.com Contact www.carswell.com/contact MUNICIPAL & PLANNING LAW REPORTS Fifth Series/Cinqui`eme s´erie Recueil de jurisprudence en droit municipal

[Indexed as: Magder v. Ford] Paul Magder, Applicant and Robert Ford, Respondent Ontario Superior Court of Justice Docket: Toronto CV-12-448487 2012 ONSC 5615 Charles T. Hackland R.S.J. Heard: September 5, 6, 2012 Judgment: November 26, 2012*** Municipal law –––– Council members — Conflict of interest — Failure to disclose interest — Pecuniary interest — What constitutes –––– Mayor was councillor prior to his election as mayor — While on council in 2010, report of city integrity commissioner concluded that mayor had breached municipal code of conduct — Breaches related to solicitation of donations for mayor’s private foundation, for which mayor used city logo and resources as well as his status as councillor — Recommendation that mayor reimburse donors came before city council in 2010 — Speaker for council alerted mayor to potential conflict of interest in voting on recommendation, but mayor did so regardless — Council adopted recommendation of integrity commissioner, but mayor did not reimburse money — Integrity commissioner recommended that mayor provide proof of reimbursement by March 2012 — Matter came before council again in Febru- ary 2012, with another councillor moving to rescind 2010 decision and have no further action taken on matter — Mayor voted on this motion, which passed —

*Reversed at Magder v. Ford (2013), 2013 CarswellOnt 387, 2013 ONSC 263 (Ont. Div. Ct.). **A corrigendum issued by the court on November 30, 2012 has been incorporated herein. 2 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Application was brought by citizen to find that mayor was in violation of municipal law by voting on motion — Application granted — Seat of mayor declared vacant — Municipal law applied to violation of municipal code of conduct — Mayor had pecuniary interest in matter before council, and under law this was enough to disqualify him from speaking or voting on matter — Any denial of fairness to mayor was matter for potential law reform, as provisions of applicable law were clear — In any event, there was no justification for mayor voting on motion as this was clear conflict of interest — Mayor’s seat was declared vacant, but mayor was not barred from seeking office after current term — Dec- laration was to take effect 14 days after judgment, to allow for necessary administrative changes. Municipal law –––– Council members — Conflict of interest — Disqualifica- tion –––– Mayor was councillor prior to his election as mayor — While on council in 2010, report of city integrity commissioner concluded that mayor had breached municipal code of conduct — Breaches related to solicitation of donations for mayor’s private foundation, for which mayor used city logo and resources as well as his status as councillor — Recommendation that mayor reimburse donors came before city council in 2010 — Speaker for council alerted mayor to potential conflict of interest in voting on recommendation, but mayor did so regardless — Council adopted recommendation of integrity commissioner, but mayor did not reimburse money — Integrity commissioner recommended that mayor provide proof of reimbursement by March 2012 — Matter came before council again in February 2012, with another councillor moving to rescind 2010 decision and have no further action taken on matter — Mayor voted on this motion, which passed — Application was brought by citizen to find that mayor was in violation of municipal law by voting on motion — Appli- cation granted — Seat of mayor declared vacant — There was no inadvertence in violation of law by mayor as he intended to speak and vote as he did, and admitted that he had not familiarized himself with applicable law — Mayor did not seek legal advice to determine his responsibilities — Law did not provide for any sanction other than declaration that mayor’s seat was vacant, despite relatively minor nature of violation — Mayor’s seat was declared vacant, but mayor was not barred from seeking office after current term — Declaration was to take effect 14 days after judgment, to allow for necessary administrative changes. Municipal law –––– Council members — Conflict of interest — Miscellane- ous –––– Mayor was councillor prior to his election as mayor — While on council in 2010, report of city integrity commissioner concluded that mayor had breached municipal code of conduct — Breaches related to solicitation of donations for mayor’s private foundation, for which mayor used city logo and resources as well as his status as councillor — Recommendation that mayor reimburse donors came before city council in 2010 — Speaker for council alerted Magder v. Ford 3

mayor to potential conflict of interest in voting on recommendation, but mayor did so regardless — Council adopted recommendation of integrity commissioner, but mayor did not reimburse money — Integrity commissioner recommended that mayor provide proof of reimbursement by March 2012 — Matter came before council again in February 2012, with another councillor moving to rescind 2010 decision and have no further action taken on matter — Mayor voted on this motion, which passed — Application was brought by citizen to find that mayor was in violation of municipal law by voting on motion — Appli- cation granted — Reimbursement was not specified penalty for violation committed by mayor — However, other municipal laws gave council broad powers to deal with violations in interest of governing city and its own affairs — Im- plied powers were sufficient to be acted on by council, barring actions that were clearly outside scope of powers — Reimbursement was reasonable penalty — Although small, amount of money was significant to mayor and was cited by him as objection that he had to motion — Mayor’s seat was declared vacant, but mayor was not barred from seeking office after current term — Declaration was to take effect 14 days after judgment, to allow for necessary administrative changes. Cases considered by Charles T. Hackland R.S.J.: Campbell v. Dowdall (1992), 12 M.P.L.R. (2d) 27, 1992 CarswellOnt 499, [1992] O.J. No. 1841 (Ont. Gen. Div.) — considered Mondoux v. Tuchenhagen (2011), (sub nom. Tuchenhagen v. Mondoux) 107 O.R. (3d) 675, 2011 ONSC 5398, 2011 CarswellOnt 11438, 88 M.P.L.R. (4th) 234, 284 O.A.C. 324 (Ont. Div. Ct.) — referred to Nanaimo (City) v. Rascal Trucking Ltd. (2000), 20 Admin. L.R. (3d) 1, 183 D.L.R. (4th) 1, 2000 CarswellBC 392, 2000 CarswellBC 393, 2000 SCC 13, 251 N.R. 42, 132 B.C.A.C. 298, 215 W.A.C. 298, [2000] 1 S.C.R. 342, [2000] 6 W.W.R. 403, 76 B.C.L.R. (3d) 201, 9 M.P.L.R. (3d) 1, [2000] S.C.J. No. 14 (S.C.C.) — considered Shell Canada Products Ltd. v. Vancouver (City) (1994), 1994 CarswellBC 115, 1994 CarswellBC 1234, [1994] 3 W.W.R. 609, 20 M.P.L.R. (2d) 1, 20 Ad- min. L.R. (2d) 202, 110 D.L.R. (4th) 1, 88 B.C.L.R. (2d) 145, [1994] 1 S.C.R. 231, 163 N.R. 81, 41 B.C.A.C. 81, 66 W.A.C. 81, [1994] S.C.J. No. 15, EYB 1994-67078 (S.C.C.) — considered Statutes considered: Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 Generally — referred to City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A s. 6(1) — considered s. 7 — considered 4 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

s. 8(1) — considered s. 160(5) — considered Municipal Act, 2001, S.O. 2001, c. 25 Generally — referred to s. 223.4(5) [en. 2006, c. 32, Sched. A, s. 98] — considered Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 Generally — referred to s. 4 — considered s. 4(j) — referred to s. 4(k) — referred to s. 9 — referred to s. 9(1) — referred to s. 5(1) — considered s. 10(1) — referred to s. 10(2) — referred to

APPLICATION by voter to find respondent mayor in contravention of conflict of interest law.

Clayton C. Ruby, Nader R. Hasan, Angela Chiasson, for Applicant Alan J. Lenczner, Q.C., Andrew Parley, for Respondent

Charles T. Hackland R.S.J.: Introduction 1 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 To- ronto. 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. 2 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 insignif- Magder v. Ford Charles T. Hackland R.S.J. 5

icant 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)).

Background 3 On August 12, 2010, the City of Toronto Integrity Commissioner issued a report to Toronto City Council (“Council”), concluding that the respondent, Robert Ford (then a member of Council), breached Articles IV (Gifts and Benefits), VI (Use of City Property, Services and Other Resources), and VIII (Improper Use of Influence) of the Code of Conduct. 4 The Integrity Commissioner found that the respondent used the City of Toronto logo, his status as a City Councillor, and City of Toronto resources to solicit funds for a private football foundation he created in his name. The Integrity Commissioner recommended that Council take steps to require that Councillor Ford reimburse $3,150.00 in donations made by lobbyist and corporate donors, and provide confirmation of such reimbursement to the Integrity Commissioner. The Integrity Commissioner’s report, including her recommendations, were adopted by Council on Au- gust 25, 2010. 5 I quote from the Resolution before Council on August 25, 2010: Councillor Rob Ford used the City of Toronto logo, his status as a City Councillor, and City of Toronto resources to solicit funds for a private football foundation he created in his name. Donors to the Councillor’s foundation included lobbyists, clients of lobbyists and a corporation which does business with the City of Toronto. I concluded that there had been a breach of Articles IV (Gifts and Bene- fits), VI (Use of City Property, Services and Other Resources) and VIII (Improper Use of Influence) of the Code of Conduct for Mem- bers of Council (“The Code of Conduct”). I recommend that Council impose a sanction that will appropriately address the breaches of the Code of Conduct. RECOMMENDATIONS The Integrity Commissioner recommends that: 1. City Council adopt the finding that Councillor Rob Ford violated Articles IV, VI and VIII of the Code of Conduct. 6 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

2. City Council adopt the recommendation that the following sanction permitted by Article XVIII of the Code of Conduct be imposed: 1. Councillor Ford will reimburse the lobbyist and corporate donors in the amounts listed in the attachment to this report and provide confirmation of such reimbursement to the Integrity Commissioner. 6 At the City Council meeting on August 25, 2010, the Integrity Com- missioner’s report and recommendations were initially approved without debate. Later in the meeting, a Councillor moved for reconsideration of that approval. A vote was held and the motion for reconsideration was defeated. The respondent voted on that motion. Just before this vote, Council Speaker Sandra Bussin alerted the respondent to a conflict of interest. She described what occurred in her affidavit in this proceeding, as follows: Because the matter involved Councillor Ford’s conduct and made him personally liable for $3,150.00, it was my opinion that Council- lor Ford had a direct and personal interest in Item CC52.1 which amounted to a conflict of interest that prohibited him from speaking on or voting on the motion. As a Councillor bound by the City’s Code of Conduct, it was Coun- cillor Ford’s responsibility to declare that he had a conflict of interest because of his pecuniary interest in the motion. Nevertheless, as Speaker, when I realized that Councillor Ford intended to vote on the motion, I alerted him directly to his conflict of interest. I said to him in a clear voice: Councillor Ford. This matter deals with an issue regarding your conduct. Do you intend to declare a conflict? You are voting? Okay. I have attached a transcript of the exchange to this affidavit as Ex- hibit “A”. I alerted Councillor Ford to his conflict of interest in the hope and expectation that he would declare his conflict and not vote on the motion. Having ignored my warning, there was nothing more that I could do. Councillor Ford did not seem surprised when I told him that he had a conflict of interest. Instead, he just nodded to me, indicating that he understood what I had said but that he was voting on the item. He then proceeded to do so. Magder v. Ford Charles T. Hackland R.S.J. 7

7 Notwithstanding the adoption of the Integrity Commissioner’s report and recommendation that the respondent reimburse $3,150.00, the respondent did not comply. In the Integrity Commissioner’s Annual Report to Council for 2011, she reported on her attempts to obtain the respondent’s compliance with Council’s resolution of August 25, 2010. The In- tegrity Commissioner stated: Council’s decision required the Councillor to reimburse lobbyists and corporate donors from whom he had improperly solicited and taken donations. A copy of the decision was provided to the Councillor and follow-up letters were sent on August 31, 2010, September 15, 2010, May 10, 2011, June 7, 2011 and July 4, 2011. Confirmation of compliance remains outstanding. 8 In view of the respondent’s continuing refusal to comply with Coun- cil’s resolution, the Integrity Commissioner issued a report to Council, dated January 30, 2012. This report disclosed that the respondent had written to the Integrity Commissioner on October 24, 2011, advising that he had corresponded with the donors, and attached letters from three of the donors who had written in response to him, to say that they did not wish to receive reimbursement for their donations. The Integrity Com- missioner advised that she had written to the respondent confirming his obligation to obey Council’s decision and advising him that asking lob- byistsdonors for the additional favour of forgiving repayment could amount to a breach of the Lobbyists’ Code of Conduct. In her compliance report, the Integrity Commissioner made the following recommendation: 1. City Council adopt a recommendation that Mayor Ford provide proof of reimbursement as required by Council decision CC 52.1 to the Integrity Commissioner on or before March 6, 2012, and 2. City Council adopt the recommendation that if proof of reimbursement has not been made by March 6, 2012, that the In- tegrity Commissioner report back to Council. 9 The resolution quoted in the previous paragraph came before City Council for action on February 7, 2012. The respondent was present. He spoke to the matter, explaining the workings of his football foundation and, with apparent reference to the proposed sanction, the respondent said, “And then to ask that I 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.” About five minutes later, in response 8 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

to a question from a Councillor regarding the use of his letterhead, the respondent spoke a second time saying, “I made a mistake before a few years ago, for the last I don’t know how many years, that is exactly what I send out. No city logo, no titles. I don’t know what else I can say.” 10 Councillor Ainslie then made a motion to rescind Council’s August 25, 2010, decision. His motion was as follows: “That City Council re- scinds the previous decision made under item CC 52.1 and directs that no further action be taken on this matter.” The respondent did not speak to this motion. The respondent did, however, vote on the motion, which carried by a vote of 22-12. The effect of this motion was that Council rescinded its adoption of the Integrity Commissioner’s findings as to the respondent’s violations of the Code of Conduct, as well as the repayment obligation. 11 The applicant subsequently brought this application, pursuant to s. 9(1) of the MCIA, for determination of whether the respondent contravened s. 5(1) of the MCIA by speaking or voting on the motions before Council on February 7, 2012.

Analysis (a) Does s. 5 (1) of the MCIA apply to a City of Toronto Code of Conduct Violation? 12 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; Magder v. Ford Charles T. Hackland R.S.J. 9

(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. 13 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. 14 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. 15 The significance of s. 5(1) of the MCIA applying to a Code of Con- duct 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 Mondoux v. Tuchenhagen, 2011 ONSC 5398, 107 O.R. (3d) 675 (Ont. 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. 10 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

16 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. Oth- erwise, 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. 17 In his factum, the respondent’s counsel referred to a recommendation made by Commissioner Cunningham, in October 2011, in the Missis- sauga Judicial Inquiry. Commissioner Cunningham recommended that the MCIA be amended to state explicitly that a councillor does not violate the Act by making submissions to Council concerning the imposition of a penalty under a municipal Code of Conduct. At p. 173 of his “Report of the Mississauga Judicial Inquiry: Updating the Ethical Infrastructure”, the Commissioner recommended: I recommend that the Municipal Conflict of Interest Act be amended to include a provision stating explicitly that nothing in the Act prevents a member of council from making submissions regarding a finding in a report by the integrity commissioner or regarding the imposition of a penalty under a municipal code of conduct. It is important that members of council be afforded procedural fairness under municipal codes of conduct. 18 Professor David Mullan testified at the Mississauga Inquiry in favour of the recommendation noted above. He observed, in his testimony before the Inquiry, in relation to his experience as Toronto’s former In- tegrity Commissioner, that he had recommended that it was necessary to provide some form of procedural fairness on the floor of Council when Council is deciding whether or not to implement a recommendation for some form of sanction. 19 Professor Mullan went on to observe that the notion of allowing a councillor to participate in a debate about proposed sanctions against himself or herself should not be viewed as a conflict of interest and that Council should not be absolved of the obligation to extend procedural fairness simply because the Integrity Commissioner might have given procedural fairness at the reporting stage. 20 In his reference to “procedural fairness at the reporting stage”, Profes- sor Mullan was alluding to the entitlement councillors have to procedural Magder v. Ford Charles T. Hackland R.S.J. 11

fairness in the course of the Integrity Commissioner’s investigation. Elsewhere in the materials before this court, Professor Mullan has explained that councillors also would have the opportunity, in appropriate circumstances, to seek judicial review of the Integrity Commissioner’s recommendations for sanctions or in respect of City Council’s imposition of sanctions. Nevertheless, his observations support the argument advanced by the respondent’s counsel, Mr. Lenczner, that the principles of procedural fairness, audi alteram partem, should allow a member of council to speak to proposed sanctions against himself or herself under the municipal Code of Conduct and such submissions are properly made to City Council as the body making the decision. 21 In addition to the policy arguments to which I have just referred, it is submitted on behalf of the respondent that, as a matter of statutory interpretation, the MCIA does not apply to Code of Conduct violations. They are said to be two separate regimes. The MCIA has as its objectives transparency and disclosure in relation to matters affecting the business and commercial interests (or financial interests) of the City. In contrast, the Code of Conduct is enacted pursuant to the City of Toronto Act and governs the ethical conduct of members of council. It is pointed out that the vast majority of decided cases deal with business and commercial matters concerning the municipality or board. 22 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. 23 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 12 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

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. 24 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 Council’s original adoption of the Integrity Commissioner’s Report. I find that both motions related to a matter engaging the respondent’s pecuniary interests. 25 Section 4 of the MCIA sets out eleven enumerated categories of pecuniary interests which are deemed to be exempt from the application of s. 5 of the MCIA. For example, pecuniary interests that are “common with electors generally” (MCIA, s. 4(j)) are exempt, as are interests “so remote or insignificant” (MCIA, s. 4(k)) as not to be reasonably regarded as likely to influence the member. Notably absent from these exemptions is any reference to a potential pecuniary penalty which may arise from a municipal Code of Conduct violation. In my opinion, the court should be reluctant to create another exemption when, to date, the Legislature has chosen not to do so. 26 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 Magder v. Ford Charles T. Hackland R.S.J. 13

result, take part in the decisionmaking 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 influ- enced by any personal pecuniary interest in the matter at hand. It in- vokes 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. 27 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. 28 The Code of Conduct addresses the intended operating relationship between the Code and the MCIA. The two regimes are to operate together and the Code of Conduct is a “supplement” to the MCIA. Article II of the Code of Conduct addresses “Statutory Provisions Regulating Con- duct”, and provides: This Code of Conduct operates along with and as a supplement to the existing statutes governing the conduct of members. The following provincial legislation governs the conduct of members of Council: • the City of Toronto Act, 2006, and Chapter 27, Council Proce- dures, of the Municipal Code (the Council Procedures By- law) passed under section 189 of that Act; • the Municipal Conflict of Interest Act; • the Municipal Elections Act, 1996; and • the Municipal Freedom of Information and Protection of Pri- vacy Act. [Emphasis added.] 29 Article VIII of the Code of Conduct concerns “Improper Use of Influ- ence” and prohibits the use of the councillor’s office to benefit “oneself, or one’s parents, children or spouse, staff members, friends or associates, business or otherwise.” It is evident that some types of inappropriate conduct can contravene both the MCIA and the Code of Conduct. Further, 14 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Article IX of the Code of Conduct is entitled “Business Relations”. It provides that: No member shall act as a paid agent before Council, its committees, or an agency, board or commission of the City except in compliance with the terms of the Municipal Conflict of Interest Act. 30 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 Coun- cil 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. 31 In summary, I am satisfied that the MCIA does apply to Code of Con- duct 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.

(b) Did City Council have the Authority to Require the Respondent to Reimburse $3,150.00 to Donors? 32 The respondent submits that City Council exceeded its authority in August 2010 when it passed a resolution requiring him to personally repay the donors $3,150.00. While this sanction is provided for in the Code of Conduct, it is argued that, in this regard, the Code is ultra vires the City of Toronto Act which allows for only two penalties for Code of Con- duct violations. Subsection 160(5) of the City of Toronto Act provides: Penalties City council may impose either of the following penalties on a member of council or of a local board (restricted definition) if the Com- missioner reports to council that, in his or her opinion, the member has contravened the code of conduct: 1. A reprimand. Magder v. Ford Charles T. Hackland R.S.J. 15

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. [Emphasis added.] 33 The Code of Conduct, at Article XVIII, goes further and provides as follows: XVIII. COMPLIANCE WITH THE CODE OF CONDUCT Members of Council are accountable to the public through the four- year election process. Between elections they may, for example, be- come disqualified and lose their seat if convicted of an offence under the Criminal Code of Canada or for failing to declare a conflict of personal interest under the Municipal Conflict of Interest Act. In addition, subsection 160(5) of the City of Toronto Act, 2006, authorizes Council to impose either of two penalties on a member of Council following a report by the Integrity Commissioner that, in her or his opinion, there has been a violation of the Code of Conduct: 1. A reprimand; or 2. Suspension of the remuneration paid to the member in respect of his or her services as a member of Council or a local board, as the case may be, for a period of up to 90 days. Other Actions The Integrity Commissioner may also recommend that Council or a local board (restricted definition) take the following actions: 1. Removal from membership of a Committee or local board (restricted definition). 2. Removal as Chair of a Committee or local board (restricted definition). 3. Repayment or reimbursement of moneys received. 4. Return of property or reimbursement of its value. 5. A request for an apology to Council, the complainant, or both. 34 The ultra vires argument is premised on the phrase “may impose either of the following penalties” in s. 160(5) of the City of Toronto Act, which is said to operate as a restriction. The respondent submits that only two penalties are allowed under Toronto’s Code of Conduct; a reprimand or suspension of the member’s remuneration for a period of up to 90 days. The “Other Actions” provided for in Article XVIII of the Code of Conduct are said to be unauthorized and ultra vires and that any Council 16 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

resolution authorizing or seeking to enforce such other actions is a nullity. 35 Materials filed in the record of this proceeding disclose that Missis- sauga’s Code of Conduct (April, 2011), applicable to the mayor and all members of council in that municipality, is cast in virtually identical terms with respect to sanctions for violation of its Code; i.e., the same two “penalties” followed by a series of “other actions” which the Integ- rity Commissioner may recommend. The Municipal Act, 2001, S.O. 2001, c. 25, authorizes municipalities to establish a Code of Conduct for Members of Council and local boards and, like the City of Toronto Act, the same two penalties are permitted and the phrase “may impose either of” two penalties is used. Subsection 223.4(5) of the Municipal Act provides: Penalties 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. [Emphasis added.] I mention this in order to illustrate that this particular interpretation issue is of broad application to Codes of Conduct in use in other cities in On- tario, which are enacted pursuant to the Municipal Act. 36 Recognizing, as I do, that the words “either of” seem to suggest a restriction and that the expressio unius est exclusio alterius interpretive rule (to express one thing is to exclude another) may support such an interpretation, I am of the opinion that the “other actions” provided for in the Code of Conduct are not ultra vires. A reprimand or suspension of pay is clearly a penalty. But other actions, such as the specified removal from membership of a Committee or as Chair of a Committee; repayment or reimbursement of moneys or property received; or the request for an apology to Council and/or the complainant are, in essence, a range of proportionate and necessary remedial measures to address situations which may arise from or the consequences of a member engaging in a Code of Conduct violation. While the member may view the other ac- Magder v. Ford Charles T. Hackland R.S.J. 17

tions as penalties, they are in fact necessary remedial measures to allow the Code of Conduct to operate effectively and to address the problems arising from Code of Conduct violations. 37 The applicant submits that the repayment sanction in the Code of Conduct is consistent with s. 6(1) of the City of Toronto Act which provides for a broad interpretation of the City’s powers: The powers of the City under this or any other Act 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 en- hance the City’s ability to respond to municipal issues. In addition, s. 7 of the City of Toronto Act provides that, “[t]he City has the capacity, rights, powers and privileges of a natural person for the purpose of exercising its authority under this or any other Act.” Further, s. 8(1) of the City of Toronto Act confers a broad welfare power, providing that, “[t]he City may provide any service or thing that the City considers necessary or desirable for the public.” 38 The controlling jurisprudence in the Supreme Court of Canada supports a broad application of municipal powers in order to carry out the objectives of municipalities. The court in Shell Canada Products Ltd. v. Vancouver (City), [1994] 1 S.C.R. 231 (S.C.C.), at para. 47, noted that to a large extent, the inclusion of the broad, “general welfare provisions” in municipal acts “was intended to circumvent, to some extent, the effect of the doctrine of ultra vires which puts the municipalities in the position of having to point to an express grant of authority to justify each corporate act.” 39 The Supreme Court of Canada has consistently adopted a generous approach to interpretation of those powers. In Nanaimo (City) v. Rascal Trucking Ltd., 2000 SCC 13, [2000] 1 S.C.R. 342 (S.C.C.), the Supreme Court of Canada, at para. 36, quoted, with approval, the following statement by McLachlin J. in Shell Canada Products Ltd., at para. 19: Recent commentary suggests an emerging consensus that courts must respect the responsibility of elected municipal bodies to serve the people who elected them and exercise caution to avoid substituting their views of what is best for the citizens for those of municipal councils. Barring clear demonstration that a municipal decision was beyond its powers, courts should not so hold. In cases where powers are not expressly conferred but may be implied, courts must be prepared to adopt the “benevolent construction” which this Court referred to in Greenbaum, and confer the powers by reasonable impli- 18 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

cation. Whatever rules of construction are applied, they must not be used to usurp the legitimate role of municipal bodies as community representatives. 40 I conclude that the reimbursement obligation in the section “Other Actions” in the Code of Conduct is properly and logically connected to the permissible objectives of the City of Toronto in establishing its Code of Conduct. As such, it is an action lawfully available to Council upon recommendation of the Integrity Commissioner. In my opinion, it would be a significant and unwarranted impairment of the remedial powers under municipal Codes of Conduct to declare these other actions as ultra vires.

(c) Was the Respondent’s Pecuniary Interest in the Reimbursement of $3,150.00 Unlikely to Influence him? 41 The respondent submits that his pecuniary interest involved in the Council resolutions requiring him to reimburse $3,150.00 to donors is sufficiently insignificant in its nature that it did not influence him. He relies on one of the enumerated exemptions in s. 4 of the MCIA, s. 4(k), which states: 4. Section 5 does not apply to a pecuniary interest in any matter that a member may have, (k) by reason only of an interest of the member which is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member. 42 The respondent argues that the amount of money involved ($3,150.00) is very modest considering his salary as Mayor. It is stated at para. 59 of the Respondent’s Factum that, “No objectively reasonable person could conclude that the Respondent, a City Councillor for ten years and Mayor for two years would jeopardize his position for $3,150 ...” 43 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 deliver- Magder v. Ford Charles T. Hackland R.S.J. 19

ing 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....” 44 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.

(d) Was s. 5 (1) of the MCIA Contravened through Inadvertence or an Error in Judgment? 45 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 Septem- ber 21, 2006: Even more importantly, the City should make every endeavour to persuade the provincial government to either modernize the Munici- pal 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 20 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

penalty (save in the case of inadvertence) is the sledgehammer of an order that the member’s office is vacated. 47 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. More specifically, I recommend that: (a) Subsection 10(3) be repealed, and the following lesser sanctions be made available where a judge finds contravention of the MCIA: • suspension of the member for a period of up to 120 days; • a form of probation of the member, with oversight by the integrity commissioner or auditor; • removal from membership of a committee of council; • removal as chair of a committee of council; • a reprimand publicly administered by the judge; and • a formal apology by the member. 48 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. His remarks to City Council on February 7, 2012, focused at least in part on the proposed sanction against him, in circumstances where many informed commentators would contend that the principles of procedural fairness, audi alteram partem, should have allowed him to speak (although not to vote). The respondent’s actions, as far as speaking against the proposed sanction is concerned, was an unfortunate but arguably technical breach of s. 5(1) of the MCIA. The only pecuniary interest the respondent had in Magder v. Ford Charles T. Hackland R.S.J. 21

the matter before Council was the financial sanction sought to be imposed upon him. Moreover, there were no transparency concerns here, in view of the Integrity Commissioner’s initial and follow-up reports, which carefully and accurately explained both the Code of Conduct issues and the respondent’s ongoing refusal to comply with Council’s repayment resolution adopted at the meeting of August 25, 2010. In short, the relevant facts were fully available to Council at its meeting of February 7, 2012. 49 In addition, the respondent submits that he has complied with s. 5(1) of the MCIA on numerous occasions by declaring his interest in various matters and refraining from speaking or voting. Further, he submits that he has followed the Integrity Commissioner’s direction to not use councillor letterhead or city staff in fundraising activities for the Rob Ford Foundation. The latter point was somewhat undermined by the respondent’s evidence in cross-examination that he often exchanges his city business card (Exhibit 2) with people he encounters in his work as Mayor and then often follows up with requests for donations from these people for his football foundation. 50 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. 51 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. The respondent gave the following evidence in the cross-examination on his affidavit: 376. Q. So your speaking and voting were deliberate acts, correct? 22 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

A. I’m voting because I know my foundation...it’s a fantastic foundation. 377. Q. You deliberately chose to make the speech you did and vote the way you did? A. Absolutely. 378. Q. And you don’t regret for a moment having done that? A. Absolutely not. 52 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 (Ont. 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 perfec- tion, but it is honesty, candour and complete good faith. 53 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. Magder v. Ford Charles T. Hackland R.S.J. 23

54 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. More- over, 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. 55 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. 56 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 Commis- sioner’s report, or at least her recommendation that he personally reimburse the funds he had solicited from donors. The Integrity Commis- sioner’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 24 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

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 In- tegrity Commissioner’s position that he profoundly disagreed with. 57 On my review of the record in this proceeding, the respondent has never acknowledged a key point addressed in the Integrity Commis- sioner’s report; that is, that it was not appropriate for the respondent to use his status as Councillor (or Mayor) for private fundraising, notwithstanding that the purpose was to benefit a good cause. The rationale for this is explained by the Integrity Commissioner in the following excerpt, on p. 14, from her excellent report, dated January 30, 2012, which I respectfully endorse: In fairness to Councillor Ford, it is common for a person who has blurred their roles to have difficulty “seeing” the problem at the beginning. It often takes others to point out the problem, especially in a case where the goal (fundraising for football programs for youth) is laudable. The validity of the charitable cause is not the point. The more attractive the cause or charity, the greater the danger that other important questions will be overlooked, including who is being asked to donate, how are they being asked, who is doing the asking, and is it reasonable to conclude that a person being asked for money will take into account the position of the person asking for the donation. Where there is an element of personal advantage (in this case, the publication of the Councillor’s good works, even beyond what they had actually achieved), it is important not to let the fact that it is “all for a good cause” justify using improper methods for financing that cause. People who are in positions of power and influence must make sure their private fundraising does not rely on the metaphorical “mus- cle” of perceived or actual influence in obtaining donations. 58 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. Toronto’s current Code of Con- duct is modelled on the recommendations of The Honourable Denise Bellamy, who conducted the Toronto Computer Leasing Inquiry, in 2005, when the respondent was a member of City Council. At pp. 65-66 Magder v. Ford Charles T. Hackland R.S.J. 25

of her report, Commissioner Bellamy had this important observation as to the role of the Mayor: 71. For the Mayor, integrity in government should be a top priority. The Mayor of Toronto has many responsibilities, pressures, and functions, but perhaps the greatest is providing leadership for integrity in government. The Mayor is the face of City government, both internally and externally. Maintaining the integrity of government is the Mayor’s most important job. In view of the respondent’s leadership role in ensuring integrity in municipal government, it is difficult to accept an error in judgment defence based essentially on a stubborn sense of entitlement (concerning his football foundation) and a dismissive and confrontational attitude to the In- tegrity Commissioner and the Code of Conduct. In my opinion, the respondent’s actions were characterized by ignorance of the law and a lack of diligence in securing professional advice, amounting to wilful blindness. As such, I find his actions are incompatible with an error in judgment. 59 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 60 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 under s. 10(1)(b) of the MCIA. 61 Accordingly, I declare the seat of the respondent, Robert Ford, on Toronto City Council, vacant. 62 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. 26 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

63 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. Application granted; seat of mayor declared vacant. Magder v. Ford 27

[Indexed as: Magder v. Ford] Paul Magder, Applicant (Respondent in Appeal) and Robert Ford, Respondent (Appellant) Ontario Superior Court of Justice (Divisional Court) Docket: 560/12 2012 ONSC 6929 Pardu J. Heard: December 5, 2012 Judgment: December 5, 2012 Municipal law –––– Council members — Removal from office — Practice and procedure — Miscellaneous –––– Stay pending appeal — By November 26, 2012 judgment, application judge removed mayor from his office for violation of Municipal Conflict of Interest Act — Mayor filed appeal and brought motion for stay of judgment pending hearing of appeal — Motion granted — There were serious issues to be determined on appeal, scheduled for January 7, 2013 — Mayor would suffer irreparable harm if he were removed from office, but it later transpired that his appeal was successful, and order removing him was set aside — Lengthy stay was not in public interest — Stay was appropriate given that appeal was to be heard shortly. Civil practice and procedure –––– Practice on appeal — Staying of proceedings pending appeal — General principles –––– By November 26, 2012 judgment, application judge removed mayor from his office for violation of Munici- pal Conflict of Interest Act — Mayor filed appeal and brought motion for stay of judgment pending hearing of appeal — Motion granted — There were serious issues to be determined on appeal, scheduled for January 7, 2013 — Mayor would suffer irreparable harm if he were removed from office, but it later transpired that his appeal was successful, and order removing him was set aside — Lengthy stay was not in public interest — Stay was appropriate given that appeal was to be heard shortly. Cases considered by Pardu J.: RJR-MacDonald Inc. v. Canada (Attorney General) (1994), [1994] 1 S.C.R. 311, 1994 CarswellQue 120F, 1994 CarswellQue 120, 54 C.P.R. (3d) 114, (sub nom. RJR-MacDonald Inc. c. Canada (Procureur général)) 164 N.R. 1, (sub nom. RJR-MacDonald Inc. c. Canada (Procureur général)) 60 Q.A.C. 241, 111 D.L.R. (4th) 385, EYB 1994-28671, [1994] A.C.S. No. 17, [1994] S.C.J. No. 17 (S.C.C.) — followed 28 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Statutes considered: Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 Generally — referred to

MOTION by mayor for stay of judgment removing him from office for violation of Municipal Conflict of Interest Act pending hearing of appeal.

Alan J. Lenczner Q.C, for Appellant Clayton C. Ruby, for Respondent

Pardu J.:

1 The Appellant moves for a stay of the judgment of Hackland J. dated November 26, 2012, pending the hearing of his appeal from that judgment. The application judge removed the Appellant from his office as mayor of the City of Toronto, finding that he had violated the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 by speaking to and voting on a motion requiring him to repay donations made by others to a charitable foundation. The application judge concluded that the Appellant had a pecuniary interest at stake, and that his actions in speaking to and voting on the matter did not result from inadvertence or an error in judgment. 2 The parties agree that the test for determination of whether to grant a stay pending appeal requires consideration of 3 questions: Is there a serious issue to be heard? Will there be irreparable harm if a stay is not granted? Does the balance of convenience and the public interest justify granting a stay? 3 At this stage it would not be appropriate for me to enter upon a pro- longed discussion of the merits of the appeal. Having reviewed the No- tice of Appeal, I conclude that the appeal is neither frivolous nor vexatious. It is apparent that there are serious issues to be determined on the appeal. 4 It is clear that the Appellant would suffer irreparable harm if he were removed from office, but it later transpired that his appeal was successful, and the order of Hackland J. was set aside. 5 If the judgment is not stayed, then a by-election must be called, or council must appoint another person to act as mayor. If these steps are Magder v. Ford Pardu J. 29

undertaken, but the appeal is allowed, and the appellant restored to his position as mayor, significant uncertainty will result, and needless expenses may be incurred if a by-election is called. If the decision under appeal is stayed for a short interval until the appeal is heard, there is no basis to conclude that any harm will be caused to the public interest. The Application judge noted, “I recognized 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 Founda- tion of Toronto.” 6 On the other hand, a lengthy stay would not be in the public interest. Given the important issues at stake, a stay which was so lengthy as to negate the effect of the application judge’s order, should it be upheld on appeal, would be detrimental to the interests of the community. 7 The Respondent concedes that this is an appropriate case for a stay pending the appeal, given that the appeal will be heard shortly. 8 I agree that the test mandated by RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 (S.C.C.) has been met. 9 There will be an order that the order of R.S.J. Hackland dated No- vember 26, 2012 removing the appellant from office shall be stayed until a decision has been rendered by the Divisional Court on the appeal. The appeal will be heard on January 7, 2013. The Appellant shall file all documents necessary in support of the appeal by December 12, 2012. The Respondent shall file all documents in opposition to the appeal by De- cember 24, 2012. Motion granted. 30 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions1 John Mascarin*

Introduction “Accordingly, I declare the seat of the respondent, Robert Ford, on To- ronto City Council, vacant.” With those words, rendered at the conclusion of his decision in Magder v. Ford2 on an application brought pursuant to Ontario’s Municipal Con- flict of Interest Act,3 Justice Charles Hackland ignited a maelstrom of controversy. Already front page and headline news in the Greater To- ronto Area before the judgment was even issued on the morning of No- vember 26, 2012, the decision exploded onto a frenzied media. Writing in the Law Times, Jeffrey Lem noted, “This year has had its fair share of controversial, politicized and precedent-setting court decisions. No decision, however, has shaken the political landscape of the province as much as the recent ruling by Justice Charles Hackland of the Ontario Superior Court of Justice in Magder v. Ford that threatens to remove Toronto Mayor Rob Ford from office.”4

1This article is a modified version of the article reported at 6 D.M.P.L. (2d), issue 2013-1. *John Mascarin is a partner with Aird & Berlis LLP in Toronto. He is a Certified Specialist (Municipal Law: Local Government & Land Use Planning and Devel- opment). John would like to acknowledge the assistance provided to him in re- searching and drafting this article by Brett Kenworthy, student-at-law at Aird & Berlis LLP. 2Magder v. Ford, 5 M.P.L.R. (5th) 1, 2012 CarswellOnt 14510 (Ont. S.C.J.). The parties in the case will be primarily referred to in this article as the applicant and the respondent (including references to them in the application for the stay of removal and the appeal). 3Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 (“MCIA”). 4Jeffrey Lem, Law Times, “Magder teaches lesson about conflicts of interest” (December 3, 2012), 7. André Côté, IMFG Perspective, “The Fault Lines at City Hall: Reflections on Toronto’s Local Government” (Toronto: Institute on Muni- Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 31

Commentary on the judgment in the mainstream media, on local talk radio, on the internet, on the streets and at the water cooler has ranged from expressions of vitriolic indignation, shock and surprise to rueful accept- ance and gleeful schadenfreude. Like Rob Ford himself who is a polariz- ing public figure, beloved by “Joe Public”5 and his Ford Nation support- ers as an uncomplicated straight-shooting politician6 and bemoaned by his critics and many others as an embarrassment,7 the responses to the judgment have been wildly divergent. Magder v. Ford has engendered political accusations, calls for immediate legislative reform, discussions respecting the rule of law, an incredible amount of manoeuvering by and rhetoric from city councillors (both left and right wing), legal posturing and, unusual for a municipal law case, international media interest.8

cipal Finance and Governance, University of Toronto, 2013), No. 1, at 1, notes the seismic nature of the ruling: While debating the latest sign of dysfunction in the Council chamber is a popular parlour game in Toronto, the unprecedented judicial ruling in late 2012 to remove Mayor Rob Ford from office for a violation of conflict-of-interest rules has created a moment of genuine uncertainty and tension about Toronto’s city government. 5James Royson, Toronto Star, “Rob Ford proves popular at mayoral campaign launch” (March 29, 2010). 6Even the staid Wall Street Journal saw fit to write about Mr. Ford, in an article entitled “Outspoken Mayor Cuts a Big Figure” (April 6, 2012) leading with a quote that “he’s the most interesting political figure in Canada by far” and noting that he often refers to himself as “300 pounds of fun.” 7Christopher Hume of the Toronto Star (August 30, 2012) characterized Mr. Ford as “unco-operative, barely articulate and staggeringly incurious, his typical response is that he can’t remember” and “petulant, arrogant, disrespectful, lazy, out of touch, indifferent, ignorant and makes no bones about it.” Mr. Hume’s fellow columnist Rosie DiManno likened Mr. Ford to a dimwitted lunkhead: Toronto Star, “Court case bad as bozo mayor” (September 9, 2012). 8Ian Austen, New York Times, “Canada: Judge Orders Toronto Mayor to Leave Office” (November 27, 2012) at A14; Claire Sibonney, Chicago Tribune, “To- ronto’s combative mayor ordered to leave office”; The Economist, “Model-T Ford Breaks Down” (The Americas: The Economist Newspaper Limited, De- cember 1, 2012), 41-42. 32 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Within Canada, the case has received coast-to-coast coverage, with a significant amount of reporting in national newspapers and television news programs, as well as regional coverage outside of Ontario, including dai- lies in Montreal,9 Vancouver,10 and Edmonton.11 This article reviews the decision in Magder v. Ford, the background to the case, the MCIA from both a historical and contextual perspective, the subsequent application for a stay and the decision, and concludes with the grounds for appeal. While this commentary may step outside the typical confines of what normally comprises a legal analysis of a court decision, it is hoped that this may be permitted given the intense media scru- tiny and public interest the case has generated, the vast layers of agitprop that have been disseminated about it and some quite remarkable and unusual aspects about the legal proceedings and legislation.

Background

(a) Rob Ford – The Politician Mr. Ford was elected the Mayor of Toronto on October, 2010 in a land- slide victory.12 He swept into office on a conservative agenda of fiscal responsibility calling for less government, lower taxes and an end to the

9The Canadian Press, The Montreal Gazette, “Toronto Mayor Rob Ford ordered removed from office” (November 26, 2012). 10Colin Perkel, The Vancouver Sun, “Rob Ford, Toronto mayor, removed from office; says he will fight court ruling” (November 26, 2012). 11Colin Perkel, The Edmonton Journal, “Ouster of Toronto Mayor Rob Ford on hold as parties agree on stay pending appeal” (December 3, 2012). 12Kathryn Blake Carlson, National Post, “Election Wrap-Up: Ford thanks To- ronto for ‘vote of confidence’” (October 26, 2010). The City Clerk’s Official Declaration demonstrated that Rob Ford won a significant victory receiving roughly 47% of the vote (383,501 votes), with George Smitherman receiving approximately 35.6% of the vote (289,832 votes) and Joe Pantalone receiving approximately 11.7% of the vote (95,482 votes) [City of Toronto, Declaration of Results of Voting (Toronto: City of Toronto, 28 October 2010)]. Rob Ford was previously Ward 2 Councillor for Etobicoke North, having first been elected to office in 2000 and then being re-elected in 2003 and 2006. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 33

“gravy train” at City Hall.13 His mantra was and remains “Respect for taxpayers.”14 The respondent’s tenure as mayor has been tumultuous and his brash and unapologetic demeanour has only served to expand the political schism at Toronto City Hall. His mayoralty term has thus far been characterized by an astounding series of gaffes, blunders and plain outright mistakes that even the most politically-incorrect novice council member could not have committed. These include: • Mr. Ford denied and then admitted during the 2010 mayoral race that he was arrested in Florida in 1999 for driving under the influence and for possession of marijuana.15 “Go ahead, take me to jail,” Mr. Ford is quoted in the police report.16

13The Economist. “Model-T Ford breaks down” (The Americas: The Economist Newspaper Limited, December 1, 2012). Nicholas K¨ohler, Maclean’s, “The political genius of Rob Ford” (Toronto: Maclean’s Magazine, October 12, 2010): He will put an end to wasteful spending, eliminate government perks, cut taxes and reduce the size of city government-including halving the number of councillors from 44 to 22 and outsourcing garbage collection. He will do all this at the same time as he builds a new subway line. “People do not want streetcars in this city–they want subways,” Ford likes to say, his expression that of a man who has just taken a sip of sour milk. “‘If you get behind a streetcar-you’re stuck! Enough with the streetcars!’ Ford will, to sum up, ‘stop the gravy train’–a phrase the allegedly buffoonish former city councillor allegedly vetted with focus groups for maximum effect.” 14Paul Moloney, Toronto Star, “Mayor Rob Ford’s conflict of interest case: The players” (September 2, 2012). Mr. Ford was often a lone wolf at council, railing at excessive spending. It was not unusual to find Mr. Ford to be the lone dissent- ing vote on matters before council. His mantra “respect for taxpayers” was reit- erated when a relieved, rejuvenated and feisty Mr. Ford met with reporters immediately following the granting of his stay application allowing him to retain his seat at City Hall: CityNews Toronto (December 5, 2012). 15Pat Hewitt, CP24, “Toronto mayoral candidate Rob Ford talks about criminal charges he’s faced” (Toronto: The Canadian Press, August 20, 2010). 16Kelly Grant, The Globe and Mail, “Ford’s drunk driving conviction could steer his campaign into the ditch” (August 19, 2010). 34 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

• Early in the 2010 mayoral campaign, Mr. Ford was caught on tape urging an ill man to score painkillers on the street.17 • Mr. Ford has been accused of committing a number of driving faux-pas: • he admitted that he was “probably” reading while driving on the city’s busy Gardiner Expressway - the admission came in reaction to a photo that was circulating on Twitter that showed the mayor reading a document while sitting in the driver’s seat of his new black Cadillac Escalade; • he admitted he drove past the rear doors of a stopped streetcar, and was then confronted by the operator of the streetcar; • he was accused of illegally dialing numbers on his cellphone and talking on it as he steered his previous gold minivan along Dundas Street West near Spadina Avenue; • in July 2011, he first denied accusations that he raised his middle finger to a mother and her six-year-old daughter after the mother accosted him for talking on his cellphone while driving (his press secretary later acknowledged to some media outlets that the mayor had been talking on his cellphone during that incident). • Accosted in the driveway of his home by actress Mary Walsh (in character as Marg Delahunty in a mock ambush interview) and being filmed for CBC’s satirical program, This Hour Has 22 Min- utes, Mr. Ford fails to get the joke and calls 911.18

17Ben Spurr of NOW Magazine compiled a list of Mr. Ford’s more interesting quotations in “Say what?! Rob Ford in his own words and quotes from the mayor” and included an excerpt from a taped telephone conversation from June 4, 2010 when the mayor was asked if he could score some oxycontin. Mr. Ford is taped responding as follows: “I’ll try, buddy, I’ll try. I don’t know this shit, but I’ll fucking try to find it. Why don’t you go on the street and score it? Fuck, you know, I don’t know any drug dealers at all.” 18Kelly MacFarland, National Post, “CBC plays unfunny joke on unamused mayor” (October 25, 2011). Mr. Ford was accused of verbally berating the 911 dispatchers who answered his emergency call. Toronto Police Chief Bill Blair issued a statement that confirmed Mr. Ford did not call the dispatchers “bitches” Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 35

• The mayor attempted to single-handedly kill the “Transit City” (Toronto’s public transit plan) and called city council “irrelevant” after he lost his subways-first plan.19 • Mr. Ford is not a big fan of the Toronto Star because “they are liars.” The mayor’s office has attempted to essentially boycott the largest daily newspaper in Canada from having any access to the

although Mr. Ford himself admitted to being agitated and have used obscene language with the dispatchers. 19Section 132(1) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, enshrines a general principle of municipal law that the “power of the City shall be exercised by city council.” On December 1, 2010, the newly elected mayor purported to cancel Transit City by stating “the war on the car is over.” He met that day with the chief general manager of the Toronto Transit Commission (TTC) and instructed him to redi- rect all resources away from the Transit City initiative (see Natalie Alcoba, Na- tional Post, “‘The war on the car is over’ . . . and so is Transit City” (December 1, 2010)). The mayor directed the TTC to develop a new transit plan and then signed a memorandum of understanding purportedly on behalf of the city with the Province of Ontario and Metrolinx, the province’s transportation agency, to confirm the termination of Transit City, to make alternate public transit plans and to reimburse Metrolinx for non-recoverable sunk costs on the Transit City plan. City councillor Joe Mihevc commissioned a legal opinion which was written by Freya Kristjanson and Amanda Darrach and posted by the councillor on his website. The comprehensive opinion concluded that the mayor acted without the approval and the authority of city council and that he had no independent authority to cancel Transit City. The mayor’s unilateral and unauthorized cancellation of Transit City had originally been reported to cost the city approximately $65 million (Stephen Spencer Davies, Toronto Life, “Streetcar Named Disaster” (December 14, 2011) and Ben Spurr, NOW Magazine, “65 million reasons not to cancel Transit City” (December 13, 2011)). Hit in the cross-fire was TTC chief general manager, Gary Webster, a 37-year employee of the TTC, who was fired when Mr. Ford’s allies voted 5-4 vote to oust him for having the temerity to advise city council that above-ground light rail made good sense in some parts of Toronto, in defiance of the mayor’s subway-only direction. See Megan O’Toole, National Post, “‘Toadyism wins:’ Councillors rage after TTC board sacks Toronto transit chief Gary Webster” (February 21, 2012). 36 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

mayor and does not provide the Toronto Star with any official no- tices, briefings and pronouncements.20 • The mayor said the city’s taxpayers were to blame for an unexpected council vote to ban plastic bags.21 • Mr. Ford has steadfastly refused to participate in Pride Week, an annual 10-day celebration of diversity of the lesbian, gay, bisexual and transgender community held in Toronto since the early 1980s. In the two years he has been mayor, Mr. Ford has absented himself from the ceremonial kickoff to Pride Week and from participating in the Pride Parade.22 • Although he has not disclosed the amount of time that he has devoted to the management of high school football team he coaches, Mr. Ford gave a speech in the summer of 2012 where he said that coaching requires a major commitment: “Every day from 3 to 6 o’clock for September-October, and depending on how far the team goes in the playoffs, it could go to the end of November.”23 He has routinely skipped city council and other meetings to attend to his coaching duties for the Don Bosco Eagles.24 • Players on his high school football team were picked up by two TTC buses on active duty that were pulled from their routes and

20See John Honderich, Toronto Star, “Rob Ford boycotts the Star, but we’ll fight it and here’s why” (December 1, 2011). Mr. Ford also had an altercation with Toronto Star reporter, Daniel Dale, where the mayor called the police claiming that Mr. Dale had trespassed into his rear yard: CBC News, “Agitated Mayor Rob Ford confronts reporter outside home” (May 2, 2012). 21CBC News, “Toronto plastic bag ban is ‘people’s fault,’ says Ford” (Toronto: CBC News, June 7, 2012). 22Natalie Alcoba, National Post, “Rob Ford skips Pride kickoff for second year” (June 25, 2012). 23Daniel Dale, Toronto Star, “Mayor Rob Ford took most afternoons off during football season, itineraries suggest” (November 29, 2012). 24The Don Bosco Eagles reached the Metro Bowl, the high school champion- ship game, but lost 28-14. Mr. Ford was gracious in defeat noting that he was proud of his players but that the Newmarket Huron Height were the better team that evening. Mr. Ford unequivocally stated that he would be back coaching the team next year: Natalie Alcoba, National Post (November 28, 2012). Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 37

were required to abandon their paying passengers.25 Apparently, two telephone calls were placed by the mayor to the TTC chief general manager immediately prior to the re-routing of the buses. • Mr. Ford and his brother criticized the city’s medical officer of health on their weekly radio show, referring to his report recommending lowering speed limits for drivers on residential streets as “nonsense” and the officer’s salary as an “embarrassment.”26 He then claimed that the city’s Integrity Commissioner was politically motivated in the wake of her finding that their comments had violated council’s Code of Conduct. • Mr. Ford and his allies lambasted the city’s Ombudsman, Fiona Crean,27 for her report that criticized the Mayor’s office for interfering with the public appointments process.28 After being grilled at city council, the Ombudsman actually turned up a list of preferred candidates that had been provided by the mayor’s office to members of the mayor’s executive committee who were on the civic appointments committee.29 And if being embroiled in the municipal conflict of interest proceedings was not enough of a legal battle, the respondent was also named in a $6 million defamation claim by Beach restaurant owner George Foulidis who took offence with Mr. Ford’s suggestion that a leasing deal between Mr. Foulidis’ company, Tuggs Inc., and the city was corrupt. During his 2010 mayoral campaign Mr. Ford had told the Toronto Sun that a sole-

25CBC News, “TTC buses pulled off routes to pick up Rob Ford’s football team” (Toronto: CBC News, November 4, 2012). 26CBC News, “Rob Ford: Integrity commissioner politically driven” (Toronto: CBC News, October 25, 2012). 27Fiona Crean is the city’s first Ombudsman, appointed by city council in No- vember, 2008 pursuant to s. 170 of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A. 28Ombudsman Report, An Investigation into the Administration of the Public Appointments Policy (Toronto: City of Toronto, September 27, 2012). Steven Kupferman, “Toronto Ombudsman: Mayor’s Office Compromised the Public Appointments Process”, Torontoist (September 27, 2012). 29Ombudsman Addendum Report, An Investigation into the Administration of the Public Appointments Policy (Toronto: City of Toronto, October 25, 2012). 38 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th) sourced, untendered, 20-year contract the city awarded Tuggs Inc. for a restaurant on public land “stinks to high heaven.”30 The trial took place in November, 2012. A decision was released on December 27, 2012 dismissing the action against Mr. Ford. Justice John Macdonald concluded that the plaintiff failed to prove the words uttered by Mr. Ford referred to and were defamatory to him.31 Moreover, the respondent’s campaign election finances have been questioned. The financial disclosure filings by Ford’s mayoral campaign appear to show that the campaign effectively borrowed $69,722.31 from Doug Ford Holdings, a corporation whose directors include the respondent and his brother, Doug Ford.32 On May 4, 2011, Adam Chaleff- Freudenthaler and Max Reed filed for a compliance audit of the respondent’s campaign finances. Their brief identifies that the campaign may have exceeded its legal spending limits, and that it may have illegally borrowed $77,722 from Doug Ford Holdings, among other alleged violations of the Municipal Elections Act, 1996.33 On May 13, 2011, the city’s Compliance Audit Committee unanimously agreed that the mayor’s election expenses should be audited. The city has appointed Froese Forensic Partners to conduct the audit. All in all (and the foregoing only sets out a partial list of errors perpetu- ated by Mr. Ford), the respondent’s term as mayor (viewed in the best light) has been marked by a series of missteps and (observed more criti- cally) has been a shameful and reprehensible mockery of his office.

(b) Accountability and Transparency Sometime after the Municipality of Metropolitan Toronto and its six lower-tier constituent municipalities were amalgamated by the Province of Ontario into the new City of Toronto, the municipality awarded a con-

30Ben Spurr, NOW Magazine, “Rob Ford awaits verdict in libel case” (Novem- ber 20, 2012). 31Foulidis v. Ford, 2012 CarswellOnt 16516 (Ont. S.C.J.). 32John Lorinc, The Globe and Mail, “Ford’s unique approach to campaign financing: Borrow from family firm” (April 6, 2012). 33Steve Kupferman, Torontoist, “A History of Formal Complaints Against Rob Ford” (Toronto: Ink Truck Media, November 19, 2012). Municipal Elections Act, 1996, S.O. 1996, c. 32, Sched. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 39 tract with respect to city computer equipment. It appeared that an initial three-year term contract worth approximately $43 million was awarded by the city to a computer supply and service company. Over that period the city paid approximately $85 million to the contractor. An investigation was undertaken and city council passed a resolution seeking a judicial inquiry into the matter. Madam Justice Denise Bellamy was appointed as inquiry commissioner and she delivered her final report on September 12, 2005.34 Commissioner Bellamy discovered much that was wrong with the way the City of Toronto operated and she proposed a very long list of recommendations for adoption relating to ethics, governance, lobbying and other matters. Commissioner Bellamy advocated for an expanded code of conduct for municipal councillors, the hiring of a full-time integrity or ethics commissioner to report directly to council, a lobbyist code of conduct and registry, and many other enhancements to improve the transparency, accountability and operation of the city. When the City of Toronto Act, 200635 was enacted, it included Part V - Accountability and Transparency, which provisions were primarily derived from the judicial inquiry report.36 Part V requires that the City of Toronto appoint integrity officials, including an Integrity Commissioner, Ombudsman, Auditor General and a Lobbyist Registrar.37 The city is also required to establish a code of conduct for members of city council.38 City council amended the Code of Conduct for Members of Coun-

34Justice Denise Bellamy, Computer Leasing Inquiry/Toronto External Con- tracts Inquiry (Toronto: City of Toronto, 2005). 35City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A. 36Leo F. Longo and John Mascarin, A Comprehensive Guide to the City of To- ronto Act, 2006 (Markham: LexisNexis Canada Inc., 2008), 199. 37Unlike the accountability and transparency provisions in the Part V.1 of the Municipal Act, 2001, S.O. 2001, c. 25, which are discretionary powers for all municipalities in Ontario, Part V in the City of Toronto Act, 2006 is mandatory for the City of Toronto. Notwithstanding the statutory imperative, on October 25, 2012, Mr. Ford proposed eliminating the positions of Toronto Ombudsman Fiona Crean, Toronto Lobbyist Registrar Linda Gehrke and Integrity Commis- sioner Janet Leiper: Daniel Dale, Toronto Star, “Mayor Rob Ford wants to eliminate city watchdog offices” (October 27, 2012). 38Section 157 of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A. 40 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

cil–City of Toronto in 2006 to comply with the requirements of s. 157 of the City of Toronto Act, 2006.39 Toronto’s current Integrity Commis- sioner is Janet Leiper.40

(c) Code of Conduct Complaint On May 4, 2010, a member of the public filed a complaint pursuant to the Code of Conduct Complaint Protocol for Members of Council and s. 160 of the City of Toronto Act, 2006 that the respondent (then still Coun- cillor for Ward 2) had violated the Code of Conduct. The complaint alleged that the respondent had sought donations to the Rob Ford Football Foundation via letter, which was printed on his city letterhead and enclosed within a City of Toronto envelope. The complainant became aware that the respondent had announced his candidacy for mayor on March 25, 2010 and wrote “This left me uncomfortable. While it was not stated in words, there was a clear sense of an implied suggestion that a donation to his charity might serve me well should he be elected Mayor.”41 An investigation was conducted by the Integrity Commis-

39See Leo F. Longo and John Mascarin, A Comprehensive Guide to the City of Toronto Act, 2006 at 200-201 and footnote 7: The City adopted a Code of Conduct for Members of Council Inclu- sive of Lobbyist Provisions on September 28 and 29, 1999 (Clause 2 of Report 5 of Administration Committee). The Code of Conduct was amended to comply with the requirements of subsection 157(1) of the City of Toronto Act, 2006. Amendments to Code of Conduct for Members of Council was approved by city council on September 25, 26 and 27, 2006 (Clause 26 of Report 7 of the Policy and Finance Committee) and came into force on February 8, 2007 following city council’s approval on February 5, 6, 7 and 8, 2007 of the appeal mechanisms and legal support program in CC2.5 Amendments to the Code of Conduct Complaint Protocol under Members Code of Conduct. 40Janet Leiper was appointed by city council to a 5-year term which commenced on September 8, 2009. She followed current Dean of Osgoode Hall Law School, Lorne Sossin, who acted as Interim Integrity Commissioner following the retire- ment of the city’s first Integrity Commissioner, Professor David Mullan. 41Integrity Commissioner, Report on Violation of Code of Conduct (Toronto: City of Toronto, August 12, 2010) at 2. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 41 sioner, who brought a report to city council in accordance with the Com- plaint Protocol and s. 162(3) of the City of Toronto Act, 2006 concluding that the respondent had violated the city’s Code of Conduct.42 On August 27, 2010, city council adopted the following recommendations from the Integrity Commissioner’s report on consent: 1. Councillor Rob Ford violated Articles IV, VI and VIII of the Code of Conduct; 2. Councillor Ford will reimburse the lobbyist and corporate donors in the amounts listed in the attachment to the report (Au- gust 12, 2010) from the Integrity Commissioner and provide confirmation of such reimbursement to the Integrity Commissioner. More fully, the adoption of the report meant that:

Code of Conduct Article IV (Gifts and Benefits): City council found that the respondent had breached Article IV by soliciting and receiving donations from persons and organizations engaged in bidding on con- tracts from the City of Toronto. In some cases, the donations were made within several months of lobbying activity with the then councillor.

Code of Conduct Article VI (Use of City Property, Services and Other Resources): City council found that the respondent and his staff had improperly used city resources to work on the Rob Ford Football Foundation, which is not a City of Toronto-sponsored initiative.

Code of Conduct Article VIII (Improper Use of Influence): City council found that the respondent had improperly used his influence of office to seek and receive the donations in his official capacity. Subsequently, the respondent failed to provide the proof of repayment required by city council’s resolution. Between August 31, 2010 and Oc- tober 4, 2011, six written requests were sent by the Integrity Commis- sioner to the respondent requesting confirmation of repayment. The respondent’s failure to repay donors was brought to city council’s attention at its meeting on July 13, 14 and 15, 2011 during the Integrity Commis-

42Ibid. at 1. 42 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th) sioner’s annual report.43 Eventually, the Integrity Commissioner submitted a Report on Compliance with Council Decision CC52.1 and, at its meeting on February 7, 2012, city council reviewed the Integrity Com- missioner’s recommendation that: 1. City Council adopt a recommendation that Mayor Ford provide proof of reimbursement as required by Council decision CC 52.1 to the Integrity Commissioner on or before March 6, 2012; and 2. City Council adopt the recommendation that if proof of reimbursement has not been made by March 6, 2012 that the In- tegrity Commissioner report back to Council.44 The respondent did not declare a pecuniary interest on the matter at this meeting. The respondent spoke directly to the issue ahead of the vote and pleaded against enforcing city council’s previous resolution. Another member of city council moved to rescind the earlier decision and to not take any additional action with respect to the matter. The respondent did not speak to the motion directly, but subsequently cast a vote in favour of rescinding the previous decision.45

(d) Application under MCIA Enforcement of the MCIA is by private application commenced by an elector pursuant to s. 9 of the statute: 9 (1) Subject to subsection (3), an elector may, within six weeks after the fact comes to his or her knowledge that a member may have contravened subsection 5 (1), (2) or (3), apply to the judge for a determination of the question of whether the member has contravened subsection 5 (1), (2) or (3). “Elector” is defined in s. 1 of the MCIA to mean (with respect to a municipality) “a person entitled to vote at a municipal election in the municipality.”

43Integrity Commissioner, Report on Compliance with Council Decision CC52.1 (Toronto: City of Toronto, January 30, 2012) at 1. 44Ibid. at 2. 45As is well known, the respondent’s vote was not required as the motion to rescind passed 22-12. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 43

The applicant who filed the Notice of Application at the Ontario Superior Court of Justice is Toronto resident Paul Magder.46 The applicant believed that the respondent should not have spoken at city council or voted upon the motion to rescind the report from the city’s Integrity Commissioner. However, the applicant was not the first person who considered filing the application under the MCIA. Adam Chaleff-Freudenthaler went to school with the applicant’s children and was the one who first reviewed the issue and brought the potential conflict of interest to the applicant’s attention.47 As noted above, Mr. Chaleff-Freudenthaler persuaded the city’s compliance audit committee to order an audit into the respondent’s mayoralty campaign election finances. Furthermore, it was Mr. Chaleff- Freudenthaler who contacted Clayton Ruby (legal counsel for the applicant) to inquire if he would be interested in taking the case under the MCIA.48

Legislation

(a) General The original Municipal Conflict of Interest Act, 1972 was first enacted in Ontario in 1972.49 Although various statutory shortcomings were identified, which led to the enactment of the Municipal Conflict of Interest Act, 1983,50 the provisions of the statute have remained very much the same for the past 40 years with minimal modifications. The currently notorious

46Paul Moloney, Toronto Star, “Mayor Rob Ford’s conflict of interest case: The players” (September 2, 2012). Mr. Magder is not the well-known furrier bearing the same name who challenged the provincial Sunday shopping by-laws in the 1970s. 47Christie Blatchford, National Post, “Behind the people who brought down To- ronto Mayor Rob Ford” (November 29, 2012). 48Daniel Dale, Toronto Star, “Meet Adam Chaleff-Freudenthaler: The 27-year- old who triggered Rob Ford’s downfall” (November 27, 2012). 49Municipal Conflict of Interest Act, 1972, S.O. 1972, c. 142. Royal Assent was given to Bill 214 on December 15, 1972. 50Municipal Conflict of Interest Act, 1983, S.O. 1983, c. 8. Royal Assent was given to Bill 14 on February 23, 1983 and the statute was proclaimed in force on March 1, 1983. 44 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

automatic declaration of vacancy has existed since the Municipal Con- flict of Interest Act, 1972.51 An overhaul of the MCIA was proposed by a new piece of conflict of interest legislation introduced in 1994 as part of the Planning and Muni- cipal Statute Law Amendment Act, 1994.52 The Local Government Dis- closure of Interest Act, 1994 actually received Royal Assent and was proclaimed to come into force on April 15, 1994 but a change in government revoked the proclamation a mere two days before its effective date.53 This statute would have implemented a discretionary power to declare a member’s seat vacant for contravention (while at the same time

51Section 5(1) of the Municipal Conflict of Interest Act, 1972, S.O. 1972, c. 142, provided as follows: 5(1) Where the judge determines that a member of the council or of a local board has contravened subsection 1 or 2 of section 2, he shall, subject to subsection 2 of this section, declare the seat of the member vacant . . . (emphasis added) Section 10(1)(a) of the Municipal Conflict of Interest Act, 1983, S.O. 1983, c. 8, reads almost exactly the same as it does in the current MCIA: 10(1) Subject to subsection (2), where the judge determines that a member or a former member while he was a member has contravened subsection 5 (1), (2) or (3), he, (a) shall, in the case of a member, declare the seat of the member vacant . . . (emphasis added) The mandatory penalty of the vacating of the council member’s seat has remained in place for over 40 years. 52Local Government Disclosure of Interest Act, 1994, S.O. 1994, c. 23, Sched. B. The statute remained on the books as unproclaimed until it was finally and mercifully repealed by para. 484(2)9 of the Municipal Act, 2001, S.O. 2001, c. 25. 53See Patricia A. Foran and Andrea Skinner, “Is the Municipal Conflict of Inter- est Act Too Broad?”, The Six-Minute Municipal Lawyer 2011 (Law Society of Upper Canada: May 18, 2011) at 14-12-14-13 and Rick O’Connor, “Municipal Conflict of Interest: One More Time With Feeling”, 3 D.M.P.L. (May 1995), No. 5, at 63, 78-81. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 45

instituting a mandatory suspension of a member’s pay and benefits for a period of up to 90 days).54 The origins of the MCIA are well-stated by M. Rick O’Connor and George H. Rust-D’Eye: The passage of this legislation constituted a fundamental change in the approach to handling conflicts of interest in the municipal arena. Its general intent was to preclude councillors and members of local boards from considering or voting on those specific matters in which they had a “pecuniary interest” — while not affecting their qualifica- tion to remain in public office. In essence, the 19th-century principle of disqualification had been replaced by the dual concepts of disclosure and abstention by members on an issue-by-issue basis.55 In Lorello v. Meffe it was noted as follows: “The MCIA governs the conduct of local government members regarding conflicts of interest. It re- flects the need for integrity and accountability as the cornerstones of a strong local government system.”56 The MCIA sets out a legislative framework for when local decision-makers must declare an interest and must recuse themselves from participation and from voting in the decision-making process. The statutory provisions are not dissimilar to municipal conflict of interest legislation in other jurisdictions in Canada.57

54Local Government Disclosure of Interest Act, 1994, S.O. 1994, c. 23, Sched. B: 9 (1) If the court determines that a member or a former member while he or she was a member has contravened section 4, 5 or 6, the court, (a) shall suspend the member without pay or benefits for a period of not more than 90 days; (b)may, in the case of a member, declare the seat of the member vacant . . . (emphasis added) 55M. Rick O’Connor and George H. Rust-D’Eye, Ontario’s Municipal Conflict of Interest Act — A Handbook (St. Thomas: Municipal World Inc., 2007) at 2-3. 56Lorello v. Meffe (2010), 99 M.P.L.R. (4th) 107 (Ont. S.C.J.) at 113. 57Alberta - Part 5 of the Municipal Government Act, R.S.A. 2000, c. M-26; Brit- ish Columbia - Part 4, Division 6 of the Community Charter, S.B.C. 2003, c. 26; Manitoba - Municipal Council Conflict of Interest Act, C.C.S.M. c. M255; Sas- katchewan - Municipalities Act, S.S. 2005, c. M-36.1 and The Cities Act, S.S. 2002, c. C-11.1; Nova Scotia - Municipal Conflict of Interest Act, R.S.N.S. 46 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

The MCIA is a statute of general application to all “members” (broadly defined and including former members) of a municipal council or a local board in Ontario. Traditionally, municipalities have governed and regulated matters relating to property, land use development and business licensing which can be areas of risk with respect to conflicts of interest. In general, conflict of interest legislation is strict. The MCIA has recently been described as a “sledgehammer” and an “intrusion into the demo- cratic process by the courts”.58 Justice Hackland refers to it as a “very blunt instrument.” Commissioner Cunningham in his Report of the Mis- sissauga Judicial Inquiry - Updating the Ethical Infrastructure, wrote that the sanctions available under the MCIA are “severe” and “draconian.”59 However, the statute was meant to be strict and unforgiving. The severity of the MCIA was articulated by Justice Belleghem in Halton Hills (Town) v. Equity Waste Management of Canada in the following terms: The Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50, provides for the automatic unseating of any council member who votes on any public matter in which he or she has any financial interest. The Act is crystal-clear. It is harsh. It must be. It controls the actions of council members. They are the repositories of the citizens’ highest

1989, c. 299; New Brunswick - s. 207 of the Municipalities Act, R.S.N.B. 1973, c. M-22; Prince Edward Island - s. 23 of the Municipalities Act, R.S.P.E.I. 1988, c. M-13; Newfoundland and Labrador - s. 207 of the Municipalities Act, S.N.L. 1999, c. M-24. 58Professor David Mullan in a report to Toronto City Council, as quoted in the decision at para. 46, and current Mississauga Integrity Commissioner, Robert Swayze, was quoted in the Toronto Star (Sunday December 2, 2012). Mr. Swayze candidly commented that he had met with staff at the Ministry of Muni- cipal Affairs and Housing and that “[t]here was talk with the government, but no action.” In an editorial published on November 29, 2012, “Fix this Flawed Law”, the Toronto Star noted that the MCIA is inadequate and that “[t]he existing law is too narrow and, as a result, its outcomes can be overly harsh.” 59Justice J. Douglas Cunningham, Report of the Mississauga Judicial Inquiry - Updating the Ethical Infrastructure (City of Mississauga, 2011) at 158 and 171. He notes at 159: “Broadly speaking, the quasi-penal nature of the MCIA is outdated and out of step with the modern municipal accountability regime. The MCIA lacks more nuanced remedies.” Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 47

trust. They must at once be strong in their debate to put forward their electorates’ concerns; they must always have an ear to the dissent in their voters. They must not only be unshirkingly honest - they must be seen to be so - by those who voted for them, and those who voted against them. Their role, though noble in its calling, is demanding in its execution. It is onerous in the extreme.60 It is curious that so many people have decried the statute and the mandatory vacating of office for contravention as undemocratic when it was enacted by elected provincial legislators who believed that strict conflict of interest requirements were needed to keep local government officials on the right side of the law. It must be noted again that the statute and the automatic removal from office for contravening its requirements has been in place for over 40 years (and that it is not the first time that the vacating of a member’s office has been ordered).61 The MCIA may be “outdated” but it remains the law until the provincial legislators change it.

60Halton Hills (Town) v. Equity Waste Management of Canada (1995), 30 M.P.L.R. (2d) 232 (Ont. Gen. Div.) at paras. 8-9. 61Removal from office is rare but it has happened. It likely would have been ordered in Sims v. Fratesi (1996), 36 M.P.L.R. (2d) 294, 141 D.L.R. (4th) 547 (Ont. Gen. Div.), where the former mayor of Sault Ste. Marie was found to have breached the MCIA, but for the fact that he had already resigned from office. Justice Poupore exercised the discretion afforded under s. 10(1)(b) of the MCIA to disqualify the former member from holding office for 6 years. In 2009 a trustee and former chair of the Toronto Catholic District School Board had his seat vacated pursuant to s. 10(1)(a) of MCIA: Baillargeon v. Carroll (2009), 56 M.P.L.R. (4th) 161 (Ont. S.C.J.). In their book Alberta’s Local Governments: Politics and Democracy - 1958- 1968, Jack K. Masson and Edward C. LeSage note that William Hawrelak, a multi-term mayor of the City of Edmonton, was twice removed from office for conflict of interest contraventions, first in 1959 and then again (after having gained re-election) in 1965. Renata D’Aliesio, The Globe and Mail, “Other mayors have faced conflict of interest penalties” (November 26, 2012) wrote, “In an e-mail, a spokeswoman for the Ontario Ministry of Municipal Affairs said the department is not aware of any recent cases where a mayor has been found guilty of contravening the conflict-of-interest law and his or her seat has been declared vacant.” 48 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

(b) Pecuniary Interest The statute does not apply to conflicts of interest in the broad sense; instead it targets a “pecuniary interest” of a member of council. A pecuniary interest is not defined in the MCIA but has been held to be one that is “concerning or consisting of money . . . an interest that has a monetary or financial value.”62

(c) Obligations of Member The MCIA provides that if a member of council has a pecuniary interest in a matter that is to be considered by the council or a committee the member must declare the interest and then not participate or vote on the matter or attempt in any way to influence the voting on the matter. These obligations are set out in s. 5 of the statute: 5 (1) 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 Section 5 sets out the general responsibilities of a member of council. The obligations are personal ones that the member of council is solely responsible to discharge. Both the Municipal Act, 2001 and the City of Toronto Act, 2006 expressly provide that a person shall not take a seat on the council until the person takes a declaration of office.63 The declaration of office is a stan-

62Mondoux v. Tuchenhagen (2010), 79 M.P.L.R. (4th) 1 (Ont. S.C.J.). 63Municipal Act, 2001, S.O. 2001, c. 25, s. 232(1); City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, s. 186. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 49 dard form which is established by the Minister of Municipal Affairs and Housing and sets out four simple sentences which elected, acclaimed or appointed members solemnly promise and declare to abide by and fulfill. The third declaration states as follows: 3. I will disclose any pecuniary interest, direct or indirect, in accordance with the Municipal Conflict of Interest Act. The declaration of office leaves no doubt that the obligation to comply with the requirements of the statute is a personal responsibility of the member of council. This means that a member of council cannot point to the municipal solicitor, the clerk, the chief administrative officer or any other member of council to caution, warn or discharge his or her responsibility under the MCIA.

(d) Exceptions Section 4 recognizes that there are a number of instances where a member of council may have a pecuniary interest but that various interests shall not serve to trigger the obligations under s. 5. There are eleven express exceptions: the first 9 refer to narrow and specific matters and the last two are general and have consequently generated the most judicial consideration. At issue in Magder v. Ford was the final general exception which provides as follows: 4. Section 5 does not apply to a pecuniary interest in any matter that a member may have, ... (k) by reason only of an interest of the member which is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member. There is no exception for permitting a member of council to make submissions regarding a finding or recommended penalty in an Integrity Commissioner’s report.64

64Justice J. Douglas Cunningham, Report of the Mississauga Judicial Inquiry - Updating the Ethical Infrastructure (City of Mississauga, 2011) recommends a greater cohesion between the MCIA and municipal codes of conduct. His recommendation 14 (at 173) advocates an amendment to the MCIA permitting a 50 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

(e) Penalties The penalty for contravening the statute is severe. Section 10 of the statute provides that if a judge of the Ontario Superior Court of Justice determines that a member has contravened the MCIA, the member’s seat must be declared vacant. Unless one of the saving provisions is applicable, the judge has no discretion and the member’s seat is automatically vacated.65 The judge does have discretion to further disqualify the member from being elected for up to 7 years and also to order reimbursement of any financial gain. Section 10(1) provides as follows: 10(1) Subject to subsection (2), where the judge determines that a member or a former member while he or she was a member has contravened subsection 5(1), (2) or (3), the judge, (a) shall, in the case of a member, declare the seat of the member vacant; and

member to make submissions to council regarding an Integrity Commissioner’s report finding or a recommended penalty under a code of conduct. 65Much of the publicity surrounding the judicial decision was directed at the draconian nature of the penalty under s. 10(1) which ordered the removal of Mr. Ford from office. However, such a provision is not usual in similar legislation in other jurisdictions throughout Canada. In British Columbia, the Community Charter, S.B.C. 2003, c. 26, explicitly states that a council member who fails to comply with the restrictions on conflicts of interest is disqualified from office unless the contravention occurred due to inadvertence or an error in judgment made in good faith: ss. 101(3), 102(3), 103(2), 105(3), 106(3), 107(3), 108(2) and 110. Manitoba’s Municipal Council Conflict of Interest Act, C.C.S.M. c. M255, is as harsh as Ontario’s statute: 21(2) Where the judge declares that the councillor has violated a provision of this Act, the judge (a) shall declare the seat of the councillor vacant; and (b) may, where the councillor has realized pecuniary gain in any transaction to which the violation relates, order the councillor to make restitution to any person, including the municipality, affected by the pecuniary gain. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 51

(b) may disqualify the member or former member from being a member during a period thereafter of not more than seven years; and (c) may, where the contravention has resulted in personal financial gain, require the member or former member to make restitution to the party suffering the loss, or, where such party is not readily ascertainable, to the municipality or local board of which he or she is a member or former member. While the disqualification and reimbursement penalties are optional orders that a judge may impose if a contravention is found, the mandating of the member’s seat is imperative under the statute and the judge has no discretion not to impose it.

(f) Saving Provisions By virtue of the express language of s. 10, a judge does retain the ability to excuse a member’s contravention and not order his or her seat vacant if the judge determines that the member contravened the statute through inadvertence or an error in judgment. These are the two saving provisions set out in s. 10(2): 10(2) Where the judge determines that a member or a former member while he or she was a member has contravened subsection 5(1), (2) or (3), if the judge finds that the contravention was committed through inadvertence or by reason of an error in judgment, the member is not subject to having his or her seat declared vacant and the member or former member is not subject to being disqualified as a member, as provided by subsection (1). (emphasis added) Section 10(3) expressly provides that a member cannot be suspended.

The Decision

(a) Grounds for Defence The respondent defended the application on four grounds: 1. the MCIA did not apply to violations of the City of Toronto’s Code of Conduct; 52 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

2. the initial resolution of city council requiring the respondent to reimburse the $3,150 in donations was a nullity as it exceeded the statutory powers of the city under the City of Toronto Act, 2006; 3. the exception in s. 4(k) of the MCIA applied since the amount was so remote or insignificant as to not be regarded as likely to influence the respondent’s actions; and 4. the saving provisions in s. 10(2) of the statute applied as the respondent’s contravention of the MCIA was committed by inadvertence or an error in judgment.

(b) Application of the Municipal Conflict of Interest Act The statute is one of general application and clearly provides in s. 5 that if a council member has a pecuniary interest (or even a potential pecuniary interest66), he or she must first disclose the interest and the general nature thereof and thereafter not take part in any discussion or vote on the matter and not attempt to influence the vote. The MCIA recognizes that there may be instances in which a member of council may still be entitled to participate and vote on matters in which he or she has a pecuniary interest. A finite list of exceptions is set out in s. 4 of the statute. As noted above, at its meeting on February 7, 2012, city council had before it a report from its Integrity Commissioner setting out two recommendations: (1) that city council require the respondent to provide proof of reimbursement of the donated monies as required in its previous decision, and (2) that if proof has not been provided by March 6, 2012, the Integrity Commissioner would report back to city council. It is irrefutable that when the matter came up at council the respondent failed to declare his pecuniary interest and that he addressed the issue as noted by Justice Hackland “with apparent reference to the proposed sanction, the respondent said, ‘And then to ask that I 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’.”

66See Mondoux v. Tuchenhagen (2011), 88 M.P.L.R. (4th) 234, (sub nom. Tuchenhagen v. Mondoux) 107 O.R. (3d) 675, 284 O.A.C. 324 (Ont. Div. Ct.) and Moffat v. Wetstein (1996), 135 D.L.R. (4th) 298, 29 O.R. (3d) 371, 5 C.P.C. (4th) 128 (Ont. Gen. Div.). Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 53

A motion to rescind city council’s previous decision and not to take any further action on the matter was moved. The respondent did not speak on the motion but did cast a vote in favour of it. The motion carried by a vote of 22 to 12. The respondent argued that he would be denied procedural fairness and natural justice if he was not afforded an opportunity to address the matter. The respondent noted one of the recommendations of Justice Cun- ningham in the Mississauga Judicial Inquiry which advocated for an explicit provision stating that the MCIA does not prevent a member from making submissions regarding a finding in an Integrity Commissioner’s report or pertaining to the imposition of a penalty under a municipal code of conduct. This, as noted by Hackland R.S.J., is a policy argument. The recommendations of Justice Cunningham in the Mississauga Judicial In- quiry have not been acted upon. The statute presently sets out 11 enumerated exceptions to the engagement of s. 5 — there is no express exception in s. 4 that pertains to codes of conduct or to members being exempted from the requirements of the MCIA if a matter before their council relates to a code of conduct finding or penalty. The respondent also contended that as a matter of statutory interpretation, the MCIA does not apply to violations under a municipal code of conduct because they are two separate regimes, the first dealing with transparency and disclosure of financial interest and the second concerning ethical conduct of council members. The respondent’s position appeared to be that in order for s. 5(1) to apply, a council member’s pecuniary interest had to equate to a personal pecuniary benefit somehow arising from a municipal commercial or business matter before the council. Justice Hackland concludes 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 . . . 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.” The learned justice further notes that any argument relating to procedural fairness must end with speaking or making submissions on a matter and cannot possibly extend to a right to vote on a matter (which is expressly precluded by s. 5(1)(b) of the MCIA). Such determinations are unassailable. 54 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Contrary to the allegations of the respondent that the MCIA and the city’s Code of Conduct constituted two separate and distinct regimes, Hackland R.S.J. finds that “[b]oth are aimed at ensuring integrity in the decision-making of municipal councillors” and that they are intended to operate together.

(c) Council Authority to Order Reimbursement The respondent essentially argued that city council had no authority to require him to personally reimburse $3,150 to the donors pursuant to the City of Toronto Act, 2006 and that, therefore, the matter of the proposed sanction was ultra vires the city’s jurisdiction. The respondent advanced what essentially amounted to a fruit-of-the-poisoned-tree argument. The respondent’s submission was that the original decision requiring reimbursement constituted a nullity and that any subsequent consideration by city council could not engage the requirements of the MCIA. This argument is a red herring. Instead of simply dismissing the line of reasoning as leading to an impractical and, indeed, absurd result, Hack- land R.S.J. sought to address the question of whether the city council had the authority to impose the personal obligation to reimburse the donated funds upon the respondent. Section 160(5) of the City of Toronto Act, 2006 provides that one of two penalties may be imposed on a member of council for a contravention of the code of conduct: either a reprimand or a suspension of remuneration for a period of up to 90 days.67 The city’s Code of Conduct listed the two penalties but also set out “Other Actions” that the Integrity Commis- sioner could recommend (and, presumably, that city council could implement and enforce). Justice Hackland determines that the “other actions” provided for in the Code of Conduct are not ultra vires. He cites the broad interpretation provision in s. 6(1) of the City of Toronto Act, 2006 as well as the natural person and broad welfare powers accorded to the city under ss. 7 and 8 of the statute. He notes the seminal jurisprudence advocating the adoption of a broad and generous approach to the interpretation of municipal powers. He concludes that “the reimbursement obligation in the section

67A virtually identical provision is contained in s. 223.4(5) of the Municipal Act, 2001, S.O. 2001, c. 25. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 55

“Other Actions” in the Code of Conduct is properly and logically connected to the permissible objectives of the City of Toronto in establishing its Code of Conduct. As such, it is an action lawfully available to Council upon recommendation of the Integrity Commissioner.” This determination is incorrect in law because the restriction in s. 160(5) of the City of Toronto Act, 2006 is an express limitation on the powers of city council to impose penalties for violations of its code of conduct. Section 160(5) only authorizes a reprimand or a suspension of pay upon a member of council. There is no authority to expand the penalties to include any of the other actions as set out in the city’s Code of Conduct by virtue of ss. 12(1) and (1.1) of the City of Toronto Act, 2006: 12(1) If the City has the power to pass a by-law under section 7 or 8 and also under a specific provision of this or any other Act, the power conferred by section 7 or 8 is subject to any procedural requirements, including conditions, approvals and appeals, that apply to the power and any limits on the power contained in the specific provision. (1.1) For the purpose of subsection (1) and, unless the context otherwise requires, the fact that a specific provision is silent on whether or not the City has a particular power shall not be interpreted as a limit on the power contained in the specific provision. Section 12 is the so-called general claw-back provision that limits the broad applicability of the general municipal powers in the City of To- ronto Act, 2006.68 The broad general powers are restricted by any limita- tions contained in any specific provisions of the statute. Accordingly, it is not possible for the penalties for code of conduct violations to be expanded or enlarged because of the restrictive language used in s. 160(5). However, whether the penalty of reimbursement on the respondent could or could not have been validly imposed is immaterial to the application of the MCIA. There is nothing in the statute that gives any indication that the obligations of a member of council to declare a pecuniary interest and to not take certain actions are only predicated upon lawfully authorized actions.

68Similar provisions are contained in ss. 15(1) and (1.1) of the Municipal Act, 2001, S.O. 2001, c. 25. 56 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

To determine otherwise would lead to an uncertain and impractical application of the statute which would undermine its purpose. The respondent’s submission that all actions following the city council’s initial original resolution of August 25, 2010 which sought reimbursement of donated monies by the respondent are nullities is incorrect at law. In fact, taken to its logical extension, the respondent’s argument would have to be that since the Code of Conduct exceeds the jurisdiction of the city, any determinations made by the Integrity Commissioner or city council pursuant to the Code of Conduct would be a nullity. The requirements under s. 5(1) of the MCIA apply in respect of “any matter” in which a council member has any pecuniary interest where the member “is present at a meeting of the council . . . at which the matter is the subject of consideration.” It would lead to an unworkable result if “any matter” were to be read down as meaning any “valid matter” or “authorized matter” (or some other similar term). This would lead to uncertainty as to the application of the statute. First, it would put a member of council in the position that he or she would have to make a legal determination that a matter before council was “legally valid”. Second, it would erode the policy basis of the prohibition69 by potentially allowing council members to sometimes address a matter in which they have a pecuniary interest if the matter is somehow legally questionable. Third, it would create confusion and chaos with respect to the application of any order under the MCIA if a subsequent court challenge invalidates a bylaw, resolution or other municipal action. The absurdity of the result of the argument can be seen through an example. Toronto City Council recently enacted a by-law prohibiting the sale, consumption and possession of shark fin products. If a member of council had a financial interest in the matter (say he or she owned a Chinese restaurant that offered shark fin soup), that member of council would be required to declare his or her interest and not participate in the discussion

69Greene v. Borins (1985), 28 M.P.L.R. 251 (Ont. Div. Ct.): “The very purpose of the statute is to prohibit any vote by one who has a pecuniary interest in the matter to be considered and voted upon. It is only by strict observance of this prohibition that public confidence will be maintained.” Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 57 or vote on the matter. However, the by-law was successfully challenged and was struck down in its entirety.70 Based on the argument of the respondent, the councillor restaurateur would have been able to participate in the council debate and vote on the by-law banning shark fin products. What if the councillor had done so in the belief that the by-law was illegal but the court had decided that it was a valid municipal by-law? What if the councillor had voted on the by-law and, before a challenge to the by-law was launched, an application had been filed to declare the councillor in contravention of the MCIA? Would the conflict of interest application be required to be held in abey- ance if a by-law challenge were to be subsequently filed? What happens if the by-law ruling is later overturned on appeal? This would lead to complete chaos and absurd results. In any event, the respondent never challenged the vires of city council’s original approval of the Integrity Commissioner’s report on August 25, 2010 (although he did vote on a motion to reconsider the approval). The respondent’s statement at the council meeting on February 7, 2012 also did not articulate any challenge as to the jurisdiction to require reimbursement (his comment “there is no sense to this” appears to be more in reference to his next comment that “the money is gone; the money has been spent on football equipment”). Had the respondent seriously believed that the Integrity Commissioner’s recommendation and council’s resolution were legally invalid, it would have been expected that he would have at least raised the issue at some point. This is important because of the doctrine of presumption of validity — all municipal by-laws and resolutions are presumed to be valid unless subsequently determined otherwise.71

70In fact, City of Toronto By-law 12347-2011 purporting to ban the possession, sale and consumption of shark fins or shark fin food products within Toronto was recently declared to be ultra vires and without any force or effect: Eng v. Toronto (City), 2012 CarswellOnt 15093, 2012 ONSC 6818 (Ont. S.C.J.) (No- vember 30, 2012). 71Enbridge Gas Distribution Inc. v. Toronto (City), 2012 CarswellOnt 7739, 99 M.P.L.R. (4th) 336 (Ont. S.C.J.); Ontario Restaurant Hotel & Motel Assn. v. Toronto (City) (2004), 4 M.P.L.R. (4th) 50, 2004 CarswellOnt 5539 (Ont. Div. Ct.); Axelrod v. Toronto (City), 1981 CarswellOnt 462, 15 M.P.L.R. 143 (Ont. Div. Ct.). Accordingly, pursuant to the doctrine of presumption of validity, the 58 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Moreover, had the respondent truly been concerned about the legality of the reimbursement requirement, he was not left without a remedy as he could have commenced a judicial review application of city council’s original decision or brought an application to quash the resolution or launched an application for an interpretation under the Rules of Civil Procedure. Furthermore, on the issue of procedural fairness, the evidence at the hearing was clear that the Integrity Commissioner had given the respondent ample opportunity to discuss the complaint that he had improperly used city stationary to solicit donations with her and a full ability to respond to the complaint.72 In fact, the Integrity Commissioner wrote to the respondent six separate times inquiring as to whether he had complied with city council’s resolution. Not once did the respondent respond

original council order was valid at the time that Mr. Ford addressed and voted on the matter at council on February 7, 2012. In any event, a challenge to the jurisdiction of city council on the original decision to impose the reimbursement requirement on Mr. Ford through the MCIA would constitute an impermissible collateral attack. 72Former City of Toronto Integrity Commissioner, David Mullan, provided testimony at the Mississauga Judicial Inquiry on December 15-16, 2011. Professor Mullan noted that he believed it was not appropriate to preclude a council member from participating in a debate at a council meeting if the matter involved sanctions under a code of conduct. He testified that it was a “bizarre sense of what conflict of interest is all about” but then stated as follows: Now how far — how much further down the procedural fairness route you want to go may well depend upon the nature of the report and the nature of the allegations and the nature of the sanction that is being recommended But I certainly do not want to be in the business of exempting council from a duty of procedural fairness, simply because the Integrity Commissioner might have given procedural fairness at the reporting stage. It is clear that Professor Mullan believes that some procedural fairness should be afforded but he makes it explicit that it is not absolute and even he cannot support the extension of the concept to include an entitlement to vote on the part of the council member. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 59 to her correspondence, even to indicate that city council was without legal authority to demand reimbursement from him.73 In conclusion, the decision incorrectly determines that city council had valid authority to order the respondent to reimburse donors for the funds solicited. However, this particular determination does not invalidate the decision because whether city council had the authority to demand reimbursement does not negate the respondent’s obligations under the MCIA.

(d) Remote or Insignificant Exception The respondent argued that “[n]o objectively reasonable person could conclude that the Respondent, a City Councillor for ten years and Mayor for two years would jeopardize his position for $3,150 . . .”. The argument is based on the exception in s. 4(k) of the MCIA which exempts a pecuniary interest “which is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member”. The applicable test in determining whether a member has an interest that is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member is set out in Whiteley v. Schnurr but note the words that follow that articulation of the “test”: Would a reasonable elector, being apprised of all the circumstances, be more likely than not to regard the interest of the councillor as likely to influence that councillor’s action and decision on the question? In answering the question set out in this test, such elector might consider whether there was any present or prospective financial benefit or detriment, financial or otherwise, that could result depending on the manner in which the member disposed of the subject matter before him or her. The foregoing example is illustrative and not ex- haustive; the circumstances of each case will determine what factors should be considered in determining the applicability of s. 4(k). To attempt to set down a comprehensive “checklist” of factors could

73What the Integrity Commissioner did receive was a letter from the respondent indicating that he had written to the donors and attaching letters from three of them who noted that they did not wish to receive reimbursement for their donations. This led to the Integrity Commissioner advising the respondent that his request to lobbyist-donors to forgive repayment of their donations might potentially amount to a breach of the city’s lobbyists’ code of conduct. 60 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

tend to narrow the scope and ambit of the analysis necessary for the review process.74 Justice Hackland determined that the recommended repayment of $3,150 by the respondent was of significance to him and that it did influence him: 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’s emotional plea to city council, captured on video, made it patently obvious that while the amount may have been relatively modest,75 it was of significance to him. The respondent’s entire tenure at City Hall had been marked with a high degree of frugality and penny-pinch- ing so that it made it difficult for him to sensibly argue that the monetary sum was insignificant.

(e) Saving Provisions As noted above, a contravention of s. 5(1) of the MCIA leads to an automatic declaration of vacancy under s. 10(1)(a) unless one of the saving provisions under s. 10(2) are applicable. In Ontario’s Municipal Conflict of Interest Act - A Handbook, the authors note that the two saving provisions are often pleaded together as defences but that they are distinct types and standards of conduct . . . inadvertence refers to a failure to direct one’s mind to one’s duty, whether the other involves advertence to one’s duty, resulting in a judgment call, which proves to be in error.76

74Whiteley v. Schnurr (1999), 4 M.P.L.R. (3d) 309 (Ont. S.C.J.). 75In any event, it has been held that the fact that the value of a pecuniary interest is particularly small does not relieve a member from compliance with the MCIA: Mino v. D’Arcey (1991), 4 M.P.L.R. (2d) 26 (Ont. Gen. Div.). 76M. Rick O’Connor and George H. Rust-D’Eye, Ontario’s Municipal Conflict of Interest Act - A Handbook (St. Thomas: Municipal World Inc., 2007) at 76. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 61

The onus is on the council member to establish that the saving provisions apply to excuse a contravention of the statute.

(i) Inadvertence Justice Hackland found that the respondent’s participation in the debate at the city council meeting and his vote on the motion were deliberate acts. Hackland R.S.J. noted that “[i]nadvertence involves oversight, inattention or carelessness. On the contrary, the respondent’s participation was a deliberate choice”.77 Although not cited on the question of inadvertence, the decision notes that the respondent had been warned by Council Speaker Sandra Bussin that he may have had a pecuniary interest at the council meeting in 2010 when the Integrity Commissioner’s report was approved and then reconsidered. The same subject matter arose again at the council meeting of February 7, 2012.78

77See Benn v. Lozinski, 1982 CarswellOnt 772, 37 O.R. (2d) 607 (Ont. Co. Ct.): The Shorter Oxford English Dictionary defines inadvertence as failure to observe or pay attention, inattention, an oversight. It has been defined as the opposite of deliberate action. The Canadian Law Dic- tionary defines it as heedlessness, lack of attention, carelessness. 78The Toronto Star reported that Mr. Ford had actually been warned again prior to or at the council meeting of February 7, 2012 that he had a pecuniary interest in the matter and should refrain from voting on any motions. Royson James, Toronto Star, “The inside story on Rob Ford’s self-inflicted destruction” (No- vember 30, 2012): Meanwhile, Councillor Michael Thompson, a Ford ally, was in the mayor’s ear. “I told him, ‘Don’t speak on the matter,’” Thompson recalled Wednesday. “And just before the vote, I said, ‘Just step outside for a minute, don’t vote.’” But Ford did speak, influencing his colleagues. Before the Perruzza motion was crafted the debate was cut short, and Ford voted with the majority in a 22-12 decision to rescind the previous council decision and free him from repaying the $3,150. “People now say, ‘Why didn’t you guys warn him?’ Well, we did,” said Thompson. 62 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

The judgment quotes from evidence that the respondent provided during his cross-examination on his affidavit. When asked if his speaking and voting on the motion were deliberate acts, the respondent answered “Ab- solutely”. Hackland R.S.J. also notes that the respondent testified that: • “he appreciated that the resolution before Council impacted him financially because it required him to repay funds” • “planned his comments, which were designed to ‘clear the air’, and came to the meeting with the intention of speaking” • “he sought no advice, legal or otherwise, as to whether he should be involved in the debate” Based on the foregoing, Hackland R.S.J. could not have come to any conclusion other than “the respondent’s participation was a deliberate choice” and that the defence of inadvertence was not applicable.

(ii) Error in Judgment In one of the first decisions on the new Municipal Conflict of Interest Act, 1972, Killeen Co. Ct. J. noted as follows in Blake v. Watts: I conclude on the basis of my review of the applicable authorities that the phrase “bona fide error in judgment” adumbrates a more liberal standard of exemption than does the standard implicit in the phrase “through inadvertence”. The standard obviously involves and requires a complete consideration of the factual background of the contravention by the respondents.79 (emphasis in original) Justice Hackland does consider the complete factual background and the respondent’s contravention in making his determination as to whether the contravention was committed by an error in judgment. His determination is well set out at para. 53 of the decision: 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

79Blake v. Watts, 1973 CarswellOnt 372, 41 D.L.R. (3d) 688, 2 O.R. (2d) 43 (Ont. Co. Ct.). Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 63

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. The respondent admitted that he had not read the MCIA, that he did not know what was in the statute, that he had not attended the legal department’s orientation session for council members where the statute was addressed and that he had not read the councillor’s handbook that was prepared by city staff. This is despite the fact that the respondent had been a three-term member of council prior to being elected mayor in 2010. This meant that the respondent had made four declarations of office prior to taking his seat at city council and each time he had solemnly promised and declared to “disclose any pecuniary interest, direct or indirect, in accordance with the Municipal Conflict of Interest Act.” Based on the foregoing, Hackland R.S.J. had no choice but to conclude that the respondent’s contravention of the statute did not constitute an error in judgment. His words in the judgment are very critical of the respondent [at para. 58]: In view of the respondent’s leadership role in ensuring integrity in municipal government, it is difficult to accept an error in judgment defence based essentially on a stubborn sense of entitlement (concerning his football foundation) and a dismissive and confrontational attitude to the Integrity Commissioner and the Code of Conduct. In my opinion, the respondent’s actions were characterized by ignorance of the law and a lack of diligence in securing professional advice, amounting to wilful blindness. As such, I find his actions are incompatible with an error in judgment. The respondent failed to discharge the burden upon him to demonstrate that his contravention of the statute should be excused as an error in judgment.

(f) Current Term - Disqualification One matter that caused a great deal of legal debate related to the disposition of the order. Justice Hackland concluded that the respondent had contravened s. 5 of the MCIA and that his actions were not inadvertent or as a result of a good faith error in judgment. He accordingly declared the 64 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th) respondent’s seat vacant as required by s. 10(1)(a) of the statute. He then continued: 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. (emphasis added) The sentence was surprising because there was nothing in the decision that preceded it which indicated that the learned justice was seeking to utilize his discretionary authority to disqualify the respondent. A judge who finds that a council member has contravened the statute has a discretion under s. 10(1)(b) to disqualify the member from holding office for up to 7 years. No mention was made of this authority in the judgment so it was curious to find this seemingly contradictory statement at the conclusion of the disposition. Immediately upon release of the decision, the media commenced asking what Justice Hackland intended by the last four words “beyond the current term” as noted above. Questioned at the city council meeting the next day, Toronto’s City So- licitor, Anna Kinastowski, correctly stated that her interpretation of the judgment was that the respondent was disqualified from holding office for the remainder of the term of council.80

80Kelly Grant, Elizabeth Church and Jeff Gray, The Globe and Mail, “Toronto Mayor Ford says sorry, but intends to fight for job” (November 27, 2012): Anna Kinastowski, the city solicitor, told council Tuesday that an Ontario Superior Court decision ordering Mr. Ford out of office would also bar him from standing in a by-election if council decides to call one for 2013. Mr. Justice Charles Hackland, who ruled Monday that Mr. Ford violated a conflict-of-interest law, wrote that his decision did not disqualify the mayor beyond the end of the “current term.” Legal experts interviewed Monday differed on the definition of the word. The mayor’s own lawyer, Alan Lenczner, said it meant Mr. Ford would be free to run again almost immediately. But Ms. Kinastowski has a different view — one that carries special weight because of her role as head of the city’s legal department. Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 65

The word “term” is not defined in the MCIA or in the City of Toronto Act, 2006. While the word “term” is not expressly defined in the Munici- pal Elections Act, 1996,81 s. 6(1) provides as follows: 6(1) The term of all offices to which this Act applies is four years, beginning on December 1 in the year of a regular election. The City Solicitor’s interpretation was that “current term” could only refer to the four year period commencing December 1, 2010 and concluding on November 30, 2014. This interpretation is correct in law and is supported by other provisions in the City of Toronto Act, 2006.82 Following a conference call with both legal counsel for the applicant and respondent, Justice Hackland issued a corrigenda on November 30, 2012 whereby he deleted the words “beyond the current term” and replaced them with “under s. 10(1)(b) of the MCIA”. The import of the change is that the respondent is not disqualified from holding office and could run in a by-election if ordered or conceivably also be re-appointed by city council pursuant to s. 208 of the City of Toronto Act, 2006.

(g) Stay of Decision Pending Appeal The penultimate paragraph of the decision included a suspension of the order: Recognizing that this decision will necessitate administrative changes in the City of Toronto, the operation of this declaration shall

“It is my opinion that that word, term, means 2010 to 2014. That is our interpretation of that particular fact,” she said. “If down the road there is a by-election and Mr. Ford does not agree with our interpretation, he can certainly take action to get a judicial interpretation at that time.” The city’s most senior lawyer was asked to provide some clarifica- tion after a stunning court decision Monday ordered Mr. Ford out of his job for violating the Municipal Conflict of Interest Act, a provincial statute that carries a mandatory penalty of removal from office. 81Municipal Elections Act, 1996, S.O. 1996, c. 32, Sched. 82City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, ss. 135(6), 184 and 209. 66 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

be suspended for a period of 14 days from the release of these reasons. The stay is unusual and is likely not something that has been previously imposed in a conflict of interest ruling. Justice Hackland may have been aware that a regularly-scheduled meeting of city council was to be held the day following the release of the decision. Pursuant to s. 207 of the City of Toronto Act, 2006, where the seat of a member of council becomes vacant, the council is required to declare the seat vacant. Upon council declaring a seat vacant, there commences a 60-day period wherein the council must appoint a person to fill the vacancy or pass a by-law requiring a by-election to be held.

Ensuing Press Conferences and Statements Immediately following the release of the judgment, the applicant and his solicitor, Clayton Ruby, held their press conference at 11:30 a.m. at City Hall whereby Mr. Ruby uttered the now-famous words, “Rob Ford did this to Rob Ford. It could so easily have been avoided. It could have been avoided if Rob Ford had used a bit of common sense. And if he had played by the rules.” A short time after, the respondent met with a throng of reporters at City Hall whereby he answered the first question put to him as to whether he was going to appeal with the following statement: Absolutely I’m appealing . . . I’m going to appeal it and carry on with my job and we’ll take it from there. I’m a fighter and I’ve done a lot of great work for the city and sometimes you win, sometimes you lose.83 In typical fashion, the respondent vowed to fight “tooth and nail” to hold onto his mayoralty seat. The respondent also intimated that it was a left wing cabal that had orchestrated his ouster from office. On November 27, 2012 the respondent, looking stressed and glassy-eyed, held a press conference where he read very slowly and very deliberately from a prepared statement: Good afternoon everyone.

83Natalie Alcoba and Megan O’Toole, National Post, “Rob Ford out as Toronto mayor over conflict of interest case” (November 26, 2012). Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 67

I was elected two years ago by the people of this great city to do a job. We have accomplished a lot in the past two years, but that job is not finished yet. I respect the court’s decision that was released yesterday. My decision to appeal is not a criticism of the court, but I feel it is important to work through the appeals system so I can continue to do the work I was elected to do by the taxpayers of this city. This entire matter began because I love to help kids play football. When this came to council for a vote, I felt it was important to answer the accusations that had been made against me. I was focused on raising money to help underprivileged youth. I never believed it was a conflict of interest because I had nothing to gain and the City had nothing to lose. But, I respect the court’s decision. Looking back, maybe I could have expressed myself in a different way. To everyone who believes I should have done this differently, I sincerely apologize. The people elected me to bring respect for the taxpayers back to City Hall. I will keep working to do exactly that for as long as I can, or until the people elect someone else to do the job. Thank you very much. Unfortunately, that’s all I can say at this time.84

84Natalie Alcoba wrote as follows about Mr. Ford’s apology in the National Post (November 28, 2012): The mayor emerges, a grim expression on his face. He grasps the edges of the podium and begins his message of contrition. At times shaky, his voice hoarse, he says he “never believed there was a conflict of interest, because I had nothing to gain and the city had nothing to lose.” He emphasizes the words “nothing,” “gain,” and “lose.” You can still hear Councillor Janet Davis speaking on the floor of council, which is on the other side of the wall. “To everyone who believes I should have done this differently,” Mr. Ford goes on, pursing his lips, “I sincerely apologize.” To many, Mr. Ford’s apology was unexpected. His brother, Doug Ford, noted that Mr. Ford would henceforth conduct himself differently and commented as follows: “You get hit over the head with a sledgehammer - let’s call facts facts - and you do things a little differently”: Wendy Gillis, Toronto Star (December 5, 2012). 68 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Stay Application & Decision The respondent filed an application for a stay pending the appeal immediately and was able to secure an expedited hearing before a single judge of the Ontario Divisional Court on December 5, 2012. The applicant indicated that he would consent to the stay and accordingly the application proceeded unopposed before Justice Gladys Pardu at the Divisional Court. The well-known and standard tripartite test from the Supreme Court of Canada’s judgment in RJR-MacDonald Inc. v. Canada (Attorney Gen- eral)85 was submitted: Is there a serious issue to be heard? Will there be irreparable harm if a stay is not granted? Does the balance of convenience and the public interest justify granting a stay? Justice Pardu considered the motion and indicated that she would return shortly. After deliberating for less than one hour, Pardu J. returned and stated “this is an appropriate case for a stay,” and said that “Mr. Ford would suffer irreparable harm” if the stay was not granted.86 She endorsed the record by granting the stay and ordering the respondent to file all materials in support of the appeal by December 12, 2012 and the applicant to file his materials by December 24, 2012.87 Justice Pardu then issued a short endorsement wherein she noted the following in determining that the test for the stay had been met: • the appeal was neither frivolous or vexatious

85RJR-MacDonald Inc. v. Canada (Attorney General) (1994), [1994] 1 S.C.R. 311, 1994 CarswellQue 120F, 1994 CarswellQue 120, 54 C.P.R. (3d) 114, (sub nom. RJR-MacDonald Inc. c. Canada (Procureur général)) 164 N.R. 1, (sub nom. RJR-MacDonald Inc. c. Canada (Procureur général)) 60 Q.A.C. 241, 111 D.L.R. (4th) 385 (S.C.C.). 86Macleans, “Toronto mayor granted stay to halt removal from office” (Decem- ber 5, 2012). 87A visibly relieved Mr. Ford met with reporters outside his office at City Hall shortly after the stay was granted where he repeated three times in less than one minute that he “cannot wait for the appeal”: CityNews Toronto (December 5, 2012). Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 69

• there are serious issues to be determined • the respondent would suffer irreparable harm if he were removed from office • significant uncertainty would result if a by-election was held or an appointment made and the respondent was restored to his position as mayor • the appeal was scheduled to be heard shortly (a lengthy stay would not be in the public interest).88

The Appeal

(a) General Section 11(1) of the MCIA provides an as-of-right appeal from any order made under s. 10 of the statute to the Ontario Divisional Court. The respondent (now appellant) was successful in obtaining an expedited hearing date for the appeal. A three-judge panel of the Divisional Court convened on January 7, 2013 to consider the respondent’s appeal. The Notice of Appeal filed on November 28, 2012 alleged that six errors of law were committed by Hackland R.S.J. in his decision. The respondent argued in the appeal that Justice Hackland erred in law: • by determining that the respondent’s personal liability to reimburse $3,150 to donors was lawfully within the jurisdiction of the city to impose under the City of Toronto Act, 2006; • by concluding that the respondent could be required to make the reimbursement payment pursuant to the “other actions” in the city’s Code of Conduct; • in holding that penalties under the City of Toronto Act, 2006 could be expanded pursuant to the city’s broad authority powers in the statute; • by finding that the words “pecuniary interest” from s. 5 of the MCIA could be utilized in the City of Toronto Act, 2006 when each statute had different purposes and objectives;

88Magder v. Ford (2012), 2012 CarswellOnt 15303 (Ont. Div. Ct.). 70 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

• in determining that the respondent committed an error in judgment pursuant to s. 10(2) of the MCIA; and • in applying the wrong test under s. 4(k) of the MCIA to determine whether the amount of $3,150 could reasonably be regarded as likely to influence the respondent’s decision.

(b) Standard of Review There is an intriguing question in the appeal regarding the standard of review to be applied by the Ontario Divisional Court. In typical cases, an appellate court reviews questions of errors of law from a lower court based solely on the record before it and by granting deference to the judge at first instance. With respect to an appeal under the MCIA, there is a question as to whether the appeal before the Divisional Court is a true appeal or a trial de novo. Section 11(2) provides a seemingly broad discretion to the Divisional Court to review a judicial decision regarding conflicts of interest under the MCIA: 11(2) The Divisional Court may give any judgment that ought to have been pronounced, in which case its decision is final, or the Divi- sional Court may grant a new trial for the purpose of taking evidence or additional evidence and may remit the case to the trial judge or another judge and, subject to any directions of the Divisional Court, the case shall be proceeded with as if there had been no appeal. In late 2011, the Divisional Court confirmed (in a 2-to-1 decision) in Mondoux v. Tuchenhagen89 that the broad discretion built into the appeal provisions meant that the Divisional Court could deal with the appeal “as we would have as judges in the first instance.” Without actually using the term de novo, the Divisional Court essentially applied a standard which conferred little or no deference to the lower court decision.90 A short time later in mid-2012, a differently constituted panel of the Di- visional Court in Amaral v. Kennedy concluded that notwithstanding the

89Mondoux v. Tuchenhagen (2011), 88 M.P.L.R. (4th) 234 (Ont. Div. Ct.). 90Wilson J., in dissent in Mondoux v. Tuchenhagen, noted [at para. 81] that the “caselaw on this issue is inconsistent.” Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 71 language of s. 11(2), appeal courts generally “refrain from hearing cases de novo.”91 As such, the question is in a state of flux but that more correct determination appears to be that the Divisional Court is an appellate court and should accord deference to the applications judge.92 This is doubly so in this case where the application commenced with viva voce testimony from the respondent (which is very unusual for an application under the MCIA which would normally proceed solely on legal arguments based on a written record). It would be extraordinary for the Divisional Court to not grant deference to Hackland R.S.J.’s assessment of the live testimony and indeed to his determinations at first instance.

(c) Finality of Decision When Magder v. Ford was first released and the respondent vowed to immediately appeal, many commentators and the press assumed that it would be years before all appeals were exhausted and that accordingly Mayor Ford would (if he obtained a stay pending appeal) be certain to remain in the mayor’s seat for the likely remainder of the term of council. This is, of course, not at all the case as s. 11(2) of the MCIA expressly provides that “[t]he Divisional Court may give any judgment that ought to have been pronounced, in which case its decision is final.” The Ontario Court of Appeal has now twice pronounced that “final” in s. 11(2) actually does mean final.93 In an interesting article in the Law

91Amaral v. Kennedy (2012), 96 M.P.L.R. (4th) 49 (Ont. Div. Ct.) at para. 7. The determination was that “[t]he permissive order-making authority of s. 134(1) [of the Courts of Justice Act] does not justify a non-deferential approach to the original decision. Neither does s. 11(2) of the MCIA.” 92See John Mascarin and Piper Morley, “The Standard of Review of Appeal for Municipal Conflict of Interest Decisions”, 5 D.M.P.L. (2d) (July 2012), 1-4. In fact, it is submitted that it would be inappropriate for the Divisional Court to hear an appeal on a de novo basis based on the specific language in the latter part of s. 11(2) which expressly allows the Divisional Court to “grant a new trial for the purpose of taking evidence or additional evidence.” 93Ruffolo v. Jackson (2010), 71 M.P.L.R. (4th) 43 (Ont. C.A.) and Mondoux v. Tuchenhagen (2012), 100 M.P.L.R. (4th) 179 (Ont. C.A.) at 181, “We are bound by the decisions of this court that ‘final’ in s. 11(2) means final, and that no 72 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Times,94 Supreme Court of Canada advocacy specialist Eugene Meehan posits that the Divisional Court may, in fact, not be the end of the line for appeals in municipal conflict of interest matters in view of ss. 38 and 40 of the Supreme Court Act.95

appeal lies to this court from the Divisional Court under s. 11 of the MCIA. Indeed, we agree with that position. The legislature has chosen in s. 11(2) to permit a member only an appeal to the Divisional Court, but no further. There- fore, regardless of the possible merits of the appeal itself, we are prevented from hearing it by the legislation itself.” Interestingly, the Court of Appeal had earlier granted leave to appeal in Mondoux v. Tuchenhagen and then heard the matter on an application to quash the appeal whereupon it determined that the statute precluded an appeal beyond the Divisional Court. See also Amaral v. Kennedy (2012), 2 M.P.L.R. (5th) 34 (Ont. C.A.). 94Yamri Taddesse, Law Times, “Could mayor go to SCC despite clash of laws?” (January 7, 2013) 4. 95Supreme Court Act, R.S.C. 1985, c. S-26, ss. 38 and 40(1): 38. Subject to sections 39 and 42, an appeal to the Supreme Court lies on a question of law alone with leave of that Court, from a final judgment of the Federal Court or of a court of a province other than the highest court of final resort therein, the judges of which are appointed by the Governor General, pronounced in a judicial proceeding where an appeal lies to the Federal Court of Appeal or to that highest court of final resort, if the consent in writing of the parties or their solicitors, verified by affidavit, is filed with the Registrar of the Supreme Court and with the registrar, clerk or prothonotary of the court from which the appeal is to be taken. 40. (1) Subject to subsection (3), an appeal lies to the Supreme Court from any final or other judgment of the Federal Court of Appeal or of the highest court of final resort in a province, or a judge thereof, in which judgment can be had in the particular case sought to be appealed to the Supreme Court, whether or not leave to appeal to the Supreme Court has been refused by any other court, where, with respect to the particular case sought to be appealed, the Supreme Court is of the opinion that any question involved therein is, by reason of its public importance or the importance of any issue of law or any issue of mixed law and fact involved in that question, one that ought to be decided by the Supreme Court or is, for any other reason, of such a nature or significance as to warrant decision by it, and leave to Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 73

Consequences to the City of Toronto In suspending the operation of the declaration of vacancy for 14 days, Justice Hackland recognized that “this decision will necessitate administrative changes in the City of Toronto.” If the respondent’s appeal is allowed and the lower court decision is overturned, then the respondent remains in the mayor’s seat and business will eventually get back to whatever now constitutes normal at Toronto City Hall. Should the respondent be unsuccessful in his appeal, the judicial declaration of vacancy will take effect. Toronto city council must then declare the seat of mayor to be vacant at its next meeting.96 City council’s declaration of vacancy commences the clock running on the 60-day period within which it must make a decision: to hold a by-election to allow voters to elect the mayor or to appoint a person to be the mayor until the next municipal election in 2014.97

appeal from that judgment is accordingly granted by the Supreme Court. It is theoretically possible for an appeal to be taken to the Supreme Court of Canada from the Ontario Divisional Court under the MCIA. A number of obsta- cles stand in the way: the finality provision in s. 11(2) of the MCIA (which may be resolved by principles of paramountcy and constitutional law); an appeal is only on a question of law or of mixed law and fact; and leave of the Supreme Court of Canada is required. In the more than 40 years that the Ontario legislation has been in place, there is no record of any case under the MCIA and its predecessors being appealed to and heard by the Supreme Court of Canada (see Elizabeth Church, The Globe and Mail, “Ford’s allies differ on mayor’s best plan if he loses appeal” (January 7, 2013)). 96City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, s. 207. 97City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, s. 208. Any person can be appointed to the position as long as they consent to the appointment; the person does not have to be the deputy mayor or even a member of council. The appointment is not for an “interim” mayor; the appointment is to be the mayor for the remaining term of council. 74 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Based upon early estimates, the city’s budget chair, Mike Del Grande, has warned that the bill for a by-election to replace the mayor could climb to as much as $15 million.98

Conclusions The respondent contravened his responsibilities under the MCIA and was ordered removed from office in accordance with the mandatory requirement in s. 10(1)(a) of the statute. Magder v. Ford was correctly determined by Hackland R.S.J. His error as to the jurisdiction of the city to impose a reimbursement requirement upon the respondent does not impact the main holding of the decision. Justice Hackland acknowledged that the matter did not involve corruption or a pecuniary gain on the part of the respondent; that the amount of money was modest but that it was of significance to the respondent; that the respondent’s participation in the debate at council was arguably a technical breach of s. 5 of the MCIA; that many excellent commentators had, perhaps justifiably, pointed to the harshness of the statute and of the specific penalty of a mandatory removal from office; and that principles of procedural fairness might possibly afford a member of council the opportunity to speak to a matter involving a penalty under a code of conduct. These are all set out in the decision. However, a judge must interpret and apply the law as it stands; a judge is not a legislator and a judge cannot (or should not) create the law. Those who argue that the decision in Magder v. Ford is flawed are ignoring or simply refusing to accept that what the respondent did was directly contrary to the MCIA because he had a pecuniary interest in the repayment of $3,150,99 that any reasonable person could clearly see that the pecuni-

98Elizabeth Church, The Globe and Mail, “Toronto mayoral by-election cost could rise to as much as $15 million” (December 6, 2012). 99This particular point has been re-stated by a number of commentators but none with the brevity and succinctness of Jeffrey Lem in his column “The Dirt” in the Law Times (December 3, 2012): The case had nothing to do with Ford’s wrongful solicitation of the donations in the first place, all of which involved uncontested breaches of the code of conduct. Instead, the case had everything to do with whether or not Ford should have spoken in his own defence Eyes Wide Shut — Wilful Blindness & A Conflict of Fordian Proportions 75 ary interest was of significance to the respondent and that his contravention was neither inadvertent nor an error in judgment committed in good faith. Moreover, the judgment accords to established jurisprudence that conflict of interest legislation must be construed broadly and in a manner consistent with its purpose. To this point, the article will conclude with the oft-quoted words of Rob- ins J. in Moll v. Fisher which have been consistently adopted and applied by decisions on the MCIA for well over 30 years: The obvious purpose of the Act is to prohibit members of Councils and local boards from engaging in the decision-making process in respect to matters in which they have a personal economic interest. The scope of the Act is not limited by exception or proviso but applies to all situations in which the member has, or is deemed to have, any direct or indirect pecuniary interest. There is no need to find corruption on his part or actual loss on the part of council or board. So long as the member fails to honour the standard of conduct prescribed by the statute, then regardless of his good faith or the propri- ety of his motive, he is in contravention of the statute.100 Every member of municipal council in Ontario must swear a declaration of office whereby they promise to disclose any pecuniary interest in accordance with the MCIA. Any member who then does not at the very least read and attempt to understand the extent of their statutory obligations is indeed wilfully blind and wholly deserving of the admittedly harsh penalty that is mandated to be imposed under the statute.

and then voted on the 2012 council motion to let himself off the hook for the refund of the donations. 100Moll v. Fisher (1979), 8 M.P.L.R. 266, 23 O.R. (2d) 609, 96 D.L.R. (3d) 506 (Ont. Div. Ct.) at M.P.L.R. 269. 76 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

[Indexed as: Peachland (District) v. Peachland Self Storage Ltd.] The Corporation of the District of Peachland, Petitioner and Peachland Self Storage Ltd., Respondent British Columbia Supreme Court Docket: Vancouver S105503 2012 BCSC 1872 D.A. Betton J. Heard: March 14, 15, 2012 Judgment: December 11, 2012* Municipal law –––– Attacks on by-laws and resolutions — Grounds — Ultra vires — Beyond power of municipality — Prohibiting activity –––– By-law created annual limit on soil removal of 200 cubic metres — P Ltd. wished to operate aggregate mine on property pursuant to mines permit issued by provincial Ministry of Energy — P Ltd. brought application seeking declaration that by-law was invalid or alternatively inoperative as against P Ltd. — Application granted — Amendment of by-law did require ministerial approval because it prohibited soil removal within meaning of s. 9(1)(e) of Community Charter — Given that approval was neither sought nor obtained, enacting by-law was ultra vires district. Cases considered by D.A. Betton J.: Bell ExpressVu Ltd. Partnership v. Rex (2002), 212 D.L.R. (4th) 1, 287 N.R. 248, [2002] 5 W.W.R. 1, 166 B.C.A.C. 1, 271 W.A.C. 1, 18 C.P.R. (4th) 289, 100 B.C.L.R. (3d) 1, 2002 SCC 42, 2002 CarswellBC 851, 2002 Car- swellBC 852, 93 C.R.R. (2d) 189, [2002] 2 S.C.R. 559, [2002] S.C.J. No. 43, REJB 2002-30904 (S.C.C.) — referred to Cannon Contracting Ltd. v. Mission (District) (1994), 100 B.C.L.R. (2d) 111, 1994 CarswellBC 9, 53 B.C.A.C. 293, 87 W.A.C. 293 (B.C. C.A.) — followed Catalyst Paper Corp. v. North Cowichan (District) (2012), 34 Admin. L.R. (5th) 175, 2012 CarswellBC 17, 2012 CarswellBC 18, 2012 SCC 2, 11 R.P.R. (5th) 1, [2012] 2 W.W.R. 415, 340 D.L.R. (4th) 385, 26 B.C.L.R. (5th) 1, 93

*A corrigendum issued by the court on December 20, 2012 has been incorporated herein. Peachland (District) v. Peachland Self Storage Ltd. 77

M.P.L.R. (4th) 1, 425 N.R. 22, 316 B.C.A.C. 1, 537 W.A.C. 1, [2012] 1 S.C.R. 5, [2012] S.C.J. No. 2 (S.C.C.) — considered Squamish (District) v. Great Pacific Pumice Inc. (2003), 38 M.P.L.R. (3d) 163, 2003 CarswellBC 1643, 2003 BCCA 404, 229 D.L.R. (4th) 93, 185 B.C.A.C. 41, 303 W.A.C. 41, [2003] B.C.J. No. 1567 (B.C. C.A.) — considered United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City) (2004), 46 M.P.L.R. (3d) 1, 236 D.L.R. (4th) 385, [2004] 7 W.W.R. 603, 346 A.R. 4, 320 W.A.C. 4, 318 N.R. 170, 18 R.P.R. (4th) 1, [2004] 1 S.C.R. 485, 2004 CarswellAlta 355, 2004 CarswellAlta 356, 2004 SCC 19, 26 Alta. L.R. (4th) 1, 12 Admin. L.R. (4th) 1, 50 M.V.R. (4th) 1, [2004] S.C.J. No. 19, REJB 2004-55539 (S.C.C.) — considered Statutes considered: Community Charter, S.B.C. 2003, c. 26 Generally — referred to s. 2(1) — considered s. 2(1)(c) — considered s. 3 — considered s. 4 — considered s. 4(2) — considered s. 7 — considered s. 8 — considered s. 8(3)(m) — considered s. 8(10) — considered s. 9 — considered s. 9(1) — considered s. 9(1)(e) — considered s. 9(3) — considered s. 9(3)(c) — considered s. 10 — referred to Mines Act, R.S.B.C. 1996, c. 293 Generally — referred to Municipal Act, R.S.B.C. 1979, c. 290 s. 930.1 [en. 1989, c. 33, s. 10] — considered

APPLICATION by P Ltd. brought seeking declaration that by-law was invalid or alternatively inoperative as against P Ltd.

S. Manhas for Petitioner B. Greenberg, J.V. Payne for Respondent 78 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

D.A. Betton J.: Introduction 1 The defendant, Peachland Self Storage Ltd. (“Peachland Self Stor- age”), seeks a declaration that the plaintiff’s, the Corporation of the Dis- trict of Peachland (“District of Peachland”) Earthworks Control Bylaw No. 832 (the “Bylaw”) is invalid or alternatively inoperative as against Peachland Self Storage. 2 The Bylaw creates an annual limit on soil removal of 200 cubic meters. Peachland Self Storage wishes to operate an aggregate mine on its property pursuant to a mines permit issued by the provincial Ministry of Energy, Mines and Petroleum Resources. That permit authorizes the extraction of 100,000 cubic meters of aggregate annually. 3 The property on which Peachland Self Storage intends to operate the mine is within the boundaries of the District of Peachland.

Background 4 Between April 20, 1982 and October 23, 2007, Earthworks Control Bylaw No. 832 was in force in the District of Peachland. During that time, the Bylaw made it unlawful, with some exceptions, for any person to move, deposit or remove soils from any lands within the district without obtaining a permit from the district. It did not include any annual limit for soil removal or deposit. 5 Peachland Self Storage submitted an application to the Ministry of Energy, Mines and Petroleum Resources (the “Ministry”) on June 22, 2007. On August 2, 2007, a representative of Peachland Self Storage met with District of Peachland staff and advised them of the application under the Mines Act, R.S.B.C. 1996, c. 293. 6 On August 30, 2007, district staff prepared a request for decision recommending council amend the Earthworks Control Bylaw to impose an annual 200 cubic meter limit on soil removal from land within the district until a new comprehensive bylaw to regulate soil removal could be developed. District council adopted the amendment bylaw on October 23, 2007. 7 The Bylaw was amended by the district to add the following clause: No permit shall be issued that authorizes more than 200m3 of soil to be removed in any calendar year from any parcel of land. Peachland (District) v. Peachland Self Storage Ltd. D.A. Betton J. 79

The district did not obtain Ministry approval of the amendment to the Bylaw. 8 At the time the amended bylaw was implemented, it was the district’s intention to develop and adopt a new comprehensive Earthworks Control Bylaw. There was an expectation that such a bylaw could be modeled after bylaws of area local governments that were expected to be put in place to address soil removal in their jurisdictions. Those anticipated by- laws were not created. As a result, the District of Peachland set about developing its own comprehensive Earthworks Control Bylaw beginning in August 2009. On February 23, 2010, that process was concluded. The proposed new comprehensive bylaw did require Ministerial approval, and it was submitted to the province accordingly. 9 The Ministerial approval was received on January 30, 2012. The Dis- trict of Peachland council considered adopting the new comprehensive bylaw on February 8, 2012, but determined instead to leave the amended Bylaw No. 832, which is the subject of these proceedings, in force. It was that decision that prompted this application. 10 On October 14, 2009, Peachland Self Storage was issued its permit under the Mines Act. That permit had a variety of restrictions which included limits on seasons and hours of operation, dust control, noise miti- gation and water management. When the Ministry issued the mining permit, it noted, “[o]ther legislation may be applicable to the operation, such as bylaws established by Municipalities or Regional Districts and you (the Permittee) may be required to obtain approvals or permits under that legislation.” 11 It is not possible for Peachland Self Storage to operate a commer- cially viable sand and gravel operation within the 200 cubic meter annual limit set by the amended bylaw. The volume is simply too small.

Law 12 The operation of an aggregate mine, more commonly referred to as a gravel pit, requires a mines permit from the Ministry. 13 There are several relevant provisions of the Community Charter, S.B.C. 2003, c. 26. 14 Subsection 2(1) of the Community Charter states: 2(1) The citizens of British Columbia are best served when, in their relationship, municipalities and the Provincial government (a) acknowledge and respect the jurisdiction of each, 80 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

(b) work towards harmonization of Provincial and municipal en- actments, policies and programs, and (c) foster cooperative approaches to matters of mutual interest. 15 Subsection 8(3)(m) of the Community Charter, reads: (3) A council may, by bylaw, regulate, prohibit and impose requirements in relation to the following: ... (m) the removal of soil and the deposit of soil or other material. 16 Subsection 8(10) reads: (10) Power provided to municipalities under this section (a) are subject to any specific conditions and restrictions established under this or another Act, and (b) must be exercised in accordance with this Act unless otherwise provided. 17 Section 9 of the Community Charter which is titled “Spheres of concurrent authority” includes: 9(1) This section applies in relation to the following: (e) bylaws under section 8(3)(m) [removal and deposit of soil and other material] that (i) prohibit soil removal, or (ii) prohibit the deposit of soil or other material, making reference to quality of the soil or material or to contamination. Subsection 9(3)(c) reads: (3) Recognizing the Provincial interest in matters dealt with by by- laws referred to in subsection (1), a council may not adopt a bylaw to which this section applies unless the bylaw is ... (c) approved by the minister responsible. 18 Section 4 of the Community Charter provides that: 4(1) The powers conferred on municipalities and their councils under this Act or the Local Government Act must be interpreted broadly in accordance with the purposes of those Acts and in accordance with municipal purposes. (2) If (a) an enactment confers a specific power on a municipality or council in relation to a matter, and Peachland (District) v. Peachland Self Storage Ltd. D.A. Betton J. 81

(b) the specific power can be read as coming within a general power conferred under this Act or the Local Government Act, the general power must not be interpreted as being limited by that specific power, but that aspect of the general power that encompasses the specific power may only be exercised subject to any conditions and restrictions established in relation to the specific power. 19 Section 3 of the Community Charter sets out the purposes of the Act as follows: 3 The purposes of this Act are to provide municipalities and their councils with (a) a legal framework for the powers, duties and functions that are necessary to fulfill their purposes, (b) the authority and discretion to address existing and future community needs, and (c) the flexibility to determine the public interest of their communities and to respond to the different needs and changing circumstances of their communities. 20 Section 7 of the Community Charter enumerates the purposes of a municipality: 7 The purposes of a municipality include (a) providing for good government of its community, (b) providing for services, laws and other matters for community benefit, (c) providing for stewardship of the public assets of its community, and (d) fostering the economic, social and environmental well-being of its community. 21 In United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City), 2004 SCC 19 (S.C.C.) at para. 6, the Supreme Court of Canada noted that: [6] The evolution of the modern municipality has produced a shift in the proper approach to the interpretation of statutes empowering municipalities... It further noted that “a broad and purposive approach to the interpretation of municipal powers has been embraced” (ibid.). The court later held that such an approach “is...consistent with [the] Court’s approach to statutory 82 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

interpretation generally” (para. 8) as stated in Bell ExpressVu Ltd. Partnership v. Rex, 2002 SCC 42 (S.C.C.). 22 In Bell Express Vu the court said: [26] In Elmer Driedger’s definitive formulation, found at p. 87 of his Construction of Statutes (2nd ed. 1983): Today there is only one principle or approach, namely, the words of an Act are to 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. Driedger’s modern approach has been repeatedly cited by this Court as the preferred approach to statutory interpretation across a wide range of interpretive settings... 23 In Cannon Contracting Ltd. v. Mission (District) (1994), 100 B.C.L.R. (2d) 111, 53 B.C.A.C. 293 (B.C. C.A.), the Court of Appeal was dealing with analogous circumstances to those before me. There, Cannon Contracting sought to have the District of Mission’s soil removal bylaw quashed for failure to obtain Ministerial approval on the basis that the bylaw prohibited soil removal. The court was then dealing with s. 930.1 of the Municipal Act, R.S.B.C. 1979, c. 290 which stated: 930.1(1) In this section “soil” includes sand, gravel, rock and other substances of which land is composed (2) The council may, by bylaw, regulate or prohibit (a) the removal of soil from, and (b) the deposit of soil or other material on any land in the municipality or in any area of the municipality, and different regulations and prohibitions may be made for different areas. (3) A provision in a bylaw under subsection (2) that prohibits the removal of soil has no effect until the provision is approved by the minister with the concurrence of the Minister of Energy, Mines and Petroleum Resources. [emphasis added] 24 The trial judge stated in her reasons: Authorities cited to me to assist in characterizing the issue as regulatory or prohibitory suggest that the proper test is the effect of the bylaw read as a whole: see Municipal Corporation of the City of Toronto v. Virgo, [1986] A.C. 88 (P.C.). The power to regulate nec- Peachland (District) v. Peachland Self Storage Ltd. D.A. Betton J. 83

essarily implies the power to prohibit when conditions are not met. The power to require holding of a permit necessarily implies the power to prohibit the activity if no permit is held. I think a requirement that a permit be held is significantly different from a prohibition under s. 930.1(2) which would involve denial of the opportunity to remove soil in an area in all circumstances. I would say the purpose of s. 930.1(3) in having the Minister of En- ergy, Mines and Petroleum Resources approve a bylaw is to protect the value of provincial permits. The Minister of Energy, Mines and Petroleum Resources has an interest in a municipal bylaw if the action of the municipality prevents a provincial permit holder to use that permit. Such is not the case here. Provided the effect of the bylaw is not to bar use of the provincial permit, the Minister’s approval under s. 930.1(3) is not required. 25 In dismissing the appeal, Carrothers J.A. for the court stated at para. 7: [7] I have not been persuaded that the chambers judge fell into error in holding, in effect, that the approval of the Minister of Energy, Mines and Petroleum Resources pursuant to the above quoted s. 930.1(3) of the Act was not required before the Bylaw has any force or effect, in whole or in part. In his opening, counsel for Cannon restated the issue to be whether the permit requirement of the Bylaw is “prohibitory” or “regulatory”, or perhaps both. This expands the focus of examination of the meaning of “prohibit” from the narrow context of s. 930.1(3). This lends some flexibility to the construction to be given to the word “prohibit” in circumstances where a permit has not been obtained and can include a prohibition that is essentially regulatory. In the context of the entire regulatory scheme, the word “prohibit” can be given the connotation of “impermissible” or “re- strained” rather than that of a peremptory interdiction. 26 In Squamish (District) v. Great Pacific Pumice Inc., 2003 BCCA 404 (B.C. C.A.), the Court of Appeal said at para. 7: [7] However persuasive the economic arguments in favour of exclu- sive provincial jurisdiction over the regulation of the mining industry, to begin with the view the mining legislation must take priority over the municipal legislation is to give precedence where the Legis- lature stated none, or to fall into the error Lambert J.A. identified in British Columbia Lottery Corp. v. Vancouver (City) (1999), 61 B.C.L.R. (3d) 207 (C.A.) at ¶19: It is no longer the key to this kind of problem to look at one comprehensive scheme, and then to look at the other 84 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

comprehensive scheme, and to decide which scheme entirely occupies the field to the exclusion of the other. In- stead, the correct course is to look at the precise provisions and the way they operate in the precise case, and ask: Can they co-exist in this particular case in their operation? If so, they should be allowed to co-exist, and each should do its own parallel regulation of one aspect of the same activity, or two different aspects of the same activity.

Position of the Parties A. Peachland Self Storage 27 Peachland Self Storage says that the Bylaw effectively prohibits its commercial sand and gravel mining operations that had been authorized by the Ministry through the issuance of the mines permit. It says that the provincial interest expressed in s. 9 of the Community Charter in respect of soil removal relates to mining operations and the commercial value of provincial permits to engage in such mining operations. It says the Bylaw that engages that interest, is prohibitory, and therefore required Ministe- rial approval to be validly enacted. 28 Further, it says that the Bylaw “frustrates the purpose of the Prov- ince’s comprehensive legislative scheme that is designed to regulate and manage the extraction of mining resources throughout British Columbia”. 29 Peachland Self Storage did not pursue the additional argument set out in its materials that the Bylaw was enacted with an improper purpose.

B. District of Peachland 30 The District of Peachland says that Ministerial approval of its soil removal bylaw was not required because the Bylaw does not prohibit soil removal; it says that the Bylaw is regulatory and not prohibitory. 31 While acknowledging that commercial soil removal operations (such as that proposed by Peachland Self Storage) may not be viable under the Bylaw, the District of Peachland contends that the Bylaw does not, in fact, prohibit all soil removal. 32 Further, the District of Peachland says that its bylaw should not be rendered inoperable on the basis that it frustrates a provincial purpose because there is no express legislative intent that mining legislation Peachland (District) v. Peachland Self Storage Ltd. D.A. Betton J. 85

should take precedence over local government regulation. In support, it refers to s. 10 of the Community Charter.

Analysis 33 I begin by making this general observation. The scope of the District of Peachland’s powers in relation to soil removal require that ss. 8 and 9 of the Community Charter be read together in the context of the Act as a whole. Section 9 reserves an oversight by the province where their common interests are affected. The challenge raised in this case is in the manner in which the Community Charter has defined the trigger of that oversight. 34 The first position advanced by Peachland Self Storage is that the By- law is invalid because it did not have the required approval of the Minis- try. Resolution of this issue turns on whether the Bylaw is properly categorized as prohibitory within the meaning intended by s. 9 of the Community Charter. The Legislature has decreed by enacting ss. 9(1) and (3) that there is a provincial interest in bylaws that, inter alia, prohibit soil removal. Thus, if the Bylaw prohibits soil removal, it requires Ministerial approval. 35 On the evidence, there is no question that the Bylaw will not allow for any viable commercial sand and gravel extraction operation, including that which would otherwise have been allowed by the mines permit issued by the province to Peachland Self Storage. Thus, the question is whether the prohibition of commercial sand and gravel extraction constitutes a prohibition within the meaning of s. 9(1)(e) of the Community Charter. 36 The relevant portions of ss. 8 and 9 of the Community Charter do not expressly distinguish between commercial and non-commercial soil removal. Clearly, it would have been possible for the legislature to expressly include such a distinction or specifically reference situations where mining permits may be affected by bylaws, but it did not do so. 37 Both parties referred me to the Court of Appeal’s decision in Cannon Contracting Ltd. v. Mission (District) referenced above. There, the Dis- trict of Mission’s bylaw was ultimately characterized as regulating, not prohibiting the removal of sand and gravel and other material. That bylaw required a permit to remove that material and imposed a volumetric charge for its removal. 86 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

38 In my view, the comments of the Court of Appeal in Cannon Con- tracting at para. 7 above do not qualify or diminish its approval of the comments of the chambers judge. 39 Cannon Contracting and other authorities cited by counsel in their submissions confirm that regulation by necessity involves elements of prohibition where the regulatory prerequisites have not been satisfied. 40 However, what is of greatest significance from the Cannon Con- tracting case is the conclusion that the purpose of the past equivalent of s. 9 of the Community Charter [s. 930.1 of the Municipal Act] was to protect the value of provincial permits. That conclusion suggests that if the effect of a bylaw is to render a permit of no value and prevent the provincial permit holder from using the permit, then Ministerial approval of the bylaw must be obtained. 41 There is no doubt that the effect of Peachland’s Earthworks Control Bylaw No. 832 would render the mines permit held by Peachland Self Storage of no value due to the 200 m3 limit. 42 While I acknowledge that the law has developed since Cannon Con- tracting, particularly with the decision in United Taxi Drivers, I am unable to conclude that the reasoning in the Cannon Contracting case is no longer applicable. The broad and purposive approach to interpretation explained in United Taxi Drivers does not affect the merit of the Cannon Contracting decision as it pertains to this case. I therefore find Cannon Contracting applicable to this issue. 43 It must be remembered that s. 9 of the Community Charter, if it applies, does no more than require Ministerial approval of a bylaw. It does not, recognizing the irony of this language, prohibit the District of Peach- land from having such a bylaw. This is a system, as is suggested by the title of s. 9 (“[s]pheres of concurrent authority”), which ensures consulta- tion and co-management where municipal and provincial interests inter- sect. The obligation to seek Ministerial approval fosters a co-operative approach to a matter of mutual interest. Rather than limit a municipal power, it actually manifests a principle of municipal-provincial relations espoused in s. 2(1)(c) of the Community Charter. 44 In the course of submissions, counsel for the District of Peachland addressed the inquiry of the bench as to whether a bylaw that restricted soil removal to one cubic metre would require Ministerial approval. In his response, counsel referred the court to the Supreme Court of Canada decision in Catalyst Paper Corp. v. North Cowichan (District), 2012 Peachland (District) v. Peachland Self Storage Ltd. D.A. Betton J. 87

SCC 2 (S.C.C.), for the proposition that the alleged harshness of the limit is not open for review by the courts unless the limit can be said to be such that no reasonable municipality could have come to the same conclusion. Applying this to the hypothetical question posed, counsel agreed that a one-cubic-meter limit would be unreasonable. 45 Catalyst Paper addressed the scope of the court’s power to set aside validly enacted municipal bylaws. The issue before this court, however, is whether or not Ministerial approval of the Bylaw was required by the provisions of the Community Charter set out above; that is to say, whether the Bylaw creates a prohibition. The distinction is perhaps sub- tle, but it is important. 46 The District of Peachland is essentially saying that the reasonableness analysis should determine if the limit constitutes a prohibition. 47 The question of “what is a reasonable limit” can only arise if the imposition of the limit is itself validly in place. Failure to get Ministerial approval for a bylaw which engages s. 9 would make that bylaw void ab initio because the municipality lacked the delegated authority without that approval. In this case, the court cannot determine if the Bylaw is reasonable if it was never valid in the first place. The response, in my view, does not answer the question posed. 48 The District of Peachland argues that the provincial interests in soil removal are expressly set out in s. 9(1)(e). It contends that if legislators intended to specify that Ministerial approval was required in relation to the prohibition of commercial soil removal, it would have said so. While the legislature could have included that language, it is my view that such an interpretation is not in keeping with the principals of interpretation contained in the Community Charter, United Taxi Drivers and Bell Ex- press Vu. To attach that literal interpretation to the legislation would be to ignore the context of the legislation as a whole. 49 Section 4(2) of the Community Charter gives guidance as to how the broad approach to interpretation should be applied in this context. The District’s general power to regulate or prohibit the removal of soil is set out in s. 8(3)(m). The specific power to prohibit soil removal is contained in s. 9(1)(e). As stated in s. 4(2), “that aspect of the general power that encompasses the specific power may only be exercised subject to any conditions and restrictions established in relation to the specific power”. Thus, while the municipal power to address soil removal must be interpreted broadly, the specific power to prohibit soil removal, even in the 88 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

guise of a regulation, must be exercised subject to the requirement to obtain Ministerial approval. 50 The broad and purposive approach to interpretation dictates a result that favours the respondent. 51 In the result, it is my conclusion that the amendment of Earthworks Control Bylaw No. 832 did require Ministerial approval because it prohibited soil removal within the meaning of s. 9(1)(e) of the Community Charter. Given that approval was neither sought nor obtained, enacting the Bylaw was ultra vires the District of Peachland. 52 Peachland Self Storage also advanced the argument that the Bylaw is invalid because it frustrates a provincial purpose. The District of Peach- land points out that the applicability of this argument turns on whether the Bylaw is prohibitory, and acknowledges that if it is prohibitory, it is invalid. 53 Having reached the conclusion that the Bylaw is prohibitory, there is no need to address this issue. I will say, however, that had it been necessary to consider this argument, I would have found that the Bylaw is invalid for this reason as well. 54 Counsel did not make submissions as to costs. Given the result and in the absence of further information, Peachland Self Storage should have its costs. Either party is at liberty to bring the matter of costs before me for argument if necessary. Application granted. St. Mary’s Cement Inc. v. Clarington (Municipality) 89

[Indexed as: St. Mary’s Cement Inc. v. Clarington (Municipality)] St. Mary’s Cement Inc. (Canada), Applicant (Appellant) and Municipality of Clarington, Respondent (Respondent) Ontario Court of Appeal Docket: CA C53545 2012 ONCA 884 W.K. Winkler C.J.O., S.E. Pepall J.A., Patrick Smith J. (ad hoc) Heard: November 20, 2012 Judgment: December 17, 2012 Municipal law –––– Zoning — Zoning by-laws — Miscellaneous –––– Permit- ted land use — Cement company proposed to burn alternative fuel derived from post-composting and post-recycling residual materials in its cement plant — Under by-law, “waste disposal area” was not permitted use and was defined as “place where garbage, refuse or domestic or industrial waste is dumped, destroyed, or stored in suitable containers” — Cement company unsuccessfully brought application for declaration that proposed activity was not land use controlled by by-law, or alternatively, was accessory use permitted under by-law — Application judge held that use of alternative fuel was not permissible as legal non-conforming use — Application judge held that cement company was introducing new and additional use on site, as it would be disposing of industrial waste, and operating waste disposal area on site — Cement company appealed — Appeal allowed — Proposed use of alternative fuel did not constitute new land use — Application judge erred in concluding that use of “waste” as fuel brought plant within definition of “waste disposal area” and constituted new use — Proposed fuel fell within broad definition of “waste” under Environmen- tal Protection Act — However, cement company would not be dumping, destroying or storing waste, so there was no “waste disposal area” — Use of alternative fuel would not be considered “destruction of waste”, as fuel was being used productively as part of permitted use of manufacturing cement. Municipal law –––– Zoning — Legal non-conforming use — What constitutes –––– Cement company proposed to burn alternative fuel derived from post- composting and post-recycling residual materials in its cement plant — Under by-law, “waste disposal area” was not permitted use and was defined as “place where garbage, refuse or domestic or industrial waste is dumped, destroyed, or stored in suitable containers” — Cement company unsuccessfully brought application for declaration that proposed activity was not land use controlled by by- 90 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

law, or alternatively, was accessory use permitted under by-law — Application judge held that use of alternative fuel was not permissible as legal non-conforming use — Application judge held that cement company was introducing new and additional use on site, as it would be disposing of industrial waste, and operating waste disposal area on site — Cement company appealed — Appeal allowed — Proposed use of alternative fuel did not constitute new land use — Application judge erred in concluding that use of “waste” as fuel brought plant within definition of “waste disposal area” and constituted new use — Proposed fuel fell within broad definition of “waste” under Environmental Protection Act — However, cement company would not be dumping, destroying or storing waste, so there was no “waste disposal area” — Use of alternative fuel would not be considered “destruction of waste”, as fuel was being used productively as part of permitted use of manufacturing cement. Cases considered by W.K. Winkler C.J.O.: Aon Inc. v. Peterborough (City) (1999), 1999 CarswellOnt 924, 96 O.T.C. 34, 1 M.P.L.R. (3d) 225, [1999] O.J. No. 1225 (Ont. Gen. Div.) — referred to Montreal (Ville) v. 2952-1366 Québec inc. (2005), (sub nom. Montréal (City) v. 2952-1366 Québec Inc.) 134 C.R.R. (2d) 196, [2005] 3 S.C.R. 141, 201 C.C.C. (3d) 161, 32 Admin. L.R. (4th) 159, 15 M.P.L.R. (4th) 1, 2005 Car- swellQue 9633, 2005 CarswellQue 9634, 2005 SCC 62, 258 D.L.R. (4th) 595, (sub nom. Montreal (City) v. 2952-1366 Québec Inc.) 340 N.R. 305, 18 C.E.L.R. (3d) 1, 33 C.R. (6th) 78, [2005] S.C.J. No. 63 (S.C.C.) — followed Neighbourhoods of Windfields Ltd. Partnership v. Death (2008), 2008 Carswell- Ont 5025, 49 M.P.L.R. (4th) 183, [2008] O.J. No. 3298 (Ont. S.C.J.) — considered Neighbourhoods of Windfields Ltd. Partnership v. Death (2009), 2009 ONCA 277, 2009 CarswellOnt 1756, 55 M.P.L.R. (4th) 159, [2009] O.J. No. 1324 (Ont. C.A.) — referred to Neighbourhoods of Windfields Ltd. Partnership v. Death (2009), 2009 Carswell- Ont 7244, 2009 CarswellOnt 7245, 403 N.R. 389 (note), 263 O.A.C. 399 (note), [2009] S.C.C.A. No. 253 (S.C.C.) — referred to R. v. Durham County Council & Lafarge Redland Aggregates Ltd. (2001), [2001] EWCA Civ 781 (Eng. C.A.) — considered 1121472 Ontario Inc. v. Toronto (City) (1998), 1998 CarswellOnt 1701, 39 O.R. (3d) 535, (sub nom. Toronto (City) v. 1121472 Ontario Inc.) 109 O.A.C. 146, 160 D.L.R. (4th) 83, 47 M.P.L.R. (2d) 23 (Ont. C.A.) — considered Statutes considered: Environmental Protection Act, R.S.O. 1990, c. E.19 Generally — referred to s. 25 “waste” — considered s. 27 — considered St. Mary’s Cement Inc. v. Clarington (Municipality) W.K. Winkler C.J.O. 91

Regulations considered: Environmental Protection Act, R.S.O. 1990, c. E.19 General — Waste Management, R.R.O. 1990, Reg. 347 s. 2 — considered Recycling and Composting of Municipal Waste, O. Reg. 101/94 Generally — referred to

APPEAL by applicant cement company from judgment reported at St. Mary’s Cement Inc. v. Clarington (Municipality) (2011), 81 M.P.L.R. (4th) 275, 2011 ONSC 1533, 2011 CarswellOnt 1773, [2011] O.J. No. 1167 (Ont. S.C.J.), dismissing its application for declaration that proposed activity was not land use controlled by by-law, or alternatively, was accessory use permitted under bylaw.

Harry C.G. Underwood, Brendan Brammall, for Appellant Ian Godfrey, Jon Smithen, for Respondent

W.K. Winkler C.J.O.: A. Overview 1 This is an appeal by St. Mary’s Cement Inc. (Canada) (“SMC”) from a decision on an application for the interpretation of a municipal zoning by-law. SMC is proposing to substitute alternative fuel for part of the conventional fossil fuel currently used in its cement manufacturing process. The proposed fuel is recovered from post-recycling and post-composting materials. The appellant took the position that the by-law permits it to continue the manufacturing process with the new fuel. The respondent, the Municipality of Clarington (“Clarington”), disagreed. 2 The application judge interpreted the by-law in favour of Clarington and held that the use of the alternative fuel would be an impermissible change in land use. 3 The determinative issue in this case is whether SMC’s proposed use of alternative fuel constitutes a new land use that is not permitted at the site in question. I conclude that it does not constitute a new land use. For the reasons that follow, I would allow the appeal.

B. Background 4 SMC operates a cement manufacturing plant on the north shore of Lake Ontario in the Municipality of Clarington, within the Regional Mu- nicipality of Durham. Clarington’s By-Law 84-63 permits the use of the 92 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

site for a “cement manufacturing plant” as well as any accessory uses that are “customarily incidental and subordinate to, and exclusively devoted to, the main use”. 5 SMC is proposing to substitute fuel consisting of post-composting and post-recycling materials for some of the conventional fossil fuel that it currently uses. 6 Clarington opposes SMC’s proposal on the basis that it would give rise to a new land use; namely, the use of the site as a “waste disposal area,” which is not permitted under the by-law. Clarington therefore maintains that an amendment to the by-law is required for SMC to use the new materials. Further, Clarington takes the position that the alternative fuels are not “customarily” used in the cement industry in Ontario and therefore do not fall within the scope of the accessory use provision of the by-law. 7 SMC contends that its proposal does not give rise to a new land use. In the alternative, it argues that use of the alternative fuels is a permissible accessory use authorized under the by-law. 8 Clarington’s objection gave rise to the instant application. The application judge issued an order declaring that SMC’s proposed use was neither a permissible use nor an acceptable accessory use under the bylaw.

C. The Zoning By-Law 9 The SMC plant comprises approximately 321 hectares and is zoned as an “Extractive Industrial (M3) Zone.” 10 Section 25.1 of the by-law lists the “Permitted Uses” of land within an M3 zone. Any use that is not permitted is prohibited. A cement manufacturing plant is not listed as one of the permitted uses in s. 25.1. How- ever the plant is subject to a specific site exception in s. 25.4.1, which reads: Notwithstanding Section 25.1, those lands zoned M3-1 on the Sched- ules to this By-law may, in addition to the other uses permitted, be used for a cement manufacturing plant and a maximum of two (2) residential dwelling units for a manager, caretaker, watchmen, or other similar persons employed on the same lot and their families. St. Mary’s Cement Inc. v. Clarington (Municipality) W.K. Winkler C.J.O. 93

11 Section 3.1(a) of the by-law permits “Accessory Buildings, Structures and Uses”: Where this By-law provides that a lot may be used or a building or structure may be erected or used for a purpose, that purpose shall include any accessory building or structure or accessory use... An “accessory use” is defined in s. 2 of the by-law to mean: [A] use established during or after the establishment of the main use which is customarily incidental and subordinate to, and exclusively devoted to, the main use of the lot, and located on the same lot as such main use. “Use” is also defined in s. 2 of the by-law to mean: [T]he purpose or function for which a lot or building or structure, or any combination thereof, is designed, arranged, occupied or maintained and when used as a verb, “USE” shall have a corresponding meaning.

D. SMC’s Proposal 12 SMC currently uses petroleum coke (“petcoke”), a by-product of crude oil refining, as fuel for its cement manufacturing process. Most of the petcoke is transported to the site by lake freighter, and the rest arrives by truck. SMC has proposed to conduct a time-limited demonstration project in which three alternative fuels would be substituted for up to 30 percent of the petcoke currently used. According to the proposal, the fuels would be transported exclusively by truck and delivered on a “just-in- time” basis shortly before their use. Three alternative fuel types are proposed: post-composting residual plastic film from a composting plant, post-recycling paper bio-solids, and post-recycling residual materials from a recycled paper plant. It is hoped that this project will reduce the plant’s dependency on non-renewable fossil fuels and cut costs. SMC has applied for the necessary approvals to the Ministry of the Environment under s. 27 of the Environmental Protection Act, R.S.O. 1990, c. E. 19 (the “EPA”). These approvals are pending the outcome of this appeal. 13 Similar alternative fuels have been used by other cement manufactur- ers in plants in other jurisdictions including Quebec and British Colum- bia, as well as the United States and Europe. 14 SMC operates another cement plant in the Town of St. Mary’s in southwestern Ontario. That site has proposed to use one of the same fuels proposed for use at the Clarington plant, pending approval by the Minis- 94 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

try of the Environment. The Town of St. Mary’s has a similar by-law but, unlike Clarington, the Town took the position that the use of alternative fuel does not constitute a change in use, that fuel storage and handling is an accessory use, and that no additional planning permission is required. 15 Should the Clarington pilot project demonstrate that the alternative fuels can be used without any significant change in emissions or environmental impact, SMC plans to seek regulatory approval for long-term use. 16 SMC filed expert evidence on the application to the effect that the project will not create adverse neighbourhood effects. While the substitution of fuels would result in some increased truck traffic, the system of alternative fuel delivery is enclosed and, by design, the process would not create additional litter, odour or dust nuisances. Instead, the use of post-recycled and post-compost materials is proposed to have environmental benefits and its substitution for petcoke is expected to reduce the plant’s greenhouse gas and sulphur emissions.

E. Decision Below 17 The application judge referred to the correct legal principles in inter- preting the Clarington by-law. The modern principles of statutory interpretation apply equally to the interpretation of a municipal by-law and a statute: Montreal (Ville) v. 2952-1366 Qu´ebec inc., 2005 SCC 62, [2005] 3 S.C.R. 141 (S.C.C.), at para. 10. Thus, the interpretation of a by-law involves consideration of the text of the by-law, the intent of municipal council, and the purpose and scheme of the by-law as a whole: Neighbourhoods of Windfields Ltd. Partnership v. Death (2008), 49 M.P.L.R. (4th) 183 (Ont. S.C.J.), at para. 33, aff’d 2009 ONCA 277 (Ont. C.A.), leave to appeal to S.C.C. refused [2009] S.C.C.A. No. 253 (S.C.C.). 18 The application judge decided that the proposed fuel substitution would bring the subject lands outside the expressly permitted use of the land as a “cement manufacturing plant.” At para. 30 of his reasons, he concluded: While I agree that SMC’s use of the site for the manufacturing of cement will continue to be a permitted use under the Demonstration Project ... in my view, through the introduction of a fuel that falls within the EPA definition of waste, SMC is introducing a new and additional use on the site, because it will be disposing of industrial waste. As such, SMC will be operating a waste disposal area on the site. St. Mary’s Cement Inc. v. Clarington (Municipality) W.K. Winkler C.J.O. 95

19 The application judge also rejected the argument that use of the proposed alternative fuel was an accessory use to the main use of the site as a cement manufacturing plant, holding, at para. 33, that “[t]he evidence does not support the conclusion that the proposed use is common or cus- tomary within the Municipality of Durham or Province of Ontario.”

F. Analysis (i) The error in the decision below 20 In my view, the application judge erred in concluding that the use of “waste” as fuel brought the plant within the definition of “waste disposal area,” and that it therefore constituted a new and additional use. In reaching this decision he did not apply the express language used in s. 2 of the by-law to define “waste disposal area.” 21 I agree with the application judge that the proposed fuel falls within the broad definition of waste under the EPA. Section 2 of the General Waste Management Regulation, R.R.O. 1990, Reg. 347, sets out an ex- pansive list of materials designated as wastes under the EPA, including post-recycling and post-composting materials regulated by Recycling and Composting of Municipal Waste Regulation, O. Reg. 101/94. “Waste” is not defined by the by-law; the Official Plans of Clarington and Durham define the term by reference to the EPA definition. Since by-laws are the means by which official plans are implemented, the terms of the official plans aid in the contextual interpretation of the by-law: Aon Inc. v. Peterborough (City) (1999), 1 M.P.L.R. (3d) 225 (Ont. Gen. Div.), at para. 18. 22 The parties agree that use of the subject lands as a “waste disposal area” is not permitted. The term “waste disposal area” is defined by s. 2 of the by-law as “a place where garbage, refuse or domestic or industrial waste is dumped, destroyed, or stored in suitable containers.” Under the by-law, a “waste disposal area” is neither a generally permitted use nor a use listed under the site specific exemption for the subject lands. 23 Under the proposal, however, SMC would not be dumping, destroying or storing waste. As a result, there is no “waste disposal area” within the meaning of the by-law. Accordingly, the sole use continues to be the use expressly permitted by s. 25.4.1 of the by-law — that is, the operation of a “cement manufacturing plant.” 96 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

(ii) “Waste disposal area” 24 The application judge concluded that because SMC would be operating a waste disposal area on the site it would be introducing a new use to the site. This conclusion is based on his finding that the proposed activity falls within the definition of “waste disposal area.” In reaching this conclusion he failed to consider, and therefore analyze, the wording of the definition as it appears in the by-law. In adopting this approach to the construction of the by-law he fell into error. 25 The site must be used for “dumping”, “destroying” or “storing” waste to fall within the definition of a “waste disposal area.” Clarington contends waste is “destroyed” when it is burned as fuel in a cement kiln. 26 SMC’s use of the alternative fuel would not be considered “destruction of waste”, just as the use of petcoke fuel would not be characterized as the destruction of petcoke. In both cases, fuel is being used productively as part of the permitted use — the manufacturing of cement. 27 Reading the definition of “waste disposal area” in the context of the by-law as a whole, and in the context of the official plans, the purpose of the definition is clear: the Municipality seeks to regulate land that is used for the purpose of removing, containing or managing unwanted materials. Conversely, SMC is proposing to use the materials as a resource for an existing and approved manufacturing process. The fact that the fuel materials are being diverted from the waste stream is not, on the facts of this case, determinative of the land use. In this context it is worth noting that petcoke is a “by-product” of petroleum production, and by definition, would itself be a waste product if it did not have a productive use. The use of one fuel as opposed to another does not alter the fact that the SMC plant is in essence a cement plant and not a waste disposal area.

(iii) Is the proposed use of the land a prohibited additional use? 28 Clarington submits that even if the proposal does not fall within the definition of “waste disposal area”, the proposed substitution of fuels is a use that is still prohibited because the by-law does not permit any kind of waste processing at the SMC site. The by-laws should be interpreted in the context of the Official Plans for Durham and Clarington. Clarington argues that the provisions in the Official Plans show an intention to regulate the land use aspects of waste handling. Neither the M3 Zone, nor the M3-1 Exception Zone, explicitly lists any kind of waste processing as a permitted use. By contrast, another provision in the by-law explicitly al- St. Mary’s Cement Inc. v. Clarington (Municipality) W.K. Winkler C.J.O. 97

lows for a “waste transfer station and material recovery and recycling facility for solid non-hazardous waste.” Therefore, by implication, it is Clarington’s position that any kind of waste processing activity is a new use that would require explicit permission. 29 Clarington cites the decision of this court in 1121472 Ontario Inc. v. Toronto (City) (1998), 39 O.R. (3d) 535 (Ont. C.A.), at para. 15 as authority for the proposition that land may have more than one use, and if one of the uses is prohibited, that use is not saved because the primary use is permitted. Applying this reasoning to the instant circumstance, Clarington asserts that the proposed use of alternative fuel constitutes a second use of the subject lands, namely the handing of waste, which is not permitted. 30 I cannot accede to this submission that the use of the alternative fuel by SMC constitutes a second use. All the above arguments by Clarington are contingent on a finding that the SMC proposal would introduce an additional use of the land. In my view, there is no additional use in the present circumstances. This is a complete answer to the line of argument advanced by Clarington. 31 The proposition that partial substitution of alternative fuels constitutes a change in use requiring new planning permission was considered and rejected by the Court of Appeal of England and Wales in R. v. Durham County Council & Lafarge Redland Aggregates Ltd., [2001] EWCA Civ 781 (Eng. C.A.) [hereinafter Lowther]. Although Lowther was decided under a different regulatory framework, the interpretive issue in that case is analogous to the present circumstance. 32 In Lowther, the Lafarge company ran an operation in which kilns were used to produce dolomite. Petcoke served as the primary fuel. Lafarge proposed to substitute a fuel derived from waste solvents for some of the petcoke used and received approval from the Environment Agency. The issue was whether use of the alternative fuel constituted “a material change in use of any buildings or other land” requiring separate planning permission. The court in Lowther noted that waste disposal could constitute a separate and distinct use of land. 33 In Lowther, the court held that the use of alternative fuel was not a “material change” in land use. At para. 45, Phillips M.R. stated: I have been unable to identify any principle of planning law that de- crees that, simply because waste is matter which has to be disposed of, a person who makes constructive use of the waste for the purpose 98 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

of some activity other than disposal of the waste, but who inciden- tally disposes of the waste at the same time, must be deemed to be making two uses of the land, namely waste disposal and the ulterior activity. 34 Moreover, at para. 54, the Master of the Rolls relied on “the principle that, when one is dealing with waste, the object of the operation is of particular importance when analysing the nature of the activity for planning purposes.” At para. 72, Phillips M.R. agreed that there was no waste disposal use in Lafarge’s burning of the alternate fuel. He concluded that the burning of fuel is a process of “energy recovery” that is “so entirely part of the manufacture of cement for lime that it would be wrong to characterise it as a separate use.” 35 I find the reasoning in Lowther to be compelling and apposite to the instant case. The burning of fuel is inherent in the production of cement, and the use of alternative fuel does not amount to a separate use of the land. 36 There may be instances where land truly has two uses, one of which would render the entire enterprise prohibited. Examples of this could include methane recapture from a landfill site or energy generation from a garbage incinerator. These situations could fall within the restricted definition of “waste disposal area.” Phillips M.R. averted to this possibility at para. 58 of Lowther: In some circumstances an operation may involve a nice balance between the objective of waste disposal and the ultimate objective of the operation. In those circumstances it may be correct to hold that the land is being subjected to two uses, waste disposal and the ultimate objective. 37 Whether any particular activity constitutes a second use for planning purposes will depend on the facts of the case and specific language of the by-law at issue.

G. Conclusion and Disposition 38 My conclusion that the by-law does not bar SMC’s alternative fuel use is in no way an invitation to unregulated waste disposal in the municipality. The by-law is still effective against any activity captured by the definition of “waste disposal area,” as it is against any other activity where land is being used for an additional use that is not permitted. 39 It is worth repeating that the present case is a land use case and not an environmental matter. Even though the by-law does not restrict the sub- St. Mary’s Cement Inc. v. Clarington (Municipality) Patrick Smith J. (ad hoc) 99

stitution of fuels in this case, SMC is still subject to the broad regulatory oversight of the Ministry of the Environment. At para. 10 of his reasons, the application judge emphasized that “the focus of this case is on land use, not environmental regulation.” Use of the proposed fuels still requires s. 27 approval from the Ministry under the EPA, which is pending in this case. 40 Moreover, it is also important to emphasize that this case is about the interpretation of a specific by-law. It does not involve an issue as to the powers of the municipality. 41 Given my conclusion that the proposed use of alternative fuel falls within the permitted use under the by-law, it is unnecessary to address the second issue of accessory use. 42 For the reasons above, I would allow the appeal, set aside the judgment below and the application judge’s order as to costs. 43 An order shall issue declaring that use of the proposed alternative fuels at the SMC plant in the Municipality of Clarington does not constitute a new land use and is permissible for the purposes of Zoning By-Law 84- 63. 44 SMC is entitled to its costs on the application and the appeal. The costs of the appeal are fixed at the agreed amount of $25,000, inclusive of disbursements and taxes.

S.E. Pepall J.A.:

I agree

Patrick Smith J. (ad hoc):

I agree Appeal allowed. 100 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

[Indexed as: Faro (Town) v. Knapp] Town of Faro, Respondent (Petitioner) and Angelika Knapp dba A. Knapp Accounting Services and North Star Adventures, a partnership between Angelika Knapp and Eric Dufresne, Angelika Knapp and Eric Dufresne, Appellants (Respondents) Yukon Territory Court of Appeal [In Chambers] Docket: 11-YU681 2012 YKCA 13 Hinkson J.A. Heard: November 8, 2012 Judgment: December 27, 2012 Municipal law –––– Development control — Development permits — Prac- tice and procedure –––– Town refused to approve development permit for construction of well-house and shed on applicants’ property on basis that continued residential use of property was in contravention of permitted and discretionary uses prescribed in zone — Applicants’ appeal was placed on inactive list — Ap- plicants brought application seeking order that appeal be removed from inactive list, that leave be granted for them to proceed with appeal, and that time for filing appeal book, factum, transcript extract book and brief of authorities be extended — Application dismissed — Applicants had not established any ground for appeal that offered any real likelihood of success — There was no error on part of chambers judge in ruling. Civil practice and procedure –––– Practice on appeal — Time to appeal — Extension of time — Grounds for extension –––– Town refused to approve development permit for construction of well-house and shed on applicants’ property on basis that continued residential use of property was in contravention of permitted and discretionary uses prescribed in zone — Applicants’ appeal was placed on inactive list — Applicants brought application seeking order that appeal be removed from inactive list, that leave be granted for them to proceed with appeal, and that time for filing appeal book, factum, transcript extract book and brief of authorities be extended — Application dismissed — Interests of justice did not warrant granting orders sought by applicants — Free legal advice was not entitlement to civil litigants, nor was absence of such advice reason for failure of applicants to prosecute appeal in any expeditious way — There came time when failure to comply with Rules of Court warranted placement of appeal on inactive list, as appeal was, and once that occurred, law expected litigant Faro (Town) v. Knapp 101 whose appeal has been placed on that list to establish good reason for reactivating appeal — Applicants failed to do so. Cases considered by Hinkson J.A.: Faro (Town) v. Knapp (2011), 2011 CarswellYukon 48, 2011 YKSC 43, 84 M.P.L.R. (4th) 51 (Y.T. S.C.) — referred to Kar Recovery Ltd. v. KDA (2004), 2004 BCCA 503, 2004 CarswellBC 2128, 204 B.C.A.C. 181 (B.C. C.A. [In Chambers]) — considered Knapp v. Faro (Town) (2009), 59 M.P.L.R. (4th) 117, 2009 YKSC 34, 2009 CarswellYukon 64 (Y.T. S.C.) — referred to Knapp v. Faro (Town) (2010), 2010 CarswellYukon 92, 492 W.A.C. 224, 291 B.C.A.C. 224, 72 M.P.L.R. (4th) 19, 2010 YKCA 7 (Y.T. C.A.) — referred to Murphy v. Wynne (2008), 2008 CarswellBC 104, 2008 BCCA 26, 250 B.C.A.C. 249, 416 W.A.C. 249 (B.C. C.A. [In Chambers]) — considered Whiskey Flats Investment Corp. v. Whitehorse (City) (2010), 76 M.P.L.R. (4th) 281, 2010 YKSC 27, 2010 CarswellYukon 133 (Y.T. S.C.) — considered Statutes considered: Building Standards Act, R.S.Y. 2002, c. 19 Generally — referred to Court of Appeal Act, R.S.B.C. 1996, c. 77 s. 25 — considered Court of Appeal Act, R.S.Y. 2002, c. 47 Generally — referred to s. 12 — considered Judicature Act, R.S.Y. 2002, c. 128 s. 38 — referred to Municipal Act, R.S.Y. 2002, c. 154 Generally — referred to ss. 338-344 — referred to s. 345 — considered Summary Convictions Act, R.S.Y. 2002, c. 210 Generally — referred to Rules considered: Court of Appeal Rules, 2005, 2005 Generally — referred to R. 46 — considered R. 46(2)-46(7) — referred to Rules of Court, O.I.C. 2009/65 R. 2(1) — considered R. 2(2) — considered 102 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

R. 10 — referred to R. 51(6) — considered R. 54 — considered

APPLICATION by applicants seeking order that appeal be removed from inactive list, that leave be granted for them to proceed with appeal, and that time for filing appeal book, factum, transcript extract book and brief of authorities be extended.

Appellants, for themselves R.G. Macdonald, Q.C., for Respondent

Hinkson J.A.:

1 Ms. Knapp and Mr. Dufresne, on their own behalves and on behalf of their partnership (“North Star Adventures”) seek orders: 1) that their appeal be removed from the inactive list; 2) that leave be granted for them to proceed with their appeal; 3) that the time for filing their appeal book, factum, transcript extract book and their brief of authorities be extended; and 4) for special costs or costs on an increased scale for their application, payable forthwith.

Background 2 The applicants own a lot in the Town of Faro (“the Town”): Lot 1028, located on Johnson Lake, within the Town boundaries (the “Pro- perty”). They lived in a cabin on the Property. The Property was zoned by the Town as ‘Hinterland’. Up until 2006 the applicants operated an outdoor tourism business through North Star Adventures, offering canoe rentals, and guided canoe and hiking trips at the Property. 3 The Town claimed that the use of the Property as a residence conflicted with its zoning. As described by the chambers judge who heard the Town’s petition, matters came to a head in 2007 when the Town refused to renew the applicants’ business licence “until action is taken by [the applicants] to resolve the issue of the inappropriate residential use of the property in question”. 4 On September 19, 2007, the Town refused to approve a development permit for the construction of a well-house and a shed on the Property “on the basis that the continued residential use of the property was in Faro (Town) v. Knapp Hinkson J.A. 103

contravention of the permitted and discretionary uses prescribed in the Hinterland Zone.” 5 The applicants claimed they were treated unfairly and believed they should be allowed to reside and conduct their business on the Property. They sought a declaration that the zoning of the Property conflicted with the Town’s Official Community Plan and orders quashing decisions of the Town’s Board of Variance and Business Licensing Appeal Board. They also sought a variety of declarations that the Town’s treatment of them was unfair. 6 The petition was heard by Groberman J., as he then was, who determined that the use of the Property as a full-time residence was not a permitted use under the zoning by-laws. While he found that the residential use of the Property could arguably be permitted as a discretionary use, he noted that the Town Council had never exercised its discretion in this way. 7 Groberman J. quashed the decision of the Licensing Appeal Board that denied the applicants a business licence on the basis that the Pro- perty was being occupied for residential purposes. He held that the decision was improper as there was no connection between that unlawful use and the proper considerations for the Town in deciding whether or not to issue a business licence. He further held that the Town was not entitled to use the business licence application as “an opportunity to exact penance on the [applicants] or to place pressure on them to cease unlawful uses on their land.” 8 Groberman J. also quashed the decision of the Board of Variance de- nying the applicants a development permit. He found that it was not clear that the proposed developments were contrary to the zoning bylaw, as they may have been accessory buildings connected with use of the land for outdoor recreation pursuits. He found as well that there was a breach of procedural fairness by the Board of Variance in both rendering its decision without hearing from the applicants and in taking into account submissions that were not provided to the applicants. 9 Groberman J. remitted both the matter of the business licence and the development permit to the relevant bodies for fresh determination. He then considered the applicants’ various arguments about their unfair treatment by the Town, and dismissed all of their applications for the declarations sought. The reasons for judgment of Groberman J. are indexed at 2009 YKSC 34 (Y.T. S.C.). 104 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

10 The applicants appealed the decision of Groberman J. to this Court. The central issue for determination was whether he had erred in refusing to make any of the declarations sought. The appeal was dismissed, the Court finding that Groberman J.’s decision not to grant the declarations was within his discretion and that he was entirely correct in his analysis as to whether the zoning bylaw permitted full-time residential use. The Court concluded that in the absence of an application for permission to use the Property as a full-time residence, the Town was not acting improperly in seeking to limit residential occupancy. The reasons for judgment in the appeal are indexed at 2010 YKCA 7 (Y.T. C.A.). 11 The Town subsequently petitioned to the Yukon Supreme Court for a permanent injunction to prevent the applicants from using and occupying the Property as a full-time residence. The applicants filed a cross-application asking that the petition filed by the Town be dismissed. 12 The chambers judge described the applicants’ “technical grounds” for opposing the petition as follows (at para. 7): 1. The Town is “estopped” from seeking the injunction (presumably, the [applicants] mean a type of equitable estoppel or estoppel by representation arising from the history of dealings between the parties); 2. Groberman J.’s reasons for judgment and the order arising therefrom are “moot”; 3. The petition is not valid under Rule 10 of the Rules of Court; 4. The petition is not valid under Rule 51(6); and 5. There is no evidence of any breach of the Zoning Bylaw before this Court. (I interpret this last ground as a submission that there is no evidence of the continuance of any “wrongful act” in order to justify the application of Rule 51(6)). 13 The chambers judge found that the first ground failed because the applicants had not made out a case of estoppel against the Town, and rejected their second ground that Groberman J.’s reasons for judgment or his order were moot. 14 The chambers judge addressed the applicants’ third technical ground at para. 51. He agreed with the Town that the provisions in ss. 338-344 of the Municipal Act, R.S.Y. 2002, c. 154, respecting the enforcement of bylaws by prosecution under the Summary Convictions Act, R.S.Y. 2002, c. 210, are very heavy-handed and can result in massive financial penalties. He also agreed that there is nothing in those provisions or elsewhere Faro (Town) v. Knapp Hinkson J.A. 105

in the Municipal Act which limits the Town to proceeding by way of prosecution. The chambers judge accepted that the Town had a choice of proceeding civilly or by way of prosecution because s. 345 of the Muni- cipal Act states “Conviction of an offence under this Act or a bylaw does not exonerate a person from civil liability”. 15 With respect to their fourth technical ground, the applicants contended that Rule 51(6) applies only to temporary injunctions, and that the petition must be invalid because the Town pleaded its reliance on Rule 51(6) in support of its application for a permanent injunction. The chambers judge disagreed and held that the wording of Rule 51(6) is broad enough to include applications for permanent injunctions. He observed (at para. 52): Indeed, [Rule 51(6)] presupposes that a party may apply for an injunction after obtaining a judgment to prevent the continuance of a wrongful act established by a judgment. Rule 51(6) states: In a proceeding in which an injunction has been or might have been claimed, a party may apply by petition after judgment to restrain another party from the repetition or continuance of the wrongful act or breach of contract established by the judgment or from the commission of any act or breach of a like kind. 16 The chambers judge addressed the applicants’ fifth technical ground for opposing the Town’s petition (at para. 53), that Rule 51(6) should be interpreted to mean that the Town should have applied for the permanent injunction under the “proceeding” before Groberman J. (S.C. No. 08- A0125). He concluded that, while the Town could have applied for a permanent injunction within the proceeding before Groberman J., the Town was correct to contend that there is nothing in Rule 51(6) preventing it from commencing a fresh application by petition. He also accepted that since the Town could have cross-applied for an injunction, the proceeding before Groberman J. was a proceeding in which an injunction might have been claimed, and therefore the condition precedent in Rule 51(6) was met. He reasoned that the Town could thus apply by petition after the judgment of Groberman J. to restrain the applicants from continuing the wrongful act of occupying the Property as a residence. 17 In the alternative, the chambers judge ruled that Rules 2(1) and 2(2) were broad enough to protect the validity of the petition, in the event that it somehow contravenes either Rule 10 or 51(6) (at para. 54). 106 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

18 The chambers judge allowed the Town’s injunction application, concluding at para. 62: ... that the [applicants] shall immediately discontinue their use and occupation of the property as a residence. Should the [applicants] wish to continue to reside on the property, either part-time or perma- nently, they will have to make an application to the Town for permission to do so as a discretionary accessory use under the Bylaw. In the absence of such an application and the Town’s permission being granted, and in the absence of a change to the zoning in which the property is located, the [applicants] are prohibited from residing on the property. 19 Finally, the chambers judge dealt with costs, and at para. 78 concluded that: ... while special costs are clearly justifiable here, I am going to exercise my discretion against such an award, as it would likely have a disproportionately punitive effect upon the [applicants]. On the other hand, the Town does deserve their costs as the successful party, and they also deserve a certain end to this proceeding. Therefore, as I have the authority under Rule 60(14) to fix a lump sum as the costs of the proceedings, I do so in the amount of the $3,000, to be paid within six months of the date of the order arising from these reasons. The reasons for judgment of the chambers judge are indexed at 2011 YKSC 43 (Y.T. S.C.). 20 The order arising from the hearing and from which the applicants have filed their notice of appeal was entered May 16, 2011, the date when it was faxed to their attention. 21 A notice of appeal on behalf of the applicants was filed on June 14, 2011. Ms. Knapp deposes that the transcripts were filed on June 24, 2011, and the appeal record was filed on August 16, 2011. Ms. Knapp further deposes that her appeal books were not ready for filing within the required time and that counsel for the Town advised her in January 2012 that if her appeal books were not filed by February 15, 2012, he would apply to dismiss the appeal. 22 Ms. Knapp deposes that the appeal books were finally ready for filing on June 14, 2012, but the Court Registry refused to accept them for filing without a consent order signed by counsel for the Town, who declined to sign such an order. 23 On June 20, 2012, the Deputy Registrar of the Court wrote to the parties advising that the appeal had been placed on the inactive list. Faro (Town) v. Knapp Hinkson J.A. 107

Discussion 24 As I have indicated above, the applicants have already filed their notice of appeal, transcripts, and appeal record, so they do not require leave to perfect those filings. Rule 46 of the Yukon Court of Appeal Rules, 2005, (authorized by s. 38 of the Judicature Act, R.S.Y. 2002, c. 128) provides: 46(1) Immediately after an appeal or an application for leave to appeal is settled or abandoned, the appellant must (a) file a Notice of Settlement or Abandonment in Form 22; and (b) serve one filed copy of the Notice of Settlement or Abandon- ment on each of the other parties. (2) If a certificate of readiness is not filed in accordance with the rules within one year after the filing of the applicable notice of appeal or notice of application for leave to appeal, the registrar must (a) place the appeal or application for leave to appeal on the inactive appeal list maintained in the registry; and (b) mail notice of the action taken by the registrar under paragraph (a) to the following persons at their respective addresses for delivery: (i) each counsel of record; (ii) each unrepresented appellant or respondent who has provided the registry with an address for delivery. (3) An appeal or application for leave to appeal referred to in subsection (2) must be removed from the inactive appeal list when a justice grants leave to the appellant or the applicant to proceed with the appeal or application for leave to appeal. (4) A justice may, in an order under subsection (3), impose terms and conditions and give directions that the justice considers appropriate. (5) The registrar must return the appeal or application for leave to appeal to the inactive appeal list and must mail notice of that action in accordance with subsection (2)(b) if (a) a justice makes an order under subsection (3) that requires terms, conditions or directions to be complied with by a specified date and the appellant or applicant fails to comply with those terms, conditions or directions by that date; or (b) in any other case, a certificate of readiness is not filed in accordance with the rules within 180 days after the making of an order under subsection (3) in respect of the appeal or application for leave to appeal. 108 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

(6) If an appeal or application for leave to appeal has remained on the inactive appeal list for 180 consecutive days it shall on the 181st day, stand dismissed as abandoned. (7) An appeal or application for leave to appeal that stands dismissed as abandoned under subsection (6) must not be reinstated unless a justice otherwise orders. 25 Section 25 of the British Columbia Court of Appeal Act, R.S.B.C. 1996, c. 77 contains effectively the same wording as Rule 46(2)-(7) of the Yukon Court of Appeal Rules. That section of the British Columbia legislation was considered by Chief Justice Finch, in chambers, in Murphy v. Wynne, 2008 BCCA 26 (B.C. C.A. [In Chambers]), where at paras. 19-20 he commented: [19] Section 25 of the Court of Appeal Act governs inactive appeals. There is no rigid test on an application to reinstate. The overriding issue has been said to be whether it is in the interests of justice to grant the application: Kar Recovery Ltd. v. KDA, 2004 BCCA 503. Factors which have been considered by the Court in removing a case from the inactive list are the extent of the delay, any explanation for the delay, the existence of prejudice arising from the delay, and the likelihood of success on appeal. [20] The applicant bears the onus of establishing a good reason for reactivating the appeal under s. 25(2): see Galiano Conservancy As- sociation v. British Columbia (Ministry of Transportation and High- ways) (1997), 40 B.C.L.R. (3d) 171 (C.A.) at 176. 26 As no certificate of readiness was or could have been filed by June 14, 2012, the applicants bear the onus of establishing a good reason for the reactivation of their appeal. The applicants contend that they satisfy the factors referred to by Madam Justice Ryan in Kar Recovery Ltd. v. KDA [2004 CarswellBC 2128 (B.C. C.A. [In Chambers])] I will examine these factors and the applicants’ contentions with respect to each of those factors.

a) The Extent of the Delay 27 Although initially complying with the requirements of the Rules, the applicants effectively took no steps to prosecute their appeal after filing their appeal record on August 16, 2011. It is apparent from the affidavit of Ms. Knapp that counsel for the Town was prepared to accept the filing of the applicants’ appeal books as late as February 15th of this year. Faro (Town) v. Knapp Hinkson J.A. 109

28 As the applicants’ notice of motion is dated November 5, 2012, the period of delay in the prosecution of the appeal from the date that the Town was prepared to tolerate for the filing of the appeal books may be as little as eight and a half months. That does not take into account the time that will be needed for the applicants to prepare and file a factum, and no estimate has been provided for the preparation and filing of their factum. This factor is a reason, but, in my view, not a strong reason to refuse the application.

b) The Explanation for the Delay 29 The applicants contend that the appeal books were not ready for filing until June 14th of this year. Ms. Knapp has deposed to health and financial challenges over the past 13 years, but I am unable to find that they were so overwhelming as to preclude her from prosecuting her appeal more expeditiously than she has. 30 As a partner in North Star Adventures and in his personal capacity, Mr. Dufresne is expected to protect his interests in the proceedings or to explain why he has failed to do so. Other than his extended absences from the Whitehorse area for work commitments of four to six months at a time, Mr. Dufresne offers no evidence of any impediment on his part that explains his failure to prosecute the appeal more expeditiously. It is apparent from his affidavit that he was in Yukon for some period of time after March 2010, from September of 2011 until February of 2012, and from July of this year. 31 I reject as untenable the applicants’ submission that the Town’s litigation strategy distracted them from focussing on the appeal. Far too much time expired without any activity to justify that explanation. Moreover, it is inconsistent with their alternate submission that the Town’s failure to file and serve an appearance within the time required by the Rules led them to believe that their appeal was unopposed, an explanation which I also reject as untenable. 32 The applicants’ contention that they were relying on counsel for the Town to consent to the time for their required filings is, in my opinion, no explanation for their need for such an accommodation, nor does it address the delay in bringing their application from February 15, 2012 until November 5, 2012. 33 The failure of any compelling explanation for the delay in the prosecution of this appeal weighs against the application, but I am unable to 110 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

find that the lack of a compelling explanation is necessarily determinative of the application.

c) The Existence of Prejudice to the Town from the Delay 34 The Town is unable to point to any prejudice from the delay in the prosecution of the appeal by the applicants, other than the fact that the appeal has now been outstanding for over sixteen months and that little has been done to prosecute the appeal since August 16 of this year. This factor alone is an insufficient basis upon which to refuse the application.

d) The Likelihood of Success on Appeal 35 The applicants raise a number of issues with respect to the likelihood of success of their appeal, contending that each has merit. The applicants’ written submissions were somewhat repetitive. I will discuss the issues that they have raised, as I understand them. 36 The applicants deny that they are attempting to overturn the decision of Groberman J. or of this Court on the appeal from the decision of the chambers judge, but at the same time contend that one issue on their proposed appeal is whether Groberman J. was correct in his interpretation of the applicable zoning bylaw. Such an argument is unavailable even if the relief sought is granted, and thus there is no merit in that submission. 37 The applicants further contend that, because they were acting under a valid business license at the time the permanent injunction was granted, the injunction ought not to have been issued. This contention betrays a misapprehension of the basis for the injunction. The basis for the injunction was that the applicants’ business is a “discretionary use” under the zoning bylaw, and any residential accommodation associated with that discretionary use is a “discretionary accessory use”, for which the applicants had not applied. The injunction was not issued to affect the operation of the business, but rather the residential occupation of the premises from which the business was conducted. The Town concedes that the injunction itself does not restrain North Star Adventures from carrying on its business activities. In the result, the Yukon Building Standards Act, R.S.Y. 2002, c. 19, which is relied upon by the applicants, has no application and I am unable to see any merit with respect to these issues. 38 The applicants also contend that the Town relied solely upon hearsay evidence and therefore failed to prove a prima facie case to support its Faro (Town) v. Knapp Hinkson J.A. 111

injunction application. They also contend that the chambers judge disal- lowed the use of their evidence in reaching his conclusions. I see no merit in these contentions. 39 The chambers judge relied upon the findings of fact made by Groberman J. in the earlier proceedings between the parties. The applicants contend that he erred in so doing. Not only was the chambers judge entitled to rely on the findings of fact made by Groberman J., he was obliged to do so based upon the principles of res judicata, and issue estoppel which he discussed at paras. 20-21 of his reasons for judgment. 40 In my view the factual findings of Groberman J. precluded the use of much of the further evidence that the applicants proffered. However, the findings of fact by Groberman J., and the applicants’ evidence that their home on the Property was used as a “caretaker residence” to secure the buildings and assets on the site year-round was an ample factual foundation for the order of the chambers judge. I see no merit in this submission. 41 The applicants’ submit that the Yukon Municipal Act does not authorize a municipality to initiate civil proceedings to deal with the breach of a bylaw, referring to the decision of Mr. Justice Gower in Whiskey Flats Investment Corp. v. Whitehorse (City), 2010 YKSC 27 (Y.T. S.C.). I am unable to find any support for this contention in Whiskey Flats Investment Corp. That decision addresses an application under Rule 54 of the Yukon Rules of Court for judicial review of a decision of the municipal council for the City of Whitehorse that required the petitioner to remove a free-standing sign on its property. That decision was quashed on the basis that the city Council of Whitehorse incorrectly interpreted s. 8.5.3 of the City’s Zoning Bylaw, 2006-01. 42 The applicants contend that the chambers judge erred by restricting the use and occupation of the land and buildings, despite the fact that North Star Adventures was found to be entitled to use the Property as its place of business. This appears to be just another way of saying that, because they were acting under a valid business license at the time the permanent injunction was granted, the injunction ought not to have issued. For the reasons I have given, I am unable to see any merit with respect to this submission. 43 The applicants also contend that the chambers judge erred by failing to draw an adverse inference from the Town’s alleged failure to disclose what they argued was crucial evidence of a permit issued to previous 112 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

leaseholders of the Property. What the chambers judge wrote about this contention is found at para. 58 of his reasons: The [applicants] submitted that they attended at the Town Office to ask for documents from this registry and were advised that the registry does not exist. While that is unfortunate and may be the basis for a legal remedy in other circumstances, I fail to see how it is relevant to the question of whether there is evidence that the [applicants] are in breach of the Zoning Bylaw. 44 I see no error on the part of the chambers judge in this ruling, and find no merit in the submission that the ruling offers any likelihood of success on the proposed appeal. 45 The applicants further contend that, as the petition for the injunction refers to both of them as individuals as well as to their partnership, the injunction prevents not only their residence at the Property, but also the business activities of North Star Adventures. With respect, there is no merit in this contention. The injunction addresses only the residential use of the Property. Its terms are found at para. 62 of the chambers judge’s reasons: I order that the [applicants] shall immediately discontinue their use and occupation of the property as a residence. Should the [applicants] wish to continue to reside on the property, either part-time or perma- nently, they will have to make an application to the Town for permission to do so as a discretionary accessory use under the Bylaw. In the absence of such an application and the Town’s permission being granted, and in the absence of a change to the zoning in which the property is located, the [applicants] are prohibited from residing on the property. 46 In the result, I am not persuaded that the applicants have established any ground for their appeal that offers any real likelihood of success.

e) The Interests of Justice 47 In applications such as those brought by the applicants, the interests of justice are always an overriding factor. The applicants contend that this factor supports the granting of their applications. I am not persuaded that it does. 48 The applicants contend that the fact that this Court historically sat in Whitehorse only once a year makes it almost impossible for self-represented litigants to comply with strict rules in respect to the form that must be followed in the prosecution of an appeal. The frequency with Faro (Town) v. Knapp Hinkson J.A. 113

which the Court sits in Whitehorse has no bearing upon the ability of litigants, self-represented or not, to comply with the Rules. In any event, despite the accommodations that were offered to the applicants, there is, as I have discussed above, no compelling explanation for the delay in the prosecution of this appeal. 49 The applicants contend that the Yukon Court of Appeal Act relies on the B.C. Court of Appeal Rules and that this is confusing. This contention is not entirely correct. Section 12 of the Yukon Court of Appeal Act only requires resort to the B.C. Court of Appeal Rules for matters not otherwise provided for by the Yukon Act or the Yukon Civil or Criminal Rules. More importantly, as I have discussed above at paras. 20-21 of these reasons, the applicants were not confused as to what they were obliged to do to prosecute their appeal. 50 The remaining assertions by the applicants with respect to the interests of justice are that they have limited access to free legal advice, that they should not be held to the same standard as members of the Bar, that they were given insufficient time to prepare their case in the Court below, that Ms. Knapp’s health issues warrant greater latitude for her in complying with the Rules, and that the applicants’ case would have a greater prospect of success if she were given more time to prepare it. 51 In my opinion, none of these submissions justify granting the orders sought by the applicants. Free legal advice is not an entitlement to civil litigants, nor is the absence of such advice the reason for the failure of the applicants to prosecute their appeal in any expeditious way. 52 The applicants have not been held to the same standard as lawyers, either by the Town, or by the Court. There comes a time when the failure to comply with the Rules of Court warrants the placement of an appeal on the inactive list, as this appeal was, and once that occurs, the law expects a litigant whose appeal has been placed on that list to establish a good reason for reactivating the appeal. These applicants have failed to do so. 53 The remainder of the applicants’ assertions have been addressed and rejected above where the explanation for the delay is discussed. 54 I conclude that the interests of justice do not warrant granting the orders sought by the applicants. 114 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

f) Costs 55 The applicants contend that the chambers judge’s order for costs should be set aside. That could only be done, if appropriate, by a division of the Court. To the extent that an appeal from the order for costs might be pursued, I see no merit in such an appeal. 56 As the applications have failed, the Town is entitled to its costs of the application. The applicants’ submission that they should recover special costs or costs on an increased scale for their application is dismissed.

Conclusion 57 The applications of the applicants are dismissed. Application dismissed. Irlande (Municipalit´e) c. Lachance 115

[Indexed as: Irlande (Municipalité) c. Lachance] Municipalité d’Irlande (Demanderesse) c. Bertrand Lachance (Défendeur) Cour supérieure du Québec Docket: C.S. Frontenac 235-17-000005-096 2012 QCCS 4321 Michaud, J.C.S. Heard: 7-8 juin 2012 Judgment: 13 septembre 2012 Droit municipal –––– Reglements ` municipaux — Application et effet — Per- sonnes visées –––– En 1972, un vendeur de voitures usagées a fait l’acquisition d’un terrain situé dans une municipalité pour y entreposer en tas des carcasses de voitures — En 2005, le maire de la municipalité a communiqué avec le vendeur et lui a demandé de collaborer avec le conseil de la municipalité afin d’élaborer un plan visant a` enlever ces tas de carcasses de voitures — En 2008, la municipalité a adopté un règlement relativement au problème de la nuisance et de certaines activités, incluant l’entreposage de carcasses de voitures — Vendeur a refusé de collaborer avec le conseil de la municipalité, faisant valoir qu’il avait des droits acquis — Municipalité a déposé une requête visant a` obtenir une injonction permanente a` l’encontre du vendeur — Requête rejetée — On s’entendait sur le fait que le vendeur avait des droits acquis relativement a` l’entreposage de carcasses de voitures — Prétentions de la municipalité etaient´ fondées sur l’art. 57 de la Loi sur les compétences municipales, lequel prévoyait qu’une municipalité pouvait exiger d’un propriétaire qu’il elimine´ toute cause d’insalubrité relative a` un immeuble lui appartenant et exécute les travaux nécessaires pour empêcher qu’elle ne se manifeste a` nouveau — Cour etait´ d’avis que le règlement municipal portait clairement atteinte aux droits acquis du vendeur de poursuivre ce qui etait,´ par ailleurs, une activité parfaitement légale — Rien ne démontrait que les activités du vendeur affectaient négativement ses voisins de quelque manière ou soulevaient des questions environnementales, visuelles ou sonores — Par consé- quent, les tas de carcasses de voitures entreposés sur la propriété du vendeur ne pouvaient pas etreˆ considérés comme des nuisances, et le vendeur n’était pas tenu de procéder a` leur enlèvement. Droit municipal –––– Reglementation ´ et délivrance de permis — Régle- mentation du comportement — Nuisance — Divers –––– En 1972, un vendeur de voitures usagées a fait l’acquisition d’un terrain situé dans une municipalité 116 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

pour y entreposer en tas des carcasses de voitures — En 2005, le maire de la municipalité a communiqué avec le vendeur et lui a demandé de collaborer avec le conseil de la municipalité afin d’élaborer un plan visant a` enlever ces tas de carcasses de voitures — En 2008, la municipalité a adopté un règlement relativement au problème de la nuisance et de certaines activités, incluant l’entreposage de carcasses de voitures — Vendeur a refusé de collaborer avec le conseil de la municipalité, faisant valoir qu’il avait des droits acquis — Municipalité a déposé une requête visant a` obtenir une injonction permanente a` l’encontre du vendeur — Requête rejetée — On s’entendait sur le fait que le vendeur avait des droits acquis relativement a` l’entreposage de carcasses de voitures — Prétentions de la municipalité etaient´ fondées sur l’art. 57 de la Loi sur les compétences municipales, lequel prévoyait qu’une municipalité pouvait exiger d’un propriétaire qu’il elimine´ toute cause d’insalubrité relative a` un immeuble lui appartenant et exécute les travaux nécessaires pour empêcher qu’elle ne se manifeste a` nouveau — Cour etait´ d’avis que le règlement municipal portait clairement atteinte aux droits acquis du vendeur de poursuivre ce qui etait,´ par ailleurs, une activité parfaitement légale — Rien ne démontrait que les activités du vendeur affectaient négativement ses voisins de quelque manière ou soulevaient des questions environnementales, visuelles ou sonores — Par consé- quent, les tas de carcasses de voitures entreposés sur la propriété du vendeur ne pouvaient pas etreˆ considérés comme des nuisances, et le vendeur n’était pas tenu de procéder a` leur enlèvement. Municipal law –––– By-laws — Operation and effect — Who affected –––– In 1972, used-car seller purchased land located in municipality to store piles of junk cars — In 2005, mayor of municipality contacted seller and asked him to collaborate with municipality’s council to set up plan to remove piles of junk cars — In 2008, municipality adopted by-law regarding issue of nuisance and certain activities, including storage of junk cars — Seller refused to collaborate with municipality’s council, claiming he had vested rights — Municipality brought motion seeking permanent injunction against seller — Motion dismissed — It was not disputed that seller had vested rights with respect to storage of junk cars — Municipality’s claim was based on s. 57 of Municipal Powers Act, which provided that municipality could require owner to eliminate any unsanitary conditions in connection with owner’s immovable and perform necessary work to prevent their recurrence — Court was of view that municipality’s by-law clearly violated seller’s vested rights to pursue what otherwise was perfectly legal activity — No evidence showed that seller’s activities adversely affected his neighbours in any way or raised any environmental, visual or noise issues — Therefore, piles of junk cars stored on seller’s property could not be considered as nuisance, and seller did not have to remove them. Municipal law –––– Licensing and regulation — Regulation of behaviour — Nuisance — Miscellaneous –––– In 1972, used-car seller purchased land located Irlande (Municipalité) c. Lachance 117 in municipality to store piles of junk cars — In 2005, mayor of municipality contacted seller and asked him to collaborate with municipality’s council to set up plan to remove piles of junk cars — In 2008, municipality adopted by-law regarding issue of nuisance and certain activities, including storage of junk cars — Seller refused to collaborate with municipality’s council, claiming he had vested rights — Municipality brought motion seeking permanent injunction against seller — Motion dismissed — It was not disputed that seller had vested rights with respect to storage of junk cars — Municipality’s claim was based on s. 57 of Municipal Powers Act, which provided that municipality could require owner to eliminate any unsanitary conditions in connection with owner’s immovable and perform necessary work to prevent their recurrence — Court was of view that municipality’s by-law clearly violated seller’s vested rights to pursue what otherwise was perfectly legal activity — No evidence showed that seller’s activities adversely affected his neighbours in any way or raised any environmental, visual or noise issues — Therefore, piles of junk cars stored on seller’s property could not be considered as nuisance, and seller did not have to remove them. Cases considered by Michaud, J.C.S.: Anctil c. Cour municipale de la Ville de La Pocatière (1972), 1972 CarswellQue 82, [1973] C.S. 238 (Que. S.C.) — considered Beaumont (Municipalité) c. Dorval (2008), 2008 CarswellQue 1119, 2008 QCCS 586, EYB 2008-129872 (Que. S.C.) — considered Club de golf de Val Bélair inc. c. Québec (Ville) (2007), 2007 QCCS 927, 2007 CarswellQue 1753, EYB 2007-116109 (Que. S.C.) — considered Huot c. L’Ange-Gardien (Municipalité) (1992), 48 Q.A.C. 163, [1992] R.J.Q. 2404, 103 D.L.R. (4th) 197, 1992 CarswellQue 237, [1992] J.Q. No. 1074 (Que. C.A.) — considered Price (Village) c. Ouellet (1992), 1992 CarswellQue 1836, [1992] R.J.Q. 1587, EYB 1992-74940 (Que. S.C.) — referred to St-Gabrier (Ville) c. Messier (1991), 1991 CarswellQue 1721, EYB 1991-75846 (Que. S.C.) — considered 2419-6388 Québec inc. c. St-Michel-Archange (Municipalité) (1992), (sub nom. 2419-6388 Québec Inc. c. Saint-Michel Archange (Municipalité)) 45 Q.A.C. 161, (sub nom. 2419-6388 Québec Inc. c. Saint-Michel Archange (Municipalité)) [1992] R.J.Q. 875, 1992 CarswellQue 177 (Que. C.A.) — considered Statutes considered: Aménagement et l’urbanisme, Loi sur l’, L.R.Q., c. A-19.1 art. 227 — considered Compétences municipales, Loi sur les, L.R.Q., c. C-47.1 art. 57 — referred to 118 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

art. 58 — referred to art. 61 — referred to

REQUETEˆ déposée par la municipalité visant a` obtenir par voie d’injonction permanente l’enlèvement de carcasses de véhicules automobiles entreposées sur un terrain situé sur son territoire.

Me Luc Ouellette, pour la demanderesse Me Jean-Claude Chabot, pour le d´efendeur

Michaud, J.C.S.:

1 La Municipalité d’Irlande demande par injonction, le 22 janvier 2009, que Bertrand Lachance enlève de son terrain les 400 carcasses de véhicules automobiles qu’il y a accumulées a` compter de 1972. 2 Le défendeur conteste la demande en soutenant qu’il a des droits acquis a` cet usage sur son terrain, qu’il ne contrevient a` aucune disposition réglementaire environnementale, et que les règlements de zonage et de nuisance pertinents lui sont inopposables.

I- LES FAITS 3 En 1971, Bertrand Lachance opère depuis quelques années un commerce de vente d’automobiles usagées a` Black Lake. Comme il est a` l’étroit sur son site, il achète un terrain d’environ 575 000 p2 sur le Rang 6, a` Irlande1, pour y déplacer plusieurs carcasses d’automobiles desquel- les il prélève toutes sortes de pièces mécaniques et de carrosserie : il les revend a` des clients ou les installe sur d’autres automobiles antiques lui appartenant. 4 Au fil des ans, monsieur Lachance déplace encore un grand nombre de carrosseries sur le tiers avant de son terrain boisé2, au point où il s’en trouve environ 350 en 2005, et près de 400 en 2012. Monsieur Lachance construit egalement´ sur son terrain, en 1979 et 1980, un entrepôt pour ses pièces3.

1Acte notarié P-3, du 12 octobre 1972. 2Le terrain mesure environ 450 pieds de fa¸cade sur environ 1250 pieds de profondeur. 3Selon le permis de construction D-3, accordé par la municipalité le 7 mai 1979. Irlande (Municipalité) c. Lachance Michaud, J.C.S. 119

5 Le défendeur rapporte qu’il se rend presque tous les jours sur son terrain, en période estivale, pour y prélever des pièces ou pour entretenir ses chemins d’accès, en tondant le gazon. 6 Ce n’est qu’en 1989 que la municipalité commence a` gérer l’implantation des cours d’entreposage de carcasses de véhicules4. L’année suivante, le plan qui accompagne le premier règlement de zonage de la Municipalité d’Irlande indique que le lot du défendeur sur le Rang 6 – portant le numéro 341 – est un cimetière de voitures5. 7 Rien de particulier ne survient ensuite jusqu’à ce que le maire Bruno Vézina demande par ecrit´ a` monsieur Lachance, en février 2005, de com- muniquer avec le conseil municipal « afin d’établir un plan d’action visant a` eliminer´ ces carcasses. . .6 ». 8 Une rencontre de travail réunit les parties a` l’automne 2005 : monsieur Lachance rapporte qu’il ne s’est alors engagé a` rien, alors que le maire Vézina déclare qu’une entente verbale est intervenue pour que l’avant du terrain soit d’abord nettoyé des carcasses, et le reste de la propriété sur trois ans. 9 Selon la demanderesse, aucune démarche concrète n’est encore faite sur le terrain en mars 20067, alors que monsieur Lachance déclare avoir enlevé – en 2006 et 2007 – la plupart des carrosseries se trouvant en fa¸cade de son bâtiment. Selon lui, le maire aurait annulé en 2006 une ou deux rencontres qu’ils devaient tenir ensemble, pour discuter du suivi du dossier. 10 La Municipalité d’Irlande adopte le 5 mai 2008 son Règlement relatif aux nuisances et régissant certaines activités extérieures8, dont l’article 5 concerne les Véhicules hors d’état de fonctionnement. 11 Le 29 juillet 2008, la directrice générale Céline Roy avise monsieur Lachance, par courrier recommandé, que « la Municipalité d’Irlande s’adressera a` la Cour Supérieure afin d’obtenir une injonction pour

4Règlement n° 332 sur la Gestion et implantation d’une cour d’entreposage de carcasses de véhicules et rebuts (pièce P-8, document # 2). 5Plan P-1A, accompagnant le Règlement de zonage numéro 339 (pièce P-1). 6Lettre du 23 février 2005, (pièce P-8, document # 8). 7Selon la lettre du 15 mars 2006 de la directrice générale Céline Roy (pièce P-8, document # 8). 8Pièce P-2. 120 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

procéder au démantèlement de tout entreposage fait sur ledit terrain9 », du fait de ses contraventions au Règlement de zonage (no 339)10 et au Règlement relatif aux nuisances (no 433)11. 12 Monsieur Lachance se rend a` la séance publique suivante du conseil municipal, le 4 août 2008, mais le ton monte entre les intervenants, jusqu’à ce que le défendeur quitte l’assemblée en manifestant son refus de s’exécuter. 13 Le défendeur re¸coit ensuite la mise en demeure formelle du procureur de la Municipalité, datée du 13 novembre 200812, et y répond en invoquant ses droits acquis13, ce qui mène aux procédures d’injonction signifiées en janvier 2009.

II- LES QUESTIONS EN LITIGE 14 Les principales questions a` l’étude se présentent tel qu’il suit : 1 Le défendeur bénéficie-t-il de droits acquis en regard des usages actuels de son terrain du Rang 6, malgré l’adoption du Règlement de zonage (no 339) du 3 décembre 1990? 2 Le Règlement relatif aux nuisances (no 433), adopté le 5 mai 2008, est-il opposable a` monsieur Lachance, s’il bénéficie de droits acquis?

III- L’ANALYSE 1 - Les droits acquis 15 Il n’est pas contesté que c’est en 1972 que monsieur Lachance a com- mencé a` utiliser son terrain du Rang 6 pour l’entreposage de carcasses de véhicules automobiles : on se trouve alors plusieurs années avant l’adoption du premier règlement municipal gérant l’implantation de telles cours d’entreposage14, et 18 ans avant l’adoption – en 1990 – du Règle- ment de zonage no 339, dont le chapitre 11 se nomme « Gestion et im-

9Pièce P-8, document # 8. 10Pièce P-1. 11Pièce P-2. 12Pièce P-5. 13Lettre du 26 novembre 2008, pièce D-8. 14Règlement n° 332, précité note 4. Irlande (Municipalité) c. Lachance Michaud, J.C.S. 121

plantation d’une cour d’entreposage de carcasses de véhicules et de rebuts ». 16 Le 7 mai 1979, la Municipalité d’Irlande Sud emet´ au bénéfice du défendeur un permis de construction l’autorisant a` bâtir sur son lot un entrepôt, dans lequel il rangera certaines parties des véhicules qui se trouvent sur son terrain15. 17 De très nombreuses pièces sont produites au dossier, au soutien de l’argument de droits acquis de la défense, mais peu d’entre elles sont utiles a` la discussion qui nous intéresse, puisque : a) le fait que le défendeur détienne – depuis aussi loin que 1964, et sans interruption depuis 1984 – une licence de commer¸cant de la SAAQ l’autorise a` vendre des véhicules automobiles usagés16, mais concerne une opération tout a` fait distincte de celle de l’entreposage de carcasses d’automobiles par monsieur Lachance; b) le même raisonnement s’applique au certificat de membre annuel emis´ a` son bénéfice par l’AMVOQ17, ainsi qu’aux bilans person- nels que monsieur Lachance transmet annuellement a` cette association18. 18 Il est par contre pertinent d’apprendre que le défendeur a procédé a` 14 ventes de pièces d’automobiles entre 2008 et 201219, en plus d’avoir vendu a` l’occasion – soit huit fois entre 2007 et 2010 – des véhicules pour environ 300 $, « pour les pièces ou pour restauration »20. 19 Monsieur Lachance explique qu’il ne fait aucune publicité a` l’égard des carcasses ou des morceaux d’automobiles qu’il possède, se limitant a` se rendre sur des sites d’exposition de voitures antiques, pour eventuelle-´ ment y offrir ses pièces. C’est ainsi que les montants associés a` ces trans- actions sont a` ce point limités qu’on pourrait qualifier ses ventes de « confidentielles ». Monsieur Lachance admet avoir vendu pour aussi

15Pièce D-3. 16Pièces D-1, D-11 et D-16, pour la période de 2008 a` 2014. 17Association des marchands de véhicules d’occasion du Québec inc. (pièces D- 2, D-10 et D-18), pour la période de 2008 a` 2013. 18Pièces D-9, D-25 et D-26, pour la période de 2005 a` 2012. 19Pièces D-13, D-22 et D-23. 20Pièce D-12. 122 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

peu que 100 $ ou 300 $ de pièces certaines années, mais dit en avoir déjà vendu pour 1 000 $ a` 1 500 $, au cours des cinq premiers mois de 2012. 20 Même si les ventes de pièces de monsieur Lachance ne permettent manifestement pas de soutenir une famille, il n’a pas et´´ e suggéré par la demande que ces opérations liées aux carcasses d’automobiles aient et´´ e modifiées ou interrompues de fa¸con significative, depuis leurs débuts en 1972. 21 Le Tribunal retiendra donc le témoignage de monsieur Lachance voulant qu’il se rende sur son site presque tous les jours, pour y travailler sous une forme ou sous une autre. 22 Dans les faits, les six conditions d’existence des droits acquis, telles qu’elles ont et´´ e enonc´´ ees par le juge Roger Chouinard dans l’arrêt Huot21, sont rencontrées en la présente affaire. C’est la raison pour la- quelle le procureur de la demanderesse soulignait avec a` propos, a` l’occasion de sa plaidoirie, ne pas soutenir qu’il n’existait pas de droits acquis au bénéfice de monsieur Lachance. 23 Dans ces circonstances, il faut constater que le défendeur bénéficie effectivement de droits acquis quant a` l’entreposage de carcasses de véhicules automobiles, sur son terrain du Rang 6.

2 - Les nuisances a) La demande entreprise 24 La Municipalité ne plaide pas que la demande en injonction ici prés- entée se fonde sur l’article 227 de la Loi sur l’aménagement et l’urbanisme, qui permet a` la Cour supérieure d’ordonner « la cessa- tion. . . d’une utilisation du sol incompatible avec. . . un règlement de zonage ». Par ailleurs, les conclusions mandatoires de la requête de la demanderesse ne réclament pas le respect ou l’assujettissement a` certaines normes d’implantation, mais plutôt l’enlèvement pur et simple de toutes les carcasses d’automobiles et des rebuts se trouvant sur l’immeuble du défendeur. 25 Le recours ici entrepris s’attache donc davantage a` l’aspect « nuisances » du problème et s’appuie en conséquence sur les articles 57, 58

21Huot c. L’Ange-Gardien (Municipalit´e) [1992 CarswellQue 237 (Que. C.A.)], EYB 1992-64028, paragr. 27. Irlande (Municipalit´e) c. Lachance Michaud, J.C.S. 123

et 61 de la Loi sur les compétences municipales : c’est là que la Cour supérieure peut s’autoriser d’une cause d’insalubrité ou d’une nuisance pour enjoindre un propriétaire d’immeubles de prendre les mesures re- quises pour faire disparaˆıtre la cause reprochée, après l’envoi d’une mise en demeure par la Municipalité22.

b) Le Règlement no 433 26 Le défendeur prétend que les dispositions réglementaires adoptées et invoquées par la Municipalité d’Irlande « ont et´´ e adoptées uniquement pour viser directement et intentionnellement le lot du défendeur », et que ces règlements « ont et´´ e instaurés dans le but précis et intentionnel de nuire au défendeur »23. 27 Examinons particulièrement ces allégations en regard du règlement relatif aux nuisances, puisqu’il est difficile de croire que la demanderesse aurait consacré les 124 pages de son règlement de zonage a` l’objectif précis de nuire au défendeur. Le règlement relatif aux nuisances enonce´ ce qui suit : Article 5 Véhicules hors d’état de fonctionnement Le fait de laisser, déposer ou jeter dans ou sur tout immeuble un ou plusieurs véhicules automobiles fabriqués depuis plus de sept ans, non immatriculés pour l’année courante ou hors d’état de fonctionnement, constitue une nuisance et est prohibé. 28 Comme la défense suggère que cette disposition vise spécifiquement le terrain de monsieur Lachance, le procureur de la Municipalité d’Irlande a soumis au Tribunal sept autres règlements similaires, ema-´ nant de municipalités de la région et comportant une semblable disposition. La défense a répliqué a` ce test comparatif en produisant elle aussi une dizaine de règlements sur les nuisances, que le Tribunal se gardera bien –comme pour les premiers – de traiter sur une base individuelle. 29 L’exercice permet toutefois de constater que les termes employés dans le Règlement 433 de la Municipalité d’Irlande sont identiques a` ceux d’au moins six autres règlements au même effet : cela permet dès lors d’écarter l’argument de malveillance et de discrimination soulevé

22Monsieur Lachance a et´´ e mis en demeure par une lettre de la secrétaire- trésorière le 29 juillet 2008 (pièce P-8, document # 8), et par la mise en demeure formelle signée par Me Luc Ouellette le 13 novembre 2008 (pièce P-5). 23Paragraphes 27 et 30 de la défense. 124 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

par le défendeur, puisque la demanderesse n’a manifestement rien in- venté en qualifiant de nuisances certains véhicules automobiles fabriqués depuis plus de sept ans. 30 Il faut cependant remarquer que l’article 5 ici discuté se veut plus large que la majorité des dispositions similaires : il ajoute en effet, comme seconde condition préalable au constat de nuisance, que le véhicule ne soit pas immatriculé pour l’année courante ou qu’il soit hors d’état de fonctionnement, alors que tous les autres textes proposés, sauf un24, exigent que ces deux dernières conditions soient cumulatives et non alternatives. 31 Cela signifie que la Municipalité d’Irlande pourrait demander que soit déclaré nuisance un véhicule de collection de 10 ans – même en parfait etat´ de fonctionnement – du simple fait qu’il ne serait pas immatriculé pour l’année courante. 32 Quant a` l’interprétation de cet article 5, il est egalement´ intéressant de remarquer la déclaration du maire Vézina, a` l’audience, voulant qu’il faille qu’un véhicule demeure au moins sept ans sur un terrain, comme celui de monsieur Lachance, avant que l’on puisse le faire déclarer nuisance : cela n’est evidemment´ pas exact.

c) Les autorités 33 Le Règlement no 433 ne contient pas la définition d’une nuisance, pas plus que la plupart des dispositions réglementaires similaires. Les tribunaux ont ainsi et´´ e amenés a` définir cette notion, surtout a` partir de l’importante décision Anctil, du juge Arthur Gendreau : 32 Qu’est-ce qu’une nuisance? Il est difficile de définir une nuisance par une formule brève, mais on la reconnaˆıt facilement par ses principales caractéristiques ou ses el´´ ements essentiels. 33 La première caractéristique d’une nuisance est de produire des inconvénients sérieux ou de porter atteinte, soit a` la santé publique, ou soit au bien-être de la communauté, ou d’une partie importante de la communauté. Cet el´´ ement nuisible, qu’il provienne d’un etat´ de chose ou d’un acte illégal ou de l’usage abusif d’un objet ou d’un droit, a toujours un certain

24Seul le Règlement no 96-2005 de la Municipalité de Beaulac-Garthby emploie le « ou », a` son article 8. Irlande (Municipalité) c. Lachance Michaud, J.C.S. 125

caractère de continuité et est intimement lié a` la chose ou a` l’acte. [...] 38 Le pouvoir de définir et prohiber une nuisance ne comporte pas celui d’en créer ou d’en fabriquer en vue de servir de sanction additionnellea ` un autre règlement municipal, et dans le présent cas, au règlement 4-66 concernant la construction et le zonage. [. . .]25 [nous soulignons] 34 En 2007, après avoir rapporté cette définition classique de la nuisance, le juge Claude C. Gagnon propose ce qui suit26 : [35] Le professeur Giroux, aujourd’hui juge a` la Cour d’appel, enonce,´ en quelques propositions, les paramètres du pouvoir réglementaire en matière de nuisances mis de l’avant par les tribunaux québécois3. [36] Nous nous permettons de les résumer ainsi : (a) l’impossibilité d’utiliser le pouvoir de réglementation sur les nuisances aux fins de prohiber de fa¸con absolue des usages par ailleurs licites4; (b) un règlement de zonage ne peut faire d’une chose ou d’une activité une nuisance ce qui ne le serait pas autrement5; (c) une municipalité ne peut utiliser son pouvoir de supprimer les nuisances parce que son règlement de zonage n’atteint pas sa finalité6; (d) le pouvoir de réglementation des nuisances ne peut etreˆ utilisé pour porter atteinte de fa¸con détournée aux droits acquis7; (e) un usage autorisé par le règlement de zonage ne peut constituer une nuisance en soi mais l’exercice abusif ou nuisible de l’activité peut etreˆ ainsi réprimé8; ______3 Développements récents en droit de l’environnement – Retour sur les compétences municipales en matière de nuisance – Lorne Giroux – page 306 et suivantes;

25Anctil c. Cour municipale de la Ville de La Pocatière (1972), [1973] C.S. 238 (Que. S.C.). 26Club de golf de Val Bélair inc. c. Québec (Ville), 2007 QCCS 927 (Que. S.C.), paragr. 35 et 36. 126 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

4 Saint-Gabriel (Ville) c. Messier, C.S. Joliette, n° 705-05- 000931-891, 12 février 1991, j. H. Marx, J.E. 91-508, p. 8 et 9 du jugement (désistement d’appel le 10 avril 1992); 5 Article 17 du règlement de nuisance qui a et´´ e déclaré nul dans Anctil c. La Pocatière, Anctil a et´´ e suivi sur cet aspect précis dans Ste-Pétronille, C.S.Q. n° 200-05-002639-933, 21 février 1994 – R. Pidgeon, J.E. 94,439, p. 11-12; 6 Juge Gomery dans Bourdeau c. Ste-Catherine, supra, note 4, p. 13 du jugement (version electronique);´ 7 St-Michel Archange c. 2149-6388 Québec Inc. supra, note 14, [1992] R.J.Q. 875, p. 880; 8 Price (Village) c. Ouellet, [1992] R.J.Q. 1587 C.S.; 35 On comprend donc qu’une nuisance doit avoir un caractère nuisible, en ce sens qu’elle produira des inconvénients sérieux ou portera atteinte a` la santé publique ou au bien-être de la communauté. 36 C’est dans ce sens que le juge Marx refusait en 1991 de qualifier de nuisance une « cour de ferraille » que l’on disait dans un etat´ de dé- labrement généralisé : 23 Cependant, malgré le délabrement des lieux, il n’y a pas de preuve que la situation met en danger l’hygiène ou la sécurité publique. Dans ce cas, le règlement municipal aurait présé- ance sur les droits acquis. [. . .] 24 D’autre part, la Ville peut faire disparaˆıtre une nuisance. Mais, une « cour de ferraille » n’est pas nécessairement une nuisance. C’est la fa¸con de l’exploiter qui peut en constituer une. 25 Il faut donc distinguer le fait de faire disparaˆıtre l’aspect nuisance d’une activité et celui de faire disparaˆıtre l’activité en tant que tel. La Ville ne peut pas utiliser la réglementation sur les nuisances afin de mettre la « cour de ferraille » de l’intimé hors commerce. En effet, la Ville ne peut pas faire indirecte- ment ce qu’elle ne peut pas faire directement. [. . .]27 [nous soulignons]

27St-Gabrier (Ville) c. Messier, [1991 CarswellQue 1721 (Que. S.C.)], J.E. 91- 508, paragr. 23 a` 25. Irlande (Municipalit´e) c. Lachance Michaud, J.C.S. 127

37 La Cour d’appel réitérait les mêmes principes en 1992, dans l’affaire St-Michel-Archange (Municipalité) : Il est reconnu que les pouvoirs des municipalités de définir ce qu’est une nuisance et de la prohiber ne va pas jusqu’à permettre la création d’une nuisance. Il faut que l’objet de la prohibition soit, de par sa nature, une véritable nuisance (Anctil c. Cour municipale de Ville de la Pocatière et autres, [1973] C.S. 238; [. . .] [...] En invoquant son pouvoir délégué de prohiber les nuisances, une municipalité ne peut adopter un règlement qui porte atteinte de fa¸con détournée aux droits acquisa ` une exploitation par ailleurs toujours légale.28 [nous soulignons] 38 Rappelons enfin que le juge Robert Pidgeon citait avec approbation les décisions Anctil et St-Michel-Archange (Municipalité), lorsqu’il ex- aminait la demande de la Municipalité de Price de faire nettoyer un cime- tière d’automobiles, entre autres sous l’autorité d’un règlement sur les nuisances29...... 39 A` la lecture de l’article 5 du Règlement no 433 relatif aux nuisances, il est limpide que cette disposition est parfaitement incompatible avec l’exploitation de la cour d’entreposage de monsieur Lachance : les 400 carcasses garnissant le terrain ont plus de sept ans d’âge et ne sont pas immatriculées, ni en etat´ de fonctionnement. En fait, il est impossible d’exploiter ce cimetière d’automobiles, comme tout autre sur le territoire de la municipalité demanderesse, si l’on entend respecter les dispositions de son règlement sur les nuisances. 40 Comme le règlement qui nous intéresse porte atteinte aux droits acquis du défendeur – en regard de son exploitation par ailleurs légale – il y a lieu de procéder au test développé par la jurisprudence précitée, et de vérifier si l’opération du Rang 6 constitue une nuisance, comme comportant des inconvénients sérieux ou portant atteinte a` la santé publique ou au bien-être de la communauté.

282419-6388 Québec inc. c. St-Michel-Archange (Municipalité), [1992] R.J.Q. 875 (Que. C.A.), p. 880; voir egalement´ St-Roch de l’Achigan (Municipalité) c. Dubé, EYB 2008-152274 (Que. S.C.), paragr. 64 a` 66. 29Price (Village) c. Ouellet, [1992] R.J.Q. 1587 (C.S.). 128 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

d) La preuve 41 Les témoins de la Municipalité ont produit environ 120 photographies montrant particulièrement la disposition des carcasses de véhicules automobiles sur le terrain du Rang 6 en 2004, en avril 2010 et en mai 201230. 42 Plusieurs mesures ont egalement´ et´´ e prises par ces témoins : cela a permis d’apprendre que trois carcasses d’automobiles se trouvent a` environ dix mètres du Rang 6, que plusieurs carrosseries longent les lignes latérales du lot du défendeur, et que la maison la plus rapprochée se trouve a` environ 60 mètres d’un tracteur sur le terrain. 43 Outre ces photographies et ces mesures, le Tribunal doit cependant constater que la preuve est absolument muette sur le caractère nuisible du terrain de monsieur Lachance, selon les critères requis par la jurisprudence. 44 Ainsi, on peut retenir : a) qu’aucun voisin du terrain n’est venu exposer au Tribunal la nature des inconvénients qui pourraient lui résulter de la présence du cimetière d’automobiles a` cet endroit; monsieur Lachance men- tionne qu’il n’a aucun problème avec ses voisins, et que personne ne lui a rien dit quant a` l’état de sa propriété; b) après des inspections en octobre 2005 et juin 2007 sur le terrain, les représentants du ministère de l’Environnement ont fermé leur dossier, constatant que monsieur Lachance ne semblait pas etreˆ un recycleur d’automobiles, au sens de la loi, et qu’aucune trace de contamination n’est visible sur son terrain; monsieur Lachance précise a` cet effet que, lorsqu’il retire un moteur d’une carcasse, il ne le démonte pas; c) l’état boisé de la partie avant du terrain entraˆıne comme consé- quence que la grande majorité des carcasses sur le lot sont peu ou pas visibles de la route; d) au niveau sonore, rien n’indique que le terrain de monsieur Lachance soit une source de désagrément pour les voisins, compte tenu en particulier de la rareté des démarches qui s’y effectuent. 45 Somme toute, l’impact des opérations du défendeur sur son terrain du Rang 6, aux points de vue environnemental, visuel et sonore, apparaˆıt

30Voir les photographies P-4, P-6 et P-7. Irlande (Municipalit´e) c. Lachance Michaud, J.C.S. 129

fort limité, et la preuve est inexistante quant au fait que ce cimetière d’automobiles puisse porter atteinte a` la santé publique ou au bien-être de la communauté. 46 Loin de leur reprocher des manœuvres discriminatoires, le Tribunal eprouve´ plutôt de la sympathie pour les dirigeants de la Municipalité, qui souhaiteraient uniformiser la beauté du paysage autour du Rang 6 en débarrassant le terrain des carcasses et des pièces automobiles, dont l’immense majorité ne seront – a` l’évidence – jamais vendues. Cela n’est toutefois pas possible pour l’instant, compte tenu des droits acquis du défendeur, et du fait que ses opérations sur le Rang 6 n’ont pas le caractère nuisible requis par la jurisprudence. 47 La situation etait´ bien différente dans la décision Beaumont, citée par la demande, là où le juge Banford concluait au contraire que le site d’entreposage de carcasses opéré par le défendeur constituait concrète- ment une nuisance : De par sa nature et surtout de la fa¸con plutôt désorganisée des opéra- tions qu’effectuent le défendeur et son fils sur les lieux, l’endroit présente des risques pour la sécurité du public et pour la salubrité en général. Selon les normes municipales, le site d’exploitation du défendeur constitue une nuisance et l’usage que monsieur Dorval fait de sa propriété constitue aussi une nuisance au sens large du terme.31 [nous soulignons] 48 Pour conclure, signalons que la Municipalité d’Irlande n’a suggéré a` ses procédures aucune autre mesure remédiatrice ou corrective que l’enlèvement pur et simple de l’ensemble des 400 carcasses de véhicules automobiles : cette fa¸con de faire ne peut etreˆ ordonnée, pour les raisons enonc´´ ees plus haut. 49 Dans ces circonstances, la demande d’injonction de la demanderesse doit etreˆ rejetée.

POUR CES MOTIFS, LE TRIBUNAL : 50 REJETTE la requête en injonction permanente de la demanderesse; 51 AVEC DEPENS.´ Requête rejetée.

31Beaumont (Municipalit´e) c. Dorval, 2008 QCCS 586 (Que. S.C.), paragr. 86. 130 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

[Indexed as: Fordham v. Dutton-Dunwich (Municipality)] Andrew James Fordham by his Litigation Guardian Andrea Fordham, Andrea Fordham, Ronald Fordham, Danielle Fordham and Phillip Fordham, Plaintiffs and The Corporation of the Municipality of Dutton-Dunwich, Defendant Andrew James Fordham and E.L. Fordham Motors Ltd., Defendants and The Corporation of the Municipality of Dutton- Dunwich, Third Party Ontario Superior Court of Justice Docket: 55057, 57634A 2012 ONSC 6739 J.N. Morissette J. Heard: May 29, 31, 2012; July 9-11, 2012 Judgment: November 27, 2012 Municipal law –––– Municipal liability — Negligence — Property maintenance — Miscellaneous –––– Plaintiff was 16-year old holder of G2 driver’s licence — Plaintiff had consumed between 1.7 and 2.3 bottles of beer at some point — Plaintiff was involved in single car accident at intersection of two gravel roads — Yield signs at intersection had recently been replaced with stop signs — Plaintiff was convicted of failing to stop at stop sign — There was local practice in rural area where crash occurred for drivers to go though stop signs if they considered it safe — Plaintiff and his passenger each sustained serious injuries that deprived them of having any memory of events — Plaintiff brought action against municipality alleging non-repair of road at intersection — Action allowed in part — Plaintiff had initial onus to prove both that condition of non- repair existed and that it caused or contributed to damages alleged — Intersec- tion was off-set intersection that required additional signage — Intersection was not in reasonable repair at time of accident and but for non-repair, crash would probably not have occurred — Defendant failed to establish defence under s. 44(3) of Municipal Act, 2001 — Plaintiff was contributorily negligent — Pursu- ant to Negligence Act, plaintiff and defendant were each found responsible in law to extent of 50 percent of plaintiff’s damages. Cases considered by J.N. Morissette J.: Deering v. Scugog (Township) (2010), 76 M.P.L.R. (4th) 178, 2010 ONSC 5502, 2010 CarswellOnt 7526, 3 M.V.R. (6th) 33, 77 C.C.L.T. (3d) 167, [2010] O.J. No. 4229 (Ont. S.C.J.) — considered Fordham v. Dutton-Dunwich (Municipality) J.N. Morissette J. 131

Deering v. Scugog (Township) (2012), 2012 CarswellOnt 7056, 93 C.C.L.T. (3d) 198, 2012 ONCA 386, 97 M.P.L.R. (4th) 49, 33 M.V.R. (6th) 1 (Ont. C.A.) — referred to Foley v. East Flamborough (Township) (1898), 29 O.R. 139, [1898] O.J. No. 76 (Ont. Div. Ct.) — referred to Hanke v. Resurfice Corp. (2007), 69 Alta. L.R. (4th) 1, 404 A.R. 333, 394 W.A.C. 333, 2007 CarswellAlta 130, 2007 CarswellAlta 131, 2007 SCC 7, [2007] 4 W.W.R. 1, 45 C.C.L.T. (3d) 1, 278 D.L.R. (4th) 643, [2007] R.R.A. 1, 357 N.R. 175, [2007] 1 S.C.R. 333, [2007] S.C.J. No. 7 (S.C.C.) — considered Housen v. Nikolaisen (2002), 10 C.C.L.T. (3d) 157, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, 2002 CarswellSask 178, 2002 CarswellSask 179, 2002 SCC 33, 30 M.P.L.R. (3d) 1, 219 Sask. R. 1, 272 W.A.C. 1, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, REJB 2002-29758 (S.C.C.) — referred to Morsi v. Fermar Paving Ltd. (2011), 2011 ONCA 577, 2011 CarswellOnt 9211, 86 C.C.L.T. (3d) 210, 86 M.P.L.R. (4th) 30, 283 O.A.C. 247, [2011] O.J. No. 3960 (Ont. C.A.) — distinguished Statutes considered: Municipal Act, 2001, S.O. 2001, c. 25 Generally — referred to s. 44(1) — considered s. 44(2) — considered s. 44(3) — considered Negligence Act, R.S.O. 1990, c. N.1 Generally — referred to

ACTION by plaintiff for damages caused by non-repair of intersection.

James J. Mays, Emily Foreman, Anna Szczurko, for Plaintiffs Terry R. Shillington, Jonathan de Vries, Keri Wilson, for Defendant, Corpora- tion of the Municipality of Dutton-Dunwich

J.N. Morissette J.: Overview: 1 This action arises as a result of a single vehicle accident which occurred at the intersection of Willey Road and Erin Line in Dutton- Dunwich, Ontario at approximately 8:50 p.m. on January 20th, 2007. 2 The plaintiff, Andrew Fordham, who was 16 years old at the time, with a G2 driver’s licence was the driver, while Robert Kersten, a 23- 132 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

year-old acquaintance was in the front passenger seat. There were no witnesses to the accident. Neither the plaintiff nor the passenger have memory of the accident. 3 Acquaintances and friends of the plaintiff have confirmed that he attended a get-together at the Tomczyk residence on the evening in question and was on his way to a gathering at the Drouillard residence at the time of the collision. 4 The parties have agreed to the following facts: (1) Andrew was the holder of a G2 license at the time of the collision; (2) Willey Road and Erin Line are gravel roads; (3) the accident occurred in a rural area; (4) the intersection was marked with stop signs for southbound and northbound traffic along Willey Road at the time of the accident; (5) the plaintiff had a blood alcohol level between 29.6 and 53.6 mil- ligrams per deciliter at the time of the collision. He had consumed between 1.7 to 2.3 bottles of beer at some point pre-collision. It was further agreed that the closer the alcohol was consumed to the time of the collision, the closer it would be to the lower end of the ranges; (6) Police charged the plaintiff with careless driving but instead he pled guilty to failing to stop at a stop sign.

Summary of the position of the parties and identifying the issues: 5 The plaintiffs concede that Andrew failed to stop at the stop sign at the intersection, however, he submits that the defendant failed to warn him of the change in the road alignment through the intersection, or the concrete abutment on the other side of the intersection thereby causing a risk of harm. 6 The defendant submits that the plaintiff failed to prove a condition of non-repair at this intersection. Had he stopped at the stop sign, the plaintiff would have had no unreasonable risk of harm. 7 The following are the questions that the parties have asked me to answer: (1) What happened that evening and how did this single motor vehicle accident occur? Fordham v. Dutton-Dunwich (Municipality) J.N. Morissette J. 133

(2) Does the plaintiff meet his onus to show that there exists a non- repair of the road and that this non-repair, if any, caused or contributed to the accident? (3) Did the defendant establish that the plaintiff contributed to the accident? (4) If so, how is liability apportioned?

The crash and events leading up to it: 8 This Court has heard from a number of lay witnesses and the police as to what happened that evening. Although there is not great controversy as to what happened leading up to the crash, the facts are still important to my eventual findings on the issues of non-repair, causation and driver’s negligence. 9 Andrew and his passenger each sustained serious injuries that deprive them from having any memory of the events of January 20th, 2007, and there were no witnesses to the crash. 10 Andrew’s father sponsored a car at Delaware Speedway which involved his son, Andrew, as a pit crew member and then eventually as a racer every week from May to September just prior to the accident. An- drew attended driving lessons in classroom sessions each week before getting on the track. In the summer of 2005, Andrew began racing full sized vehicles and ran one race in October of 2005. As of 2006, he ran races once per month from April to October. At the last race in October of 2006, he won an award for the “most improved driver.” 11 As a result of this uncontraverted evidence, I find that Andrew had more experience operating a motor vehicle than an average 16-year-old with a G2 licence. 12 On the evening of January 20th, 2007, Andrew had planned to meet up with his friend, Andrew Okolisan, then visit Dustin Drouillard and stay there overnight. Andrew’s mom had driven Andrew to Dustin’s home once before that night. Andrew had never driven on Willey Road near Erin Line before that night. 13 Andrew used his father’s 1999 Pontiac Grand Am motor vehicle. It was in good operating condition. Andrew left home at approximately 6:00 p.m. He had not consumed any alcohol prior to his departure. 14 Andrew visited the Tomczyk residence and called his mother at 7:34 p.m. advising her of his whereabouts. Cassandra Tomczyk testified that 134 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Andrew arrived at her residence with other people gathering at her house and planning to go to the Drouillard residence. She indicated that she believed that Andrew was only at her place for no more than 10 minutes. She did not see Andrew bring alcohol into her home and/or consume any alcohol in her home prior to his departure for the Drouillard residence. 15 Andrew left with an acquaintance Robert Kersten as his passenger and followed another vehicle with Andrew Okolisan and Jeff Voros in it, en route to the Drouillard residence. Cassandra left her residence shortly thereafter. Andrew Okolisan’s vehicle was ahead of Andrew’s vehicle. Okolisan testified that he lost sight of Andrew’s vehicle behind him and slowed to look behind and saw Andrew’s vehicle stopped at the side of the road and Robert Kersten stepped outside the vehicle to urinate. Okolisan and Veros arrived at the Drouillard residence and within a few minutes of their arrival he received a cell phone call from Cassandra Tomczyk advising that the plaintiff had been in a crash. Cassandra did not see the crash. 16 Police photographs indicate that there was a case of beer in the Ford- ham vehicle. There was no forensic investigation performed by police on the case of beer itself to determine its location in the vehicle or its ownership prior to the crash. 17 As indicated, the parties agree that Andrew’s blood alcohol concentration was between 29.6 and 53.6 mg/DI which is equivalent to consuming 1.7 to 2.3 beers prior to the crash. Both parties agree that the closer to the collision, Andrew is found to have consumed the alcohol, the lower his blood alcohol concentration would have been at the time of the crash. 18 Given that there is no evidence that Andrew was seen to have consumed alcohol at the Tomczyk home, then the only reasonable inference is that he consumed that beer while en route to the Drouillard residence. As a result, I find that his concentration of blood to alcohol would be closer to 29.6 mg/DI.

The stop sign: 19 Mr. Hull is the road superintendent for the municipality of Dutton Dunwich, a position he has held since 2001. His job includes maintaining the roadways, reporting to council and the clerk, attending council meetings and supervising the repair and construction of roadways. He has seven employees in his department but no professional engineer. Fordham v. Dutton-Dunwich (Municipality) J.N. Morissette J. 135

20 Mr. Hull was raised in this area and prior to his employment with the defendant he had worked for the Ministry of Transportation of Ontario for 15 years in construction of roadways, signage and drainage. 21 Mr. Hull testified that 80% of the roadways in this County are gravel roads. A traffic count performed in 2007 revealed that only 69 vehicles per day travel on Willey Road. 22 In the fall of 2006, the Municipal Council asked Mr. Hull to consider if stop signs should be installed at the various intersections in the County because taxpayers had complained of drivers failing to obey yield sings. Based on Mr. Hull’s review of the Ontario Traffic Manual, he formed an impression that stop signs were not required due to the low traffic volume, clear sightlines and no collision history. 23 In the fall of 2006, Municipal Council overruled Mr. Hull’s recommendations and ordered 46 yield signs in the Municipality be replaced with stop signs. This decision was clearly done to satisfy taxpayers for political reasons and not for valid engineering principles. 24 Mr. Hull’s evidence at discovery was that people had a habit of going through yield signs in the area. Although he initially denied this fact, at trial he eventually conceded in cross-examination that he had been telling the truth at discovery. He further confirmed that the removal of the yield signs was conducted between December 5th and 14th, 2006 by simply placing the stop signs on the old posts. No traffic studies were conducted. No “new stop ahead” sign were installed. 25 Mr. Hull testified at trial that warning markers were placed around the concrete bridge abutment after the Fordham crash because a snow plow operator requested the placement. At discovery, he had stated that the object markers were placed because of the crash itself. 26 On behalf of the plaintiffs, an expert in accident reconstruction, Mr. Hrycay, testified that the new stop sign was not warranted at that intersection and that Mr. Hull was right when he recommended to the Muni- cipal Council that yields signs ought not be replaced. In agreeing with Mr. Hull’s original opinion on this issue, he confirmed that uniform signage is important for motorists. If there are too many stop signs in place, motorists have a tendency to ignore them. 27 In fact, the evidence of Ms. Tomczyk who was also a beginner driver with a G2 licence, testified that in her experience as a passenger travel- ling in that area, many drivers would go through intersections without stopping at a stop sign if they could see that there was no traffic coming. 136 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

28 Dustin Drouillard, who has lived in the vicinity most of his life and can see the intersection of Willey Road and Erin Line from his house, says that depending on the time of year, as to whether the crops are high or not, if he can see both ways as he approaches the intersection mostly in the winter, when there are no crops, he would run through the intersection if he felt safe to do so. 29 Clearly, it is a local practice in this rural area for drivers do go through stop signs if they consider it safe.

The intersection of Willey Road and Erin Line: 30 The parties agree that this intersection is a rural hard-pack dirt and gravel road with no lane markings and an unposted speed limit of 80 km per hour. There are no shoulders. There is no artificial light in the vicinity of the intersection. 31 At issue is the configuration or characterization of the intersection. In other words, what is the most accurate manner in which to describe the geometric design of this intersection? The plaintiff’s experts and the police investigators describe the intersection as “offset”. The defendant expert describes the intersection as “skewed.” The geometric design determines the appropriate signage. 32 Of note, the Elgin County Ontario Provincial Police prepared a Tech- nical Collision Investigation (TTCI) report at the time of the crash and arrived at their findings outside of the context of this litigation. They found the following salient points: • The night of the crash was cold and overcast. There was no moon. There was no artificial or ambient light present. The collision occurred in a rural area, surrounded by farmland. In January, there were no crops or foliage in the fields interfering with sight lines at the intersection. • The officers described the intersection as “offset” measuring 8.9 metres. • There was a stop sign controlling southbound and northbound traffic. • Because of the heavy damage to the vehicle, the investigators could not determine if the vehicle’s headlights were on high or low beam in the moment preceding the crash. Fordham v. Dutton-Dunwich (Municipality) J.N. Morissette J. 137

• The vehicle left marks in the gravel road leading to the crash site which were measured using a total sight survey device. As a result of these tire marks and the vehicle damage, the investigators concluded that the vehicle failed to stop at the stop sign and slid into a yaw to the right, resulting in the driver’s side colliding with the concrete abutment rotating into the abutment, coming to rest facing the culvert.

Expert evidence on characterization of the intersection: 33 The plaintiffs called two experts on the reconstruction of the crash while the defendants called one. 34 I qualified Mr. Hrycay as an accident re-constructionist and a road design and maintenance engineer. 35 I further qualified Dr. Alison Smiley as an ergonomist expert in the area of interaction between the behaviors of people and motor vehicles and roads. She has a PhD in Vehicle Steering Control. She has researched how human factors and highway safety interrelate. She has conducted research in young drivers and alcohol. 36 The defendants called Jack De Chiara who I qualified as a traffic engineer in the area of road design and traffic control and signage.

James Hrycay: 37 Mr. Hrycay described the intersection as an “offset”. He explained that due to the absence of a hard road surface, gravel roads tend to mean- der over time. He confirmed that the width of Willey Road north of Erin Line was 8.16 metres but that the road is narrowest between the concrete headwall (bridge abutments) at 6.6 metres. He described the road flared at the northwest corner of the intersection, which appeared to be a migra- tion of the original road surface. 38 Mr. Hrycay disagreed with the defendant’s suggestion that the road could be best categorized as “skewed” intersection. He noted that the ra- dius of the curve is very short, at approximately 140 metres. The length of the curve at the intersection is 31 metres on each side. This, in his opinion, was a substantial change in alignment and could only be characterized as “offset”. 138 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Dr. Alison Smiley: 39 Dr. Smiley testified that she accepted Mr. Hrycay’s report on the characterization of the intersection. She testified that the road turns sharply and one needs 2.5 to 3 seconds before the turn to respond in time to navigate safely through the intersection.

Jack De Chiara: 40 Mr. De Chiara opined that the jogged intersection initially arose as a result of surveying practices from the pioneering days and this intersection arose gradually from those days. He referred to Exhibit 17 which was the schematic diagram of the intersection prepared by Mr. Hrycay and accepted the measurements. From those measurements he opined that the angle of the intersection resulted in a 13 degree skew across the intersection and therefore disagreed with the characterization of Mr. Hry- cay that this intersection was “offset”.

Analysis on the characterization of the intersection: 41 First, I must make clear that I found Mr. De Chiara’s credentials im- pressive, but unfortunately, his testimony was so stringent and unyield- ing even when certain uncontroverted facts were put to him in cross-examination, that I have found his opinion to be less then objective. 42 I say this because he advised the Court that according to Mr. Hry- cay’s own diagram and measurements he could calculate the angle of the intersection. However, when asked why he chose that point on Mr. Hry- cay’s diagram he indicated that it was Mr. Hrycay’s own determination of the middle of the road markings. 43 But on the other hand, he was asked numerous times why he chose that spot instead of another point closer to the stop sign to calculate his angle of the intersection and he could not advise or help the Court with an answer. 44 The point Mr. De Chiara chose on Mr. Hrycay’s diagram assisted him in arriving at a “skew angle” of 13 degrees at the intersection which supports his opinion. 45 However, in doing so he finally conceded, after considerable cross- examination, that no guidance was provided in either the Ontario Traffic Manual or any other manual to suggest where a point should be selected to determine a skew angle of an intersection. Had he chosen a point Fordham v. Dutton-Dunwich (Municipality) J.N. Morissette J. 139

closer to the stop sign then the angle would have been greater than 13 degrees which then would defeat his own opinion. 46 I am also mindful that when his handwritten notes of his own measurements of the site were reviewed during trial, it appeared that he cal- culated the distance of the concrete abutment from the side of the road at 2 metres. However, in his report, he stated that the distance was 2.1 metres. This minor difference is not so minor because at 2 metres an object marker sign on the abutment would have been required. 47 This demonstrates partisanship and not unbiased expert opinion. 48 Given the unbiased opinion of the police and the expert opinion of Mr. Hrycay, and having reviewed the numerous photographs of the intersection in question, I find that this intersection is best described as an “offset” intersection.

The Law: 49 The duty of a municipality with respect to the highways within its jurisdiction is contained in section 44 (1) and (2) of the Municipal Act, 20011: 44. (1) The municipality that has jurisdiction over a highway or bridge shall keep it in a state of repair that is reasonable in the circumstances, including the character and location of the highway or bridge. (2) A municipality that defaults in complying with subsection (1) is, subject to the Negligence Act, liable for all damages any person sus- tains because of the default. 50 The plaintiff bears the initial onus to proving both that a condition of non-repair exists and that the condition of non-repair caused or contributed to the damages alleged. 51 The existence of a condition of non-repair will depend on a variety of factors, including the location of the road, its history, its character, its normal usage and the resources of the municipality within which it is located.2

1S.O. 2001, c. 25 2Foley v. East Flamborough (Township), [1898] O.J. No. 76 (Ont. Div. Ct.) at paras. 8-10 140 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

52 In Deering v. Scugog (Township), [2010] O.J. No. 4229 (Ont. S.C.J.), Howden J. noted that guidelines like the Ontario Traffic Manual (OTM) “are always subject to informed judgment in their application” and further are “not intended to be used to impose civil liability.”3 53 Justice Howden defined the municipality’s general duty of repair as: ... a duty to ordinary motorists to keep their roads in reasonable repair. The duty to repair arises wherever unreasonable risks of harm exists on the roadway for which obvious cues on or near the road are not present and no warnings are provided. The ordinary motorist includes those of average driving ability — not simply the perfect, the prescient, or the especially perceptive driver, or one with exception- ally fast reflexes, but the ordinary driver who is of average intelli- gence, pays attention, uses caution when conditions warrant, but is human and sometimes makes mistakes.4 54 The OTM sets standards for design, maintenance and, in particular, placement of warning signs on roads in Ontario. It was accepted by all expert witnesses, including Mr. Hull, that it is the only collection of best practices.

Was additional signage required? 55 The OTM requires a checkerboard sign to be placed if the intersection is considered an “offset”5. 56 Mr. Hrycay testified that in his opinion, a checkerboard sign for both legs of Willey Road ought to have been installed. Dr. Smiley testified that the subject intersection required some form of warning sign to advise motorists of the upcoming change in the road alignment. A stop sign was insufficient. 57 Given Mr. De Chiara’s opinion that the geometric design of the intersection was not an “offset”, he was of the view that no additional signage was required.

Dr. Smiley’s opinion on signage: 58 Dr. Smiley testified that she conducted a site visit in February of 2011 and she confirmed that the visibility of the stop sign at the intersection

3at paras. 100-101. 4Ibid at para. 154 5OTM Exhibit 4, at tab 4, pp. 34-35. Fordham v. Dutton-Dunwich (Municipality) J.N. Morissette J. 141

was not an issue. She further confirmed that the stop sign was visible on low beam at a distance of 200 metres. 59 Dr. Smiley focused her analysis on what happens if a driver chooses not to stop at the stop sign. She testified that road maintenance personnel should design roadways for “all people”, not just the “reasonable driver who’s sober, wearing a seat belt and obeying all traffic laws.” Accord- ingly, she opined that additional signage would have assisted drivers, who likely will drive through a stop sign in a rural area while having clear visibility of the intersection to negotiate the offset. 60 In support of that opinion, she testified that a driver operating a motor vehicle can only focus on a very small amount of information. To process information, she says that we interpret the world by making assump- tions on how things are going to be. When things are not as expected, we have trouble. So when drivers are surprised because their expectations are violated, slowed responses and errors occur. At night, drivers are particularly reliant on expectations because the visual information available is very reduced, especially in rural areas. 61 She explained that a study was conducted in which subject drivers first encountered a pedestrian target without forewarning. Once the driver knew exactly where the target was and what it looked like, a repeat run was made at the same speed. On average, seeing distances when the target was unexpected were 50% of those obtained when the driver knew where to look. Applying this 50% correction factor to account for expectancy reduces the estimated visibility distances for drivers not expecting an offset. 62 Thus, Dr. Smiley estimated that the visibility distance for drivers using low beams who are not expecting the offset at this intersection to be 9 to 41 meters. This is a distance travelled in 0.4 to 1.8 seconds at 80 kilometers per hour. If high beams were utilized by a motorist at this intersection, the estimated visibility distance would be approximately double this distance. 63 Accordingly, Dr. Smiley opined that a driver ought to have been advised with a sign of the upcoming change in alignment in the road, otherwise the driver will simply assume that there is no change in alignment. 64 Of course, Dr. Smiley recognized that alcohol can impact driving even at low levels. 65 I heard extensive evidence about the “ordinary driver.” Dr. Smiley testified that road authorities should design for the 95th percentile when 142 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

designing roads. She further stated that is it well known that drivers make mistakes and do not always “follow the rules.” That is why road authorities provide redundant safety systems such as rumble strips, warning signs and other safety measures to assist the ordinary driver. 66 Dr. Smiley concluded that Andrew did not have sufficient visual cues to be able to perceive the change in road alignment to safely navigate the hazards at this intersection while traveling at or near the speed limit. 67 In order to analyze the issue of non-repair, I must make findings of fact with respect to the driving of Andrew. He was driving at or about the speed limit of 80 km/hr while likely consuming a beer while driving. He had never driven on this road before that night. 68 Was that driving reckless? It certainly was not prudent to drive while consuming alcohol. 69 In that regard, the defendants are relying heavily on the recently released decision of the Court of Appeal in Morsi v. Fermar Paving Ltd., [2011] O.J. No. 3960 (Ont. C.A.). In that case. Mr. Morsi’s driving was described as follows: In my view, the unfortunate reality is that the most appropriate word to describe Mr. Morsi’s driving is ‘reckless’. From his entry onto Major Mackenzie Drive to the accident scene, he covered a distance of about 400 meters. He obviously accelerated very rapidly as he drove through the long first curve because he exited it, the experts agree, at about 90 km/h. He then accelerated again and over a short straightaway he reached a speed, the experts agree, of 120 km/h. He then lost control, flew off the road and hit a telephone pole. All this happened in about 30 seconds. During that time, Mr. Morsi would have seen, and ignored, two 60 km/h speed signs, a reverse curve warning and a 40 km/h advisory sign, and two construction signs. He also would have seen and experienced the long first curve, seen the reverse curve straight ahead of him, and noticed that the road surface straight ahead of him was about to change. In the face of all this information, he chose to accelerate and reach a speed of 120 km/h in a legal 60 km/h zone with a curve advisory speed of 40 km/h. 70 In light of the Morsi decision, my assessment of liability should be done based on all of the circumstances, including the stop sign and the lack of warning with respect to the change in alignment. 71 So did this intersection pose an unreasonable risk of harm to an ordinary motorist exercising reasonable care who was approaching the intersection while southbound on Willey Road? Fordham v. Dutton-Dunwich (Municipality) J.N. Morissette J. 143

72 The defendants say no because of the stop sign. All agree that if An- drew had stopped at the stop sign, then he would have been able to manoeuver safely through this intersection. 73 The plaintiffs say yes because the stop sign was not enough. As indicated by Dr. Smiley and other witnesses including that of Mr. Hull, “rural stop signs are not viewed as credible signs.” Drivers who are able to assess the existence of traffic on an intersecting road are known to disre- gard regulatory signs. A study referenced by Dr. Smiley indicated that in these circumstances, up to 75% of drivers do not make a full stop and a lesser number (about 30 to 35%) proceed straight through.

Analysis of signage required: 74 In Morsi, the plaintiff had had many warning signs which he ignored. He drove at an excessive speed notwithstanding. This is not the case before me. Andrew was not driving at an excessive speed. He had never driven on this road before. He was not aware that on this road the alignment was about to change. He had no warning of that. He did have a clearly visible stop sign, but given the time of year, he likely saw that there was no oncoming traffic on Erin Line and simply drove through not suspecting a change in the alignment of the road. 75 The defendant knew that some rural drivers do not follow the regulatory signs placed at intersections. The activities of these drivers caused sufficient complaints to Council members in just few months before the accident to order the superintendent to change all yield signs to stop signs, notwithstanding Mr. Hull’s beliefs that this change would not be necessary. In fact, this change to stop signs did not equip the defendants with knowledge that this would correct the driving behavior of rural drivers. 76 Ordinary rural drivers do not always stop at stop signs and the defendant knew that. Proper signage was inexpensive at only $800. There was evidence that the defendant’s practice was to place checkerboard signs in conjunction with stop signs at other similar intersections such as Coyne Road and Pioneer Line intersection. Mr. Hull testified that it was “probably there to protect people from going through the stop sign.” 77 This hidden and unknown change in the road alignment, obscured from view with no signs to warn of the deceiving sharpness of the curve 144 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

or the need to slow down from the speed limit of 80 km/h has been held to be a “hidden hazard.”6 78 I find that the circumstances of this intersection require more than a stop sign to give ordinary ‘rural’ motorists reasonable notice of potentially catastrophic hazard ahead. 79 The defendant ought to have placed a warning sign at the subject intersection to warn motorists of an impending change in road alignment. That warning sign could have been the checkerboard sign as suggested by Mr. Hrycay or at the very least a reverse curve sign.7

Causation: 80 In Hanke v. Resurfice Corp.,8 the Supreme Court of Canada determined that the plaintiff bears the onus of showing that “but for” the negligent act or omission of the defendant, the injury would not have occurred. 81 Both Mr. Hrycay and Dr. Smiley were of the opinion that Andrew was unable to perceive the change in road alignment at the intersection with enough time and distance to safely navigate the hazard, that is the change in alignment of the road to avoid the concrete abutment on the other side. 82 The plaintiff argues that if a checkerboard sign or some other sign would have been present warning motorist of the change in road alignment, then Andrew would have had the information needed to safely navigate through the intersection at a lower speed and avoid the hazard. 83 The defendant argues that notwithstanding the presence of these warning signs, it is only speculative to say that Andrew would have reduced his speed. 84 I disagree with that argument. It is quite reasonable to infer that had Andrew known about this change of alignment in the road, he would very likely have reduced his speed. Andrew was an experienced young race car driver. It is not speculation that if Andrew would have been pro-

6Deering v. Scugog (Township), 2010 ONSC 5502 (Ont. S.C.J.) at para. 131, affirmed 2012 ONCA 386 (Ont. C.A.) citing Housen v. Nikolaisen, 2002 SCC 33 (S.C.C.) 7p. 25 of tab 4 of Exhibit 4 (OTM) 8[2007] S.C.J. No. 7 (S.C.C.), paras, 21-23 Fordham v. Dutton-Dunwich (Municipality) J.N. Morissette J. 145

vided with this information about the change in the alignment of the road, he would have reduced his speed to manoeuver his vehicle accordingly. To infer otherwise or to suggest that this is purely speculation is not founded in the evidence. 85 The fact that he was not going to reduce his speed for the stop sign does not, in my view, suggest that he would not have done so for another type of warning sign. It can reasonably be inferred that likely Andrew looked at the lack of oncoming traffic from both sides of Erin Line simply provided him with sufficient information that he could continue to drive through expecting the road to continue in a straight line in front of him. 86 Accordingly, I find that the cause of the crash was two-fold: (1) Andrew did not stop at the intersection of Willey and Erin Line; and (2) the defendant did not warn Andrew of the change in road alignment through the intersection, or the concrete abutments on the other side of the intersection. 87 “But for” Andrew’s failure to stop, and the defendant’s failure to warn motorists of the hazard ahead, this accident would not have occurred.

Statutory defences: 88 Section 44(3) of the Municipal Act, 2001 provides a statutory defence for the defendant municipality if they have done their reasonable best to seek out and remedy conditions of non repair. 89 Not one of the statutory defences apply in the present case. Mr. Hull’s evidence was that at no point did he take any steps whatsoever to assess whether this intersection posed a hazard to motorists. There was no evidence of any predecessor having conducted any such analysis.

Apportionment of liability: 90 The evidence before this Court regarding Andrew’s driving in the time period leading up to the crash and his resulting injuries are as follows: • Andrew had a recently obtained his G2 licence; • he was driving at or close to the speed limit in a rural road that he was unfamiliar with; 146 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

• he was not wearing his seatbelt; although the defendants agree that had Andrew been seat-belted he would likely not have sur- vived the crash and so no contributory negligence will be apportioned to Andrew for this failure. [My emphasis.] • he had been consuming alcohol while driving; and • drove through a clearly marked stop sign. 91 Clearly, Andrew has contributed to his own injuries. In my view, the degree of fault ought to be shared equally. Andrew’s negligence was a causal factor to the extent of 50% because if he had stopped at the stop sign this crash would not have happened. Recognizing that the failure to stop at the stop sign was part of the “ordinary” rural driver’s behavior in this area, it remains that had he had warning signs that the hazard was ahead he likely would not have been injured even if he had not stopped at the stop sign. Accordingly, I find defendant liable to the extent of 50%.

Conclusion: 92 For these reasons, I find as follows: 1) the intersection of Willey Road and Erin Line was not in a reasonable repair on January 20th, 2007; 2) that but for the non-repair of the intersection in question, the crash would probably not have occurred and, therefore, the condition of non-repair was a cause of the plaintiff’s injuries; 3) that the defendants have failed to establish on the evidence a defence under s. 44(3) of the Municipal Act, 2001; 4) Andrew was contributorily negligent which contributed to the crash; and 5) that pursuant to the Negligence Act, the defendant is found responsible in law to the extent of 50% of the plaintiff’s damages, and Andrew responsible at 50%;

Costs: 93 I am prepared to hear from counsel on the issue of costs, should they not be able to agree on same. I understand that the issue of damages was bifurcated and, as such, if this Court is required for same then again I invite counsel to seek a date for such a hearing through the trial coordinator. Action allowed in part. Sun Wave Forest Products Ltd. v. Prince Rupert (City) 147

[Indexed as: Sun Wave Forest Products Ltd. v. Prince Rupert (City)] Sun Wave Forest Products Ltd., Plaintiff and City of Prince Rupert, Defendant British Columbia Supreme Court Docket: Vancouver S100413 Master Muir Heard: November 23, 2012 Judgment: December 17, 2012 Real property –––– Registration of real property — Certificate of pending litigation (lis pendens) — Vacating certificate — General principles –––– Plaintiff brought three actions against defendant city — Certificate of Pending Litigation was filed against lands — Defendant city brought application for order that Certificate of Pending Litigation (“CPL”) filed against each of seven parcels of land be cancelled — Application granted — Order was made for removal of CPL from lands without security — Statutory requirements for order removing CPL had been met and it was in interests of justice to do so — Regis- tration of CPL prevented city from carrying to fruition plans to sell lands and resolve potential environmental contamination issues — In meantime it was subject to significant costs in holding lands — City had shown that substantial hardship and inconvenience was being experienced and was likely to be experienced and hardship and inconvenience was directly attributable to registration of CPL on titles to lands. Municipal law –––– Municipal liability — Miscellaneous –––– Plaintiff brought three actions against defendant city — Certificate of Pending Litigation was filed against lands — Defendant city brought application for order that Cer- tificate of Pending Litigation (“CPL”) filed against each of seven parcels of land be cancelled — Application granted — Order was made for removal of CPL from lands without security — Statutory requirements for order removing CPL had been met and it was in interests of justice to do so — Registration of CPL prevented city from carrying to fruition plans to sell lands and resolve potential environmental contamination issues — In meantime it was subject to significant costs in holding lands — City had shown that substantial hardship and inconvenience was being experienced and was likely to be experienced and hardship and inconvenience was directly attributable to registration of CPL on titles to lands. 148 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

Cases considered by Master Muir: Gray v. Langley (Township) (1986), 1986 CarswellBC 385, 9 B.C.L.R. (2d) 1, [1987] 2 W.W.R. 157, 34 M.P.L.R. 183, 34 D.L.R. (4th) 270, [1986] B.C.J. No. 1215 (B.C. C.A.) — considered Hansard Spruce Mills Ltd., Re (1954), 1954 CarswellBC 6, 34 C.B.R. 202, [1954] 4 D.L.R. 590, 13 W.W.R. (N.S.) 285, [1954] B.C.J. No. 136 (B.C. S.C.) — considered Liquor Barn Income Fund v. Mather (2011), 302 B.C.A.C. 304, 511 W.A.C. 304, 333 D.L.R. (4th) 360, 17 B.C.L.R. (5th) 164, 2011 BCCA 141, 2011 CarswellBC 593 (B.C. C.A.) — considered Strata Corp. VR149 v. Berezowsky (1986), 1986 CarswellBC 211, 5 B.C.L.R. (2d) 316 (B.C. C.A.) — considered Zeitel v. Ellscheid (1994), 21 M.P.L.R. (2d) 247, 113 D.L.R. (4th) 609, 71 O.A.C. 134, [1994] 2 S.C.R. 142, 165 N.R. 214, 17 O.R. (3d) 782 (note), 1994 CarswellOnt 1156, 1994 CarswellOnt 614, EYB 1994-67656 (S.C.C.) — considered Statutes considered: Community Charter, S.B.C. 2003, c. 26 s. 26 — considered s. 94 — considered Fisheries Act, R.S.C. 1985, c. F-14 s. 38(6) — referred to Land Title Act, R.S.B.C. 1996, c. 250 Generally — referred to s. 23 — considered s. 23(2) — considered s. 25 — considered s. 256(1) — considered s. 257 — considered s. 257(1) — considered s. 276 — considered s. 276(1) — considered Local Government Act, R.S.B.C. 1996, c. 323 Generally — referred to s. 403 — considered s. 420 — considered s. 420(1) — considered s. 420(5) — considered s. 422(3) — considered s. 424 — considered Sun Wave Forest Products Ltd. v. Prince Rupert (City) Master Muir 149

Municipal Act, R.S.B.C. 1979, c. 290 s. 475 — considered

APPLICATION by defendant city for order that Certificate of Pending Litiga- tion filed against land be cancelled.

O.J. James, E. Pitcher, for Plaintiff H. Wang, for Defendan

Master Muir:

1 This is an application by the defendant, City of Prince Rupert (“Prince Rupert”) for an order that Certificate of Pending Litigation No. BB1238420 (the “CPL”) filed against each of seven parcels of land be cancelled.

Background 2 The lands in question once contained the operations of the now failed Skeena pulp mill on Watson Island in Prince Rupert. 3 The plaintiff, Sun Wave Forest Products Ltd. (“Sun Wave”) decided to attempt to re-start the mill, and in doing so acquired the lands in question (the “Lands”) plus a further parcel known as Lot 4 and entered into a “partnering agreement” with Prince Rupert, under which Sun Wave was exempted from municipal taxes for an extended period. 4 In June 2006 the parties agreed that Sun Wave would achieve full operational capacity in the mill by December 31, 2007 and in the meantime would commence start-up operations at the mill. 5 It is alleged that Sun Wave decided in late 2007 not to re-start operations at the mill and thereby breached terms of the partnering agreement. Prince Rupert gave Sun Wave notice of default under the partnering agreement on January 2, 2008. 6 On February 8, 2008 Prince Rupert purported to terminate the partnering agreement and took the position that all municipal taxes became due for the exempt period. 7 By September 2008 those taxes remained unpaid and Prince Rupert offered the Lands and Lot 4 and the improvements on them for sale apparently as required by s. 403 of the Local Government Act, RSBC 1996, c. 323. 150 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

8 As no offers were received, Prince Rupert was declared the purchaser of the Lands. Sun Wave exercised its right to redeem Lot 4 but did not exercise its rights of redemption regarding the Lands and on September 29, 2009 Prince Rupert became the registered owner of the Lands and improvements thereon. 9 Sun Wave did not provide Prince Rupert with any notice setting out the grounds of complaint as to why the tax sale ought to be set aside or declared invalid as is apparently required by s. 422(3) of the Local Gov- ernment Act. 10 Three actions have been commenced by Sun Wave: a) This action, which is referred to as the Land action, in which Sun Wave seeks a declaration that it is the rightful owner of the Lands, an order quashing the sale and damages, all based on an alleged breach of the partnering agreement; b) A second action regarding equipment in which Sun Wave claims that Prince Rupert has wrongly retained and converted certain production equipment on the Lands and seeks declaratory relief and damages; and c) A Petition seeking Judicial Review to quash the tax sale as being ultra vires. The latter Petition was only commenced on May 7, 2012. 11 The Certificate of Pending Litigation was filed against the Lands in this action. I am advised that since the hearing of this matter a Certificate of Pending Litigation has also been filed against the Lands in the Judicial Review action. 12 In this, the Land action, it is pleaded: a) In breach of the Partnering Agreement Prince Rupert, “took the position that, upon termination, the Plaintiff had an immediate obligation to pay municipal taxes on the Lands for 2006 and 2007.” b) “... the Plaintiff was not required to pay municipal taxes in the event of a breach of that agreement, but rather damages equivalent to the value of the Tax Exemption ...” c) “In or around September 2009, the Defendant wrongfully seized the Lands, put them up for sale at a tax sale and subsequently acquired freehold title to the Lands.” d) “Throughout the Plaintiff’s dealings with the Defendant, beginning in or about February 2008 when the Defendant purported to Sun Wave Forest Products Ltd. v. Prince Rupert (City) Master Muir 151

terminate the Partnering Agreement ... the Defendant has acted in bad faith and discriminated against the Plaintiff.” e) “As a result of the Defendant’s wrongful conduct, the Plaintiff has suffered loss, damage and expense including the loss of use and enjoyment of the Lands.” f) And, inter alia, an order is sought “that the Lands be transferred back to the Plaintiff.” 13 Prince Rupert argues that Sun Wave has not pursued the proceedings with diligence, including obtaining two adjournments of summary trials, the latter of which was heard by Mr. Justice Grauer on May 7, 2012. In his oral reasons, Mr. Justice Grauer noted: [9] I am satisfied, however, of two things: the petition that Sun Wave has just filed, which is the main reason it seeks an adjournment, raises a claim, or an argument, that is not, in my view, bound to fail. I cannot comment on the merits. I would not call it a slam dunk, but it is not bound to fail and it intimately involves the issues that arise in these two actions, in particular the question of who owns the land in question. [10] In its petition Sun Wave claims that the City of Prince Rupert acted ultra vires in proceeding to a tax sale. If it is correct in that, then it argues that the result is a nullity, regardless of any failure on its part to launch an appeal or other proceedings within the specified time. That is an argument that has some backing in the authorities and it is not one I can say is entirely without merit. That raises an issue that is key to the issues in the other two actions. That being the case, it seems to me that the overarching requirement in the Rules that matters are decided on their merits requires that these three matters be determined together. [11] I do not think it is appropriate in the context of an adjournment for me to order as a condition that the certificates of pending litigation be discharged and I decline to do so. That is, of course, without prejudice to the City’s right to bring on an application to discharge them at any time if it is so moved. But this was not the kind of context when the appropriate evidence is before me to make a reasoned decision and I do not think it appropriate to do it simply as a condition of adjournment. 14 I was advised that the three matters are set for summary trial in Janu- ary 2013, but that Sun Wave may be seeking a further adjournment and if that application was successful the matters would not be able to be heard on their merits until May 2013 at the earliest. 152 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

15 Sun Wave says that it has not proceeded with the court proceedings in the last year as it was working on a potential resolution being negotiated with all parties.

Hardship and Inconvenience 16 Prince Rupert relies on the provisions of s. 256(1) of the Land Title Act, RSBC 1996, Ch. 250, which provides: Cancellation of certificate of pending litigation on other grounds 256 (1) A person who is the registered owner of or claims to be entitled to an estate or interest in land against which a certificate of pending litigation has been registered may, on setting out in an affidavit (a) particulars of the registration of the certificate of pending litigation, (b) that hardship and inconvenience are experienced or are likely to be experienced by the registration, and (c) the grounds for those statements, apply for an order that the registration of the certificate be cancelled. 17 Prince Rupert points to various matters that it contends constitute significant hardship and inconvenience. 18 Prince Rupert has given notice in accordance with sections 26 and 94 of the Community Charter of its intention to sell the Lands to Watco Development Corporation (“Watco”) for consideration of $5 million. 19 That transaction has yet to complete and is the subject of an Exclusiv- ity Agreement, which sets out: The Joint Venture is aware that, prior to the date of this Agreement, the City has had several discussions with one or more third parties concerning a possible transaction which may be similar to the Pro- posed Transaction. 20 Prince Rupert then agrees that it will not solicit other such proposals or offers during the Exclusivity Period. 21 The Exclusivity Agreement is subject to an Amending Agreement, in which it is provided in one of the recitals that “Watco intends to submit to the City a conditional Offer to Purchase the Lands” and extending the termination date for the Exclusivity Period to December 31, 2012. 22 It is argued that the existence of the CPL on title will impede the proposed sale. Sun Wave Forest Products Ltd. v. Prince Rupert (City) Master Muir 153

23 Further, Prince Rupert argues that it is suffering significant hardship due to its inability to collect municipal taxes with respect to the Lands. 24 In addition, Prince Rupert points to significant exposure to liability for environmental contamination. Not only are the Lands considered to be contaminated, they contain a significant amount of chemicals stored in various decaying containers throughout the property, including 1.5 million gallons of black liquor, more than 500 tonnes of pulp left in various vessels, 10% and 50% caustic soda, 23 tonnes of sulphur currently stored in a warehouse which is damaged and leaking, 30,000 bbls bunker C fuel oil, 50,000 m3 of hog fuel and resulting leachate, PCBs, 38 nu- clear devices used to measure the flow of solids and semi-solids through the pipes, and asbestos, which is strewn throughout the lands. 25 Reports going back as far as 2005 have documented the sad environmental state of the Lands and some remediation has been completed. 26 In February 2011, Environment Canada issued an Inspector’s Direc- tion to the City and Sun Wave pursuant to s. 38(6) of the Fisheries Act, RSC 1985, c. F-14, in which it is noted that Environment Canada had: ... reasonable grounds to believe that, out of the normal course of events, there is a serious and imminent danger of a deposit of a dele- terious substance in water frequented by fish ... and that immediate action is necessary to take all reasonable measures consistent with safety and with the conservation of fish and fish habitat to prevent any such occurrence. 27 On June 24, 2012 there was a sulphuric acid leak on the Lands of nearly 5000 liters, which may have impacted fish habitat. The BC Minis- try of the Environment has taken the position that Prince Rupert is liable for the cost of the spill response and for “any environmental damage resulting from conditions at this site.” 28 The cost of clean-up of this sulphuric acid spill is in excess of $80,000. 29 Watco sent a letter to Prince Rupert dated October 30, 2012. I was advised that it was this letter that precipitated this application. In the letter, Watco includes the most recent environmental assessments of the Lands, and states: This is pursuant to our offer to purchase Watson Island from the City of Prince Rupert, to remediate the Island and develop a seaport terminal and industrial park on the site. This was subject to a number of 154 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

conditions, including settling current outstanding issues between the City and the former owner, Sun Wave Forest Products. As a result of the work that has been done on the Island by our engi- neers, we are very concerned with the current state of chemical storage on the Island. I attach the following materials: • An email from James Dottori of Nexus3 on the need to deal with the chemicals as soon as possible; • An email from Tracy Casavant, Executive Director of Light- house, raising concerns with the current lack of a credible emergency response plan; and • A report from John Taylor, P.Eng CSAP of Core6 Environ- mental providing details on the current state of chemical storage, and recommending immediate removal. The Watson Island Development Corporation is prepared to fund the immediate clean-up of the chemicals and ensure that they are all removed from the site before there is a major breach or spill. We have discussed this with the Ministry of the Environment and we have developed a mechanism that will allow us to fund the immediate removal of the chemicals and deal with the issues of liability while that is being done. This can only proceed if the lingering issues related to ownership are dealt with. ... This is now urgent. As set out in the accompanying materials, if any of the major chemical tanks breach or result in significant contamination to the soil or to marine environment, the cost of remediation will escalate to the point that redevelopment would simply not be feasible and the potential value of this asset to the community and its potential contribution to the regional economy will be lost. 30 Mr. Rodin, the Chief Financial Officer of Prince Rupert, provided this material in his affidavit, and concluded: The potential inability of the City to transfer the Lands to WatCo, which has committed to undertake environmental remediation as part of its responsibilities in acquiring the Lands if there is no impediment to the sale of the Lands, leaves the City with an unreasonable exposure to financial and other liability due to the precarious environmental state of the Lands. 31 Mr. Rodin also points out that Prince Rupert also incurs significant holding costs and soft costs as a result of being unable to sell the Lands. Sun Wave Forest Products Ltd. v. Prince Rupert (City) Master Muir 155

He says the City’s cumulative deficit for holding the Lands from Sep- tember 2009 is well in excess of $1 million. 32 Prince Rupert says its hardship is exacerbated by the delays of Sun Wave and essentially says that Sun Wave is holding it to ransom by de- laying the court proceedings in the face of the potential for loss of the Watco sale and irremediable environmental damage being incurred. 33 Sun Wave submits that Prince Rupert has not shown that this hardship and inconvenience is due to the registration of the CPL. It relies on Liquor Barn Income Fund v. Mather, 2011 BCCA 141 (B.C. C.A.) at para. 37. 34 In this case, Sun Wave submits that it is clear from the letter from Watco that it is not just the CPL that is preventing or will prevent the sale. The letter from Watco set out above references that a condition of the sale is “settling current outstanding issues between the City and the former owner, Sun Wave Forest Products.” Further that remediation would only be done if: “the lingering issues related to ownership are dealt with.” 35 Sun Wave further points to a letter of October 15, 2012 from Watco to Sun Wave, in which Watco says: “... the resolution of issues related to ownership and liability must be resolved for the Site to be sold by the City...” and further regarding remediation: “Watco will not proceed further with any of these steps, and the sale to Watco will not proceed, while there is pending litigation and the ownership and liability issues have not been resolved. 36 Sun Wave therefore says that it is not the registration of the CPL, but the existence of the litigation itself that is a bar to the sale. 37 The chambers judge in the Liquor Barn case had found that the allegations of fraud in the underlying litigation were a bar to the sale in that case: [14] The chambers judge dismissed Becker and Owen’s application. He found that while the appellants had demonstrated hardship and inconvenience caused by the underlying litigation, they had failed to demonstrate that they had experienced or were likely to experience hardship and inconvenience as a result of the registration of the CPLs as was required by the provisions. While the CPLs may have alerted the lending institutions to the litigation, the chambers judge found that it was the nature of the litigation itself, which included allegations of fraud and breach of fiduciary duty, that created the impediment for completion of the refinancing arrangements, not the regis- 156 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

tration of the CPLs. This finding, he stated, was supported by the appellants’ rejection of the respondents’ offer to temporarily lift the CPLs on all of the affected properties to enable the appellants to complete their new agreements with the lenders. 38 Here, although there is reference by Watco to a need to resolve the litigation with Sun Wave, there is no indication that there is any real impediment to the sale other than the uncertainty as to title, which would be resolved by the removal of the CPL from the titles to the Lands. There are no issues in the litigation that put this case on a par with Liquor Barn. 39 The registration of the CPL has prevented Prince Rupert from carrying to fruition plans to sell the Lands and resolve the potential environmental contamination issues. In the meantime it is subject to significant costs in holding the Lands. I am satisfied that the applicant, Prince Ru- pert, has shown that substantial hardship and inconvenience is being experienced and is likely to be experienced and the hardship and inconvenience is directly attributable to the registration of the CPL on the titles to the Lands.

The Claim to an Interest in the Lands 40 In supplemental submissions, Prince Rupert also submitted that the claim of Sun Wave to an interest in the Lands was unsupportable. 41 It was submitted that Prince Rupert had not been able to put full argument before Mr. Justice Grauer on the point and that Sun Wave incorrectly stated the law before him and, citing Hansard Spruce Mills Ltd., Re, 1954 CarswellBC 6 (B.C. S.C.) at paras. 4 & 6, argues that I am not bound by Mr. Justice Grauer’s conclusion as to the arguments of Sun Wave. 42 As noted, essentially, Sun Wave submitted that Prince Rupert acted ultra vires in its tax sale and that made the sale a nullity. They argue that it follows that the Lands should be returned to them. 43 Prince Rupert says even if the tax sale were a nullity, it cannot affect the title to the Lands, which is now vested in Prince Rupert. This is the argument counsel submits he was unable to put before Mr. Justice Grauer. Prince Rupert says Sun Wave’s claim to ownership of the Lands is statute barred by the following provisions: Sun Wave Forest Products Ltd. v. Prince Rupert (City) Master Muir 157

44 S. 420 of the Local Government Act, RSBC 1996, Ch. 323: Registration of purchaser 420 (1) If a parcel of land sold for taxes is not redeemed as provided in this Act, at the end of the redemption period, the collector must forward a notice to that effect to the registrar of land titles. ... (5) The notice referred to in subsection (1) operates (a) as a conveyance to the purchaser from the registered owner in fee simple, without proof of the signature of the collector and without an attestation or proof of execution, and (b) as a quit claim in favour of the purchaser of all right, title and interest of every previous owner in fee simple of the parcel, or of those claiming under any previous owner, and of all claims, demands, payments, charges, liens, judgments, mortgages and encumbrances of every type, and whether or not registered in accordance with the Land Title Act, subsisting at the time the application to register was received by the registrar, except (i) the matters set out in section 276 (1) (c) to (g) of the Land Title Act, and (ii) any lien of the Crown or an improvement district. 45 S. 424 of the Local Government Act: Restrictions on legal actions in relation to tax sale 424 (1) After the end of the period allowed for redemption, no action may be brought to recover the property sold or to set aside its sale. 46 S. 276 of the Land Title Act: Effect of registration of title derived from tax sale 276 (1) Despite any other Act, if land is sold for taxes, rates or assessments, the registration of the tax sale purchaser for an estate in fee simple purges and disencumbers the land of (a) all the right, title and interest of every previous owner, or of those claiming under a previous owner, and (b) all claims, demands, payments, charges, liens, judgments, mortgages and encumbrances of every nature and kind, whether or not registered under this Act, that are subsisting immediately before the registration of the tax sale purchaser, except (c) an easement registered against the land, 158 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

(d) a restrictive covenant, declaration of building scheme, or covenant under section 219 registered against the land, (e) a statutory right of way registered as a charge against the land, (f) the rights specified in section 23 (2) (a), (b), (e), (f), (h), (i) and (j), and (g) a lien or mortgage of the Crown or an improvement district. 47 S. 23 of the Land Title Act: Effect of indefeasible title 23 (1) ... (2) An indefeasible title, as long as it remains in force and uncancel- led, is conclusive evidence at law and in equity, as against the Crown and all other persons, that the person named in the title as registered owner is indefeasibly entitled to an estate in fee simple to the land described in the indefeasible title, subject to the following: (a) the subsisting conditions, provisos, restrictions, exceptions and reservations, including royalties, contained in the original grant or contained in any other grant or disposition from the Crown; (b) a federal or Provincial tax, rate or assessment at the date of the application for registration imposed or made a lien or that may after that date be imposed or made a lien on the land; (c) a municipal charge, rate or assessment at the date of the application for registration imposed or that may after that date be imposed on the land, or which had before that date been imposed for local improvements or otherwise and that was not then due and payable, including a charge, rate or assessment imposed by a public body having taxing powers over an area in which the land is located; (d) a lease or agreement for lease for a term not exceeding 3 years if there is actual occupation under the lease or agreement; (e) a highway or public right of way, watercourse, right of water or other public easement; (f) a right of expropriation or to an escheat under an Act; (g) a caution, caveat, charge, claim of builder’s lien, condition, entry, exception, judgment, notice, pending court proceeding, reservation, right of entry, transfer or other matter noted or Sun Wave Forest Products Ltd. v. Prince Rupert (City) Master Muir 159

endorsed on the title or that may be noted or endorsed after the date of the registration of the title; (h) the right of a person to show that all or a portion of the land is, by wrong description of boundaries or parcels, improperly included in the title; (i) the right of a person deprived of land to show fraud, including forgery, in which the registered owner has participated in any degree; (j) a restrictive condition, right of reverter, or obligation imposed on the land by the Forest Act, that is endorsed on the title. 48 S. 25 of the Land Title Act: Protection of registered owner against actions for recovery of land 25 (1) In this section, “courts” includes a person or statutory body having, by law or consent of parties, authority to hear, receive and examine evidence. (2) An action of ejectment or other action for the recovery of land for which an indefeasible title has been registered must not be commenced or maintained against the registered owner named in the indefeasible title, except in the case of (a) a mortgagee or encumbrancee as against a mortgagor or en- cumbrancer in default, (b) a lessor as against a lessee in default, (c) [Repealed 2005-35-13.] (d) a person deprived of land improperly included in an indefeasible title of other land by wrong description of boundaries or parcels, (e) 2 or more indefeasible titles having been registered under this Act in respect of the same land, the registered owner claiming under the instrument that was registered first, (f) a right arising or partly arising after the date of the application for registration of the title under which the registered owner claims, including, without limitation, (i) the right of a purchaser claiming under a contract with the registered owner for the sale of the land, and (ii) the right of a beneficiary if the registered owner is a trustee, and (g) a right arising under section 23 (2). 160 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

(3) In any case other than those enumerated by way of exception in subsection (2), the production of a subsisting state of title certificate must be held in all courts to be an absolute bar and estoppel to an action referred to in subsection (2) against the registered owner named in the certificate, despite a rule of law or equity to the contrary. 49 Prince Rupert also referenced the decision of Madam Justice McLachlin, as she then was, in Gray v. Langley (Township), 1986 Can- LII 832 [1986 CarswellBC 385 (B.C. C.A.)] regarding finality in tax sales of land: [69] I am satisfied upon consideration of s. 473 and s. 475 that the intention of the legislature was to make tax sales final notwithstanding defects in procedure save for the specified exceptions. There are two stages. During the redemption period, under s. 473, there is a fairly broad right of challenge. After the redemption period, however, claims are restricted to compensation or indemnity; no claims with respect to the land itself or title can be maintained. [70] I am confirmed in this view by other considerations. First, this reading of the Municipal Act is consistent with the land registry system in place in British Columbia. The keystone of that system is the conclusiveness and finality of title as an indication of ownership. The prospect of challenges to the title of the tax purchaser long after the redemption period has passed and after the purchaser may have in good faith expended money and work in improving what he thought was his land is not consistent with the goals of our land registry system. More particularly, s. 255 of the Land Title Act provides that: 255.(1) ... where land is sold for taxes, rates, or assessments, the registration of the tax sale purchaser for an estate in fee simple purges and disencumbers the land of (a) all the right, title and interest of every previous owner, or of those claiming under him ... Clearly the legislature’s intention was that a purchaser such as Mrs. Griffith, who obtains title pursuant to s. 272 of the Municipal Act at the end of the redemption period, should take title free from any claims of the previous owner. [71] Second, the history of the legislation confirms the increasing concern of the legislature with ensuring certain title on tax sales, within such limits as are necessary to protect the property owner. Before 1900, tax purchasers in British Columbia could only purchase prima facie title. Tax titles could always be impeached, and tax purchasers were never sure of their titles: Johnson v. Kirk 1900 CanLII Sun Wave Forest Products Ltd. v. Prince Rupert (City) Master Muir 161

29 (SCC), (1900), 30 S.C.R. 344. In 1900 the legislature enacted s. 8 of the Land Registry Amendment Act to cure uncertain tax titles by estopping and debarring claims after the redemption period: see Temple v. North Vancouver reflex, (1914), 6 W.W.R. 70 at 103-105 (S.C.C.) [B.C.], per Duff J.; Crumm v. Shepard, 1928 CanLII 45 (SCC), [1928] S.C.R. 487 at 511-12, [1928] 3 D.L.R. 887 [Alta.]. In 1913 the legislature added an indemnity provision for persons who could not recover their land because of the operation of the Land Registry Act. Between 1914 and 1919 the legislation permitted actions to set aside tax sales if they were brought within a year of delivery of the deed to the tax purchaser, but not otherwise. In 1919 the legislature repealed the existing tax sale provisions and enacted the predecessors of the present ss. 472 and 475 of the Municipal Act. Finally, in 1978, s. 255 of the Land Title Act was enacted, providing that the tax purchaser obtains lee simple free of encumbrances. [72] Third, as a matter of statutory construction, it may be observed that s. 475 would be redundant if it were held only to apply to “valid” sales where all provisions of the Act have been met. If the sale is valid, there can be no cause of action with respect to it. On the other hand, if it is invalid, it is said s. 475 does not apply to it. On this reasoning, s. 475 would never come into play. The principle of statutory construction that a meaning should be given to every provision of a statute, if possible, militates against Mr. Gray’s position. [73] Counsel for Mr. Gray submitted that if s. 475 bans actions to set aside sales where the mandatory requirements of the Act as to notice and the conduct of the sale have not been complied with, then those sections are meaningless and can be ignored by municipalities with impunity. This submission overlooks the fact that before expiry of the redemption period, actions for some procedural omissions can be brought under s. 473(1)(c). Moreover, s. 474(2) empowers council to order return of the purchase price to the purchaser where it finds “manifest error” during the redemption period. 50 Despite having taken up my invitation to submit supplementary submissions regarding these statutory provisions, Sun Wave did little more than repeat its previous argument. With respect to the impact of the vest- ing and certainty of ownership provisions, if I can call them that, in the Local Government Act and the Land Title Act, Sun Wave says only: 10. If Sun Wave succeeds in establishing on its judicial review that the City’s assessment is ultra vires, then the assessment is a nullity, 162 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

and the City’s tax sale, which requires as a condition precedent a vires assessment that taxes are “delinquent”, must fall. Local Government Act, s. 403(1) Zietal [sic] v. Ellscheid, [1994] S.C.R. 142 at para. 15 11. The existence of statutory appeal and limitation provisions respecting the assessment and resulting tax sale, including those found in ss. 422 and 424 of the Local Government Act (the “LGA”) do not bar Sun Wave’s judicial review. 12. Likewise, provisions found in the LGA which give effect to those limitation periods, such as the quit claim found in s. 420(5) of the LGA, and corresponding provision s. 276 found in the Land Title Act should not, and do not, bar Sun Wave’s judicial review application. These provisions are the mechanism through which the appeal process of an administrative act is given effect and, it is submitted, are not fatal to a review challenging the vires of that administrative act. 51 I am not convinced that s. 403 of the Local Government Act or Zeitel v. Ellscheid [1994 CarswellOnt 1156 (S.C.C.)] stand for the proposition asserted. In para. 20 of Zeitel, Justice Major, for the majority, confirms the finality of tax sales: 20 Finally, it is necessary to consider the objects of the MTSA. The statute exists to allow property which is the subject of tax arrears to be sold by a municipality. As purchasers must be assured of the integrity of title, the legislature has stated that, with few exceptions, once a tax deed is issued, it is final and binding. In recent years, the legislation has been amended to better ensure finality. As my col- league, Sopinka J., notes, s. 13(1) was introduced to abolish the power of courts to declare tax sales invalid on the basis that an assessment was invalid... 52 The position of Sun Wave is contra to the principle that finality is desired in tax sales. Section 424 of the Local Government Act, set out above is very similar to s. 475 of the Municipal Act, RSBC 1979, ch. 290, which was considered by Madam Justice McLachlin in Gray v. Langley (Township) at paras. 72 & 73. One would only have to substitute “ultra vires” for “valid” and I can see no reason why the conclusions there would not apply equally to ultra vires sales. 53 Sun Wave has not argued that it can avail itself of any of the statutory exceptions contained in the Local Government Act or the Land Title Act sections relied upon by Prince Rupert. Sun Wave Forest Products Ltd. v. Prince Rupert (City) Master Muir 163

54 The decision of Mr. Justice Grauer was really on a different point — was the Judicial Review Act proceeding able to proceed despite the ef- fluxion of time? I do not disagree on that point. Sun Wave is entitled to proceed and obtain a declaration that the actions of Prince Rupert were ultra vires, if that is the case. Sun Wave is, however, barred from recov- ering the Lands by the statutory provisions set out above. 55 I am therefore of the view that the claim of Sun Wave to an interest in the Lands is overcome by the statutory provisions of the Local Govern- ment Act and the Land Title Act and hence there is no foundation for a Certificate of Pending Litigation to remain on the titles.

Prejudice 56 Sun Wave has not set out any prejudice in its affidavit material or argument that cannot be compensated for by damages. They assert no specific interest in or plans for these Lands. They assert no uniqueness or any other factors specific to this property that make actual repossession of the Lands important. 57 The only concern raised is that removing the CPL might make its Judicial Review Act application moot, as no damages can be awarded under that Act. 58 Damages are sought, however, and could be awarded in this action.

Security 59 The Land Title Act, s. 257 sets out the powers of the court on an application under s. 256(1) as follows: Power of court to order cancellation 257 (1) On the hearing of the application referred to in section 256 (1), the court (a) may order the cancellation of the registration of the certificate of pending litigation either in whole or in part, on (i) being satisfied that an order requiring security to be given is proper in the circumstances and that damages will provide adequate relief to the party in whose name the certificate of pending litigation has been registered, and (ii) the applicant giving to the party the security so ordered in an amount satisfactory to the court, or 164 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

(b) may refuse to order the cancellation of the registration, and in that case may order the party (i) to enter into an undertaking to abide by any order that the court may make as to damages properly payable to the owner as a result of the registration of the certificate of pending litigation, and (ii) to give security in an amount satisfactory to the court and conditioned on the fulfilment of the undertaking and compliance with further terms and conditions, if any, the court may consider proper. 60 While I appreciate that the power to cancel a CPL should be exercised with very great caution when a party is seeking specific perform- ance, I am satisfied here that damages will provide adequate compensation to Sun Wave. 61 Prince Rupert relies on a decision of the BC Court of Appeal in Strata Corp. VR149 v. Berezowsky (1986), 5 B.C.L.R. (2d) 316 (B.C. C.A.) at para. 35, as authority for the proposition that where the registrant of a CPL has no interest in the land and hardship and inconvenience have been shown it may be appropriate to cancel the CPL “in whole and without security.” 62 Given the position and assets of Prince Rupert and Sun Wave’s lack of any potential interest in the Lands making the registration of a CPL an inappropriate remedy, it is my view that here too the CPL should be cancelled in whole and without security.

Certificate of Pending Litigation in the Judicial Review Action 63 I am advised by counsel that a CPL has been filed in the Petition action since the hearing of this matter. Counsel for Prince Rupert urges me that it is in the interests of justice to cancel that CPL as well. That action is not before me and neither is an application to remove that CPL. I cannot see why the same reasoning would not apply to the new CPL. Its filing in the face of this application appears abusive, but as the matter is not before me I do not believe I have the jurisdiction to order its cancellation.

Conclusion 64 In all of the circumstances, I am of the view that the statutory requirements for an order removing the CPL have been met and it is in the Sun Wave Forest Products Ltd. v. Prince Rupert (City) Master Muir 165 interests of justice to do so. I therefore exercise my discretion in favour of ordering a removal of the CPL from the Lands without security. Application granted. 166 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

[Indexed as: Von Einsiedel v. Dewdney Area Improvement District] Carl Von Einsiedel, Petitioner and Dewdney Area Improvement District, Peter Schalkx and Douglas McNeill, Respondents British Columbia Supreme Court Docket: Vancouver S124167 2012 BCSC 2020 Stromberg-Stein J. Heard: November 27, 2012 Judgment: November 27, 2012 Public law –––– Elections — Voters — Right to vote — In municipal elections — Miscellaneous –––– Landowner in zone 1 was elected trustee for zone 1, and landowner in zone 2 was elected trustee for zone 2 — Letters patent required nine elected trustees of district to be elected by qualified voters who owned land in district — Amended letters patent divided district into three zones, and required three trustees from each of three zones — Petitioner brought petition to set aside two elections and for order for re-elections, restricted to entitled voters owning property in relevant zones — Petition dismissed — There was no irregularity — Petitioner overlooked fact that trustees had to be landowners in zone in which they were elected, thus ensuring equal representation by zone on district board — Voting restriction could have been subject of order in council amending letters patent, but it was not — Appropriate venue to address petitioner’s concerns was district board meeting, not court. Statutes considered: Local Government Act, R.S.B.C. 1996, c. 323 Generally — referred to s. 731 — considered s. 737 — considered

PETITION to set aside elections of two trustees and for order for re-elections.

B.A. Mason, for Petitioner J. Goulden, for Respondents Von Einsiedel v. Dewdney Area Improvement District Stromberg-Stein J. 167

Stromberg-Stein J. (orally):

1 By amended petition, the petitioner seeks to set aside the elections on May 28, 2012, of Peter Schalkx, representing Zone 1 Hatzic Prairie and a landowner in that zone, and Douglas McNeill, representing Zone 3 Dewdney, a landowner in that zone, as Trustees of the Dewdney Area Improvement District, which I will try to call the District. 2 The petitioners seek an order for re-elections to the two zones restricted to entitled voters owning property in the relevant zone. 3 The factual basis is set out in the petition, particularly paragraphs 1 through 11 of the amended petition. 4 The District was incorporated by Letters Patent on August 17, 1972. The objects of the District, as set out in the Letters Patent, are the diking and drainage of land, and the construction, acquisition, maintenance, and operation of works for these purposes, and all things incidental thereto. 5 The Letters Patent stipulated that there should be nine elected Trust- ees of the District. The Trustees were vested with the duty to call Annual General Meetings of the owners of land in the District. Trustees were elected by qualified voters who were described as Canadian citizens, 19 years or older, and a landowner in the Improvement District. 6 The District Board resolved to establish three electoral areas within the District, with three Trustees representing each of the three areas, in order to ensure even representation on the District Board. By amended Letters of Patent, Order in Council Number 0867 on December 1, 2006, the District was divided into three zones: Zone 1 Hatzic Prairie; Zone 2 Hatzic Lake; and Zone 3 Dewdney. Land in Zones 1 and 3 is primarily agricultural and in Zone 2 it is described as more residential/recreational. 7 The amended Letters of Patent provided that there shall be three Trustees from each of the three zones. There were no restrictions in the amended Letters of Patent placed on eligible voters. 8 Historically the District Board has conducted elections at their An- nual General Meetings in accordance with the 1972 Letters Patent. That is, Trustees are elected by eligible voters at the Annual General Meeting at large from each of the three zones. The petitioner maintains that the eligible voters should, in fact, be segregated to voters only in the zone for which a particular Trustee is running for. 9 The petitioner is a Trustee and has been since 2004. He became concerned following the May 28, 2012, Annual General Meeting and elec- 168 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

tion, that the election of Trustees by voters at large was a serious irregularity. He maintains that voters should be segregated to vote for Trustees in their own zone, otherwise a zone with a significantly higher number of voters could skew the elections and would defeat the purpose of achiev- ing even representation on the Board. 10 In this case, Hatzic Lake apparently has significantly more voters than the other two zones, and I just would note that the Hatzic Lake Trustee was acclaimed, so the two Trustees that are the subject of this proceeding are not from the Hatzic Lake zone. 11 The petitioner argues the election of Trustees at large is contrary to the fundamental concept of constituent representation, as determined by voters from each represented zone. Counsel has relied on a number of authorities which, in my view, are not relevant to the circumstances in this petition. 12 What is overlooked in the petitioner’s argument, in addition to the proper interpretation of the legislation, is the fact that the elected Trust- ees have to be landowners in the zone to which they are elected, thus ensuring equal representation by zone on the Board. 13 The District is governed by the Letters Patent and amended Letters Patent and the Local Government Act. Section 731 of that Act permits the district to be divided into zones, as it was in this case, and to specify the number of Trustees to be elected from each zone, and to provide for the election and method of election of Trustees in any zone. This section provides the power to specify the method of election, that could be at large or segregated, in terms of eligible voters. This has not been done in this case. 14 Section 737 of the Act stipulates who, in fact, is eligible to vote for Trustees in the Improvement District, and there is no restriction in that section to segregate eligible voters to specific zones within a district. 15 The Letters Patent do not divide eligible voters into three zones, with each group representing a zone and each group being eligible to vote only for the Trustees in their zone. Such voting restriction could have been the subject of the Order in Council amending the Letters Patent; it was not. 16 I agree with the respondents that the appropriate venue for the District Board to address the petitioner’s concerns is at a District Board meeting and not in this Court. The District Board should consider whether it Von Einsiedel v. Dewdney Area Improvement District Stromberg-Stein J. 169

wishes to amend the Letters Patent. If so, a proper request should be made to the Government. 17 I agree that policy questions, such as those raised by the petitioner, are better left to the Board and the Government. The Letters Patent should be interpreted by this Court as they are clearly and unambigu- ously written, and that is that the District is divided into three zones with three Trustees elected from each zone. The eligible voters can vote for all nine Trustees. There is no basis for restricting voter eligibility. As I have said, this was not done in the Letters Patent. 18 In my view, the election was held in accordance with the Letters Pat- ent and the amended Letters Patent and the Local Government Act. There is no irregularity and the petition is dismissed with costs. Petition dismissed. 170 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

[Indexed as: Fishburn Holdings Ltd., Re] In the Matter of subsection 45(12) of the Planning Act, R.S.O. 1990, c. P.13, as amended Applicant and Appellant: Fishburn Holdings Ltd. Subject: Minor Variance Variance from By-law No.: 2010-0050 Property Address/Description: 15479 Steeles Avenue Municipality: Town of Halton Hills Municipal File No.: D13VAR12.008H - Fishburn-15479 OMB Case No.: PL120540 OMB File No.: PL120540 Ontario Municipal Board Docket: PL120540 J. de. P. Seaborn, V-Chair Decision: September 7, 2012 Municipal law –––– Zoning — Judicial interpretation of zoning by-laws — Interpretation — Terms in by-laws — Miscellaneous –––– “Service industrial” — Landowner purchased property in 1960s, which was then zoned agricultural — Landowner obtained variance and began undertaking industrial operations, including roofing, sandblasting and painting on property — In 2010, respondent municipality enacted new zoning by-law creating site-specific zoning with permitted uses including inter alia “light manufacturing”, “service industrial” and “warehousing” — Landowner’s tenant sought to operate truck-servicing business on rented portion of property, including truck parking lot, and landowner brought application before municipality and respondent regional authority for declaration that tenant’s proposed uses were permitted by 2010 bylaw — Application was dismissed on basis that “truck terminal” was not permitted site-specific use, and landowner appealed — Appeal allowed — “Clear direction and intent” of municipality and region was that land would no longer be considered agricultural — Land had been used for industrial purposes, and trucks routinely parked on landowner’s property for many years — Municipality and region wrongly characterized proposed uses as “truck terminal” — As bylaw expressly permitted “service industrial” and “warehousing” uses, proposed uses of truck parking and servicing were permitted under present wording of bylaw — Appeal was accordingly properly allowed without resort to legal non- conforming use provisions. Fishburn Holdings Ltd., Re J. de. P. Seaborn, V-Chair 171

Statutes considered: Planning Act, R.S.O. 1990, c. P.13 Generally — referred to s. 2 — considered s. 3(5) — considered s. 45(1) — considered s. 45(2)(b) — considered

APPEAL by landowner from decision of respondents municipality and region holding that truck parking and servicing does not comply with permitted uses of landowner’s property pursuant to municipal zoning by-law.

H.T. Arnold, for Fishburn Holdings Ltd. D. Beck, for Regional Municipality of Halton, Town of Halton Hills

J. de. P. Seaborn, V-Chair: Introduction 1 Fishburn Holdings Ltd. (“Fishburn”) seeks relief from the provisions of zoning by-law 2010-0050 (“By-law”) enacted by the Town of Halton Hills (“Town”) to permit the use of a portion of its land and building for truck parking and servicing. The Committee of Adjustment (“Commit- tee”) denied the request and the Town and the Regional Municipality of Halton (“Region”) were represented at the hearing and oppose the application.

Issue and position of the parties 2 The issue for determination is whether an additional use beyond those provided for in the By-law should be permitted. The appeal by Fishburn is pursuant to s. 45(2)(b) of the Planning Act (“Act”) which provides that: (2) Other powers.-In addition to its powers under subsection (1), the committee, upon any such application, (b) where the uses of land, buildings or structures permitted in the bylaw are defined in general terms, may permit the use of any land, building or structure for any purpose that, in the opinion of the committee, conforms to the uses permitted in the by-law. 3 Fishburn seeks permission to use a portion of its land and one building for truck parking and servicing. The Region and the Town take the 172 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

position that the proposed use fails to conform to the By-law and should not be permitted under s. 45(2)(b). 4 Ms. Partridge, a planner with the Region and Mr. Farr, a planner with the Town provided their respective opinions, both concluding that the application to permit the requested use should be denied on the basis that a transport terminal use does not conform to the uses permitted in the By-law. Mr. Riepma, also a land use planner qualified to provide opinion evidence, testified that Fishburn merely wishes to park trucks in a designated area and have those vehicles serviced on site inside an existing structure. It was Mr. Riepma’s testimony that the proposed activities are improperly characterized by the municipalities as a transport terminal and the proposal conforms to the uses permitted under the By-law.

Evidence and Findings Site location, activities and zoning 5 The Fishburn property is located at 15479 Steeles Avenue, between the North Line and the Tenth Line. The activities of the business include a roofing company, offices, a laboratory, and sand blasting and painting operations. Fishburn has been in operation since the mid-1960’s and em- ploys about 40 people. There are four buildings on site and the proposal is to rent out the building that is currently vacant to a tenant who would service trucks and trailers on the site. A maximum of twelve trucks could be parked on site at any given time and the trucks would be serviced inside (building#4 on the site plan). In order to service trucks, the prospective tenant sought a garage license from the Ministry of Transport (“MTO”). MTO requires a letter from the municipality confirming that the use is permitted in the zoning by-law. It is this requirement that triggered Fishburn’s application to the Committee, which was denied. 6 The By-law was enacted by the Town in 2010, and zones the property RU-EMP (14). The property is therefore subject to site specific zoning and the permitted uses are: (i) Business office, accessory; (ii) Dry industrial use; (iii) Light manufacturing use; (iv) Outdoor storage, accessory; (v) Public use; (vi) Retail store accessory; (vii) Service industrial use; (viii) Warehousing. Only the terms in italics are defined in the By-law.

Applicable policies 7 Despite the site specific official plan amendments applicable to the Fishburn property permitting their existing operations, the Region and Fishburn Holdings Ltd., Re J. de. P. Seaborn, V-Chair 173

the Town argued that the official plan policy framework does not support the additional permission sought for truck parking and servicing. 8 Under the Regional official plan, the property is designated as being within the Agricultural Rural Area. Regional Official Plan Amendment No. 14 (ROPA 14), approved in 2000, permitted painting, sandblasting and accessory office uses on the site. Regional Official Plan Amendment No. 38 (ROPA 38), adopted by Regional Council in December 2009 and approved by MMAH, designates the property as Urban Area with an Em- ployment Area overlay. While ROPA 38 remains under appeal, none of the appeals affect the Fishburn property. 9 The property is designated Agricultural Area (A) in the Town’s official plan. In 2010 the Town adopted Official Plan Amendment No. 10 (OPA 10) which designates the area north of Steeles, including the Fishburn property, as Future Employment Area. OPA 10 conforms to ROPA 38. 10 Both planners argued that while ROPA 38 and OPA 10 set out the future land use designations applicable to the property. The future direction set out in these official plans and background work undertaken in support of their enactment includes considerable commentary on the location of truck terminals close to the 401/407 corridor. Mr. Farr indicated that there is a general concern that the decision in this matter could serve as a precedent to generally locate transport terminals on lands adjacent to the highway corridor. 11 Given ROPA 38 and OPA 10 remain under appeal, the municipal planners evaluated the transport terminal use in the context of policies applicable to the Agricultural Rural Area. Ms. Partridge concluded that under ROPA 14 (a site specific OPA), Fishburn was given permission to use additional land it had acquired for a painting and sandblasting operation and accessory office uses. No site specific permission exists for the new proposed use. As well, the addition of a new truck parking and servicing use is not consistent with the permitted uses captured in the 1995 Regional Official plan for the rural area. Similarly, Mr. Farr testified that Official Plan Amendment No. 98 (OPA 98) (the Town’s site specific amendment) does not recognize transport terminals as a permitted use. That amendment recognized and re-designated the lands to Rural Indus- trial Area. 12 On this matter, the Board finds that the addition of a truck parking and servicing use at the Fishburn site is supported by the applicable offi- 174 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

cial plan policies. First, while ROPA 38 and OPA 10 may remain under appeal, the clear direction and intent of the respective municipal councils is that the lands in question will no longer be designated as agriculture. Moreover, the property has been subject to site specific policies for several years permitting, among other activities, sandblasting and painting. Trucks routinely enter and exit the site. It is an industrial operation and has operated as such for many years. 13 Second, both planners went to considerable effort to explain that transport terminals are not supported under either existing official plan policies (as they are not permitted in designated agricultural areas) or under ROPA 38 and OPA 10. However, the simple fact is that Fishburn is not proposing to operate a transport terminal. It is seeking permission to add a use that is consistent with the site specific designations that apply to the property. 14 Finally, for reasons discussed below the test to permit a use under s. 45(2)(b) of the Act is different from the four part test for a minor variance sought under s 45(1) of the Act. Under s. 45(2)(b) conformity with the uses permitted in the by-law is what needs to be established. The By- law that zones the property is site specific and conforms to both official plans.

Application of s. 45(2)(b) 15 Section 45(2)(b) of the Act gives the Committee (and on appeal, the Board) additional powers beyond the ability to authorize minor variances from the provisions of the applicable by-law. Unlike s. 45(1), there is no four part test set out in s. 45(2)(b). The section merely states that if the uses permitted in the governing by-law are defined in general terms, additional uses may be permitted as long as they conform with the uses permitted in the by-law. Mr. Riepma’s opinion was that the RU-EMP(14) site specific zoning meets this test. First, the by-law defines the uses permitted on the site in general terms; and second, the proposal to use part of the land and building #4 for a truck parking and servicing use conforms with the uses permitted in the by-law. The Board adopts and relies upon Mr. Riepma’s analysis and finds that the proposed truck parking and servicing use conforms with permitted uses. On this basis, the application should be allowed. 16 The difficulty with the opinions advanced by the Mr. Farr and Ms. Partridge was that their analysis was largely based on the premise that the proposed use is for a transport terminal, defined as: The use of land Fishburn Holdings Ltd., Re J. de. P. Seaborn, V-Chair 175

for the purpose of storing, servicing, washing, repairing or loading of trucks or transport trailers with materials or goods that are not manufactured, assembled, warehoused or processed on the same lot. 17 What Fishburn proposes is a subset of the range of activities that define a transport terminal. Simply put, the use is much narrower than those envisioned by a transport terminal. There is no suggestion that goods will be loaded or unloaded from either transport trailers or trucks or that goods manufactured elsewhere will be stored on site. 18 For an application under s. 45(2)(b) to succeed, the permitted uses must be defined in general terms. The By-law permits light manufacturing, service industrial and warehousing. None of these terms are in italics or defined in the By-law and it was Mr. Riepma’s opinion that they are therefore defined in general terms. If the permitted uses are defined in general terms, then s. 45(2)(b) allows new uses to be permitted as long as they conform with the permitted uses. Truck parking already occurs on the site. The permission for truck servicing as a permitted use arises because the prospective tenant requires a service licence from MTO. Given the range of industrial uses permitted under the By-law, in particular, the permissions for service industrial use and warehousing, the Board finds that truck parking and servicing conforms to the uses set out in the By- law and is therefore may be permitted. 19 The Board has also considered matters of provincial interest as required under s. 2 of the Act, as well as s. 3(5), which requires that decisions be consistent with provincial policy statements and conform to provincial plans that are in effect. The Board finds that the addition of the truck parking and servicing use satisfies both of these sections of the Act. There was no evidence of impact associated with the proposal. The main issue for the municipalities was that an approval could set a precedent for the location of transport terminals within the 401/407 highway corridor. Given that the proposal is not for a transport terminal, no precedent ema- nates from the Board’s decision. The effect of the Board’s decision is to permit an additional use that conforms to what is already occurring at this industrial site.

Decision and Order 20 For all of the reasons given, the Board orders that the appeal is allowed and pursuant to s. 45(2)(b) of the Act, the Board permits the use of truck parking and servicing at the Fishburn property. 176 MUNICIPAL & PLANNING LAW REPORTS 5 M.P.L.R. (5th)

21 So orders the Board. Appeal allowed.