Canadian Lawyer InHouse

Until the media got hold of the Ford stuff in ontario, i don't know if the risks were fully understood. JAMie Johnson, City of edmonton the issue before voting to rescind the council's earlier decision requiring him to repay the money. This prompted Toronto resident Paul Magder to file an application at the Ontario Superior Court, under the Municipal Conflict of Interest Act. Justice Charles Hackland found Ford had contravened the act by voting on a matter in which he had a pecuniary interest; the strict provisions of the legislation meant his seat would have to be declared vacant. However, this was overturned by the Divisional Court in a controversial decision that found city council lacked the power to require Ford to repay the money. Ford had therefore not contravened the act because the financial sanction had been "a nullity," the court ruled. This decision is "very dangerous," says John Mascarin, a municipal lawyer at Aird & Berlis LLP in Toronto. The spectre of councils having to retrospectively invalidate decisions could "lead to administrative chaos," he warns. He adds: "Strictly through a municipal law lens, the presumption of validity doctrine applies. When Ford went to council, it [the financial sanction] was presumed to be valid at that point, so he clearly had a pecuniary interest." Administrative lawyers would argue the nullity argument trumps the presumption of validity doctrine. "You're going to see a real clash if this ever gets heard at the Supreme Court of Canada," Mascarin predicts (Magder's lawyer 34 • ju n e 2013 INHOUSE Clayton Ruby has asked the Supreme Court for leave to appeal). Bill White, corporate legal counsel for the City of Waterloo, is equally concerned about the Divisional Court ruling. "The decision established a situation where, if a person can find a technicality like [the council] not having enough authority to go with a decision, even though they may have had a conflict of interest under the act, they can get away with it. It's almost like a new law," he says. "It seems to be turning the legislation around to focus on the actions of the municipality, as opposed to the actions of the individual councillor, which is what the legislation was intended to [focus on]." The Divisional Court did not quibble over the fact the solicited money went to Ford's football foundation and not into his own bank account. But in Schlenker v. Torgrimson, the Court of Appeal for British Columbia considered whether elected officials had a pecuniary interest when the sums involved didn't directly fatten their own wallets. The court held that two local government officials possessed an interest when the body they served on awarded two service contracts to a non-profit corporation where they served as directors. Justice Ian Donald wrote on Jan. 13, 2013: "The public is disadvantaged by the conflict, whether the respondents derived any personal gain or not, because the public did not have the undivided loyalty of their elected officials." Or how about an elected representative who doesn't benefit from the contested money, but whose relative does? This cropped up in the case of 92-year-old Mississauga, Ont., Mayor Hazel McCallion who allegedly pushed for a bylaw change that would have benefited a hotel project involving her son by up to $11 million. In the city's submission to a 2011 judicial inquiry into the matter, lawyer Clifford Lax said McCallion's actions were "unbecoming of a city official." The inquiry report, written by Justice Douglas Cunningham, also criticized her actions but stopped short of finding her in breach of the Municipal Conflict of Interest Act, because she declared an interest at a city council meeting, even though she failed to do so on other occasions. Cunningham recommended the act be amended to cover "all meetings attended by members of council in their official capacities." He also wanted the act to clarify that members must disclose pecuniary interests affecting their "spouses, parents, children, siblings, and other relatives." His recommendations are yet to be implemented but the Ontario government is reviewing the act, which contains similar provisions to conflicts of interest legislation in other provinces. In April, McCallion appeared in Ontario's Superior Court facing claims she should have declared a conflict of interest when voting at a 2007 Peel Region council meeting. Part of her defence is the claim that any breach of the act was done through an error in judgment. But ignorance of the act is not to be relied upon as a defence, as Magder v. Ford demonstrated. Ford admitted he had not read the act, did not know what was in the statute, had not attended the legal department's awareness session, or read his councillor's handbook. Hackland argued this was not a bona fide error in judgment but a lack of diligence amounting to "willful blindness." Will Hackland's words encourage a greater awareness of the act among councillors? White doubts it. "There's a lot of material to read. But still, it seems to me that members should be more concerned than they are. It's 'there but for the grace of God go I.'" However, sometimes councillors

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