|
Municipal - Municipal Conflict of Interest Act (MCIA)
MORE CASES
Part 2
. Patrie v. City of Elliot Lake (Integrity Commissioner)
In Patrie v. City of Elliot Lake (Integrity Commissioner) (Div Court, 2023) the Divisional Court considered an appeal under s.11 of the Municipal Conflict of Interest Act (MCIA) "from a decision in an application initiated by the Integrity Commissioner of the City of Elliot Lake". The grounds of the application were under s.5(1)(c) ['When present at meeting at which matter considered - influencing voting'] and s.5.2(1) ['influence'] of the MCIA:
In these quotes the court considered the MCIA s.4(j) 'pecuniary interest' exception for having a 'common interest with electors' (issue #4):Issue #4: Did the application judge correctly apply s. 4(j) of the Act?
Mr. Patrie’s position
[131] Mr. Patrie argues that the application judge erred in her assessment of whether he had an interest in common with electors generally under s. 4(j) of the MCIA. If Mr. Patrie had such an interest, ss. 5 and 5.2 of the MCIA would not apply to him.
[132] Mr. Patrie notes that while the MCIA does not include a definition of “pecuniary interest”, it defines “interest in common with electors generally” in the following manner:“interest in common with electors generally” means a pecuniary interest in common with the electors within the area of jurisdiction and, where the matter under consideration affects only part of the area of jurisdiction, means a pecuniary interest in common with the electors within that part. ....
[135] Mr. Patrie relies on Ennismore (Township), Re (1996), 31 M.P.L.R. (2d) 1 (Ont. Gen. Div.), at para. 16, in which Laforme J., as he was then, considered the definition of “electors generally” and concluded that it does not apply to “all the electors” but rather to electors “of a certain class or order.”
....
[138] The application judge noted that it is not the nature of the interest, but the breadth of those who share the interest which defines whether s. 4(j) of the MCIA applies: Tuchenhagen v. Mondoux, 2011 ONSC 5398, 107 O.R. (3d) 675 (Div. Ct.), at para. 43, leave to appeal quashed, 2012 ONCA 567, 100 M.P.L.R. (4th) 179.
[139] In respect of electors in the whole of the community, the application judge found there are many electors who do not own property or businesses the size of the Oakland Plaza with the interests of the plaza. She noted, for example, that many of the members of the community are retired individuals according to Mr. Patrie’s own position.
[140] With specific reference to electors with businesses in the Oakland Plaza, the application judge found there was no evidence on the record that the other businesses were landlords, landowners, or business owners with the same interests as Mr. Patrie. The application judge said these were distinctions that could not be glossed over with bald descriptions. She said that an interest in common is an interest of the same kind. She noted, for example, that a restaurant in the area, The Fireside, was Klover’s tenant and that other businesses in the area in which Klover had no interest were of different kinds, including the Moose Lodge and a car wash.
[141] The application judge concluded that Mr. Patrie’s interests were not interests in common with the electors generally and that the exception in s. 4(j) of the MCIA does not apply on the facts of the case. The conclusions of the application judge were available to her on the evidence.
Conclusion with respect to Issue #4
[142] The application judge did not err in her finding that Mr. Patrie’s interests are not common with the electors generally and that the s. 4(j) exception does not apply. . Patrie v. City of Elliot Lake (Integrity Commissioner)
In Patrie v. City of Elliot Lake (Integrity Commissioner) (Div Court, 2023) the Divisional Court considered an appeal under s.11 of the Municipal Conflict of Interest Act (MCIA) "from a decision in an application initiated by the Integrity Commissioner of the City of Elliot Lake". The grounds of the application were under s.5(1)(c) ['When present at meeting at which matter considered - influencing voting'] and s.5.2(1) ['influence'] of the MCIA.
In these quotes the court considered the issue of 'direct or indirect pecuniary interest' in the context of the MCIA(issue #3):Issue #3: Did the application judge correctly assess whether Mr. Patrie had a direct or indirect pecuniary interest?
[87] The sections of the MCIA the Integrity Commissioner found Mr. Patrie to have breached are s. 5(1)(c) and s. 5.2(1). Both sections require a determination of whether a member “has any pecuniary interest, direct or indirect.”
[88] Section 5(1) provides as follows:When present at meeting at which matter considered
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. [89] Section 5.2(1) provides as follows:Influence
5.2(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 that is being considered by an officer or employee of the municipality or local board, or by a person or body to which the municipality or local board has delegated a power or duty, the member shall not use his or her office in any way to attempt to influence any decision or recommendation that results from consideration of the matter. ....
Discussion
The test for pecuniary interest
[105] The application judge carefully canvassed the legal principles applicable to the issue of whether Mr. Patrie had a pecuniary interest in the matter of the location of the Hub.
[106] The application judge noted that s. 5(1) of the MCIA refers to “any pecuniary interest, direct or indirect”. (The Integrity Commissioner had found that Mr. Patrie had contravened both s. 5(1)(c) and s. 5.2(1) of the MCIA. The words “any pecuniary interest, direct or indirect” appear in both sections.)
[107] The application judge noted that s. 4 of the MCIA contains exceptions to s. 5 and s. 5.2. She noted that the exception relied upon by Mr. Patrie was s. 4(j), which states that ss. 5 and 5.2 do not apply to a pecuniary interest in any matter that a member may have “by reason of the member having a pecuniary interest which is an interest in common with electors generally.” (I will address this exception, and whether Mr. Patrie had a pecuniary interest in common with electors generally, below, when I consider the fourth issue raised by Mr. Patrie on the appeal.)
[108] The application judge noted that “pecuniary interest” is not defined in the MCIA. She noted that “pecuniary interest” has been defined in the jurisprudence as relating to a financial, monetary, or economic interest. She also noted that “pecuniary interest” is not to be “narrowly confined”, however, must also not be construed so broadly that it captures almost any financial or economic interest needlessly disqualifying councillors from dealing with matters of importance: Ferri, at paras. 9-10.
[109] The application judge considered the principles relating to the duties of members of council listed in s. 1.1 of the MCIA. These principles are the following:1. The importance of integrity, independence and accountability in local government decision-making.
2. The importance of certainty in reconciling the public duties and pecuniary interests of members.
3. Members are expected to perform their duties of office with integrity and impartiality in a manner that will bear the closest scrutiny.
4. There is a benefit to municipalities and local boards when members have a broad range of knowledge and continue to be active in their own communities, whether in business, in the practice of a profession, in community associations, and otherwise. [110] The application judge determined that an objective standard is applied in assessing the issue of a conflict of interest and application of s. 5 of the MCIA. She noted that it is a member’s actions, objectively viewed, that are relevant, and that intention is relevant only to sanction: Baillargeon v. Carroll (2009), 56 M.P.L.R. (4th) 161 (Ont. S.C.), at para. 77.
[111] I agree with the Integrity Commissioner that the Court of Appeal decision relied on by Mr. Patrie, Ferri, addressing the viewpoint of a “reasonable elector” was in relation to the exception to finding a pecuniary interest set out in s. 4(k) of the Act. The language of that provision required the court to consider whether a conflict would “reasonably be regarded” in a certain way, hence the reference in the test to the “reasonable elector”.
[112] The existence of a pecuniary interest under ss. 5 and 5.2 of the MCIA is properly determined through the application of an objective test. The application judge, in her analysis, expressly rejected a subjective test and properly upheld the objective standard. As reproduced, above, the test applied by the application judge was: what would an objective observer understand and believe in the place and circumstances of Patrie on the facts of this case?
....
[115] The application judge concluded that, given the place and circumstances of Mr. Patrie, on the facts of this case, an objective observer would understand and believe that Mr. Patrie had a pecuniary interest in the matter of the location of the Hub.
[116] The application judge made no error in applying the test she applied or in the manner in which she applied the test.
....
Conclusion with respect to Issue #3
[130] The application judge did not err in respect of the test to be applied in determining whether Mr. Patrie had a pecuniary interest or in her application of the test, nor did she err in her treatment of Mr. Naccarato’s evidence. . Patrie v. City of Elliot Lake (Integrity Commissioner)
In Patrie v. City of Elliot Lake (Integrity Commissioner) (Div Court, 2023) the Divisional Court considered an appeal under s.11 of the Municipal Conflict of Interest Act (MCIA) "from a decision in an application initiated by the Integrity Commissioner of the City of Elliot Lake". The grounds of the [court] application were under s.5(1)(c) ['When present at meeting at which matter considered - influencing voting'] and s.5.2(1) ['influence'] of the MCIA.
These quotes illustrate MCIA/Integrity Commissioner procedures, up to and including the court application:[1] This is an appeal under s. 11 of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 (MCIA), from a decision in an application initiated by the Integrity Commissioner of the City of Elliot Lake.
[2] In its notice of application, the Integrity Commissioner pleaded that it had determined that Chris Patrie, an Elliot Lake city councillor at the time, violated ss. 5(1)(c) and 5.2(1) of the MCIA.[3] The application judge, Rasaiah J., concluded that there was more than sufficient evidence on the record to support a finding that Mr. Patrie had contravened the MCIA as alleged. Under s. 9(1) of the MCIA, she ordered that Mr. Patrie be removed from office and disqualified from being a member[1] for two years.
....
[7] The parties to the appeal are Mr. Patrie, City of Elliot Lake (Integrity Commissioner), and the Corporation of the City of Elliot Lake, which was added as a respondent by Kurke J.
[8] A non-profit corporation, Expertise for Municipalities or “E4M” acted as the Integrity Commissioner for Elliot Lake in this case.
....
[26] On March 29, 2019, the then-mayor of Elliot Lake, Dan Marchisella, filed a complaint about Mr. Patrie with the respondent, the city’s Integrity Commissioner.
....
[29] The Integrity Commissioner retained Sean Sparling, a former Sault Ste. Marie deputy chief of police, to conduct the investigation.
[30] The Integrity Commissioner also retained a consultant, Jason Naccarato, to prepare an asset valuation change report to assist in determining whether the location of the Hub would have a pecuniary impact on the Oakland Plaza and the Trading Post.
[31] The Integrity Commissioner presented its report to council on September 19, 2019.
[32] The Integrity Commissioner concluded that Mr. Patrie had a pecuniary interest in the location of the Hub and that he had violated the MCIA by lobbying the mayor, councillors, and members of the public about locating the Hub at the Oakland/Ski Hill site.
[33] In accordance with s. 8 of the MCIA, the Integrity Commissioner then brought an application for a determination of whether Mr. Patrie had contravened the MCIA and, if so, for a determination of the appropriate penalty.
The Decision of the Application Judge
The appointment of the Integrity Commissioner
[34] The application judge found that Expertise for Municipalities (“E4M”) had been properly appointed to act as Integrity Commissioner for Elliot Lake. She found that even though there were procedural irregularities in the appointment and contracting of the services of E4M, it was understood that E4M had been retained through a letter of engagement, that it would continue its on-going investigations and that its services would be discontinued through a letter of engagement. The application judge found that a retroactive by-law passed on September 23, 2019 appointing E4M was within the power of council.
[35] The application judge also found that there is no requirement that an appointment be in the form of a written services agreement for it to be lawful and binding.
....
Whether Mr. Patrie contravened the MCIA
[39] The application judge admitted and weighed the evidence of Mr. Naccarato, which was to the effect that the Oakland/Ski Hill site was within a 200-metre “zone of convenience” for the Oakland Plaza.
[40] The application judge also accepted the evidence of Mr. Cyr, that Mr. Patrie had implied that he would file a complaint against Mr. Cyr if Mr. Cyr did not declare a conflict of interest. The application judge found that this had the effect of influencing the December 2019 vote on the 151 Ontario site and had a potential effect on the pecuniary interests of Mr. Patrie, who would benefit from the location of the Hub at the Oakland/Ski Hill site. The defeated motion changed the course of the progress on the Hub.
[41] The application judge rejected Mr. Patrie’s evidence that after the November 27, 2017 council meeting, he believed that the Centennial Arena site was the final conclusively-decided site for the Hub. In rejecting Mr. Patrie’s evidence, the application judge said that Mr. Patrie’s position was contrary to the actions he took and the discussions he had following the meeting.
[42] The application judge found that there was more than sufficient evidence to support a conclusion that Mr. Patrie had contravened the MCIA.
....
[45] The application judge ordered removal from office and disqualification of two years.
....
The Jurisdiction of the Divisional Court
[51] The Divisional Court has jurisdiction to hear this appeal under s. 11 of the MCIA, which provides that an appeal lies from any order made under s. 9 of the MCIA to the Divisional Court in accordance with the rules of court. . Patrie v. City of Elliot Lake (Integrity Commissioner)
In Patrie v. City of Elliot Lake (Integrity Commissioner) (Div Court, 2023) the Divisional Court considered an appeal under s.11 of the Municipal Conflict of Interest Act (MCIA) "from a decision in an application initiated by the Integrity Commissioner of the City of Elliot Lake". The grounds of the application were under s.5(1)(c) ['When present at meeting at which matter considered - influencing voting'] and s.5.2(1) ['influence'] of the MCIA.
In these quotes, the court considers an appeal of the costs order on the MCIA application:[6] Mr. Patrie also appeals the application judge’s costs decision. Mr. Patrie submits that the application judge made errors of law when she awarded costs of $89,143.77 against him. Mr. Patrie asks this court to set aside the costs decision or to vary it in his favour.
....
Costs
[46] The application judge considered s.223.4.1(18) of the Municipal Act, 2001, S.O. 2001, c. 25, which provides that a municipality must pay an Integrity Commissioner’s legal costs for bringing an application.
[47] The application judge held that this provision does not preclude an Integrity Commissioner from receiving costs awards to offset its legal fees. The application judge reviewed a body of jurisprudence that confirmed that Integrity Commissioners have received costs awards on a percentage of a partial indemnity basis or on a partial indemnity basis. The application judge noted that the overriding principle in awarding costs is reasonableness, and the successful party is entitled to recover a reasonable allowance from the unsuccessful party.
[48] The application judge noted that the Integrity Commissioner was substantially successful on the application. She also noted that Mr. Patrie took a number of steps that were counterproductive and added to the costs of the proceeding.
[49] The application judge found that this was a complex case that involved numerous issues that required a reply from the Integrity Commissioner.
[50] The application judge found that the costs requested by the Integrity Commissioner were too high. She considered the factors under r. 57.01(1)(0.b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, including the reasonable expectations of the parties and the principle of proportionality, and awarded fees of $80,000, inclusive of HST, plus $9,143.77 in disbursements.
....
Issue #8: Appeal in respect of costs
Mr. Patrie’s position
[182] Mr. Patrie recognizes that costs awards are discretionary and that the standard of review is high, meaning that reviewing courts will only vary or set aside a costs award where there is an error of principle or the decision is plainly wrong.
[183] Mr. Patrie argues that (1) the application judge erred in law in her application of s. 223.4.1 of the Municipal Act and, (2) in the alternative, the application judge made a series of errors in law or principle in her treatment of the relevant considerations with respect to the quantum of costs.
[184] With respect to the first argument, Mr. Patrie submits that s. 223.4.1(18) of the Municipal Act explicitly states that the costs of the Integrity Commissioner shall be paid by the municipality.
[185] Mr. Patrie submits that if the legislature had intended the normal rules of costs to apply, this intention would have been set out in the statute, or the statute would have been silent with respect to costs. Here, he submits, the legislature clearly intended for costs to be paid by the municipality. Mr. Patrie argues it was an error of law for the application judge to find otherwise.
[186] With respect to the second argument, Mr. Patrie argues the application judge erred by failing to consider whether the amount awarded was fair and reasonable in the circumstances. Mr. Patrie argues the application judge made two mistakes in weighing the relevant factors: (1) that the proceeding was both quasi-prosecutorial and a public interest litigation and was not a “normal or conventional” civil proceeding; and (2) the means and financial circumstances of Mr. Patrie were not given adequate weight, as he is a councillor for a small Ontario municipality with limited or modest renumeration.
[187] Mr. Patrie argues the significant costs award does not adequately reflect the findings of the application judge about the nature of the proceeding, in particular the difference in resources between a publicly funded regulatory body and an elected municipal officer holder.
[188] Mr. Patrie argues he should not be disproportionately punitively penalized for defending his reputation.
Discussion
[189] I agree with the respondents’ submission that s. 223.4.1(18) of the Municipal Act is a mandatory funding tool and not a statutory bar to recovery of costs.
[190] There is no express intention in the Municipal Act that displaces the normal rules for costs in civil litigation.
[191] The application was commenced in the Ontario Superior Court of Justice. The Courts of Justice Act, R.S.O. 1990, c. C.43, and the Rules of Civil Procedure apply.
[192] Mr. Patrie has not satisfied me that the considerations that would apply to the costs of any civil proceeding should not apply in this case.
[193] Section 131(1) of the Courts of Justice Act provides that the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court.
[194] Although discretionary, a court must fix costs on a principled basis: Clarington (Municipality) v. Blue Circle Canada Inc., 2009 ONCA 722, 100 O.R. (3d) 66, at para. 40.
[195] Rule 57.01(1) of the Rules of Civil Procedure sets out the factors the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing, in exercising its discretion under s. 131 of the Courts of Justice Act to award costs. These factors include the principle of indemnity, including the experience of the lawyer involved, the hourly rate, and the hours spent. They include the complexity of the proceeding and the importance of the issues. They also include certain conduct of the parties, including conduct that may have shortened or lengthened the duration of the proceeding or that was improper, vexatious, or unnecessary.
[196] The application judge carefully considered the issue of costs. She allowed some of the applicant’s requests for costs and denied others. The selection of the factors under r. 57.01(1) to be considered and the weight to be placed on those factors were in the application judge’s discretion. The application judge found that Mr. Patrie made the proceeding unnecessarily complex. The application judge considered the submissions of the parties and decided the amount, in her view, Mr. Patrie should reasonably expect to pay as the unsuccessful party on the application.
Conclusion with respect to Issue #8
[197] Section 223.4.1(18) of the Municipal Act is not a statutory bar to recovery of costs. Mr. Patrie has failed to identify an error of law or principle in the application judge’s costs decision. There is no reason to interfere with this discretionary decision of the application judge.
|
