Magder v. Ford: The Best Defense is Sometimes a Good Offense
The Ontario Divisional Court, on appeal from the Ontario Superior Court, has overturned a ruling that found the Mayor of Toronto was disqualified from office for breach of the Ontario Municipal Conflict of Interest Act.
In the initial hearing before the Superior Court, a challenge was brought to Mayor Ford’s participation in matters at Toronto City Council in which he was alleged to have a conflict of interest. The circumstances arose from a report prepared by the City of Toronto Integrity Commissioner for Toronto City Council which concluded that the Mayor, while he was a member of council before being elected as Mayor, had breached a number of articles of the City’s own Code of Conduct.
Specifically, the Integrity Commissioner found that Mayor Ford had used the City of Toronto logo, his status as a city councillor, and City resources to solicit $3,150.00 for a private football foundation he created in his name. The Integrity Commissioner’s recommendation that Mayor Ford reimburse $3,150.00 in donations made by lobbyists and corporations in response to his fundraising efforts went before Council. Although warned by the Council Speaker just before the vote about the possibility of a conflict of interest, Mayor Ford declined to declare a conflict or to abstain from voting. In response to Council’s resolution, Mayor Ford wrote to some of the donors about their contributions and they responded indicating that they forgave repayment. The Integrity Commissioner found that this action by Mayor Ford itself could amount to a breach of the Lobbyists’ Code of Conduct.
Mayor Ford objected to repaying the money as it had already been spent on football equipment by the charity. Council of the City of Toronto then rescinded its adoption of the Commissioner’s findings as to Mayor Ford’s violations of the Code of Conduct, eliminating the repayment obligation. Mayor Ford also voted on this matter.
In Ontario, the Municipal Conflict of Interest Act sets out a scheme for conflict that is somewhat similar to the statutory scheme relating to conflict of interest in British Columbia. An application was brought by a municipal voter for a declaration that the Mayor was disqualified for having participated in, and voted upon, a matter in which he had a pecuniary interest.
The Superior Court held that Mayor Ford was disqualified from holding office as a result of voting on a matter in which he had a pecuniary interest. It held that Council had the authority under its Code of Conduct to order repayment of the money, that the amount in issue was not insignificant (indeed, Mayor Ford’s objection to repaying it clearly showed it was significant to him), and that Mayor Ford’s participation in the voting did not result from inadvertence or an error in judgment. The latter point is of particular interest. The Superior Court stated the following:
“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.”
Although the court found he had in fact made an error in judgment, the case law in Ontario required that the error in judgment had to be one made honestly and in good faith. It held that:
“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 willful blindness as to one’s obligations.”
In British Columbia, the legislative provisions that provide for this exception to the rules regarding conflict of interest specifically require that the error of judgment be made “in good faith”.
On appeal, the Divisional Court held that Council had no jurisdiction to order repayment of the donations. The City of Toronto Act permitted Council, responding to the report of the Integrity Commissioner, to either reprimand a councillor found to have a conflict of interest, or to withhold remuneration. The order to repay money was thus a nullity. Therefore, even if Mayor Ford participated in the decision, and even if he had a pecuniary interest in the matter, this was irrelevant as the whole proceeding itself was based upon a proposal to impose a penalty for which Council had no authority.
Despite overturning the Superior Court’s decision on the ground that Council lacked jurisdiction to require repayment, the Divisional Court did validate the Superior Court ruling that “where a matter involving councillor misconduct is before Council and the resolution proposed engages the councillor’s pecuniary interest because of the proposed financial repercussions or sanctions…” that the councillor is subject to the prohibitions against participation in a matter similar to section 101 of the B.C. Community Charter. The Divisional Court went on to note that there is no exception to allow the elected official to speak in his or her defence where a potential decision in the nature of a financial penalty that might be made against them. In B.C. section 104(2) of the Community Charter allows for this and provides our elected officials a right to speak in their own defence, where the rules of natural justice require it.
The Divisional Court also held that the Superior Court was correct in finding that the amount in issue was not insignificant, and that the Mayor’s conduct was not an error of judgment in good faith.
The Divisional Court’s comments on this point are relevant in B.C. since the same defence of error in judgment is available here. As stated by the Divisional Court:
90 Accordingly, in order to obtain the benefit of the saving provision in s. 10(2), the councillor must prove not only that he had an honest belief that the MCIA did not apply; he must also show that his belief was not arbitrary, and that he has taken some reasonable steps to inquire into his legal obligations. In our view, the application judge properly stated that it was relevant to consider the diligence of the member respecting his obligations under the MCIA when determining the good faith of the member – for example, his efforts to learn about his obligations and his efforts to ensure respect for them. Wilful blindness is not confined, as the appellant contends, to a consideration of inadvertence. Therefore, the appellant has demonstrated no error in law by the application judge.
Although ultimately the Divisional Court exonerated Mayor Ford on the basis of the jurisdictional argument, the case remains an important decision on the question of error of judgment in good faith.