Magder Vs. Ford: Case Comment

By Kevin Latimer, Q.C. and Mark Mills, Articled Clerk, Cox & Palmer

On September 5th and 6th of 2012 Justice Hackland of the Ontario Superior Court of Justice heard the matter of Magder v. Ford, 2012 ONSC 5615, a court application taken by a municipal voter against the Mayor of Toronto, Rob Ford, for an order declaring his seat on Toronto City Council vacant for breaches of the Municipal Conflict of Interest Act, RSO 1990, CM.50, (“MCIA”) which prohibits members of Council from speaking or voting on matters in which they have a pecuniary interest. 

The decision on this matter was released on November 26th, 2012 and ruled in favour of the applicant. Ford’s conduct was found to have been in contravention of the Act, requiring that he vacate his seat on Council.  Below is a factual summary of the case, an analysis of the arguments made, and a comment on the findings of the judge.

FACTUAL BACKGROUND On August 12th, 2010, the City of Toronto Integrity Commissioner issued a report to the City Council concluding that the Mayor breached Articles of the Code of Conduct in using the City of Toronto logo, city resources, and his status as a City Councillor to solicit funds for a private football foundation created in his name.  The report recommended that Council take steps to require that Mr. Ford reimburse $3,150 in donations made by donors.  A resolution to that effect was passed by Council on August 25th, 2010.

Ford did not comply with the resolution requiring reimbursement of the funds. A further resolution was put before Council on February 7, 2012 to rescind both the resolution requiring that Ford repay the money and the finding that there had been a breach of the Code of Conduct. Ford participated in the vote on that resolution, which passed 22-12. The Applicant, a private citizen, then brought a motion before the Superior Court of Justice for a determination of whether Ford’s participation in the February 7th vote was a breach of the Municipal Conflict of Interest Act.

ARGUMENTS Counsel for Ford put forth five arguments in his defense:

1. The MCIA did not apply to the City Code of Conduct for Members of Council (“Code of Conduct”) It was argued that the MCIA did not apply to Code of Conduct breaches on the basis that its application prevented members of Council to speak in their defense on potential sanctions and therefore amounted to a denial of procedural fairness.

Justice Hackland agreed that there was a potential issue if members of Council were not permitted to discuss findings made against them, but found that these considerations were not sufficient to provide a basis for restricting clear statutory provisions of the Act, which clearly prevent members from voting on matters engaging any pecuniary interests. 2. MCIA Limited to Business and Commercial Conflicts Ford’s second defence was that the MCIA did not apply to the ethical conduct of members of Council and was only intended for conflicts involving “business and commercial interests”. Counsel for Ford argued that the objectives of the MCIA are transparency and disclosure in relation to matters affecting the business and commercial interest (or financial interests) of the City; whereas the Code of Conduct governs the ethical conduct of members of Council. Justice Hackland dismissed the argument on the basis of the broad language of the MCIA, which refers to “any pecuniary interest…in any manner”. He found that there was no basis to restrict “any matter” to exclude Code of Conduct violations.

3. Resolution Beyond the Scope of Council Powers Ford argued that there was a conflict between the Code of Conduct and the City of Toronto Act. The City of Toronto Act contains a provision which limits the sanctions available to Council to either reprimands or suspensions of pay, whereas the Code of Conduct includes further remedies (including reimbursement of monies received).

Justice Hackland dismissed the argument, finding that Ford was arguing in favour of essentially ignoring the Integrity Commissioner’s penalty powers. He found that the reimbursement obligation under the Code of Conduct was logically connected to the objectives of the municipality in establishing its Code of Conduct, and therefore within the scope of the powers of Council. He further noted that the current jurisprudence on point calls for a broad application of municipal powers to carry out the objectives of municipalities.

4. Insignificant Amount Ford relied on an exclusion provision under the MCIA where a conflict is excused if a pecuniary interest exists but is “so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member”. It was argued that the amount was sufficiently small to fit within the exclusion, and that no reasonable person in Ford's position would jeopardize his or her seat on council for such a modest amount. Justice Hackland rejected this argument, finding that the evidence before the court of Ford’s objections to the reimbursement of the money made it clear that the amount was not insignificant to him.

5. Error in Judgment or Inadvertence

Ford also relied on a saving provision in the MCIA which operates once a breach has been found under the MCIA to remove the requirement that the breaching member’s seat on Council be vacated. The saving provision allows a member to maintain his or her seat on Council where the contravention results from inadvertence or error in judgment.

Justice Hackland dismissed this argument, finding that Ford spoke and voted on the matter involving his repayment obligation, demonstrating that it was a deliberate choice. His testimony revealed that he appreciated that the resolution impacted him financially, he received the agenda a week prior to the meeting, he considered the matter and planned his comments, and sought no advice on the matter. Ford also admitted in testimony that he never read the MCIA, the Conflicts handbook, nor did he attend any briefing sessions regarding conflicts during his 12 years as a member of Council.

DISPOSITION AND AFTERMATH Upon rejecting all of Ford’s defences, Justice Hackland found that there had been a breach of the MCIA when Ford spoke and voted on the resolution to rescind the reimbursement order, thus requiring a declaration that Ford’s seat on Council be vacated. The judge noted however, that there were significant mitigating factors, and would therefore impose no further sanctions beyond what was required under the Act.

Justice Hackland discussed the restrictive nature of the MCIA which made no allowance for judicial discretion except in determining the length of time Ford would be disallowed from running for office. He suggested that the law be amended to prevent judges from being forced to implement severe punishments where the contraventions do no warrant them. Justice Hackland refrained from imposing any prohibition on Ford from running in future elections, including the by-election to fill his newly vacant seat.

Ford is appealing the case and was successful in his application for a stay of the declaration vacating his seat until the appeal is decided. The appeal will be heard January 7, 2013.

CONCLUSION This case is significant for Nova Scotia municipalities, as the Nova Scotia Municipal Conflict of Interest Act, R.S.N.S 1989, c. 299, is substantially the same as the Ontario Act. Under both the Ontario and Nova Scotia statues, a judge must declare the seat of a member in contravention of the Act vacant, offering virtually no discretion to judges to fashion less severe remedies upon finding a breach; even where on their face, the actions of the member may not appear as warranting severe sanctions. Even a pecuniary interest that only indirectly benefits a member may still be considered a conflict.

A complete copy of the Magder v. Ford decision can be found at: http://www.canlii.org/en/on/onsc/doc/2012/2012onsc5615/2012onsc5615.html.

Kevin Latimer, Q.C. a partner in the Halifax office of Cox & Palmer, counsel to UNSM, practices in the areas of municipal and planning law, administrative and public law litigation and can be contacted at (902) 491-4212 or email at .