Submission From Brian Kolenda on Behalf of Candidate Mark Grimes - Part 1 (EA.supp.EA4.2.3)...

7/26/2019 Submission From Brian Kolenda on Behalf of Candidate Mark Grimes - Part 1 (EA.supp.EA4.2.3) (September 1, 20

1/38

September

l

2015

VIA

HAND DELIVERY

City Clerk's Office, Election Services

City Hall, 1 l Floor North

100

Queen Street West

Toronto, ON M5H 2N2

Attention:

Compliance Audit Committee

Dear

Sirs/Mesdames:

I :

CITY CLE Rr,s OFFICE

SE H : i v m l ~ i f a I 0 W

Direct lini:: 41 (,.KM-2897

o s

....EPDirllfl fa hm A l 6 1 ~ 5 - 3 7 1 0

0 Ema\1: r

I I

~ o l i n l J @ i t i g i c cum

RE: Applica tion for Compliance

Audit

by Michael Craig concerning Councillor

Mark Grimes dated August 6, 2015

As

you know,

we are

legal counsel

to

Councillor Mark Griml s (Ward

6

Etobicokc

Lakeshore) in respect of the Application for Compliance Audit by Michael Craig

concerning Councillor Grimes dated August 6 2015 (the

..

Application"). Mr. Craig has

apparently amplified the Application in his list

of

questions ("Supplementary

Submission") submitted

in

person to the Compliance Audit Committee (the

~ ' C o m m i t t e e ) at

its meeting

on

August 25, 2015 .

Please accept this letter and the enclosed documents as Councillor Grimes' response

to

the Application and the Supplementary Submission. In particular, see the enclosed

uffidavit

of

Councillor Grimes attached at Tab

7

which provides important context and

other information which refutes the various factual assertions by

Mr.

Craig. TI1c

information summarized below is drawn, in part, on information in Councillor Grimes

atlidavit.

I Overview

Councillor Grimes

was

first elected

a

city councillor in 2003 and has won every

campaign since that time. He and his team arc experienced campaigners and well versed

in the regulation

of

municipal finance. His campaign manager, James Maloney, is himself

an experienced campaigner, and has managed every one

of

Councillor Grimes' successful

campaigns. In his over 12 years in municipal politics, Councillor Grimes has never before

faced a compliance audit.

In contrast, the Applicant is a financial supporter

of Mr.

Russ Ford, Councillor Grimes'

chief opponent in the 20 I 4 municipal election. Mr. Ford himself was apparently involved

in soliciting some of the so-called t videncc submitted along with the Application. As you

will see from Councillor Grimes' affidavit,

Mr

. Craig has also filed a complaint with the

City's Integrity Commissioner. This proceeding is nothing more than a politically

motivated complaint by Councillor Grimes' political opponents, and the Committee

EA4.2.3


2/38


September l, 2015

Page 2

should keep this in mind when assessing the credibility ofMr. Craig's assertions, which it

is obliged to do.

As described below, the substance of the complaint is entirely without merit. There is no

credible or compelling evidence that the Grimes campaign failed to account accurately

for

all

goods

or

services i t obtained. The campaign relied heavily on volunteers,

as

most

successful campaigns


3/38


September 1,

2015

Page3

credible infonnation which

raises

the 'reasonable probability' of a breach of the

However, as the Superior Court

of

Justice has recently confirmed,

..

a finding

of

reasonable [grounds] does

not

automatically

mean

that an audit is warranted. In other

words, even where

the

Committee is satisfied that the Act has been breached,

or

probably

breached, it is not compelled, after considering all

of

the circumstances, to appoint an

auditor."

6

For instance, the Committee is entitled to conclude that, even

if

technical

breaches

of

the Act may have occurred but were unintentional, the time anli r SCJ

, sripra

nole

3

at para. 72.

at paras. 66, 93-95; La11cas1er OCJ,

suprn

note 3 at paras . 28-29.

1

Harrison\_Toronto Di.s1ric1 School Board unreported , OCJ, June 19, 2008, Tab 6.

I Act , s . 66(1), Tab

1.

1

0

Act, s.66(2)1.ii, Tab

I.
http:///reader/full/66(2)1.iihttp:///reader/full/66(2)1.iihttp:///reader/full/66(2)1.ii


4/38


September

l,

2015

Page

3. Salary Staffing Expenses; and

4.

Income Recognition Loans.

Each is dealt with in tum, below. Where appropriate, we have also addressed Mr. Craig's

further questions as reflected in the Supplementary Submission.

I.

Campaig

Literature

Expe ses

Mr.

Craig's

concerns about Councillor Grimes' campaign expenses

can

be divided into

three sub-issues:

A. Concerns related to missing invoices ;

B.

Concerns related

to

allegedly fraudulent printing invoices;

and

C. Concerns related to distribution costs.

Each is addressed

in

turn.

A. Missing Invoices

Mr

. Craig alleges that Councillor Grimes breached sections

69( l

)(g) and

78( I)

of the Act

by failing to file certain receipts of, and under-reporting the alleged true cost of, certain

campaign literature. Section

69(l)(g)

provides that A Candidate shall ensure that .. .

records arc kept of every expense including the receipts obtained for

each

expense .

Section

78(1)

provides for the filing ofthe.finaneial statement and auditor' s report, in the

prescribed fonn

(i.e.

the audited Form

4 .

Councillor Grimes reported

$7

293 .51

in

expenses related to ..Brochures/flyers, as

reflected in his audited Form

4.

2

Mr . Craig suggests that Councillor Grimes failed to file

invoices

for

all but

$3,222.00

of

such expenses (and, so presumably failed to maintain

th

em pursuant to section 69( I

)(g)).

Thal

is simply

not

correct. Attached

lo

the Gr imes Affidavit

ar

e copit:s of each of three

relevant invoices reflecting Councillor Grimes' expenses related to Brochures/flyers , as

follows:

3

Date Invoice

No.

Description Amount HST

TOTAL

09/26/2014 52352

Copies I

Lot 23,000

campaign cards 4x9

4/4

1,327.43

172.57

1

,500.00

10/03/2014 52378

Copies - 1 Lot 30,000

campaign fliers I l x 17

1,425.00

185.25

1 ,610.25

Although

th

e Application uses a heading numbered 5 under

wh

ich these iss

ues

are raised,

there

is no

apparent heading numbered 4 in the Applicat ion.

I Affidavit of Mark

Grimes,

sworn September I, 2015 ,

Tab

7 [Grimes Affidavil ], Exhibit C, Tab 7C.

u Grimes Affidavit, Exhibit

D,

Tab

70.
http:///reader/full/3,222.00http:///reader/full/3,222.00


5/38


September I 2015

Page 5

Date

Invoice

No.

Description

Amount HST

TOTAL

4/4 folded

11 /28/2014

52525

Copies - Election Print

3,702.00

481.26

$4,183.26

TOTAL

S7,293.51

Each of these invoices was submitted to the City Clerk and should have been available to

Mr

. Craig to review. Note that although section 78(1) requires that lhe candidate file the

financial statement and auditor's report, in the prescribed form (i .e. Fonn 4, entitled

.. Financial Statement - Auditor's Report", pursuant to

0.

Reg. 101197 s.

7(1)(4),

as

amended), neither the Act nor Form

4

expressly require that all invoices be submitted and

accordingly the failure to submit a receipt to the City Clerk cannot support a finding of a

breach of the Act.

14

It is clear that Mr. Grimes has maintained copies of the questioned

invoices in accordance with the Act.

There is no compelling or credible evidence of

a

breach of the Act on this bac;is.

B. Alleged Fraudulent printing invoices

Mr. Craig's Application and his Supplementary Submission suggest that Councillor

Grimes' true brochure/flyer costs exceeded the

$7,293.51

reported on his Form

4.

The

evidence put forward in support of this suggestion

are

copies of some of Councillor

Grimes' brochures used in the campaign as well as quotes obtained by Mr. Craig and/or

Councillor Grimes' chiefopponent in the campaign, Mr. Russ Ford.

The

fact is that Councillor Grimes accurately

and

completely reported his true brochure

expenses. The s u g g s t i o ~ made by implication in the Application, and made expressly in

Supplementary Submission (Question

2),

is that the invoices were either forged or did not

reflect the "market value'' of the services provided. There is simply no evidence to

support this suggestion.

Mr. Craig points to Invoice 52378 dated I 0/03/2014 and described above, which refers to

30,000

campaign fliers

11x17 4/4

folded" which he assumes

was

related to only one

flyer entitled "Revitalizing the Lakeshore". In fact, this invoice reflects the printing of

10,000

copies of

each

of

three

different pieces of literature

(at a

cost of

$0.0475

per

piece). It would not have made sense for instance for Councillor Grimes to blanket the

entire Ward with

one

piece

of

literature (e.g. Revitalizing Lakeshore") when difTerent

issues would be important to constituents in different parts of the Ward.

14

The requirement to file invoices arises only under City of Toronto By-law 1108-2013, s. 8(b), Tab I,

where he Candidate has applied for participation in

the

contribution reimbursement scheme of

the

City.
http:///reader/full/7,293.51http:///reader/full/7,293.51http:///reader/full/7,293.51http:///reader/full/7,293.51


6/38


September 1 201

S

Page

Attached to the Grimes Affidavit is a breakdown of the individual campaign literature

which was ultimately produced and invoiced on each of the Gullons invoices .

15

Each of

the pieces of campaign literature (including an additional printed item not referred to by

r. Craig) is referred to here.

Mr. Craig also points to what

he

characterizes as "independent" quotes to suggest that

Councillor Grimes obtained services at below market value. For Mr. Craig to successfully

allege that the printing services provided by Gullens were an unrecorded ..contribution" ,

he would have to demonstmte that the amount charged by Gullens to the Grimes

campaign was

below

"the lowest amount the contributor charges the general public in the

same market area for similar goods and services provided at or about the same time".

6

There is not credible or compelling evidence

on

this issue. The so-called quotes included

as Attachments 4 and 5 to the Application should be discounted by the Committee on

their face. Neither

of

them reflects the actual campaign material that was printed

by

the

Grimes Campaign and reflected in the three Gullons invoices.

Further, Attachment 4, with the heading ''Netprint Ship", lacks any infonnation about

either the author of the document or the meaning

of

its contents. It does not on its foce

purport to be a quote. The substance

of

the document contains three handwritten lines

with no infonnntion about card stock or other details that would be expected in n

legitimate quote.

Attachment 5, a quote solicited by Councillor Grimes' chief opponent, Mr. Russ Ford

([email protected]) from a representative

of

The Printing House ("TPH") should be

similarly discounted. TPH (and apparently, Netprint) are apparently retail, consumer

ocused print shops. The business which printed the Grimes campaign material , Gullons

Printing, is a commercial-focused printer which sub-contracl


7/38


September I , 2015

Page

between the two quotes appended to the Application (i.e. 6,403 to 9,800 and 1 ,800

to $6,055) suggests that there is a potentially high degree of variability between

competitors for these types of services. The mere fact that the Grimes campaign obtained

a better price than Mr. Craig and/or Mr. Ford were able to do on the ba


8/38


September I, 2015

Page

2

Advertili11g tpenses

r.

Craig also alleges that Councillor Grimes failed

to

report accurately lhree further

alleged areas

of

expense:

A.

Online video costs;

B Robocall costs; and

C.

Automobile Truck advertising costs.

A. Online video costs

Mr. Craig alleges that CouncilJor Grimes should have reported

an

additional $39,800.00

in video production expenses. In support of this, Mr Craig points to 45 short YouTube

videos on

the

Grimes Campaign website.

Mr.

Craig suggests that

the

cost for video

editing submitted

from

Mathew Lochner

20

and

Ken MacLauchlin

21

did not reflect their

true value.

He

alleges that

Mr

Lochner and Mr. MacLauchlin must have effectively

donated professional services to Councillor Grimes.

As evidence for this, Mr. Craig points to

the

website of Fifth Ground Entertainment Inc .

CFGE ), a film and video production company, which features Mr. Lochner and

Mr.

Heaslip (the photographer). Mr. Craig implies that

the

professional association

of

these individuals means Councillor Grimes should have reported a larger campaign

expense for video production.

Firstly, as described above,

Ms.

Heaslip only provided photography services.

econdly,

the

affidavit

of

Chris Szarka,

the

President and sole owner

of FGE

attached

as

Tab

8, makes clear that Mr. Lochner and Mr. Heaslip do not work exclusively with FOE

and are

free

to

take on other projects.

He

sub-contracts

work

to them

from

time

to

time.

They are not partners in FGE as alleged. The rates that FOE pays to

Mr.

Lochner and

Mr.

Heaslip are consistent with the rates charged to

tht:

Campaign.

rn any event, the services

of

Mr. Lochner and Mr. MacLauchlin were used for only a very

small portion of the videos on lhe Grimes Campaign website. The vast majority

of

the

56

minutes of footage on lhe YouTube site were either shot via cell phone cameras

of

volunteers or family members of Councillor Grimes (for instance,

one

video from a

family wedding in Ottawa). One of the videos was from a 2010 CTV News story.

Mr.

Szarka filmed approximately two

of

the videos on his cell

phone

camera.

He did

not

charge for that time (and so that time was exempt

as

a reportable contribution pursuant to

s.

66(2)2.ii

of

the

Act.

Further, Mr. MacLauchlin's modest bill

for

video services of $260.00) was incurred and

accounted for under expenses related to fundraising, not subject to the spending limit. HE

assisted only with filming

for the

voting day party.

As

is clear on the face

of Mr

.

z Grimes Affidavit, Exhibit r Tab 71.

21

Grimes Affidavit, Exhibit J Tab 7K.
http:///reader/full/39,800.00http:///reader/full/66(2)2.iihttp:///reader/full/39,800.00http:///reader/full/66(2)2.ii


9/38


September I, 2015

Page9

MacLauchlin's invoice, he was at the time a Humber College film student, which

explains his modest rate.

Attachment 12 to the Application is a quote from a video production company for the

approximate cost

of

video production services to produce the clips on the website. llrn.t

quote

clearly states that

the

videos cover a wide variety

of

subject matter and locations

and are

of

varied quality .

The

writer goes on to state that

the

editing for the most part

is basic and does not contain complicated effects

or

motion graphics . In closing, the

letter states I f we get confirmation on the number

of

shooting days and the amount of

post-production, audio mixing, compressions, output, revisions, etc .. we can provide a

more accurate quote .

These very questions reflect the fundamental misunderstanding of Mr. Craig and the

letter writer: these were not professionally-produced videos (and with a few exceptions,

were not paid for). The videos that were shot by Mr. Lochner were shot for the most part

in one day on locations within a short distance

of

one other in Ward 6 and were competed

with little

or

no editing. voiceovers, without sound mixing

or

many

of

the other post

production costs quoted.

There is simply no credible

or

compelling evidence upon which

lo

conclude Lhal

Councillor Grimes has misreported his video production expenses.

B

"Robocal/" costs

Mr. Craig complains that Councillor Grimes must have misreported the true cost of

robocalls by then-candidate John Tory endorsing Councillor Grimes, who reported a cost

of $113.00 for robocalls. Mr. Craig states, baldly, that he has

no

confidence that the

receipt enclosed with Grimes' financial statements reflects the true market vaJue

or

the

amount

of

service received . Zero evidence is offered in support

of

this hypothesis .

Mr . Craig can only ask questions about the strategic value of this small a robocall effort,

which he estimates could only account for calls to 1,000 households, on the basis

of

an

estimate from n U S.-based website.

The

cost of

these calls

was

in fact paid by Councillor

Grimes's

campaign. The invoice for

those services is attached to the Grimes Affidavit.

22

The cost was

$0.05 per call, with a

minimum charge of $100.00. The calls were targeted at voters who were known to e

supporters

of

Mr. Tory.

Again, there is no credible

or

compelling evidence upon which to suggest that Councillor

Grimes under-reported these robocall expenses.

C Autumobile Truck Advertising Costs

Mr . Craig asserts, without any evidence, that

Near

the end

of

lhe campaign, before

polling day, the

Grimes'

[sic] campaign used a number

of

trucks to drive up and down

22

Grimts Affidavit, Exhibit K

Tab

7K.
http:///reader/full/Affidavit.22http:///reader/full/Affidavit.22http:///reader/full/Affidavit.22


10/38


September

1 2015

Page 10

the main streets

of

ward six, flashing their lights while decorated with many Grimes

signs." Ile alleges that there was under-reporting

of

several categories

of

expenses under

Sections 69( I)(d), (e ), (

f

and (g) for the alleged failure to report expenses for truck to

auto costs in relation to this alJcgcd activity.

TI1c

reason that no such expenses were reported is because the Campaign did not use any

vehicles for advertising.

As for the suggestion that the Jack

of

gas receipts is suspicious, the fact is that none were

submitted

to

the campaign, whether by volunteers or otherwise.

Again, Mr. Craig's unsupported assertions in this area do not amount

to

credible

or

compelling evidence

of

a breach

of

the Act.

3

Salarv I Staffi g xpense

Mr. Craig alleges that Councillor Grimes either paid (or should have paid) one or more

staff and so should have reported an additional $31,500.00in

staff

costs.

He

implies that

Mr. Maloney was

or

should have been paid, along with another volunteer on the Grimes

campaign, Ms. Sheila Paxton ("Ms. Paxton").

As detailed in Councillor Grimes' affidavit, any time spenl

by

Mr. Maloney

or

Ms. Paxton on the Campaign was unpaid. In fact, Mr. Maloney has never been paid for

his role as campaign manager on any

of

Councillor Grimes' last four campaigns.

The alleged conversation between Ms. Paxton and Mr. Russ Ford lacks all credibility.

Mr

. Craig does not cite the source

of

his information, the time

of

the alleged conversation

or anything other than two lines. In her Affidavit, Ms. Paxton confirms that she did not

say those words and that she was not paid by the Campaign.

23

The assertion by Mr. Craig that campaigns cannot be run solely by volunteers, is also not

credible. Indeed, given the campaign spending limits

in

place, having an effective

volunteer network in place is essential to winning campaigns.

Attached

to

the Grimes Affidavit is a spreadsheet summarizing the salary expenses

of

the

44 successful city councillor campaigns in the

2014 election, as taken from each

campaign's

onn

4.

24

The majority (24/44)

of

successful campaigns had zero

salary

expenses. The average salary expense across all campaigns was

$1,858.68.

All but six

had salary expenses

of

under $5,000.00.

Councillor Grimes is well-known in his Ward and has a large family network. He is one

of

five siblings and has four adult children, all

of

whom volunteered significant time on

Councillor Grimes' campaign. In part through family and other contacts, Councillor

Grimes has been able to develop a large network

of

individuals who volunteer various

Afli


11/38

Cily Clerk's Office, Election Services

September 1. 2015

age

amounts of time on his campaigns. Over 250 individuals were involved in Councillor

Grimes' campaign in one fashion or another.

The suggestion that Mr. Maloney's salary as a city councilJor should in some way be

attributed to the campaign of Councillor Grimes is without precedent. Mr. Maloney was

himself

appointed as the councillor

in

Ward 5 in

July

2014

and

was not seeking re

election (in any event, he did not work on

Mr

. Grimes' campaign full-time).

The Act specifically exempts voluntary labour from being counted as a contribution.

25

The foct that Mr. Maloney and Ms. Paxton were not paid disposes of this issue.

Mr. Craig's position that unpaid labour of city councillors on City election campaigns

should be valued as contributions of their salaries is not only contrary to the Act but is

also absurd.

f

Councillors' salaries earned during election periods were attributed as

contributions to election campaigns, any incumbent Councillors seeking re-election

would surely exceed every spending limit.

Mr. Craig alleges that a member of Councillor

Grimes'

city hall staffspent a considerable

amount of time working on the campaign. Mr. Craig states, baldly, that

[

have reason to

believe" this fact. but does not state the reason for that belief or the source of his

information. There are no particulars of the allegation to which to respond, let alone

credible

or compelling evidence

of

a breach

of

the election finance provisions

of

the Act.

In any event, as long Jabour was provided on a ''voluntary unpaid" basis to the Campaign,

it cannot be counted as a contribution, pursuant to the Act. The fact that

an

individual

may

also draw a salary from another source during all

or

a part of the election period is

not in breach of the Act.

Finally, Mr. Craig asks that an audit be struck to examine the work of the Event co

ordinator" for fundraising work as described in Schedule 2 to Councillor Grimes' Form 4.

This is again a complaint without any basis. The fees were paid to two coordinators

whose invoices are attached to the Grimes Aftidavit.

26

This time was spent

on

organizing

important fundraising events leading up to the election and were accounted for as

fundraising event costs.

CounciJlor

Grimes' expenses for fundraising were consistent with the average

expenditures of other campaigns. Attached to the Grimes Affidavit is a chart

summarizing the costs and expenses of the top ten successful candidates' fundraisers.

27

.

There

is no credible or compelling evidence upon which the Committee could conclude

that lhese payments

were

in any way misreported.

! ! Ac . s.

66(2)2.

i,

Tab

I.

6

m e ~

Affidavit, Exhibit

M.

Tab 7M.

7

Grimes Affidnvir, Exhibit N,

Tab

7N .
http:///reader/full/contribution.25http:///reader/full/contribution.25http:///reader/full/Aftidavit.26http:///reader/full/Aftidavit.26http:///reader/full/fundraisers.27http:///reader/full/fundraisers.27http:///reader/full/fundraisers.27http:///reader/full/contribution.25http:///reader/full/Aftidavit.26http:///reader/full/fundraisers.27


12/38


September

I

2015

Page 12

4 ncome Recog ition I

Louns

Councillor Grimes' campaign raised a total of$77,349.50and spent a total of 77, 160.94.

Mr

. Craig concludes his Application by suggesting that, based on the evidence he has

described, Councillor Grimes must have spent over $100,000.00 more than reported.

Mr

. Craig implies that there has been another breach

of

the Act when he asks,

rhetorically, how the candidate could have spent the vast additional sum he estimates

without paying for the additional expenses personally or taking on a loan.

The

answer

to

this question is straightforward: the additional expenses alleged

by

Mr

. Craig are

a

fiction. In most cases, they are not supported

by ny

evidence. Those

instances where

Mr

. Craig has cited some other infonnation in support, it

is

either not

credible on its face

or othciwisc plainly contradicted

by

the evidence presented herein.

IV. Conclusion

For the reasons above, Councillor Grimes respectfully requests that the Committee reject

the Application.

Yours very truly,

Brian Kolenda

BK

c.

William C. McDowell, Lenczner Slaght

Client
http:///reader/full/of$77,349.50http:///reader/full/of$77,160.94http:///reader/full/of$77,160.94http:///reader/full/of$77,160.94http:///reader/full/100,000.00http:///reader/full/100,000.00http:///reader/full/100,000.00http:///reader/full/of$77,349.50http:///reader/full/of$77,160.94http:///reader/full/100,000.00


13/38

.

l n ~ x

)


14/38

0

0

0


15/38

IN THE MATIER OF AN APPLICATION BY MICHAEL

CRAIG

UNDER THE MUNICIPAL ELECTIONS ACT 1996 THE "ACT") TO THE

CITY

OF

TORONTO COtvfi>LIANCE AUDIT COM1v1ITIEE IN RESPECT

OF THE FINANCIAL STATEMENT OF

MARK

GRIMES, CANDIDATE

FOR ELECTION TO TORONTO CITY COUNCIL,

WARD

6 (THE

"CANDIDATE").

RESPONDING MATERIALS OF COUNCILLOR MARK GRIMES

IN EX

DOCUMENT

AB

Relevant Legislative Provisions

Lyras

v

Heaps 2008

ONCJ 524.

3

2

Lancaster

v


et

.

2012 ONSC 5629.

4

Lancaster v. Compliance Audit Committee et. . 2012 ONCJ 70.

5

Vezina

v

Parrish

2013 ONSC

2368.

6

Harrison v. Toronto District School Board

wrreportcd, OCJ, June

19

2008

7

Affidavit of Mark Grimes, sworn September l, 2015

Russ Ford's Audited Form 4

.

Photograph of

Russ Ford and

Michael Craig

.

c

Mark Grimes' Audited

Form

4

Invoices

from

Gullens Printing.

Gullens Printing Invoice Breakdown

.

Shutting the Door" Brochure

.

G. Google Maps

of

Printing Houses, Toronto Municipal

Ward

Map


16/38

- 2

T B

DO UMENT

H

Invoice

from

James Heaslip Photography

I.

Invoices from Matthew Lochner

J. Invoice from

Ken

MacLauchlin

K. Invoice for John Tory robocalls

L

Spreadsheet summarizing 2014 successful campaign salary expenses

M.

Invoices for Fundraising Coordinators

N. Spreadsheet summarizing 2014 successful campaign

8 Affidavit o

Chris

Szarka sworn September I 2015

A.

lnvoices from Matthew Lochner

9

Affidavit o Sheila Paxton sworn September I 2015

5045355


17/38

1


18/38

.

0

0

0


19/38

MUNICIPAL ELECTIONS ACT

1996, S.O. 1996, C. 32, SCHED. 35.

Election Campaign Finances

Contributions

66.(l)For

the purposes of this Act, money, goods and services given to

and

accepted by or

on

behalf

of

a person for

his

or her election campaign are contributions. 1996, c. 32, Sched., s. 66

I).

Additional rules

(2)Without restricting the generality

of

subsection (1), the following rules apply

in

determining

whether

an amount is a contribution:

I.

The following amounts are contributions:

i. an

amount

charged for admission to a fund-raising function,

ii

if

goods and services are

sold

at a fund-raising function for more than their

market value, the difference between the amount paid and market value,

iii if

goods and services used

in

a person s election campaign are purchased for

less than their market value, the difference between the amount paid and market

value, and

iv. ny unpaid but guaranteed balance in respect

of

a

loan under section 75.

2. The following amounts

are

not contributions:

i

the value of services provided

by

voluntary unpaid labour,

ii. the value

C f

services provided voluntarily, under the person s direction,

by

an

employee whose compensation from all sources for providing them does not

exceed the compensation

the

employee would normally receive for the period the

services are provided,

iii. an amount of 10

or

less that is donated at a fund-raising function,

iv.

the

value of political advertising provided

without

charge

on

a broadcasting

undertaking s defined in section

2

of the Broadcasting Act (Canada), u

A. it is provided in accordance with that Act and the regulations and

guidelines made under it, and


20/38

- 2

B.

it

is provided equally

to

all candidates

for

office on the particular

council or local board

v. the amount of a loan under section 75. 1996, c. 32, Sched., s. 66 (2).

uties o candidate

69. ( 1) A candidate shall ensure that,

(a) one

or

more campaign accounts are opened at a financial institution, exclusively for

the purposes of the election campaign and in the name of the candidate's election

campaign;

(b) all contributions ofmoney are deposited into the campaign accounts;

(c) all payments for expenses, except for a nomination filing fee, are made from the

campaign accounts;

(d) contributions

of

goods or services are valued;

(e) receipts are issued for every contribution and obtained for every expense;

(f) records are kept of,

i) the receipts issued for every contribution,

(ii) the value

of

every contribution,

(iii) whether a contribution is

in

the fonn ofmoney, goods

or

services, and

(iv) the contributor's name and address;

(g) records are kept of every expense including the receipts obtained for each expense;

(h) records arc kept of any claim for payment of an expense that the candidate disputes

or

refuses to pay;

(i) records are kept of the gross income from a fund-raising function and the gross

amount ofmoney received at a fund-raising function by donations of 10 or Jess;

G records are kept

of

any loan and its terms under section 75 ;

G

l the records described in cJauses (f), (g), (h), (i) and

0

are retained

by

the candidate

for the term

of

office

of

the members

of

the council

or

local board and unti] their

successors are elected and the newly elected council

or

local board is organized;

(k) financial filings are made in accordance with sections 78 and 79.1;


21/38

-3

(l) proper direction is given to the persons who are authorized to incur expenses and

accept or solicit contributions on behalf of the candidate;

(m) a conlribution

of

money made or received in contravention

of

this Act is returned to

the contributor as

soon

as

possible after the candidate becomes aware of the

contravention;

(n) a contribution not returned to the contributor under clause (m) is paid to the clerk with

whom the candidate s nomination was filed; and

(o) an anonymous contribution is paid to the clerk with whom the candidate s nomination

was filed. 1996, c. 32, Sched.,

s

69 (1); 2002, c. 17, Sched. D, s. 26; 2009, c. 33, Sched.

21, s 8 (34).

Expenses

76.(l)An expense shall not

be

incurred by or on behalf of a person unless he or she is a

candidate. I 996,

c

32, Sched., s. 76

(I).

Maximum amount

(4)During the period that begins on the day a candidate is nominated under section 33 and ends

on voting day, his or her expenses shall not exceed an amount calculated in accordance with the

prescribed formula. I 996, c. 32, Sched., s. 76 (4).

Financial statement

and

auditor s

report

78. (1)

On

or before 2 p.m.

on

the filing date, a candidate shall file with the clerk with whom the

nomination was filed a financial statement and auditor s report, each in the prescribed fonn,

reflecting the candidate s election campaign finances,

(a) in the case of a regular election, as of December 31 in the year of the election; and

(b) in the case of a by-election, as of the 45th day after voting day. 1996, c. 32, Sched., s.

78

(1);

2000, c. 5, s

35

(l);

2002, c. 17, Sched. D,

s

29

(l);

2009, c. 33, Sched. 21, s. 8

(41).

Compliance Audit

Application


22/38

- 4

81.

I)

An elector who is entitled to vote in an election and believes on reasonable grounds that a

candidate has contravened a provision of this Act relating to election campaign finances may

apply for a compliance audit

of

the candidate s election campaign finances. 2009, c. 33, Sched.

21,

s

8 (44).

Requirements

(2)

An

application for a compliance audit shall be made to the clerk

of

the municipality

or

the

secretary

of

the local board for which the candidate

w s

nominated for office; and

t

shall be in

writing and shall set out the reasons for the elector s belief. 2009, c. 33, Sched. 21, s. 8 (44).

Deadline

(3) The application must be made within 90 days after the latest of,

(a) the filing date under section 78;

(b) the candidate s supplementary filing date,

if

any, under section 78;

(c) the filing date for the final financial statement under section 79.

I; or

(d) the date on which the candidate s extension, any, under subsection 80 (4) expires.

2009, c. 33, Sched. 21, s. 8 ( 44).

Application to be forwarded to committee

(4) Within

to

days after receiving the application, the clerk

of

the municipality or the secretary

of

the local board, as the case may be, shall forward the application to the compliance audit

committee established under section 8 l

1

and provide a copy

of

the application to the council or

local board. 2009, c. 33, Sched. 21, s. 8 (44).

Decision

(5) Within 30 days after receiving the application, the committee shall consider the application

and decide whether it should be granted or rejected. 2009, c. 33, Sched. 21, s. 8 (44).


23/38

- 5

CITY O TORONTO BY LAW 1108 2013

8. o participate

in

the contribution rebate program, a candidate for an office

on

the

municipal council:

(a) must fiJe an audited Financial Statement and Auditor s Report in compliance with

subsections 78(1) to (4)

of

the Act; and

(b) shall include with the documents filed under subsection 78( 1) or (2)

of

the Act, s

the case may be, a

copy

of the receipt issued for the contribution and a copy

of

all

campaign expense invoices incurred s part of the campaign.

S 4S363


24/38


25/38


26/38

0

0

0


27/38

Lyras v. Heaps, 2008 ONCJ 524, 2008

CarswellOnt

6348

2ooa

oNCJ524, 2ooacarswe11ont 6348. 2ooa o.J.

No.

4243, f10 A.cW.s. 3d) f11. :

2008 ONCJ

524

Ontario Court of Justice

Lyras v. Heaps

2008

CarswellOnt

6348,

2008

ONC.J

524

, {

2008]

O.

J.

No.

4243,

170 A.C.W.S. C:id 771, 51

M.P.L.R.

(4th)

277

JOHN LYRAS (Applicant/

Appellant

in

Appeal)

AND ADRIAN

HEAPS

and COMPLIANCE AUDIT

COMMITTEE OF

THE

CITY OF TORONTO (Respondents /

Respondents

in Appeal)

M.E. L-.nc .L

Judgment: October

17,

2008

Docket: None given

Counsel: Ronald

J.

Walker,

Charles/\

.

Toth

for Appellant, John Lyras

Paula Boutis for Respondent, Adrian

l

le.ips

Kalli Y. Chapman for Respondent, Compliance Audit Committee oflhc City

of

Toronto

Subject: Public; Property

He11dnote

Public

law -

Elections - Candidates - Expenses

Municipal councillor was elected - Councillor filed financial statement with city clerk's office - Applicant sought

compliance audit

of

councillor's election campaign finances pursuant to s .

81 of

Municipal Elections Act,

1996 -

Applicant alleged councillor incurred campaign expenses exceeding his reported limit, that financial statement foiled

to disclose full extent of campaign finances, and that councillor failed lo account for goods and services which were

purchased for less lhnn fair market

v11luc

- Compliance audit committee rejected application - Applicant appealed

- Appeal dismissed - Applicant misinterpreted and misapplied provisions of Act - Act is very clear that value of

services provided by voluntary unpaid labour need not be considered contribution, and makes no distinction between

free professional services and free services for

other

campaign assistance - Councillor's evidence

was

that services

used to create am.I maintain website were provided by voluntary 11npa1d labour - There was no compelling and credible

information lo contrary - Commiuce finding that applicant had

no r e a ~ o n a b l c

grounds for his complaint about cost of

website was reasonable detcrminutton - Committee's understanding

of

applicable law was correct - Decision !hat audit

of

cost'i

of

telephone lines

was

unnecessary was reasonable,

given

privacy interest at stake and unrealistiQlly onerous

burden of determining differenl types of usage

of

what were essentially private lines - Applicant's clann regarding cost

of

flyer, consisting

of

highi:r quote from unrelated company af\er the fact, was no more than speculation and conjecture

- Regarding true market volue

of

campaign office rental expenses, there was ample evidence before committee to rebut

applicant's allegations Only rental value

of

premises m question was that paid

311d

dccl:ired

by

councillor fur two months

of

campaign.

Public

law -

Elections - Legislation - Elcctlon Acts

Municipal councillor

was

elected - Councillor filed financial statement with city clerk's office - Applicant sough!

compliance audit

of

councillor's election campaign finances punmanl to s. 81

of

Municipal Elections Act,

1996

-

Applicant alleged councillor incurred campaign expenses exceeding his reported limit, that financial statement failed to

disclose full extent

of

c:unpuign linances, and that councillor failed

to

account for goods

and

services which were purchased

for less than foir market value - Compliance audit committee rejected applicauon - Applicant appealed - Appeal

dismissed

on

other grounds - Meaning of"reasonable grounds" under Act is question oflaw - Where the statute requires

W.t.s ti

awNext CAHADA Copynghl

) ThOmson

Rculcrs

Canada

Limited or

Ks

llce11sors ~ e i u d l n g lnd


28/38

Lyras

v.

Heaps

2008

ONCJ

524, 2008

CarswellOnt

6348

-

2 8 N C J S 2 0 0 8 CarswellOnt 6348, (2008) O.J. No. 4243. 170AC.W .S.-(3d) 771 ...

"belief on reasonable g r o u n d s ~ . jurisprudence applicable in other contexts indicates that standard to be applied is that of

objective belief based on compelling and credible infonnation which raises "reasonable probability" of breach

of

statute

- Standard of pnma facie case" in either itc; penniss ive or presumptive sense is too high standard.

Administrative law - Standard of review - Miscellaneous

Municipal councillor was elected - Councillor filctl finunci11l

su11cmcn1 wilh

city clerk's oflicc - Applicant sought

compliance

aud11 of

councillor's election campaign finances pursuant to s. 81

of

Municipal Elections Ac , 1996

Compliance audu committee rejected application - Applicant appealed - Appeal dismissed on other grounds

Members

of

committee had demonstrated knowledge of municipal election campaign finance rules and were appointed

with purpose of deciding when applications for compliance audits were appropriate - Span of committee's authority is

limited to Act, and issues it has lo decide arc questions of mixed law and fnct - Applicants anti cand1da1c respondents

have

full

opportunity to present their positions, and process

rs

open and transparent - Considerable deference must be

shown to dec1sio11

of

committee - Fact that committee does not give reasons for its decision is not factor which should

weigh heavily given context and their fncuon - Act does not include privative clause and expressly allows court

on

appeal relating 10 financing to make any decision council or committee could

make -

This statutory authority pennit s

court to review decision of committee for its rcasonublcncss, particularly as ii may relate to questions of mixed fact and

law which arise from allegations before committee - For questions of law which could arise, determinations can be made

on correctness standard - As committee was not structured as tribunal with duty to provide reasons for its decisions, 1t

becomes residual role ofappeal court to articulate law where those with greater expertise on Act itself arc not in position

to do so.

Table

of

Authorities

Cases

considered by M.E. Lane

J.:

Chapman v. Hamilton (City) (2005), 2005 ONCJ 158, 2005 CarswcJIOnt 1914, 10 M.P.L.

R.

(4th) 120 (Ont. C.J.)

- distinguished

Devine v. Scarborough (Cit)) Clerk (1995), 1995 CarswelJOnt 172, 27 M.P.L.R. (2d) 18 (Ont Prov. Div.) - referred

to

Harris

v 01/awa

(City)

(1994), 1994 CarsweltOnt 641, 27 M.P.

LR

. (2d) 36 (Ont. Prov.

Div.)-

considered

Harrison v. Toronto District School Board

(June 19, 2008), Sheppard J. (Ont. C.J.) - followed

Mugesem

c Canada (Ministre

de

la Citoyennete de /Immigration)

(2005), (sub nom.

Mugesera v.

C

ll .t

wNext CAllMlll Copynghl C Thomson

Reuters

Canada

Ltm11Cd

or

1ls

hccnsor.i e ~ c t u d 1 n g 1ndn11dual court documents).

All

rights

reserwd

. 2


29/38

lyras v.

Heaps,

2008

ONCJ

524, 2008

CarswellOnt

6348

2008 ONCJ

524. 2008 CarswellOni. 6348, [2008} O.J-:No-:4243:-110 A.C.

w

s . (3d) n :

:

-

- -

-

-

R

v. Mezzo

(1986), 1986

CarswcllMan

327, 1986

CarswcllMan

403,

(sub

nom

.

Mezzo v.

R.)

[19B6] I

S.C.R.

802, 30

DLR

.

(4th}

I


30/38

Lyras v. Heaps, 2008 ONCJ 524, 2008 CarswcllOnt 6348

2ooa

ONCJ 524,

2oos carswe11ont 6346 ,

12ooa1 o.J. 4243, 1fo"A.c.w.s-:-(3d) n1-:: -

here

is

a distinction in law between "credibly based probability" and "a prima facie case: ' A belief

is

founded on

''reasonable grounds" where there is an objective basis

for

the belief that is based on "compelling end credible infonnation."

The standard

is

"reasonable prob11bihty," not proofbeyoml rcasonnblc doubt or a prima fac1c c 1 1 ~ e R. v. Le

(2006), 210

C.C.C.

(3d)

181

(8

.C. C.A.)

leaved

t

appeal

to

S.C.C. refused

(2006),

212

C.C.C. (3d)

vi

(note)

(S.C.C.);

MugefertJ

c.

Canada (Ministre de la Citoyc,,nete

de

1

1

/mmigration)

(2005), 197 C .C.C.

(3d)

233 (S.

C.C.) at para 114.

A

"prima

facic

case" connotes a case conto.ining evidence on

all

essential points

of

a charge which, if believed by the trier of fact

and unanswered, would warrant a conviction: R.

v.

Mezzo

(1986), 27 C.C.C.

(3d)

97 (S.C.C.).

Black's

Law

Dictionary

6th

ed at p. 1190 also indicates

tho.t

"Prima foc1e evidence refers not only to evidence which would reasonably allow

the

conclusion which

the

plaintiff seeks, but also

to

evidence which would compel such a conclusion

if

the defendant produced

no rebuttal evidence "As MacDonncll, Prov. Div J. noted

in

R.

v.

Skorput ( 1992), 72 C.C C. (3d) 294 (Onl. Prov Div.), at

pp. 296-297,

the fonncr use

is

pennissive;

the

latter carries "a degree of cogency (that) ..might conveniently be dcscnbcd

as

"presumptive": Cross on Evidence 6th cd at pp. 60-6 .

. . where the statute requires "a belief on reasonable grounds," the jurispmclencc applicable in other contexts indicates

that

the

standard to be npphed

s

that of an objective belief based on compelling and credible information winch raises

the "reasonable probability" of n breach

of

the

statute. The

sl11Jldard

of

"a

prima

focie

case" in either its pennissive

or

presumptive sense is too high a standard_

APPEAL by applicant from dcc : on rejecting application for compliance audit of election campaign finances

of

mumcipal

councillor.

M.E. ane J.:

Tius is an appeal pursuant to :;ection 81 (3.3)

of

he Municipal Elections Act. 1996, S.O. 1996,

c.

32, Sched. (the "MEA ")

rom the

decision

of the

Compliance Audit Committee of

the

City of Toronto (the "Committee") dated July

16, 2007.

The

Committee rejected Mr . Lyras' application for a compliance audit of the election campaign finances of Adrian Heaps,

now

Municipal Councillor for Ward 35, incurred during the 2006 Toronto municipal elections.

The

appellant seeks an order setting

aside the

dec1s1on

of

the Committee and requmng a compliance audit

of

Mr

. Heaps' election campaign finances.

The

Legislntive

Framework

2

This appeal is based

on

the statutory provisions set out

in

Section

81(1)

to

(4)

of the

MEA. An

elector who believes on

reasonable grounds that a candidate

has

contravened a provision

of

the MEA relating to election campaign finances may apply

m

writing for a compliance audit of those finances. Within thirty days of receiving the application, the council or local board

must consider the application and decide whether it should be granted or rejected. Under

s.

(3 .1 , the council may establish a

commiuec

and

delegate its powers and functions with respect

to

applications received in relation to an election

for

which it

wus

established. The committee to which these powers arc delegated shall not include employees or officers

of

the

municipality,

or members of the council. Under s. 3.3, the decision oft.Ile cowicil or of the corrumttce mny be appealed to the Ontano Court

of Justice within 15

days

after

the decision

is

made, and "the court may make

any

decision

the

cowicil...committec could have

m11dc

."

fit

is decided to grant the application, the council shall, by resolution, appoint an auditor to conduct

a

compliance audit

of

the a n d i d a t e ' ~ election campaign finances.

Issues

3 Jn this appeal,

the

following issues are to be addressed

' W Nl l l t CANAlo Copyright

Cl

Thom500 u ~

Caf\3da

limited or

Its

hcenSQr.;

(exdudlng Individual court document , Al'

rights

reserved. 4


31/38

Lyras v

Heaps, 2008 ONCJ 524,

2008 CarswellOnt

6348

2oo80NCJ 524. 2008 CarswellOnt 6348, (2008)

O.J. No. 4243, 170 A.C.W.S. (3d) 771 ...

1}

What is the appropriate standard for review

on

this appeal'

Is

the decision of

the


entitled

to

deference such

that

a standard of reasonableness

should

apply? Or should thts court undertake it > own

analysis of the issues and

apply

n correctness st;indard?

2) Whal is

the

test of rcasonable grounds" under the MEA?

3)

On the material before

the Com1111ttcc,

were there reasonnble growuls

to

believe that Mr. Heaps has contravened

any provision of the

MEA?

Mr. Lyrn. > alleges that Mr. Heaps filed a Financial Statement and Auditor's Report which

was defective in that he failed to::

i. account for

the

value ofa professional webmaster and website dcsi1>rn services;

ti . disclose nil of the telephone expenses incurred during the campnign;

iii. accurately disclose the cos t of a Hyer which

was

produced and distributed during the campaign, and

iv. account for

the market

vnlue

of

his campaigll office rentJll expense.

rhc fncts

4 On or about

November

16, 2006, Mr. Heaps was elected as Municipal Councillor for Ward 35 (Scarborough Southwest) in

the

City

of Toronto On or about March 29,

2007, Mr

. Heaps filed a Financial Statement with Elections and Registry Services

of

the City Clerk's Office. According

to

his Finnnc1el Statement, Mr. Heaps spending limit for

the

campaign period March 20,

2006 to January 2, 2007

was

$25,957 30 . He rcponed total campaign expenses

which

were subject

to

the spending limits

of

$24,354.04. He reported additional campai1>rn expenses of$4,19J.

49

which were not subject to any spendi ng limils and which

arc nol

in

issue

on

this nppcal.

5

Mr.

Lyras assisted

Michelle

Beracdinetti in

her

campaign for election as Municipal Councillor in the

same

ward. He also

works in the

office

of

Ms. Dernrdinerti's

husband who

is the M.P.P. for Scarborough Southwest On June 29. 2007,

he

applied

to the Clerk of lhc City

of

Toronto for u compliance audit

of

Mr Heaps' election c11mpaign finances pur.mant lo s .

81 of

lhe

MEA. He alleged that Mr . Heaps incurred total campaign expenses in excess of his

reponed

luntt,

that

his Financial Statement

failed

to

disclose

the

full

extent

of

his campaign

finances

and

that his expenses exceeding his spending hmit, and

that he

foiled

to

account

for goods and servic es

which

were purchase d for less than fair market value.

6 On July 16, 2007, the Committee which was comprised ora three member panel, heard representations

on

behalf of Mr.

Lyras

and

Mr. Heaps, and reviewed the materials which were filed in suppon of their positions. On motion by

Mr

. Love, the

Committee

rejected Mr. Lyras' application by a vote

of

2 to I, Ms. Maclean voting in the negative. There were no reasons

given for why the committee members voted

11s

they did.

I) The Standard u Review?

7 The Supreme Coun of

Canada

in its

recent

decision

of

New Brunswick Board Management) v Dunsmuir, 2008 SCC 9

(S.C.C.) determined that there ought lo be only

two

standards

of

judicial review: correctness and reasonableness. When applying

the correclncss standard, a reviewing

court

will not show deference lo

the

decision makers ' reao;oning process hut will undertake

it >

own

analysis

of

the

question, decide

whether

it agrees

wtth the

decision under appeal and,

if

not, will substitute

it

own

view and provide the correct answer. A

coun

conducting a review for reasonableness will inquire into the qualities that make

a

decision

reasonable, including

the

existence ofjustification, tnin.sparency and inlclligibility m the decision-making process,

und whether the decision falls within a range of possible, acceptable outcomes winch arc defensible

on

the

facLc;

and

the

law.

This deferential standard involves respect for the need for particular expertise and experiences in decision making, and the

legislative choice

to

leave some matters in

the

hand.


32/38

Lyras v. Heaps, 2008

ONCJ

524, 2008 CarswellOnt 6348

2008 ONCJ 524 2008

CarsweUOnt

6348, [ 2 0 0 B f O 4243-:-110 A.C.W.S. 3d) 771 -..

g

The mnJority of the Supreme Court directed that an appellate court must first asccrtnm whether the Jurisprudence

has

already determined in a satisfactory manner the degree

or

deference to be accorded to n decision maker

in

a particular category

of question. Only if this inquiry proves unfruitful, should a court analyze the factors making it possible to identify the proper

standard

of

review. Those factors tending

lo

deference include: the existence

of

n privative clause; whether the question is one

of fact, discretion or policy. or whether the legal issue is intimately intertwined with and cannot be separated from the factual

issue, where

o

decision maker is interpreting the statute closely connected with its function with which

it

will hove particular

fomihanty; or where the decision maker has developed particul11r expertise

in

the upphcation of the common lnw lo its own

statute. Questions

of

central importance to the lcgul system as n whole, outside the specialized area

of

administrative expertise,

questions regarding jurisdiction or the constitution, will always attract a correctness standard.

9 Bmntc J. indicated that contextualizing'' the reasonableness stam.lan.1 will require a reviewing court to consider the precise

nature and function

of the

decision maker including its

cxpcrt1sc,

the tcnns and objectives

of

the governing statute, and the

extent

of

he discretion conferred. He stressed the need

for

careful consideration of the reasons given for the decision.

10 Justices Deschamps, Charron and Rothstein re-emphasized the significance

of

the nature

of

the qucstmns at issue: whether

questions of law, questions of fact or questions of mixed law and

fact.

Questions of fact always attract deference, particularly

if

there

is

a privative clause. the body oversteps its

dclcgn1cd

powers, is asked to interpret laws o u t ~ i d e its area

of

expertise,

or the legislature has provided for a statutory right

of

review, deference is not owed

to

the decision maker. When considering a

question

of

mixed fact and

law,

a reviewing court should show

the

same deference as an appeal court

would

show a lower court.

11 The Jurisprudence dealing with the standard of review applicable to appeals

from

decisions about compliance audits

under the MEA is mixed. The appelhmt relics on decisions ofmy brothers Culver and Duncan in Chapman v. Hamilton

City),

[2005] 0.J. No.

1943

(Ont. C.J.) and Savage v. Niagara Fall i City), [2005] O.J. No. 5694 (Ont. C.J.) respectively. In Chapman,

Culver J. found that tl1cre was no privative clause, nor any specialized skill and knowledge exercised by lhc Council in making

its decision. He concluded that political considerations that are the particular responsibility of the local Council have no pince

m the

o.nalysis of

whether

an

elector bas reasonable grounds to believe that a candidate ha. 1 contravened

the

provisions

of the

MEA . He also found that the Council debate on the issue indicated that the councillor.; were unwilling

to

judge their peers and

wanted the court to make the ultimate decision which, in his view, amounted to a failure or refusal to meaningfully exercise

jurisdiction. (para. 37) In

Savage,

Duncan

J.11greed

with Culver J. thnt the MEA grants the appellate court the widest possible

power

of

review on appeal.

He

also noted that the decision before him was made in camera, with no record and no r e a ~ o n s

given. In his view, it

is

implicit...in a deferential or more limited approach, that the reviewing court must hnve some record of

the reasons or the process thal brought about

Ilic

decision. Where that is completely lacking, there is nothing to show deference

to. (parn 8)

12 Sheppard J. in

Harrison

v.

Toronlo DislrictSclrool Board

((June

19,

2008), Shcppttrd J. (Ont.

CJ

.

)j,

unreported dec1s1on

of

the O.C.J. released June 19, 2008, had occasion lo consider a decision not to grant a comphance 11ud1t made by the Compliance

Audit Committee delegated to perform that function y the Toronto District School Board. He

found

that the Committee

consisted

of two

chartered accountants and n lawyer in the municipnl field, all

of

whom have extensive knowledge

of

the

ek.'Ct1on campaign finance provisions of the Municipal Elections Act, 1996." As the Commillcc was appointed by a non cxpcn

School Boord and

the

City because

of

their expertise, he found

thal far

:.rn:ater dcfcn:nce owed to their decision than to

that

of

lhc political bodies

in

Chapman and Savage.

He

nlso found, however, that on either the correcmess standard or

the

less

demunding dcfercntinl stnndard, the hard copy documents making up the applicant's initial complaint in that


33/38

Lyras v. Heaps, 2008 ONCJ 524, 2008

CarswellOnt

6348

2008-

0NCJ

524, 2008 CarswellOnt 6348, (2008) O.J .

No

. 4243,

110A:C:w.s.

(3d)

n1 ... -

independent, quasi-judicial committee which would have demonstr.ited knowledge and understanding ofmunicipul election

campaign financing rules, proven analytical and decision-makinl; skills, and experience working on a committee,

task

force

or

similar setting. After a selection process, three members were h o ~ e n for the conumttce: two chartered accountants who had

been members

of

the Toronto Election Finance Review Task Force, and a lawyer with municipal law experience who had been

on various committees

of

the Canad

nn

Bar Association.

15

On April

17,

2007, the Committee adopted Rules

of

Procedure

wh1ch,

nmong other things, provide that meetings shall

be based on

on

agenda, open to the public, with an opportunity for the applicant and the candidate to address the Committee,

answer questions and view any documents submitted to the Committee, and selling out rules

for

debate. Decisions arc lo be

made by vote in the fonn

ofa

motion, and recorded

in

the minutes

of

the Committee.

16 The Minutes mdtcate that, at their meetingofJuly 16, 2007, the Committee considered three applications for a compliance

audit relating

to

the expenses

of

three different poliriciuns

111e

Committee granted the first application, denied

Mr.

Lyrns'

applic:ition on a vote of two to one, and unanimously denied the thtrd application. The Minutes also indicate the materials that

were before the Commillcc for review. and thot the Committee unanimously agreed to extend the usual speaking Lime

for

both

the applicant and Mr Heaps to address the Committee.

17 I agree with Justice Sheppard that the professional e1tpcnise

of

the specialized Compliance Audit Committee appointed

by the Toronto City Council distinguishes this case from those of

Chapman

and Savage

.

The members of the Committee

h:ivc demonstrated knowledge

of

municipal election campaign finance rules'' and were nppointcd with the precise purpose

of

deciding when applications for compliance audits were appropriate. Their function

is

to screen applications

for

such audits, so

that only those which show reasonable grounds that

a

contravention

occu1Ted

\\;II proceed. This function

is

a narrow one, the

span

of

their authority s limited to the MEA, and the issues they have to decide are questions

of

mixed law and

fncl.

Applicants

and candidate respondents have full opportunity to present their positions and relevant materials t the Committee

in

both oral

and written submissions, and to answer any questions put by Commiuee members. Although the Committee does not issue

reasons for

its

vote, the process

of

considering the application

is

an open nnd transparent one. The Committee docs not deliberate

in private and,

like other municipal committees, their decision

is

made by motion on the record.

In

these circumstances,

r

have

concluded thut cons1dcrnble deference

mu.-;t

be shown to

the

decision

of he

Committee.

18 In my view, the

fact

that the Committee does not give reasons for 1ts decision is not a factor which should weigh heavily

given the context and their function. When judicial or quasi-judicial officers are acting in a gatekeeper function, not giving

reasons is not

an

unusual practice. I note that

a

justice

of

peace or judge does not nonnally give written reasons

for

issuing or

denying n search warrant, nor does the Supreme Court

of

Canada give reasons for refusing leave to appeal .

19

The MEA, however, does not include u privutivc clause and expressly allows this Coun on

an

appeal

~ l t i n g

lo election

financing to make any decision lhc councll ..

or

committee could have mo.de." In my view, this statutory uuthority penmt-; this

court to review the decision

of

the Committee for its reasonableness, particularly as it may relate lo questions

of

mixed fact and

law

which arise

from

the allegations before the Committee. Should this court identify any questions

of

law alone which could

potentinlly arise from these allegations, this Court can also make determinations

of

general applicntion on a correctness standurd.

As the Committee was not structured as a tribunul with n duty

to

provide reasons for its decisions, it becomes the residual

role of this 11ppcal court to articulate the law wl,f rc those with greater expertise on the MEA itself

arc

not

in

o position to do so.

2) The

meuni11g 11

rca.fonable grormds ?

20 The ~ n i n g of reasonablc grounds under the MEA is one such questionof law. The appellant submits that reasonable

grounds should be defined as "crcd1bly based probability .. .

..

not to be equated with proof before a reasonable doubt or a prima

facie case Tim

the

srondard of persuasion articulated by Justice Hill in R. v. Sanclze: (1994), 93 C.C.C. (3d) 357 (Ont.

Gen. Oiv .) with respect to the issuance

of

a search warrant and adopted by Culver J. in

Chapman, supra a t para. 4/-42.

The

respondent submits that a more appropriate standard

1-;

the standard of reasonable grounds

as

detennincd

by

the jurisprudence

relating to applications

for

j udicial recount under s. 47(1)

of

the MEA:

Devine v Scarborough

C i f _ l ~

Clerk

1995), 27 M P.L.R.

(2d)

18

(Ont Prov. Div .)

MacJonne I

rov

.

J.)

and

Hams v. Ottawa (City)

(1994), 27

M.P

.

L.R.

(2d) 36

(Ont

Prov. Div .)

t t ~ w e x t C H D Copyright Cl

Thomson

Reuters Conod.l Umllod or its licensor.; A ~ C l u d l l l J Individual court

docuroontsl

.

All rights

resurvcd .


34/38

Lyras

v. Heaps, 2008 ONCJ 524, 2008 CarswellOnt 6348

2ooa ONCJ 524, 2008

CarswellOnl

6348-;[20081 O.J.

No.

4243.170 A .c.w.s (3d) 111

: - - - -

(Blishen mv.

.I

.). In Harri.{, the court held at pnras 17 and 18 thal the test for "sufficiency and rcnsonablcness of the grounds"

is c e r t i n l y a lower test than the usual civil burden

of

proof on u balance of probnbiliues .. ..but must simply provtde a prima

focie case."

21

There is no dispute thal "mere suspicion, conjecture, hypotheses or f ishing expeditions,"' and thnt which is "specula tive and

remote" foll short ufthc minimally acceptable stnnderd. The question is whether tile test for "reasonable grounds'' is "credibly

based probability" or "a primo facie case."

22 In Savagc supra, Duncan

J.

at par.i 10 thought that the "reasonable grounds" requirement had been met where the

applicant

rc1ised issues which "an auditor might very well choose to investigate." In

Sanc/rcr (adopted

in

Chapman, supra),

Hill

J. defined "reasonable grounds" as "a pracucnl, non technical and common sense probability as to the existence of the facts

and

the inferences asserted."

23 I note that, in this case, the two chartered accountants on the Committee ma de up the majority who did not thi nk the

grounds for a compliance audit had been made out. If the test were as set out in

Savage,

their decision warrants considcr.1blc

deference. It also stnkes me that even if the appellant had what he considered reasonable grounds

to

ask for an audit, the

Committee has considerably more infonnation at their dispos11l. Having heard all the submissmns and reviewed all the material

before them, the Committee is in bette r position than the appellant to determine whether, in fact, "reasoMble grounds" do

exist to proceed with an audiL t

1s

the role of the Committee to weigh the evidence nnd to make determinations ofwhat weight

should be nccorded to the representations before it.

24 There is a distinction in law between "credibly based probability" and "a prima facie case." A

belief

is founded

on

"reasonable grounds" where there is an ohjecti\'e ba. iis for the bel ief that is based on "compelling and credible information." The

standard is "rcasoooble probability," not

proof

beyond a reasonable doubt

or

a prima facie case: R.

v.

Le (2006), 210 C.C .C. (3d)

181

(B.C. C.A.) leaved to

appeal

to S.C

C.

refused (2006), 212 C.C.C.

(3d)

vi (note) (S.C.C.); Mugcsero c.

Canada (Ministrc

de la C11oye11ne1e

de

/'Immigration) (2005), 197 C.C.C. (3d) 233 (S.C.C.) at para. I 14. A "primn facie case" connotes a case

containing evidence o n all essential poinL'i

of

a charge which, if believed by the trier of fact and unanswered, would warrant a

conviction: R.

v.

Mczzo (1986), 27 C.C

.C.

(3d)97

(S.C .C.).

Black's Law Dictionary 6th ed nt p. 1190 also indicates that "Prima

acie evidence

e f c ~

not only to evidence which would reasonably allow the o n c l u s i ~ n which the plaintiff seeks, but nlso to

evidence which would compel such a conclusion 1fthe defendant produced no rebuttal evidence." As MacDonnell, Prov. Div.

J.

noted in

R.

v.

Skorput

(1992), 72 C.C.C. (3d) 294 (Ont. Prov. Div.),

at

pp

. 296.297,

the fonnc r use is penrussivc; the lellcr

carries "a degree ofcogency'(thaL) ..might conveniently be dc.


35/38

yras v. Heaps, 2008 ONCJ 524, 2008 CarswellOnt 6348

2ooe ONCJS24, 2ooa carswenont634B:12ooa1 dT.N0:-4243. T10

f3d

)771...

son Toby Heaps. According to an excerpt

from

the Corpornte K n i g h t ~ website, Peter

Diplnros is

the webmaslcr and chief

analyst

for

the fundlibrary.com

ond

his favourite hobby

is lorge

scale

web

site architecture

nnd 1iL:s1gn.

Given the quality

and comprehensiveness

of

the thirty.page

websice,

Mr.

Lyras

asserted that

" t

wns

implausible

thot

1twas designed

and

ereoted,

as well as hosted for a threemonth period, by a professional webmaster with such experience for a cost

of

only

S

120.

Mr.

Lyras obtained

two

quoles for the design, creation and hosting

of

websites similar to that operated by Mr. Heaps during

the

campaign, one

was for

more than

5,965.00,

the

other

for $2,800.00 In his

view. even the

lower of

these costs would have

caused Mr. Heaps

to

exceed his campaign spcndmg limits

28 Mr

. Heaps replied that the cost

of

developing

the

website was

not

reported as

it was

not ''paid

for ,

but rather ohtnined

through voluntary unpaid labour, a specific exemption from the definition

of

contribution under section 66(2)2.i

of the

MEA . He indicated to

the

Committee that the work

was

done on volunteer time, took approximately

10

-

14

hours, and

was

done

by

Peter Diplaros, himself, his wife,

his

son nnd others who contributed volunteer

time lo the

content and upkeep

of

the site,

29 In his

written submissions to

the

Committee

in

support

of

his application, counsel for

Mr Lyrns

asserted that

t c

voluntaey

unpaid labour provision

of

the

MEA

docs

not

apply to the contribution

of

services by those who

arc in

the

businc.-;s

of providing

such services, i.e. that the

MEA

distinguishes between voluntary unpaid labour and the contribution ofprofessionnl services.

He

nlso

submitted that allowing candidates

to

cvmle

the

application of

the

election spending limits

to

professional services

obtnined on

a

no-charge basis would result in inequality and unfairness

among

cnndtdates

30 There is

no

dispute that

the

cost

of

producing a website

is

not distinguishable

from the

cost

of

producing other campaign

literature or advertising. Mr. Heaps submits, however, that

to the

extent

that

brochure, website or other advertising

is

produced

by voluntary unpaid labour, these

are

not contributions under the

MEA

and

need

not be

declared as such. Unless something

is a contribution,

then

the rules

for

the valuation

of

the goods and services dealt with ins. f16(3)

of the

MEA do

not

apply.

3 I agree

with

counsel

for the

Commillec that Mr Lyras has misinterpreted and misapplied

the

provisions of the ME/\.

Section

66(2)

1.iii specifics that

if

goods

and

services

used in

a ... campaign are

purchased.

for

less than

their market value,

the

difference between

the

amount paid and the market value

arc

considered a contribution. Section 66(2)2.i provides that the

value of services provided by voluntary unpaid labour ...

arc JlQl

contributions. Section

66(3)

describing how to value goods

and

services only applies to goods

and

services provided

as

a contribution. (my underlining)

32 Under the

MEA, the

level

of

expertise that a volunteer has in

the

area

in

which

they

elect

to

provide volunteer services

is

an irrelevant consideration in the: deli

mt ion

ofwhat s a contribution.

t

is also clear

thut the rules

about valuing contributions

of

goods

and

services

add

nothing to the specific statutory definitions

of

what is or

is

not

a contribution. The

MEA

is

very

c l ~ r

that

the value

of

services provided by voluntary unpaid labour need not be considered a contribution,

and

makes no

distinction between

free

professional services

and free

services for other campaign assistance.

33 Mr Lyra.c;

also submitted that

the

contribution or services to design

ond

create a website

is

a contribution

of

political

advertising within

the

meaning

of

section

66(2)21v of

the

MEA, nnd

that the existence

or

the specific exemption

for

the value

of

political advertising provided without charge on a broadcasting .. under the Broadcasting

Act

(Canada) implies that other

fonns of political advertising such

s

a

website arc

not

exempt from the reporting requirements.

In my

view, this

is

a further

misreading

of

the

MEA

. This specific citcmption relates

lo

the value

of the

time provided for using the broadcast medium

to

distribute the message The cost

of

developing

the

message

is

akin

to all

other advertising used

in the

campaign

and is

reportable,

except

in so far as any of the

services used

to

produce

it

were provided

by

voluntary unpaid labour.

34

The clear statutory exemption for voluntory unpaid labour is

n

policy


36/38

Lyras v. Heaps, 2008 ONCJ 524, 2008 CarswetlOnt 6348

2008

ONCJ

524, 2008 CarswellOnt

6348,[2008] o :No

.

170 A.C.W

.S. (3dfn

- -

35 The only remaining issue

is

whether there

was

any "compelling and credible infonnation" before the Committee that

objectively raised a "reasonable possibility" that Mr . Heaps

failed

to report the cost of developing and maintaining his website.

r

. Heaps' evidence was that

the

services used to create and maintain the website were provided

by

voluntary unpaid labour,

including that provided by Peter Diplaros. There is no "compclhng and credible infonuation"

from

Mr Lyras to the contrary.

What he put before the Committee s nothing more than speculation and conjecture. That Mr. Diplaros works

for

Corporate

Knights, docs some "wcbmaster" services as part of one of his jobs, :ind likes to construct complex websites a o; n hobby is

not evidence that he did not donate his time to create the original websi

te

. The quality

of

the website is irrelevant, as

1s the

fact that other candidates may have paid for similar services, or that the services may have had substantial market value 1f

purchased on the market.

36 In my view, it

is

the role

of the

Committee to make findings

of

credibility on the information and represcntetinns before

them. In this case, the majority finding that Mr. Lyras had no reasonable grounds

for

his complaint about the cost5

of

the website

is reason able determination. I also

find

that their understandingof

he

applicable

Jew

was correct.

b All 1e/ephonc expenses?

37 Mr. Lyras submitted that Mr. Heaps failed

to

account

for the

cost

of two

telephone numbers wluch were hstcd on his

campaign website

and his

campaign literature and which

he

asserts

were

utilized during the course

of

the cnmpoign. Mr. Heaps

responded that

he was

not requ i

red

to account for

the

expenses

of

his home telephone number

and

his son's cellular telephone

number which was "on plan" and "was utilized for a total

of

14 incoming calls

from

media."

On

the evidence before the

Compliance Audit Committee, Mr. Heaps did account for the cost of

the main

telephone line used m his cnmpaign

and tnd1cnted

that the use ofthese private telephone lines for the campaign was negligible.

38 The decision that an audit

of

the costs

or

these lines was unnecessary

is

Date post:	13-Apr-2018
Category:	Documents
Upload:	to-nature-development
View:	218 times
Download:	0 times

Submission From Brian Kolenda on Behalf of Candidate Mark Grimes - Part 1 (EA.supp.EA4.2.3)...

Documents