Court File No. CV-12-448487

Divisional Court File No.

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

PAUL MAGDER

Applicant

(Respondent Party)

and

ROBERT FORD

Respondent

(Moving Party/Appellant)

FACTUM OF THE RESPONDENT,

MOVING PARTY/APPELLANT

November 28, 2012 LENCZNER SLAGHT ROYCE

SMITH GRIFFIN LLP

Barristers

Suite 2600

130 Adelaide Street West

Toronto ON M5H 3P5

Alan J. Lenczner, Q.C. (11387E) Tel: (416) 865-3090

Fax: (416) 865-2844

Email: alenczner@litigate.com

Andrew Parley (55635P) Tel: (416) 865-3093

Fax: (416) 865-2873

Email: aparley@litigate.com

Lawyers for the Respondent (Moving

Party/Appellant)

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TO: RUBY SHILLER CHAN LLP Barristers

11 Prince Arthur Avenue

Toronto, ON M5R 1B2

Clayton Ruby

Nader R. Hasan

Tel: (416) 964-9664

Fax: (416) 964-8305

Lawyers for the Applicant (Responding Party)

Court File No. CV-12-448487

Divisional Court File No.

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT B E T W E E N:

PAUL MAGDER

Applicant

(Respondent Party)

and

ROBERT FORD

Respondent

(Moving Party/Appellant)

FACTUM OF THE MOVING PARTY/APPELLANT

1. This is a motion to stay the Decision of Hackland R.S.J. of November 26, 2012.

2. An appeal lies to the Divisional Court from the Decision of Hackland R.S.J. of

November 26, 2012 pursuant to section 11 of the Municipal Conflicts of Interest Act, R.S.O. 1990,

c. M.50 (“MCIA”).

3. There is a three-fold test to be applied to grant a stay pending the appeal to the Divisional

Court. The moving party/appellant meets this three-fold test.

Serious Issue to be Tried

4. The Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General)

detailed the elements of the first requirement, “serious issue to be tried”:

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49 What then are the indicators of "a serious question to be tried"? There

are no specific requirements which must be met in order to satisfy this test.

The threshold is a low one. The judge on the application must make a

preliminary assessment of the merits of the case. …

50 Once satisfied that the application is neither vexatious nor frivolous,

the motions judge should proceed to consider the second and third tests,

even if of the opinion that the plaintiff is unlikely to succeed at trial. A

prolonged examination of the merits is generally neither necessary nor

desirable.

Reference: RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1

S.C.R. 311, at paras. 49 and 50, Tab 1

5. The issues that the moving party/appellant has raised as the subject matter of the appeal are

found in his Notice of Appeal attached hereto at Tab A. Some brief indications are provided as this

Factum is not intended to contain full argument on the points of appeal.

6. It is respectfully submitted that the Learned Applications Judge erred in determining that

the penalty imposed upon the moving party/appellant by City Council that he pay $3,150.00 to

donors that had contributed monies to a charitable foundation, was within the jurisdiction of the

City Council. The City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A (“COTA”) provides only

two penalties for breach of a provision of the Code of Conduct. S. 160(5) of the COTA provides:

(5) City council may impose either of the following penalties on a

member of council or of a local board (restricted definition) if the

Commissioner reports to council that, in his or her opinion, the member

has contravened the code of conduct:

1. A reprimand.

2. Suspension of the remuneration paid to the member in

respect of his or her services as a member of council or of the local

board, as the case may be, for a period of up to 90 days. 2006, c.

11, Sched. A, s. 160 (5).

7. If the penalty was not within the jurisdiction of the City, then the Resolution of City

Council was null and void as being ultra vires.

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8. The Learned Applications Judge relied on two bases to find that the penalty imposed was

intra vires. First, he indicated that the penalty was authorized under “other actions” in paragraph

36 of his Decision. The phrase “other actions” is not in COTA. The learned Applications Judge

imported it as legislation. In any event, a plain reading of “other actions” does not encompass

what City Council imposed upon the moving party/appellant.

9. Second, the Learned Applications Judge referred to the Supreme Court of Canada’s

Decision on “general welfare provisions” to then expand the category of “other actions” to

circumvent the effect of the doctrine of ultra vires. General welfare provisions are entitled to a

liberal interpretation. Penalties are not; they cannot be expanded beyond their express words.

10. The Learned Applications Judge also erred when he conflated the MCIA with the Code of

Conduct Provisions in the COTA. The Learned Applications Judge referred to, but did not adopt,

the recommendation of Justice Cunningham or the expert evidence of Professor Mullan at

paragraphs 18 and 19 of the Decision. The Learned Applications Judge accepted that the MCIA

usually deals with cases where the municipality has financial interests and in contrast, the Code of

Conduct is primarily aimed at councilor integrity. In this case, there was no financial interest

involved and the Code of Conduct provisions of the COTA are a complete code unto themselves.

The Learned Applications Judge, erroneously, exported the “pecuniary interests” of the MCIA and

imported it into the COTA, which has a different purpose and a different objective.

11. The Learned Applications Judge was also in error in failing to apply, in the alternative, the

defence of error of judgment pursuant to s. 10(2) of the MCIA. The moving party/appellant

declared a conflict of interest on seven other occasions and, indeed, on one occasion in the very

session of February 7, 2012, where he was found liable for not declaring a conflict of interest on a

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second occasion. A different, but reasonable interpretation of these confusing statutes, constitutes

an error of judgment.

Irreparable Harm

12. The Supreme Court of Canada in RJR-MacDonald indicated the meaning of irreparable

harm:

58 At this stage the only issue to be decided is whether a refusal to grant

relief could so adversely affect the applicants' own interests that the harm

could not be remedied if the eventual decision on the merits does not

accord with the result of the interlocutory application.

59 "Irreparable" refers to the nature of the harm suffered rather than its

magnitude. It is harm which either cannot be quantified in monetary terms

or which cannot be cured, usually because one party cannot collect

damages from the other. …

Reference: RJR-MacDonald v. Canada (Attorney General), supra, at

paras. 58 and 59, Tab 1

13. Failing to grant a stay vacates the mayoralty seat, a seat which the moving party/appellant

won through the democratic process by more than 90,000 votes. Removing the moving

party/appellant as mayor is a loss of position, not compensable by money.

… (b) As to irreparable harm, this is not a case in which damages

constitute a remedy. If sitting school trustees are disqualified, they will

lose their positions and not have the opportunity of completing their terms

and serving those who elected them. In the unique circumstances of this

case in which the government consents to the stay, I am satisfied to find

irreparable harm to the applicants. …

Reference: Baier v. Alberta, [2006] 2 S.C.R. 311 at para. 16, Tab 2

14. After the 14 days, in the absence of any stay, either a new election for mayor would be

called or City Council would install someone else as the mayor. If the Decision were then reversed

by this Court on the appeal, irreparable harm would be occasioned.

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The Balance of Convenience and Public Interest Considerations

15. The third test to be applied is that of balance of convenience and the public interest. The

Supreme Court of Canada in RJR-MacDonald v. Canada (Attorney General) outlined the elements

as follows:

62 The third test to be applied in an application for interlocutory relief

was described by Beetz J. in Metropolitan Stores at p. 129 as: "a

determination of which of the two parties will suffer the greater harm from

the granting or refusal of an interlocutory injunction, pending a decision

on the merits". In light of the relatively low threshold of the first test and

the difficulties in applying the test of irreparable harm in Charter cases,

many interlocutory proceedings will be determined at this stage.

63 The factors which must be considered in assessing the "balance of

inconvenience" are numerous and will vary in each individual case. In

American Cyanamid, Lord Diplock cautioned, at p. 408, that:

[i]t would be unwise to attempt even to list all the various matters

which may need to be taken into consideration in deciding where

the balance lies, let alone to suggest the relative weight to be

attached to them. These will vary from case to case.

He added, at p. 409, that "there may be many other special factors to be

taken into consideration in the particular circumstances of individual

cases."

…

66 It is, we think, appropriate that it be open to both parties in an

interlocutory Charter proceeding to rely upon considerations of the public

interest. Each party is entitled to make the court aware of the damage it

might suffer prior to a decision on the merits. In addition, either the

applicant or the respondent may tip the scales of convenience in its favour

by demonstrating to the court a compelling public interest in the granting

or refusal of the relief sought. "Public interest" includes both the concerns

of society generally and the particular interests of identifiable groups.

Reference: RJR-MacDonald v. Canada (Attorney General), supra, at

paras. 62, 63 and 66, Tab 1

16. Hackland R.S.J. recognized the disruption that would occur when he indicated in

paragraph 62:

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Recognizing that this decision will necessitate administrative changes in

the City of Toronto, the operation of this declaration shall be suspended

for a period of 14 days from the release of these reasons.

Reference: Reasons for Decision of Hackland RSJ of November 26, 2012,

para. 62, Motion Record Tab 2

17. The public elected Robert Ford as its mayor by more than 90,000 votes over the next

candidate. It cannot be right that the democratic process and the democratic will should be denied

for a period of another few months while the appeal is being heard and decided. Counsel for the

moving party/appellant seeks to have an expedited appeal.

… (c) … The second is that sitting trustees were elected by a majority of

electors in an election that was valid at the time. This Court must have

regard to the effect upon the public interest of a decision that would

disregard the will of the majority of electors in valid elections. Indeed, it

is apparent that there is a public benefit from the granting of a stay.

Reference: Baier v. Alberta, supra at para. 16, Tab 2

18. There is no criminal conduct involved. There is no pecuniary interest of the City that was

involved. The entire matter involved $3,150.00 which was donated by 11 donors to a charitable

foundation. The sole issue was whether the moving party/appellant was able to vote in favour of a

Resolution of City Council on February 7, 2012, rescinding the City Council Resolution of

August 25, 2010 whereby he was ordered to pay, from his own pocket, the $3,150.00 that the

donors had paid to the charitable foundation.

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19. The moving party/appellant therefore requests a stay of the Judgment of Hackland R.S.J.

dated November 26, 2012 pending the determination of the appeal to the Divisional Court.

ALL OF WHICH IS RESPECTFULLY SUBMITTED

Alan J. Lenczner, Q.C.

Andrew Parley

SCHEDULE A

1. RJR-MacDonald v. Canada (Attorney General), [1994] 1 S.C.R. 311

2. Baier v. Alberta, [2006] 2 S.C.R. 311

SCHEDULE B

CITY OF TORONTO ACT, 2006, S.O. 2006, C. 11, Schedule. A

CODE OF CONDUCT

Code of Conduct

157. (1) The City shall establish codes of conduct for members of city council and members of

local boards (restricted definition). 2006, c. 11, Sched. A, s. 157 (1).

Same

(2) Without limiting sections 7 and 8, those sections authorize the City to establish codes

of conduct for members of city council and of local boards (restricted definition) of the

City. 2006, c. 11, Sched. A, s. 157 (2).

No offence

(3) A by-law cannot provide that a member who contravenes a code of conduct is guilty of

an offence. 2006, c. 11, Sched. A, s. 157 (3).

INTEGRITY COMMISSIONER

Appointment of Commissioner

158. (1) The City shall appoint an Integrity Commissioner. 2006, c. 11, Sched. A, s. 158 (1).

Reporting relationship

(2) The Commissioner reports to city council. 2006, c. 11, Sched. A, s. 158 (2).

Status

(3) The Commissioner is not required to be a city employee. 2006, c. 11, Sched. A, s. 158

(3).

Responsibilities

159. (1) The Commissioner is responsible for performing in an independent manner the functions

assigned by city council with respect to the application of the code of conduct for members

of city council and the code of conduct for members of local boards (restricted definition)

and with respect to the application of any procedures, rules and policies of the City and

local boards (restricted definition) governing the ethical behaviour of members of city

council and of local boards. 2006, c. 11, Sched. A, s. 159 (1).

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Powers and duties

(2) Subject to this Part, in carrying out these responsibilities, the Commissioner may

exercise such powers and shall perform such duties as may be assigned to him or her by

city council. 2006, c. 11, Sched. A, s. 159 (2).

Delegation

(3) The Commissioner may delegate in writing to any person, other than a member of city

council, any of the Commissioner’s powers and duties under this Part. 2006, c. 11, Sched.

A, s. 159 (3).

Same

(4) The Commissioner may continue to exercise the delegated powers and duties, despite

the delegation. 2006, c. 11, Sched. A, s. 159 (4).

Inquiry by Commissioner

160. (1) This section applies if the Commissioner conducts an inquiry under this Part,

(a) in respect of a request made by city council, a member of council or a member of the

public about whether a member of council or of a local board (restricted definition) has

contravened the code of conduct applicable to the member; or

(b) in respect of a request made by a local board (restricted definition) or a member of a

local board (restricted definition) about whether a member of the local board (restricted

definition) has contravened the code of conduct applicable to the member. 2006, c. 11,

Sched. A, s. 160 (1).

Application of Public Inquiries Act, 2009

(2) The Commissioner may elect to exercise the powers under sections 33 and 34 of the

Public Inquiries Act, 2009, in which case those sections apply to the inquiry in accordance

with the election. 2009, c. 33, Sched. 6, s. 46 (1).

Information

(3) The City and its local boards (restricted definition) shall give the Commissioner such

information as the Commissioner believes to be necessary for an inquiry. 2006, c. 11,

Sched. A, s. 160 (3).

Same

(4) The Commissioner is entitled to have free access to all books, accounts, financial

records, electronic data processing records, reports, files and all other papers, things or

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property belonging to or used by the City or a local board (restricted definition) that the

Commissioner believes to be necessary for an inquiry. 2006, c. 11, Sched. A, s. 160 (4).

Penalties

(5) City council may impose either of the following penalties on a member of council or of

a local board (restricted definition) if the Commissioner reports to council that, in his or her

opinion, the member has contravened the code of conduct:

1. A reprimand.

2. Suspension of the remuneration paid to the member in respect of his or her

services as a member of council or of the local board, as the case may be, for a

period of up to 90 days. 2006, c. 11, Sched. A, s. 160 (5).

Same

(6) The local board (restricted definition) may impose either of the penalties described in

subsection (5) on its member if the Commissioner reports to the board that, in his or her

opinion, the member has contravened the code of conduct, and if city council has not

imposed a penalty on the member under subsection (5) in respect of the same

contravention. 2006, c. 11, Sched. A, s. 160 (6).

MUNICIPAL CONFLICT OF INTEREST ACT, R.S.O. 1990, CHAPTER M.50

Section 4

Where s. 5 does not apply

4. Section 5 does not apply to a pecuniary interest in any matter that a member may have,

(k) by reason only of an interest of the member which is so remote or insignificant in its nature

that it cannot reasonably be regarded as likely to influence the member. R.S.O. 1990, c. M.50,

s. 4; 2002, c. 17, Sched. F, Table; 2006, c. 32, Sched. C, s. 33 (1).

Appeal to Divisional Court

11. (1) An appeal lies from any order made under section 10 to the Divisional Court in

accordance with the rules of court. R.S.O. 1990, c. M.50, s. 11 (1).

PAUL MAGDER -and- ROBERT FORD

Applicant (Responding Party) Respondent (Moving Party/Appellant)

Court File No. CV-12-448487

Divisional Court File No.

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

PROCEEDING COMMENCED AT TORONTO

FACTUM OF THE MOVING PARTY, APPELLANT

LENCZNER SLAGHT ROYCE

SMITH GRIFFIN LLP

Barristers

Suite 2600

130 Adelaide Street West

Toronto ON M5H 3P5

Alan J. Lenczner, Q.C. (11387E) Tel: (416) 865-3090

Fax: (416) 865-2844

Email: alenczner@litigate.com

Andrew Parley (55635P) Tel: (416) 865-3093

Fax (416) 865-2873

Email: aparley@litigate.com

Lawyers for the Moving Party/Appellant