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7/26/2019 Submission From Brian Kolenda on Behalf of Candidate Mark Grimes - Part 1 (EA.supp.EA4.2.3) (September 1, 20
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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
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City Clerk's Office, Election Services
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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
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City Clerk's Office, Election Services
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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.
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City Clerk's Office, Election Services
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l,
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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.
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City Clerk's Office, Election Services
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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.
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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
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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
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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.
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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.
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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
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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 .
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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 -
7/26/2019 Submission From Brian Kolenda on Behalf of Candidate Mark Grimes - Part 1 (EA.supp.EA4.2.3) (September 1, 20
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l n ~ x
)
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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
Compliance Audit Committee
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
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- 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
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1
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0
0
0
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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
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- 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;
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-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
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- 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).
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- 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
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0
0
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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
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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
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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
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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
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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
Compliance Audit Committee
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.
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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
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7/26/2019 Submission From Brian Kolenda on Behalf of Candidate Mark Grimes - Part 1 (EA.supp.EA4.2.3) (September 1, 20
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 .
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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.
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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
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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