Benn v. Lozinski

[1982] O.J. No. 3356

37 O.R. (2d) 607

14 A.C.W.S. (2d) 304

Ontario

County Court

County of Essex

Hollinger Co. Ct. J.

February 12, 1982

M. Mousseau, Q.C., D. Favot, and H. Eisenberg, for applicant.

L. Paroian, Q.C., R. Colautti, and R. Valdis, for respondent.

1 HOLLINGER CO. CT. J.:-- This is an application under the Municipal Conflict of Interest Act, R.S.O. 1980, c. 305, and amendments thereto. The applicant is a ratepayer in the City of Windsor entitled to vote at the election of members of the Windsor Roman Catholic Separate School Board. The respondent is an elected trustee of the Windsor Roman Catholic Separate School Board. He is employed by the Windsor Board of Education as the vice-principal of Walkerville Collegiate in the City of Windsor.

2 The relief sought is:

(a) A determination of the question as to whether or not the respondent has contravened the provisions of the Municipal Conflict of Interest Act;

(b) A declaration that the seat of the respondent upon the Windsor Roman Catholic School Board is vacant.

3 The grounds of the application are that the respondent being a member of the Windsor Roman Catholic Separate School Board and having a direct or indirect pecuniary interest by reason of being an employee of the Board of Education for the City of Windsor and a member of the Ontario Teachers Federation, who had an interest in a contract or proposed contract that was reasonably likely to be affected by a decision of the Windsor Roman Catholic Separate School Board was present at a meeting of the Windsor Roman Catholic Separate School Board held on October 27, 1981, failed to disclose his interest in and voted upon a contract proposed contract or other matter involving the Windsor Roman Catholic Separate School Board and the teachers of the Windsor Roman Catholic Separate School Board, contrary to s. 2(1) of the Municipal Conflict of Interest Act.

4 The application was supported by an affidavit of the applicant and two others.

5 Section 1(3) of the Act for our purposes states as follows:

1(3) For the purposes of this Act, a member of a ... local board has an indirect pecuniary interest in a contract or proposed contract with the ... local board or in any contract or proposed contract that is reasonably likely to be affected by a decision of the ... local board or in any other matter in which the ... local board is concerned, as the case may be,

(a) if he ... is a member of a body

. . . . .

(ii) that has an interest in a contract or proposed contract that is reasonably likely to be affected by a decision of the ... local board, or

(iii) that has an interest in any matter in which the ... local board is concerned; or

(b) if he ... is in the employment of a person or a body,

(ii) that has an interest in a contract or proposed contract that is reasonably likely to be affected by a decision of the ... local board, or

(iii) that has an interest in any other matter in which the ... local board is concerned.

Section 2 of the Act states: t(

2(1) Where a member of ... a local board ... has any pecuniary interest, direct or indirect,

(a) in any contract or proposed contract with the ... local board, as the case may be;

(b) in any contract or proposed contract that is reasonably likely to be affected by a decision of the ... local board; or

. . . . .

and is present at a meeting ... of the ... local board at which the contract, proposed contract or other matter is the subject of consideration, he shall, as soon as practicable after the commencement of the meeting, disclose his interest and shall not take part in the consideration or discussion of, or vote on any question with respect to, the contract, proposed contract or other matter, or attempt in any way to influence the voting on any such question.

6 The Windsor Board of Education has a contract with the secondary school teachers represented by the Ontario Secondary School Teachers' Federation and the elementary school teachers represented by the Federation of Women Teachers' Association of Ontario, and the Public School Men Teachers' Federation. All three are affiliated with the Ontario Teachers' Federation which is governed by the Teaching Profession Act, R.S.O. 1980, c. 495.

7 The agreement between the Board of Education for the City of Windsor and the Federation of Women Teachers and the Public School Men Teachers' Federation expires on August 31, 1982 and will shortly be re-negotiated.

8 In Re Guimond and Sornberger (1980), 115 D.L.R. (3d) 321, 13 M.P.L.R. 134, 13 Alta. L.R. (2d) 228, Mr. Justice Clement speaking for the court and referring to s. 30(2)(d) of the Alberta Municipal Government Act which prohibits a member of a council from voting on any question in which he has a direct or indirect pecuniary interest said at p. 330 D.L.R.:

It sustains the right of an elector to the even-handed, independent consideration of his elected representatives on questions before council, unaffected by any influence that could potentially flow from a direct or indirect pecuniary interest. The only inquiry that is permitted is whether such interest exists, whatever its extent or degree. Once that is determined to exist in any degree, there can be no further inquiry: a presumption of bias is mandatory. It is irrelevant to inquire whether the councillor cast his vote for the question or against it. He may have voted favourably to his pecuniary interest or he may have "leaned over backwards" and voted against it. The latter course may be accepted morally, but it does not achieve the disinterested consideration on the question on its merits, which the elector is entitled to expect, and to receive, from his representatives and which the statute commands.

9 The same judge in Re Wanamaker and Patterson, 37 D.L.R. (3d) 575, [1973] 5 W.W.R. 193, reiterated his previous finding when he said at p. 552 D.L.R.:

Integrity in the discharge of public duties is and will remain of paramount importance, and when the question of private interest arises, the Court will not weigh its extent nor amount in determining the issue.

10 In Re Moll and Fisher et al. (1979), 23 O.R. (2d) 609, 96 D.L.R. (3d) 506, Robins J., speaking for the court and referring to the Ontario Act said at p. 612 O.R.:

So long as the member fails to honour the standard of conduct prescribed by the statute, then, regardless of his good faith or the propriety of his motive, he is in contravention of the statute.

This enactment, like all conflict-of-interest rules, is based on the moral principle, long embodied in our jurisprudence, that no man can serve two masters. It recognizes the fact that the judgment of even the most well- meaning men and women may be impaired when their personal financial interests are affected. Public office is a trust conferred by public authority for public purpose. And the Act, by its broad proscription, enjoins holders of public offices within its ambit from any participation in matters in which their economic self-interest may be in conflict with their public duty. The public's confidence in its elected representatives demands no less.

At pp. 620-21 O.R. he said:

But more important, the contraventions in this case, in my view, are neither remote nor insignificant. Collective bargaining contracts and the terms and conditions of employment determined by their negotiation, are manifestly important to persons covered by them. Clearly, it is inimical to the public interest that an elected official having a voice in bargaining on behalf of the public should, at the same time, be in a position to advance his private economic interest. In u!essence, the appellants have placed themselves on both sides of the bargaining table. Their family purse is in conflict with their public duty. Trustees, like Caesar's wife, must be, and appear to be, beyond temptation and reproach. The law sets a high objective standard of conduct.

11 In Re Blake and Watts et al. (1973), 2 O.R. (2d) 43, 41 D.L.R. (3d) 688, Kileen Co. Ct. J., was considering an application under the Ontario Act alleging a pecuniary interest of the respondents who were members of the council of the City of London and employed by the London Board of Education as school administrators. At a meeting of council they debated and voted on a motion which provided for the remission to the board of education of its portion of the City of London tax levy. The learned judge found that as school administrators employed by the Board of Education of the City of London s. 1(3)(b) of the Act, "by clear terms, places an indelible stamp of 'indirect pecuniary interest' on the respondents." [at p. 693 D.L.R.].

12 The applicant Benn relied on the affidavit of James Bartlett an acknowledged expert in labour relations. He said this,

In my experience in a negotiatian of a collective bargaining agreement including the statutory procedures of conciliation and mediation both management and Union representatives make comparisons between the demands being made in such negotiations and the provisions of other collective bargaining agreements in the same industry, and in particular in the same area with the purpose of supporting their respective proposals.

He also stated that,

The results obtained by one group of employees will affect the agreement subsequently obtained by another group of employees within the same industry. When a collective bargaining agreement provides benefits to employees which are better than those provided to employees of other similar employers it is almost universally the position of such leaders that its employees must retain their leadership in that industry.

I can see nothing wrong with those observations.

13 It was also the opinion of the applicant, Benn, a chartered accountant who for the purpose of this application, analyzed the monetary provisions of collective agreements from January 1976 to the present between the Windsor Roman Catholic Separate School Board, the Board of Education for the City of Windsor, both elementary and secondary, the Essex County Board of Education both elementary and secondary, the Essex County Roman Catholic Separate School Board and their respective teachers. He was of the view that his analysis clearly demonstrated that the monetary settlements of one board affects the monetary settlements of another board. In his affidavit in support, Edward Fortune, an elected trustee of the Windsor Roman Catholic Separate School Board said that he had served on the negotiating committee for the board with respect to two contracts in the past between the board and the teachers of the board. As a member of that committee and for the purposes of negotiating contracts with the teachers he had taken into consideration the monetary provisions of numerous other contracts between teachers and their boards in the Province of Ontario, including contracts between the City of Windsor Board of Education and their teachers. The evidence of William McRae, a director of the board and secretary and chief executive officer of the Roman Catholic Separate School Board, in effect called this standard procedure in the negotiation of collective bargaining agreements with teachers.

14 The applicant referred to the affidavit and cross-examination thereon of William Lozinski. The respondent set out what he believed to be certain criteria that boards considered in arriving at a contract settlement with the teachers. He admitted that the board looks at what is being done by comparable boards of education in Ontario and said that the commission (Education Relations Commission) as a matter of policy considers collective agreements between school boards and teachers across the province as being essential to facilitate negotiations between the parties.

15 The applicant also referred me to a publication entitled "The Role of the School Trustee". It is a publication by the Ministry of Education and is the report of the committee to examine the role of the school trustee. That publication states,

As members of a publicly elected body, Trustees are subject to an oath of office and to the Municipal Conflict of Interest Act. Conflicts of interest may arise when for example, Trustees who are employees of other Boards deal with issues such as salary negotiations and matters concerning relations between that Board of which they are a member and the Board that employs them.

16 The report points out that the employee trustee has a clear avenue to avoid the conflict of interest as set out in the Act. As well the report says this,

The situation is growing increasingly difficult as a result of the evermore complex nature of collective bargaining within the provisions of the School Boards and Teachers Collective Negotiations Act as well as the implementation of collective agreements. Improved collective agreements negotiated by the employees of one board may be used as negotiating levers on other boards. It also appears clear that certain financial and administrative decisions made by one Board have an influence on other Boards.

17 The applicant further pointed out that the respondent Lozinski, a member of the Ontario Teachers Federation, paid fees to that body on a sliding scale proportionate to the teachers salary and therefore Lozinski belonged to a body that had a monetary interest in the contracts -- not only in the contract he voted on, but future negotiated contracts of the board and teachers.

18 The respondent argued that there is no direct or indirect evidence to support the applicant's allegation that the respondent or the respondent's employer had an indirect pecuniary interest in the contract and the only evidence put forward by the applicant is nothing but vain speculation and opinion evidence by a person not qualified to give such an opinion. He also argued that there is no connection whatever between the collective bargaining carried on by the Windsor Board of Education and the Windsor Roman Catholic Separate School Board and their respective teachers. He maintained that it was the applicant's task under the Municipal Conflict of Interest Act to prove as a matter of probability that the respondent had a pecuniary interest in the contract under consideration and would probably be affected beyond the balance of probabilities by a decision of the local board. The respondent argued that this application was not a subject-matter to bring before a court. There is no limitation on a teacher running for office in any board other than the one that employs them. Any limitation should be imposed by the Legislature. If the applicant believed that teachers ought not to be voting on teachers' salaries of another board he should be before a special committee of the Legislature.

19 In so far as the law is concerned the respondent dealt with six points.

(1) In the absence of any statutory restriction or prohibition teachers as well as any other citizen, may stand for election and serve as trustees on school boards that do not employ them.

(2) A trustee has a duty and responsibility to exercise his vote in accordance with his beliefs and principles and in conformity with the provisions of the Municipal Conflict of Interest Act.

(3) It is an error in principle to simply decide in broad terms that certain categories of persons such as teachers, acting as trustees will always be in conflict of interest in certain circumstances, such as voting on proposed board/teacher contracts of a board by which they are not employed.

(4) The applicant has the onus of proving on a balance of probabilities that a clearly definable pecuniary interest of the respondent or the respondent's employer was affected by the decision made by the board. The connection between the matter under consideration by the board and the alleged pecuniary interest must be immediate, clearly definable and specified. Suspicions are not enough, opinions unsupported by objective facts and evidence are not enough and unsupported prejudice are not enough.

(5) Even if I should find there is some pecuniary interest and therefore a conflict, I must go further and look at s. 5 of the Act and consider whether the conduct is inadvertent or whether there has been a bona fide error in judgment and then I must consider whether the conflict of interest is so remote as not likely to affect the respondent's decision and if so I find I must dismiss the application.

(6) The Court ought to look to the real purpose of this application and if that purpose is in essence political the court should not as a matter of policy interfere with the Legislature.

20 There is no doubt, and I am sure the parties agree, that a teacher has the right under the Education Act, R.S.O. 1980, c. 129, to sit on a board as long as it is not on the one that employs him. I am also sure that the parties agree that as a trustee he has a duty and a responsibility to vote in accordance with his beliefs and principles as long as he acts in accordance with the provisions of the Municipal Conflict of Interest Act.

21 Counsel for the respondent referred me to the decision of the Divisional Court in Re Edwards and Wilson et al. (1980), 31 O.R. (2d) 442, 119 D.L.R. (3d) 129, 14 M.P.L.R. 128. There the respondents were members of a municipal council; were employed by or owners of downtown businesses and voted against an application to establish a suburban mall. The court found that one of the respondents who owned a downtown building that was leased until 1987 "which by the nature of its business might well be unaffected by 'the Mall'" and therefore that respondent did not have "an indirect pecuniary interest" [at p. 447 O.R. ]. The court also found on the balance of probabilities that the respective businesses associated with the other respondents would be adversely affected if the mall was constructed and found a "member of Council has an indirect pecuniary interest in a proposal for a change in permitted land uses in the municipality, if those changes probably will adversely affect the business he operates or by which he is employed" [at p. 448 O.R.]. Callaghan J. then found the respondent in contravention of s. 2(1) of the Act but found there was a bona fide error in judgment by the respondents which brought into operation s. 5(2) of the Act.

22 I intend firstly to deal with the issue as to whether the respondent as a secondary school teacher had a direct or indirect pecuniary interest in the collective bargaining agreement he voted on and which gave rise to this application.

23 I am in agreement with Sutherland J., in R. ex. rel. Mitchell v. McKenzie (1915), 33 O.L.R. 196, when he held that the power of disqualification is one which should only be exercised in a plain case upon very clearly proved facts. On the facts before me I must consider the secondary school teachers contract -- that is the contract under which the respondent Lozinski works. That contract runs from September 1, 1981 to August 31, 1984, one year beyond the termination date of the contract for teachers in the Windsor Roman Catholic Separate School system which contract was voted on by the respondent Lozinski and gave rise to this application. Mr. Bartlett was asked in cross-examination this question. Company A negotiates a contract for 3 years. Company B comes along two months later and negotiates a contract for 2 years. Will what company B got in any way effect what Company A got? His answer was: "Well, no obviously not". I am therefore of the view that the same circumstances apply in the case before me. It is obvious to me that in as much as the Windsor Roman Catholic Separate School Board contract expires a year before the termination of the secondary school teachers contract, the separate school contract can have little or no effect on the next contract of the secondary school teachers. I am therefore prepared to find that as a teacher the respondent had no direct or indirect pecuniary interest in the contract on which he voted at the meeting of the Windsor Roman Catholic School Board held on October 27, 1981. My finding would have been different had the separate school contract been in effect while the respondent's secondary school contract was being negotiated.

24 As a member of the Ontario Teachers' Federation the respondent would have an indirect pecuniary interest by reason of being a member of a body that has an interest in a contract that is reasonably likely to be affected by a decision of the local board. I base that finding on the evidence before me of the scale of fees chargeable by the federation in accordance with the salaries of the members. As well the federation is vitally interested in practically all matters in which the local board is concerned. It would be naive to think otherwise. Accordingly he ought to have availed himself to the provisions of s. 2(1) of the Act and disclosed his interest.

25 Upon the evidence before me I find that generally a collective bargaining agreement with one class of teachers will invariably affect a subsequent agreement with another class of teachers. The agreement invariably is used as a negotiating lever likely to influence financial and other terms in collective bargaining agreements. I am therefore prepared to find that the respondent was in conflict by reason of being in the employment of a body that has an interest in a contract reasonably likely to be affected by a decision of the local board. I am therefore again of the view that he ought to have disclosed his interest, not taken part in the consideration or discussion of or vote on any question with respect to the contract or attempt to influence the voting.

26 Having found that the respondent Lozinski has contravened s. 2(1) of the Act, I must consider s. 5 thereof.

27 The section states as follows:

5(1) Where the judge determines that a member of ... a local board has contravened subsection 2(1) or (2), he shall, subject to subsection (2) of this section, declare the seat of the member vacant and may disqualify him from being a member of any council ... local board during a period thereafter of not more than seven years.

(2) Where the judge determines that a member of ... a local board has contravened subsection 2(1) or (2), if the judge finds that the contravention was committed through inadvertence or by reason of a bona fide error in judgment or that the interest of the member is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member, the member is not subject to having his seat declared vacant or to being disqualified as a member, as provided by subsection (1).

Paragraph 34 of the respondent's affidavit states:

Prior to voting on the contract in question, in an effort to clearly determine in my own mind that there was no possibility of my vote being in conflict of interest, I sought a legal opinion from the Separate School Board's solicitor, Mr. Paul Mullins. I was advised by Mr. Mullins that I should seek a further legal opinion. I then received advice from my present counsel that, in his opinion there was legally no such conflict of interest. I therefore accordingly fulfilled my duty as a Trustee and chairman of the Separate School Board in so voting.

This is confirmed in para. 8 of the applicant's affidavit. Paragraph 10 states also that another teacher serving on the Separate School Board and present at the meeting of October 27, 1981, declared his conflict of interest and abstained from discussion and voting on the issue.

28 His Honour Judge Killeen in Re Blake and Watts et al. (1973), 2 O.R. (2d) 43, 41 D.L.R. (3d) 688, considered the provisions of s. 5(2) of the Act and at p. 695 D.L.R. came to this conclusion:

As I read and interpret s-s. (2) of s. 5, if I hold that the contravention by any of the respondents of s. 2(1) was committed either through inadvertence or by reason of a bona fide error in judgment, then if either exemptive clause is so held to apply to the facts, I must -- not may -- dismiss the application with the consequential results that the member does not lose his seat, nor is his future eligibility for office affected in any way.

I am in agreement with that reasoning.

29 The issue for me to decide is whether the contravention was committed through inadvertence or by reason of a bona fide error in judgment or that the interest of a member is so remote or insignificant in its nature that it can not be reasonably regarded as likely to influence the member.

30 The Shorter Oxford English Dictionary defines inadvertence as failure to observe or pay attention, inattention, an oversight. It has been defined as the opposite of deliberate action. The Canadian Law Dictionary defines it as heedlessness, lack of attention, carelessness. In my view on the evidence before me, the contravention was not committed through inadvertence but was committed after a legal opinion was obtained.

31 The Oxford Dictionary defines bona fide as with good faith, genuinely. The Canadian Law Dictionary adds the following:

honestly without fraud, collusion or participation in wrongdoing real, actual, genuine and not feigned. Bramwell L.J., in R. v. Holl et al. (1881), 7 Q.B.D. 575, said: "The correct province of this phrase is, therefore to qualify things or actions that have relation to the mind or motive of the individual." Maclay v. Dixon (1943), 170 L.T. 49, defined it as "a moral conception, involving a moral duty of someone to someone".

32 The solicitor for the Roman Catholic School Board was reluctant to offer his opinion as to whether or not there was a conflict of interest in a teacher/trustee voting on the contract in question and advised the respondent to seek his own legal opinion. He was advised by his counsel that he would not be in conflict. As well he had, on several other occasions in the past, voted on similar contracts. In view of the foregoing I must find that the contravention was committed by reason of a bona fide error in judgment.

33 There was, in my view, a real interest in the contract by the respondent's employer and by the Ontario Teachers' Federation. Therefore, on the evidence before me I am unable to find that the interest was so remote or insignificant in its nature that it can not reasonably be regarded as likely to influence the member.

34 Because the Municipal Conflict of Interest Act has far- reaching application the teacher/trustee will find it exceedingly difficult to add his or her considerable expertise and knowledge and to exercise his or her vote on many matters which come up for consideration before the board without running the risk of breaching the conflict of interest provisions in the Act.

35 I therefore find that although the respondent contravened provisions of the Municipal Conflict of Interest Act he did so by reason of a bona fide error in judgment. I make no order to declare his seat vacant or to disqualify him from sitting.

36 The applicant is entitled to his costs of this application.

Order refused.