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BETWEEN
James Karygiannis
Applicant (Respondent)
and
Respondents (Respondents)
and
Adam Chaleff
Intervenor (Appellant)
Sean Dewart and Adrienne Lei, for the respondent James Karygiannis
Mark Sibioni for the respondents, the City of Toronto and Ulli S. Watkiss
On appeal from the judgment of Justice William S. Chalmers of the Superior Court
of Justice, dated November 25, 2019.
Thorburn J.A.:
Page: 2
1. OVERVIEW
[1] The appellant, Adam Chaleff is a Toronto voter. He appeals the application
judge’s decision to grant the respondent, James Karygiannis, relief from forfeiture
of his office arising out of the Municipal Elections Act, 1996, S.O. 1996, c. 32,
[2] The respondent was re-elected a Councillor for the City of Toronto on
October 22, 2018. Like all candidates for City Council, he was required to provide
[3] The respondent filed his financial statement on March 27, 2019.
[4] Two complaints were received about his allocation of expenses and a
compliance audit was ordered. The respondent was therefore allowed to file a
Statement that showed he exceeded the allowable spending limit for expressions
of appreciation during the 2018 election. Section 88.23(2) of the Act provides that
the penalty for doing so is, among other things, automatic forfeiture of office.
Statement, the City Clerk noted that the expenses he had submitted exceeded the
allowable limit and advised the respondent that he was removed from office.
Page: 3
[7] Five days later, the respondent applied for relief from forfeiture, claiming this
was simply a good faith error in categorizing his expenses. On November 25, 2019,
[8] The appellant, who intervened in the proceedings below, claims the
application judge had no jurisdiction to grant relief from forfeiture. Even if he did,
case.
[9] In addressing the issue of whether there is jurisdiction to grant relief from
forfeiture, I will first examine the rules governing spending limits for election
campaigns and then look at the interpretation of the penalty provision of s. 88.23
based on the wording of the section, its meaning when considered in the context
of the Act as a whole, and the intention of the legislators. I will then examine
[10] For reasons that follow, I conclude there is no jurisdiction to provide relief
from forfeiture in the circumstances of this case. I would grant the appeal and set
aside the order below. I would substitute a declaration that the respondent is
subject to the penalties under s. 88.23(2) of the Municipal Elections Act, including
[11] The Act includes rules governing a City Council candidate’s campaign
[12] There is no rule against raising more income than required to cover the
candidate’s allowable expenses, but all surplus funds must be paid to the City at
[13] The Act prohibits candidates from exceeding the spending limits allowed
[14] For the purposes of this appeal, there are three relevant categories of
[15] Spending allocations are tied to the number of electors in the ward.
According to the prescribed formula, the respondent was informed that he was
allowed:
[16] Section 88.8(2) of the Act provides that a candidate can only receive
contributions during a campaign period, which, in the case of this election, ended
election campaign period is deemed to re-commence if, among other things, the
[17] Section 88.25 provides that all campaign expenses are required to be listed
financial statement may update what was in the first financial statement but cannot
[20] An elector may file an application with the City Clerk for a compliance audit
provision of the Act relating to election campaign finances. The City Clerk is then
[21] Within 30 days of the committee’s receipt of the application, the committee
must decide whether to grant the application and provide brief written reasons for
their decision. The decision to grant the application may be appealed to the
Superior Court of Justice within 15 days after the decision is made, and the court
may make any decision the committee could have made: ss. 88.33(7)-(9).
[22] If the committee decides to grant the application for an audit, it appoints an
auditor licensed under the Public Accounting Act, 2004, S.O. 2004, c. 8, to conduct
must provide a report to the compliance audit committee outlining any apparent
[23] If the auditor’s report finds there was an apparent contravention of the Act,
proceeding against the candidate. The committee must provide brief reasons for
[24] Legal proceedings for Municipal Elections Act offences are brought before
[25] Sections 88.23(1)(c) and (2) of the Act provide that when a candidate files a
document that shows on its face that the candidate incurred expenses exceeding
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the allowable expenses, the candidate forfeits his or her office and is ineligible to
Penalties
(b) until the next regular election has taken place, the candidate
is ineligible to be elected or appointed to any office to which this
Act applies.
Page: 8
[27] The compliance audit committee may also decide to commence legal
[28] Legal proceedings are brought before the Ontario Court of Justice. In such
case, the candidate may be subject not only to the penalties listed above, but also
imprisonment.
[29] In a prosecution under s. 92, if the judge finds that the candidate, acting in
described in subsection 88.23(2) do not apply: s. 92(2). The good faith exception
jeopardy from penalties that can be imposed upon conviction for a s. 92 Act
offence.
Page: 9
[30] On December 21, 2018, approximately two months after the election, the
respondent hosted a dinner party at Santorini Grill. His affidavit states that the
dinner was only for donors and that these donors were invited to the dinner in
[31] The respondent spent $27,083.50 on the dinner and related expenses.
[32] It is not clear from the record whether and if so, how many of the guests
actually donated to his campaign, and when the funds were received.
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[33] The respondent filed his Form 4 Financial Statement on March 27, 2019
(“the first Financial Statement”). The first Financial Statement provides that the
EXPRESSIONS OF $6,120.80 0
APPRECIATION
EXPENSES
[34] The first Financial Statement was audited by the respondent’s accountant
The Complaints
[35] The appellant and another candidate who ran against the respondent in the
election filed applications for a compliance audit. They alleged that the respondent
[36] The appellant complained that the respondent miscategorized the Santorini
dinner, held two months after the election, as a fundraising event and that he did
[37] The Compliance Audit Committee for the City of Toronto granted both
Act.
[38] The respondent re-opened his campaign to raise funds for the compliance
audit.
2019. This was the last day he could have filed without being subject to automatic
Supplementary Financial Statement before the respondent signed and filed it with
information different from the first Financial Statement: the Santorini dinner and
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and “other” expenses, as they were in the first Financial Statement. A comparison
of the information in the first and Supplementary Financial Statement is set out
below:
[42] The City Clerk reviewed the Supplementary Financial Statement and saw
$6,120.80.
[43] Section 88.23(2) of the Act requires automatic forfeiture of office if a financial
statement filed under s. 88.25 shows on its face that the candidate exceeded the
advised by the City Clerk that he had been removed from office.
[44] Because the Supplementary Financial Statement was filed on the last day,
[45] The respondent claims the forensic auditor incorrectly allocated the
expenses.
[46] On November 12, 2019, the respondent brought an application before the
Superior Court for relief from forfeiture. As of the application date, the compliance
[47] The application judge accepted that s. 88.23(2) of the Act stipulates that the
respondent must automatically forfeit his office, since he submitted filings that, on
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their face, showed that he exceeded the spending limits provided in the Act. He
also accepted that s. 88.23 contains no exception for inadvertence or good faith.
[48] The application judge expressed doubt about whether s. 98 of the Courts of
Justice Act could be invoked to grant relief from forfeiture. He questioned “whether
the general provisions of the CJA can supersede the specific penalties set out in
the MEA.”
[49] However, he held that s. 92(2) of the Act, which deals with campaign finance
offences and provides relief from forfeiture for similar conduct to that covered by
Although the respondent had not been charged with or convicted of an offence
under s. 92(1) of the Act, the application judge held that the good faith exception
[50] The application judge found that “the error that set out the Santorini Grill in
inadvertently” and “there was no attempt to hide the expense”. He held that it would
be absurd not to interpret the legislation to allow relief from forfeiture as “this result
could not have been intended by the Legislature.” He therefore found that "the
exception set out in s. 92(2) of the MEA applies in the case of the automatic
[51] In exercising his discretion to grant relief from forfeiture, he noted that his
decision “applies only to the penalty of forfeiture as it relates to the fact that in the
dinner under the heading of expenses related to parties and other expressions of
saying: “Those issues are properly before the Committee and are the subject
correctness: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras.
of mixed fact and law and will not be interfered with in the absence of a palpable
[53] First, the appellant claims the words in s. 88.23 are clear and unambiguous
and provide no exception for good faith errors. This, the appellant contends, is
consistent with the intention of the legislators and a contextual analysis of the
penalty for filing a financial statement under s. 88.25 that shows on its face that
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the candidate exceeded the permitted spending limits under the Act. There is
[54] Second, the appellant disputes the respondent’s assertion that s. 98 of the
Courts of Justice Act applies, as the appellant claims this is a statutory penalty and
that, in any case, the statutory regime necessarily precludes relief from forfeiture.
[55] Third, the appellant claims this was not a good faith error and therefore, even
if there were jurisdiction to grant relief from forfeiture, such relief is not warranted
in this case.
[56] First, the respondent argues s. 98 of the Courts of Justice Act provides
jurisdiction to grant relief from forfeiture in these circumstances and that to hold
[57] Second, the respondent submits that the application judge properly
exercised his discretion to grant relief from forfeiture in these circumstances. The
respondent submits that the application judge correctly found that the forensic
auditor mistakenly put the Santorini dinner in the wrong category in the
however, that he did not spend more than he was permitted and that the Santorini
6. ISSUES
[59] The parties agree that the application judge erred in asserting there was
jurisdiction to provide relief from forfeiture in this case by invoking s. 92 of the Act
to impute a good faith exception to the penalties set out in s. 88.23. A similar good
faith exception was removed from what is now s. 88.23 in 2002. As such, the good
faith exception in s. 92, which may be exercised by a judge of the Ontario Court of
[60] As such, the only issue in respect of the question of jurisdiction is whether
relief from forfeiture is available under s. 98 of the Courts of Justice Act given the
meaning of s. 88.23 as set out in the words of the provision, the context of the
[61] Section 98 of the Courts of Justice Act states that “[a] court may grant relief
[62] The mere fact that a statutory scheme is involved does not preclude relief
under s. 98: Poplar Point First Nation Development Corporation v. Thunder Bay
(City), 2016 ONCA 934, 135 O.R. (3d) 458, at para. 55, leave to appeal refused,
[2017] S.C.C.A. No. 60. However, this court held in Poplar Point, at paras. 7, 44-
45, 57, and 61, that relief from penalties or forfeiture is not available under s. 98:
relevant provisions and the intention of the legislators who crafted those
provisions.
interpretation. Words in a statute are to be read “in their entire context and in their
grammatical and ordinary sense harmoniously with the scheme of the Act, the
object of the Act, and the intention of Parliament”: Canada Trustco Mortgage Co.
Page: 19
v. Canada, 2005 SCC 54, [2005] 2 S.C.R 601, at para. 10, citing 65302 British
[65] Where the words in a statute are clear and precise, the ordinary meaning of
those words plays a dominant role in the interpretive process: Canada Trustco
[66] The words in s. 88.23 are clear: “if a document filed under section 88.25
shows on its face that the candidate has incurred expenses exceeding what is
permitted under section 88.20 … the candidate forfeits any office to which he or
she was elected and the office is deemed to be vacant and until the next regular
[67] The ordinary meaning of those words is that where a document is submitted
that on its face shows a candidate exceeded and thus violated the spending limit,
[68] The parties agree that the respondent contravened s. 88.23(1)(c) as the
Supplementary Financial Statement filed shows on its face that the respondent
incurred expenses exceeding what is permitted under s. 88.20 of the Act. The
$25,000. Moreover, that allocation of funds is different than the allocation in the
Section 88.23 in the Context of the Act: Comparing and Contrasting s. 88.23 and
s. 92
[69] The conduct captured by s. 92(1) overlaps with the conduct captured by
s. 88.23(1)(c).
[70] Subsections 88.23(1) and (2) stipulate that it will be an act of “default” to file
a document that, on its face, shows that the candidate exceeded the permissible
spending limit. Section 92(1) makes it an offence for a candidate to exceed the
incorrect or otherwise does not comply with the Act. In that sense, the conduct
[71] Both sections set out specific penalties for candidates who contravene those
a) provides broader penalties than just forfeiture of office and ineligibility to run
b) allows a judge to grant relief from the penalties set out in s. 88.23(2). This
[73] The respondent concedes, and I agree, that s. 92(2) does not authorize a
[74] The respondent has not been charged with an offence under the Act as the
compliance audit process is still ongoing. As a result, the application judge erred
[75] The legislature made a deliberate choice to simplify the process for
enforcing the Act and remove the court’s ability to grant relief from forfeiture under
s. 88.23.
[76] Prior to 2002, what is now s. 88.23 of the Act included a provision that
allowed relief from forfeiture of office upon an act of default. The exemption from
(6) The candidate may, on or before the 11th day after the
notice is mailed, apply to the Ontario Court (Provincial
Division) for a declaration that the penalties do not apply to
him or her.
(7) The court shall make the declaration if it is satisfied that the
candidate, acting in good faith, committed the default
inadvertently or because of an error in judgment.
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[77] In 2002, the provincial government decided to amend this provision of the
Act to remove the court’s ability to grant relief from automatic forfeiture.
mechanism. The Committee discussed the fact that many candidates fail to report
1. loss of deposit,
2. disqualification from office if elected; and
3. ineligibility to seek or hold municipal office
for a specified period.
[79] The opposition critic for Municipal Affairs and Housing outlined the same
concern about the costs of enforcing the Act when proposing his own amendments
problem by abolishing the saving provision in what is now s. 88.23, thus requiring
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the automatic removal of a candidate from office for any infraction listed in that
that:
[82] These discussions related primarily to the cost of enforcing the Act’s
disclosure requirements.
[83] However, it is clear from excerpts of the debate preceding the amendment
that the overall purpose for removing a good faith exception in what is now s. 88.23
[84] As noted by Dunphy J. in Giannini v. City of Toronto, 2017 ONSC 1489, 137
O.R. (3d) 109, at para. 27, “[t]he fact that more than 100 candidates from the last
election in Toronto alone are currently in default strongly suggests that great
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in question.”
councillor who violated the Act remained in office. The debates articulate policy
reasons for making this amendment, including the desire to deter those who would
not comply with filing deadlines and to enable the Act to be enforced expeditiously
[86] It is clear from looking at the legislative debates that the legislators intended
to remove the good faith exception in what is now s. 88.23 of the Act.
[87] Section 98 of the Courts of Justice Act provides that “[a] court may grant
[88] Applying the rationale from Poplar Point, in order to obtain relief from
[89] The reason s. 98 is not applicable to a true statutory penalty is that “granting
relief from forfeiture would amount to rewriting or repealing the statute, revoking
the very consequence for breach of the statute that the legislature prescribed”:
[90] The respondent claims the automatic forfeiture rule is not a “true statutory
penalty”. The respondent contends that a statutory penalty only includes criminal
or statutory offences and that s. 88.23(2) of the Act by itself does not create a
[92] In Poplar Point, this court made clear that a “statutory penalty” is any penalty
imposed for breach of any requirement of the statute: Poplar Point, at paras. 7, 58.
[93] The observation at para. 61 of Poplar Point that “the ability to grant such
relief from forfeitures and penalties is in the context of civil proceedings, and not
criminal or statutory offences” simply acknowledges that s. 98, as part of Part VII
of the Courts of Justice Act, only applies to “civil proceedings in courts of Ontario”:
“automatic and purely administrative provision” which does not clearly preclude the
ability of the court to exercise its discretion to grant relief from forfeiture. Section
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88.23 sets out statutory requirements and consequences for breach of those
statutory requirements.
[95] While a breach of those same obligations can also be the basis of a
proceeding under s. 92, that same breach still attracts a “statutory penalty”
immediately upon default within the meaning of Poplar Point. Moreover, nothing in
Poplar Point suggests a distinction between statutory penalties that are enforced
the Courts of Justice Act cannot apply where granting relief would undermine the
very consequences that the legislature prescribed for violating the provisions of
the Act.
available to the respondent. In any event, I will address the second part of the test
for obtaining relief from forfeiture pursuant to s. 98 of the Courts of Justice Act.
[98] The respondent claims that in previous cases, relief was granted to some
extent relying on s. 98. He says these cases highlight the absurdities that would
2013 ONCA 75, 114 O.R. (3d) 321, at para. 38. It is presumed that the legislature
words read in their entire context, in their grammatical and ordinary meaning, seen
harmoniously with the scheme of the Act: Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1
S.C.R. 27, at para. 27. This is important to ensure that the true intention of the
[100] The respondent points to cases such as Niagara Falls (City) v. Diodati, 2011
ONSC 2180, 106 O.R. (3d) 154, when the court ordered relief from forfeiture
because the mayor filed a financial statement that misallocated one of his
campaign expenses. The financial statement showed that the candidate had
exceeded the limit by $72.74, when he had in fact spent $82.07 less than the limit.
The basis for this decision was that it would be absurd to do otherwise.
[101] However, Diodati predates the decision of this court in Poplar Point, as do
the decisions in Obina v. City of Ottawa, 2014 ONSC 4614, 28 M.P.L.R. (5th) 116,
and Braid v. Georgian Bay (Township), 2011 ONSC 3618, 83 M.P.L.R. (4th) 335,
1In addition to the fact that these cases predate Poplar Point, they do not assist for the reasons set out
below:
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[102] In Poplar Point, the court noted that “[t]he question is … whether the
language and scheme of the statute would exclude relief from forfeiture under
s. 98”: at para. 55. See also Kingsway General Insurance Co. v. West Wawanosh
[103] The respondent submits that candidates who commit trifling errors that do
not warrant prosecution forfeit their seat automatically and with no further recourse,
while candidates who are subject to prosecution under s. 92 are able to request
relief from forfeiture. The respondent says that without relief from forfeiture under
s. 98 of the Courts of Justice Act, his only recourse is to encourage the compliance
the Act so that he can be prosecuted and convicted under s. 92(1) and then seek
Obina v. City of Ottawa, 2014 ONSC 4614, 28 M.P.L.R. (5th) 116: The respondent claimed a candidate
could be required to forfeit their seat for filing financial statements three minutes late. However, in Obina,
the candidate was barred from running in the next election not just because she filed her financial
statements three minutes late, but also because she submitted her auditor’s report over three years past
the deadline. In any case, the legislation has since been amended such that a candidate who files the
financial statement within 30 days after the filing deadline is no longer subject to the penalties in s.
88.23(2) provided the late filing fee is paid: s. 88.23(9).
Braid v. Georgian Bay (Township), 2011 ONSC 3618, 83 M.P.L.R. (4th) 335: The respondent also argues
a candidate could be required to forfeit his/her seat for filing an auditor’s report audited by someone
eligible to be licensed under the Public Accounting Act, 2004, but who is not. In Braid, the court held that
doing so would not require a candidate to forfeit a seat under s. 88.23(2) (then s. 80).
Braid is distinguishable as in Braid, the candidate had not failed to file an auditor’s report contrary to s.
88.23(1)(a) (then s. 80(1)(a)). Instead, the candidate filed one that did not comply with the Act. This
constitutes an offence under s. 92(1) of the Act (then s. 92(5)), which makes it an offence to file a
document under s. 88.25 (then s. 78) that is incorrect or otherwise does not comply with that section.
However, it would not trigger automatic forfeiture of office and ineligibility to run in the next election unless
the candidate was prosecuted and convicted.
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[104] I disagree.
[105] It is true that after a prosecution and conviction, s. 92(2) authorizes the
Ontario Court of Justice to grant relief from the consequences of filing a document
that shows on its face that the candidate exceeded one or more of the relevant
spending limits where the judge is satisfied that the candidate acted in good faith
and the error was inadvertent or the result of an error in judgment, as opposed to
a deliberate act.
very specific statutory requirements and the clear implication is that a candidate is
not entitled to apply for relief from forfeiture in circumstances other than a s. 92
enforcement process and remove the ability of the court to grant relief from
forfeiture under s. 88.23. The reasons for the removal were made clear in the
legislative debates.
means of deterring and enforcing specific violations of the Act. Councillors are
given the opportunity to change their financial statements before the filing deadline.
Where there is a clear violation of these specific provisions of the Act, the
municipality can remove the candidate immediately and at little cost. The
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good faith exception in s. 88.23 and the reasons for its removal.
[108] Under the pre-2002 version of s. 88.23 of the Act, a candidate could apply
to the Ontario Court (Provincial Division) for relief against automatic forfeiture of
office, even if the candidate was not convicted of an offence. When that right
since it would have made no sense to have overlapping powers in the Superior
Court to relieve against matters the legislature had already provided for in the
Ontario Court. The removal of the right to apply to the Ontario Court, and the
reasons why that was done, are inconsistent with a legislative intention to provide
a right to apply to the Superior Court under the Courts of Justice Act. To so hold
would undermine the very reason for the removal of the right to apply to the Ontario
Court.
[109] As such, s. 88.23 is a statutory penalty and the language and scheme of the
statute, in light of its history, exclude relief from forfeiture under s. 98 of the Courts
8. CONCLUSION
their income and expenses from the election campaign. Expenses are subject to
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clear spending limits and any income that exceeds the allowable expenses must
[111] Section 88.23 of the Act provides for forfeiture of office where a candidate
files a document that shows the candidate incurred expenses that exceed the
spending limits. The wording of this penalty provision is express and clear. What
there were serious concerns about non-compliance and the costs and delays of
proceedings that left electors with unsatisfactory results sometimes years later
[113] This is to be contrasted with s. 92, which does provide relief from forfeiture
but also carries greater jeopardy for the candidate, including fines and possible
imprisonment.
[114] This case is not about whether the respondent hid expenses as suggested
by the application judge, but how he allocated his expenses and whether he
shows he exceeded his spending limit for the 2018 election by a significant amount
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and contrary to the rules. This triggered his automatic removal from office pursuant
to s. 88.23(2).
[116] The penalty imposed pursuant to s. 88.23 may be harsh in some cases but
forfeiture is clearly what the legislators intended. It should be noted that honest
errors can be corrected before the deadline for filing and, had the respondent
have been withdrawn and refiled to correct the errors in the statement.
[117] Granting relief from forfeiture would amount to rewriting or repealing the
statute, revoking the very consequence for breach of the statute that the legislature
prescribed. The statutory penalty in s. 88.23 precludes relief from forfeiture under
[118] For these reasons I conclude there is no jurisdiction to grant relief from
forfeiture.
[119] As a result, I need not consider whether, if there were jurisdiction, the
[120] In any event, unlike the cases in Diodati and Obina, the respondent has not
clearly demonstrated to this court that this was a mere “clerical error”.
[121] For these reasons, I would grant the appeal and set aside the order below.
I would grant a declaration that the respondent is subject to the penalties under s.