COURT OF APPEAL SUMMARIES (June 22 – 26, 2020)Karygiannis v. Toronto (City), 2020 ONCA 411 (CanLII)
[Benotto, Zarnett and Thorburn JJ.A.]
Stephen Aylward and Zachary Al-Khatib, for the appellant
Sean Dewart and Adrienne Lei, for the respondent James Karygiannis
Mark Sibioni for the respondents, the City of Toronto and Ulli S. Watkiss
Keywords: Election Law, Municipal Elections, Campaign Financing, Forfeiture of Office, Relief from Forfeiture, Statutory Interpretation, Municipal Elections Act, 1996, S.O. 1996, c. 32, Sched, s. 88.23(2), ss. 88.33(17)-(18), s. 92(2), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 98, Poplar Point First Nation Development Corporation v. Thunder Bay (City), 2016 ONCA 934, leave to appeal refused,  S.C.C.A. No. 60, Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, 65302 British Columbia Ltd. v. Canada,  3 S.C.R. 804, Blue Mountain Resorts Limited v. Ontario (Labour), 2013 ONCA 75, Rizzo & Rizzo Shoes Ltd. (Re),  1 S.C.R. 27
The respondent, Toronto City Councillor, Jim Karygiannis, was found to have exceeded the allowable spending limit for expressions of appreciation during the 2018 Toronto election. Section 88.23(2) of the Municipal Elections Act (the “Act”) provides that the penalty for doing so is, among other things, automatic forfeiture of office. Less than a month later, the respondent’s application for relief from forfeiture of his office was granted and he was reinstated to his office. The appellant, who is a Toronto voter, appealed.
Did the application judge err in granting the respondent relief from forfeiture of his office?
Yes. The application judge had no jurisdiction to award the respondent relief from forfeiture of his office.
The conduct captured by s. 92(1) of the Act overlaps with the conduct captured by s. 88.23(1)(c). 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 permissible spending limits or file a financial statement under s. 88.25 that is incorrect or otherwise does not comply with the Act. In that sense, the conduct captured under s. 88.23(1)(c) is also captured by s. 92(1). Both sections set out specific penalties for candidates who contravene those provisions that include forfeiture of office. However, unlike s. 88.23, s. 92: a) provides broader penalties than just forfeiture of office and ineligibility to run in the next election, as provided in s. 88.23(2); and b) allows a judge to grant relief from the penalties set out in s. 88.23(2). This exception under s. 92(2) reads as follows: If the presiding judge finds that the candidate, acting in good faith, committed the offence inadvertently or because of an error in judgment, the penalties described in subsection 88.23(2) do not apply. Section 92(2) does not authorize a judge to grant relief from forfeiture before prosecution and conviction. 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 by relying on s. 92(2) to grant relief in these circumstances.
The only question, therefore, was whether s. 98 of the Courts of Justice Act provided jurisdiction to grant relief from forfeiture. That section states that a “court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.” 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, leave to appeal refused,  S.C.C.A. No. 60. However, the Court had held in Poplar Point that relief from penalties or forfeiture is not available under s. 98: (a) in cases involving a true statutory penalty, or (b) when the statutory regime expressly or by necessary implication precludes relief.
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”: Poplar Point.
The respondent claimed the automatic forfeiture rule is not a “true statutory penalty”. He argued 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 statutory offence as it is a “purely administrative provision.”
The Court disagreed. In Poplar Point, the Court made clear that a “statutory penalty” is any penalty imposed for breach of any requirement of the statute: Poplar Point. The observation in 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”: Courts of Justice Act, s. 95(1). 
The Court concluded that s. 88.23(2) is a statutory penalty. Section 98 of 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. Because s. 88.23(2) is a statutory penalty, relief from forfeiture is not available to the respondent.
In any event, the Court addressed the second part of the test for obtaining relief from forfeiture pursuant to s. 98 of the Courts of Justice Act (whether the statutory scheme in the Act necessarily precluded relief from forfeiture).
The respondent submitted 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 audit committee to bring legal proceedings against him pursuant to s. 88.33(17) of the Act so that he can be prosecuted and convicted under s. 92(1) and then seek relief from forfeiture under s. 92(2). That, he submitted is absurd.
The Court disagreed. It reviewed the legislative debates into amendments that led to the removal of relief from forfeiture under s. 88.23, while keeping that relief in section 92. There was a deliberate choice by the legislature to simplify the enforcement process and remove the ability of the court to grant relief from forfeiture. Unlike s. 92, s. 88.23 was meant to be a cost-effective and expeditious 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 legislative policy discussions describe the challenges resulting from including a good faith exception in s. 88.23 and the reasons for its removal.