Ontario Court of Appeal supports Orangeville's appeal

Orangeville's Mayor and Deputy Mayor do not have a conflict of interest in the potential sale of Dufferin's rail line lands, and discussions involving those negotiations, according to a ruling issued today by the Ontario Court of Appeal for Ontario. The ruling states that members of Orangeville Council who sit on Dufferin County Council are not violating their duty to Dufferin simply because they also represent the interests of Orangeville. "It is precisely in cases where Orangeville does have a significant pecuniary interest in a matter before Dufferin Council that it is most important that the electors of Orangeville be represented."

""One can well imagine many decisions taken by an upper-tier municipality in which one or more of its constituent lower-tier municipalities will have a pecuniary interest," the Ontario Court of Appeal ruling states. "The representatives of lower-tier municipalities should not be disqualified from discussing and voting on such decisions simply because the municipalities they represent have a pecuniary interest in the result. To do so, would frustrate one of the central purposes of the Municipal Act, 2001 - ensuring that the interests of lower-tier municipalities are represented on upper-tier municipal councils."

Further, the Ontario Court of Appeal states, "the legislature has chosen to have lower-tier councillors sit on the upper-tier municipal councils because they were elected to, and participate in the decisions of, lower-tier municipal councils. This leaves them well placed to understand and represent the interests of the lower-tier municipality and to co-ordinate the activities of both tiers. If they were prevented from discussing and voting on matters of interest to both tiers simply because the lower-tier had a pecuniary interest in the matter, they would be prevented from doing the job they were elected to do and that the legislature intended."

At the heart of the dispute is the agreement Orangeville entered into in April of 2008 with a third party (the Highland Railway Group) for the sale of railway lands. Under that agreement Orangeville will receive $5 million for the land and an additional $2 million, conditional on the northward expansion of the line, with the sale being conditional on Dufferin County selling railway lands it owns to the same buyer.

The County of Dufferin argued that Orangeville's Mayor and Deputy Mayor should be excluded from County Council's deliberations over the sale of railway lands because a conflict of interest existed. The Town of Orangeville brought an application for a judicial determination which resulted in a Superior Court of Justice ruling supporting the County's stand. The July 2009 ruling stated that Orangeville's Mayor and Deputy Mayor have an "indirect pecuniary (financial) interest" when it comes to discussions about selling the County's rail line corridor to a private company.

Orangeville Council subsequently voted unanimously to appeal the decision to the Ontario Court of Appeal which has now set aside the previous ruling by the Superior Court.

Mayor Rob Adams said the ruling spells out how counties and regions should work. He has maintained throughout the process that Orangeville has a right to representation on this issue at the County level. "Orangeville residents pay almost half of the county's assessment so it's important that the Town has a voice and a vote in a matter with significant economic development implications for the entire county. I am satisfied that the Ontario Court of Appeal thoroughly examined the issues and I'm happy with the outcome that supports Orangeville's right to participate in discussions that are of a public nature and interest. In fact, the ruling says that the Mayor and Deputy Mayor have an obligation to represent Orangeville's interests; it's our responsibility to do so and that will be our intent."

The three-member Court of Appeal panel was unanimous in its decision and said the case raises novel issues of interpretation of the Municipal Conflict of Interest Act and is a matter of public interest. No costs were ordered by the Court.

• Posted: Tuesday, February 2, 2010
• From: Council