James Karygiannis v City of Toronto: A Denial at the SCC Ends a Two-Year Saga

On September 24th, 2020, the Supreme Court of Canada (“SCC”) put an appropriate end to the Jim Karygiannis saga that has captured Toronto City Hall for almost two years in James Karygiannis v City of Toronto, et al. It denied leave to appeal, thereby ending Karygiannis’ efforts to return to his Scarborough-Agincourt council seat. Since the 2018 municipal election, Karygiannis has been expelled and returned to his seat five times. With the SCC’s decision, the rollercoaster has finally ended. On the very same day, Karygiannis announced that he was officially retiring from politics, after over 30 years.

The events that led to Karygiannis’ departure began on March 27th, 2019, a few months after he won his riding on October 22nd, 2018, when he submitted Financial Statements outlining the amounts of money he had raised and spent over the course of his campaign.  These statements are required of all candidates to ensure that they remain within the spending limits and to determine the amount of unused campaign funds they are required to submit to the City (Municipal Elections Act, 1996, SO 1996, c 32, ss. 88.25 and 88.31 [“MEA”]). Any “on its face” violation of the spending limits may result in the immediate forfeiture of one’s seat, without a possibility of running again until the following electoral cycle (MEA, s. 88.23(2)). Karygiannis found himself in this very position when he declared that he raised over $200,000 and spent over $90,000, including $27,000 at a now infamous dinner at Santorini Grill that he organized for his supporters. As a result, Karygiannis was removed from his seat when a follow-up Financial Statement submission had an “on its face” violation of s. 88.23. Karygiannis claimed that this was a clerical error. Over the next year, Karygiannis attempted to keep his seat through litigation that eventually ended with a decision by the Ontario Court of Appeal (“ONCA”) and an unsuccessful application for leave to appeal to the SCC.

The case brings to light two particularly salient points. First, the ONCA continues to adhere to a method of statutory interpretation that involves an analysis of both text and legislative intent. Unless there is an ambiguity in the text and a contention as to the intent of lawmakers, the court will defer to the clear meaning of the legislation. Second, the law in question is intended to protect the integrity of our electoral process. The ONCA and SCC, in their respective decisions, shed light on the role that the courts may have in advancing that goal.

The Toronto Municipal Election of 2018:

All candidates running for a seat in municipal elections in Ontario are required to file Financial Statements disclosing how much was raised and spent during their campaigns. There is no limit to the amount of money that is raised through donations to a candidate’s campaign. There are, however, limits to the amount that is spent: general spending for 2018 was limited to $61,207.80, expression of appreciation expenses were limited to $6,120.80, and expenses directly related to fundraising had no limit (MEA, s. 88.20). The remainder of the money raised during the campaign is to be paid to the city in which the candidate is running. According to the Financial Statement Karygiannis filed on March 27th, 2019, he claimed that he raised $217,669.44 and incurred the following expenses:

  • $43,812.55 in general spending,
  • $0 in expressions of appreciation expenses, and
  • $47,259.86—including $27,083.50 for the Santorini dinner—in fundraising expenses.

Not long after this submission, two complaints about his Statements were filed. An investigation of his campaign finances commenced shortly thereafter. Karygiannis was required to submit a Supplemental Financial Statement to support his initial filing. Over the next seven months, Karygiannis fought to stop any potential formal audit of his campaign and delayed sending the Supplemental Financial Statement. In May 2019, David Nickle of www.toronto.com broke the story about the concerns over Karygiannis’ Financial Statement, which led to intense media scrutiny of the affair. Karygiannis eventually submitted the Supplemental Financial Statement on the last possible day, with some noteworthy adjustments:

  • Revenue was now at $320,934.69,
  • General spending increased to $44,212.55,
  • Expression of appreciation spending increased dramatically to $32,083.50—including the cost of the Santorini Grill dinner, and
  • $143,525.04 in total expenses, including $21,125.60 in fundraising expenses.

The allowable amount for appreciation expenses is just over $6,000, putting Karygiannis over $25,000 over the limit. On its face, the Supplemental Financial Statement showed a clear breach of s. 88.23 of the Act. As a result, Karygiannis was removed from office immediately.

Five days after the forfeiture, Karygiannis applied to the Superior Court for relief, claiming that the bulk of the appreciation expense was added by mistake and was intended to be an expense. On November 25th, 2019, the application judge granted relief, accepting that the “on its face” violation was due to a clerical error. The application judge was ultimately swayed by s. 92(1) of the MEA, a provision that covers the same behaviour as s. 88.23 but applies only to those who are criminally charged with electoral financial discrepancies. Most pertinently, section 92(2) provides a “good faith” exception that allows individuals to avoid the penalties that come with violation of the section. Although Karygiannis was not criminally charged, the application judge found that the “good faith” exception of s. 92(2) applied to his case. The judge also considered s. 98 of the Courts of Justice Act, RSO 1990, c C43 [“CJA”]. This provision allows a court to “grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.” Ultimately, the judge determined that it was the intent of the legislature to allow for a “good faith” exception to s. 88.23. as well as s. 92(1) of the MEA. The reversal was challenged by a constituent and the appeal was heard by the ONCA in Karygiannis v Toronto (City), 2020 ONCA 411.

The Ontario Court of Appeal Reverses Karygiannis’ Relief:

The appellants made three arguments. The first was that the text of the section is unambiguous: there is no room for judicial review of a City Councillor’s forfeiture of their seat. Moreover, a contextual analysis of the section supports the conclusion that s. 88.23’s requirement of an “on its face” breach and its penalties were intended by the legislature to be a cost-effective, efficient means of ensuring compliance with spending restrictions. The second was that s. 92(1) of the MEA did not apply, and so the “good faith” exception was unavailable to Karygiannis. Finally, the appellant argued that even if s. 92(1) applied, Karygiannis did not act in good faith. Rather, he intentionally misrepresented his expenses on his original Financial Statement and exceeded the allowable expenses. In response, Karygiannis admitted that he violated s. 88.23. That said, the violation was a “good faith” mistake in accordance with s. 92(2) of the MEA. He argued that the application judge had discretion to override penalties set out in s. 88.25 of the MEA under s. 98 of the CJA. He suggested that not allowing a s. 98 override and, thereby not applying the exception in s. 92(2), would result in an absurd result. For this reason, the application judge had the discretion to make the decision that they did, and the decision was correct.

The ONCA agreed with the appellants. The application judge had erred by applying the “good faith” exception from s. 92(2) of the MEA. Although there are obvious similarities between s. 92(1) and s. 88.23, Justice Chalmers explained why the legislature may have included the “good faith” exception in s. 92(2), noting its criminal charge requirement and the availability of imprisonment as a penalty. In contrast, s. 88.23 provides a lower standard for breach and less severe penalties. Moreover, in light of Poplar Point First Nation Development Corporation v Thunder Bay (City), 2016 ONCA 934, s. 98 of the CJA was not available to override s. 88.23 of the MEA. To rely on s. 98, the respondents had to show (1) that s. 88.23 was not a true statutory penalty and (2) that it did not expressly or by implication preclude relief (para 88). Justice Chalmers found that the respondent could not establish either part of the test. First, s. 88.23 is a statutory penalty, not an administrative provision as Karygiannis contended, because it imposes a penalty for a breach. Second, s. 88.23 intends exactly what it says: if there is an “on its face” breach of spending restrictions on a Financial Statement, the Councillor forfeits their seat. There is no opportunity for judicial review, and this was a “deliberate choice to simplify the process for enforcing the Act” (para 75). Justice Chalmers drew the connection between the text of s. 88.23 and the context in which the legislation was drafted. Until 2002, s. 88.23 allowed courts to provide relief to City Councillors removed from their seats for violations similar to Karygiannis’. The legislature, however, amended the section in order to make administration of the provision more cost-effective. Immediate forfeiture of one’s seat with an “on its face” violation accomplished this objective. Justice Chalmers made reference to a 1986 Advisory Committee on Municipal Elections, which, in its interim report to Ontario’s legislature, called for the removal of judicial appeals of forfeiture of municipal council seats. This would cut down the costs of enforcing the Act, simplify a city councillor’s removal, and “deter the significant non-compliance by candidates” (para 83). Finally, the ONCA did not make a judgement as to the accuracy of Karygiannis’ filing. However, Justice Chalmers stated that the Act itself allows for mistakes to be corrected, as long as the corrections are completed prior to the deadline. Karygiannis filed on the last day. Had he filed earlier, his mistake could have been rectified. The ONCA unanimously found in favour of the appellant and Karygiannis was once again removed from office.

The SCC Denies Leave and Prioritizes Electoral Integrity:

Karygiannis was granted permission to re-occupy his Scarborough-Agincourt seat as he filed for leave to appeal. However, when the SCC denied leave, his seat was confirmed to have been forfeited and is now vacant. This is undoubtedly a tough decision as it relates to Karygiannis, as it brings an unceremonious end to a political career that began in an official capacity in 1988. There is, however, something to be said about what the SCC’s refusal to hear the case means for the integrity of our electoral process and the role of the courts in upholding it. As a country, across all levels of government, our laws take a hard stance on how much, and the way in which, money is used in electoral campaigns. This reflects our choice to prioritize egalitarianism and fairness over the advantages provided by a large spending purse. Often, campaign spending is tied to freedom of expression, and the argument is made that limits on donations and spending equate to limits on a constitutional right. In the United States, for example, the Supreme Court constitutionally protects “money as political speech” via the First Amendment (Citizens United v FEC, 558 US 310, 130 S Ct 876 (2010)). However, the prevailing perspective in Canada rejects this conceptualization through strict, uniform laws as it relates to campaign expenses. In finding for the appellants and denying leave to appeal, the SCC took an active role in protecting that perspective.

Looking beyond the intrigue about whether Karygiannis would return to his seat, we see the legislature and the court working in tandem to advance the same goal. That is not to say that an instance of overstepping by either the legislature or the court is not possible; in fact, this series of events began with an overstep by the application judge. What we can infer from the entire affair, however, is that our governing bodies are at the very least concerned about violations of campaign finance laws because of their implications for our electoral processes. Preserving electoral integrity can therefore explain, at least in part, why the SCC chose not to hear the Karygiannis appeal. Sometimes doing nothing is doing a lot, and in this case, the SCC’s denial upholds the legislature’s perspective that strict laws about campaign spending help to protect fairness in elections and prevent the undue influence of money.  


Kerry-Ann Cornwall

Kerry-Ann Cornwall is in her third year of the JD/MBA program at Osgoode Hall and Schulich School of Business. She obtained both her BA and her MA in Political Science from the University of Guelph. During law school, Kerry-Ann has served as a Contributor for TheCourt.ca, Associate Editor for the Osgoode Hall Law Journal (OHLJ), Secretary for the Privacy Law Society, and the National Chair of the Black Law Students’ Association of Canada (BLSA Canada). She is currently a Senior Editor for the OHLJ and National President of BLSA Canada. Kerry-Ann is interested in corporate, contract, and property law.

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