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Hazel McCallion’s Conflict of Interest hearing, Hazineh v. McCallion. Notes from Brampton Superior Court, April 10, 2013

April 11th, 2013  

Video of a Thanksgiving dinner that the Mayor, Peter McCallion and Leo Couprie all failed to mention….

Hazel McCallion, son Peter and Leo Couprie enjoy a “World Class” Thanksgiving Dinner (Oct 2006)

 

What follows is a summary of notes taken during Mayor Hazel McCallion’s conflict of interest hearing at Brampton court house on April 10, 2013. If anyone finds any errors I’d appreciate being advised.


NOTES from the Mayor Hazel McCallion Conflict of Interest hearing, Brampton courthouse, April 10, 2013.

9:58 am Astounded that only Mississauga News Louie Rosella is the only media here!

10:04 Court in session

Judge Sproat advises us that he’ll give his ruling re admissibility of evidence post October 4, 2007.

Monique Atherton (lawyer for Elias Hazineh) up.

Hazle McCallion acknowledges that she knew son Peter was involved in World Class Developments (WCD)  as a real estate agent “since Day 1”.

Topsoil study case cited as example of the public’s perception relating to  “any matter involving land”. Judge Sproat attempted to clarify –that Peter McCallion’s pecuniary interests were also the Mayor’s under the Municipal Conflict of Interest Act.

History of WCD is outlined in their packet.

Chronology: February 22, 2005 Peter McCallion incorporated World Class Developments. Two people named as President and Vice President of WCD.

In 2005 the only other person involved in WCD was Murray Cook. So, by inference, Peter telling his mother that WCD was interested in developing City Centre land really meant that he was interested.

Atherton refers to email from Ken Lusk to Michael Dal Bello (March 9, 2006). Email refers to an “unidentified purchaser” and that an offer was presented by Mayor’s son to purchase the City Centre land. Email requested that Murray Cook be asked who the purchaser is.

On May 18, 2005, Hazel McCallion meets with Peter and Cook.

Peter approaches Leo Couprie in 2006 to invest in World Class Developments. By August 2006 a filing changes over to Leo Couprie —$750,000 so WCD is in his name only.

November 20, 2006 document from WCD solicitors to Leo Couprie. Confirms Couprie now the principal.

Couprie says at time he became involved he understood that Murray Cook was also a WCD partner and they would cooperate to put the hotel/land deal together.

In cross-examination Mayor McCallion says she can’t recall when [Ed. …missed it. Acoustics/Microphone so bad that I can hardly hear!]

Atherton points out that a flurry of emails show that Mayor applied pressure to get the deal together. Atherton highlights Ken Lusk Oct 20, 2006 communication. Frets that McCallion called asking why land sale was taking so long.

In her cross-examination, McCallion says that she saw her role as Mayor was to make sure that the Mayor was available for hotel/convention centre.

On 2nd day of her cross-examination, McCallion mentioned that the condition of sale was a 4-Star hotel or better and that hotel must be built first.

By Jan 23, 2007, terms of the agreement had been finalized. At this point, McCallion was aware that Peter, Leo and long-time family friend Cook were involved in World Class Developments and also aware of progress.

In the McCallion cross-examination page 74 she states that she was not aware as to when WCD entered the agreement of purchase of sale.

In her affidavit she said she knew early in the process that she’d have to declare Conflict of Interest.

In January 29, 2007 after purchase of sale had been finalized she had dinner at Pier 4 with son Peter and Leo Couprie. There were two documents to sign —the Loan Agreement between Leo Couprie and World Class Developments Ltd $750,000 for deposit of purchase of sale.

Peter McCallion signed on behalf of WCD including guarantor. This was witnessed and signed by Hazel (actually signed twice).

The second agreement was signed at same time, the Declaration of Trust. This document declares  that Leo Couprie holds 80% of WCD shares in trust for Peter. This document is signed Peter McCallion “Beneficiary”. Also witnessed and signed by Hazel McCallion.

Under cross-examination Leo Couprie said the document was necessary because of travelling. Just before signing the Mayor asked Peter, is it okay to sign?

Under cross-examination, Leo Couprie explained the purpose of the document. In effect he would put out $750,000 and get $1.5M back. Couprie admitted that he did not seek a legal opinion. He arrived at Pier 45 restaurant separate –and the Mayor and Peter together.

Was it reasonable for Hazel McCallion to see what was written under Leo’s signatures? Couprie said no, since the Mayor was sitting opposite him. Atherton says Leo Couprie suggesting this flies against common sense, “illogical”.

McCallion said son Peter told her the documents were in place because he and Couprie were going to Asia.

Atherton submits that the Mayor’s affidavit saying she didn’t read the two documents she witnessed and signed is  not in line with McCallion’s self-proclaimed image as a business mayor, let alone her huge interest in the hotel/land.

In February  2007 following signing of agreement in Pier 4 another agreement entered into, the Shareholders Agreement. This agreement was between World Class Developments giving Murray Cook 20%  and Leo Couprie 80% of the shares. Atherton points out that despite the Shareholders Agreement, WCD would still govern as if Cook/Couprie were 50/50 partners.

At some point early in 2007 Barry Lyons became involved in WCD. Scott Walker took responsibility of day-to-day operations and Walker said that he understood from beginning that Peter was a partner.

Atherton refers Exhibit 1 which was handed to the Judge only yesterday. In examination of Mr. Walker, he indicated a business card “World Class Group”.

Walker said he kept Peter McCallion apprised of relevant happenings.

Atherton now refers to a bank ledger showing financial transactions of World Class Developments and walks us through. Shows on March 7, 2007 Peter McCallion deposited $30,000 into the account. Don’t know source of funds.

Leo Couprie says it was Peter McCallion’s money he didn’t care what Peter did with it.

Atherton now turns her attention to the November 1, 2007 promissory note. Peter McCallion’s signature appears as Signing Officer.  [Ed. Atherton introduced all kinds of details I’m not sure why]

Atherton now brings Tony DeCicco into the timeline. Peter McCallion brought DeCicco into WCD in August 2007. DeCicco would take over Murray Cook’s share.

Once again, Leo Couprie did not get legal advice.

Couprie in cross-examination said it was Peter McCallion who decided who would stay and who would go. Atherton said that Peter trusted Tony and Leo trusted Peter.

Regarding the Landplex agreement Leo understood that it now replaced the Declaration of Trust.

Atherton states that it will be their submission that the Landplex Agreement was the agreement that stood at the time of the October 4, 2007 vote at Peel Regional Council.

Under cross-examination, Leo Couprie said that Peter McCallion’s ultimate goal was to be the real estate agent for the City Centre condos and the “crowning glory of his career”.

During the cross-examination, the Mayor said that she found out her son was Owner of World Class Developments only when the information came out through Judicial Inquiry.

Atherton asked “Did you ever ask Peter if he had an ownership interest in WCD?” Mayor replies No.

Atherton, “But did you ask?” Again the Mayor replies No.

At the time of the Peel October 4, 2007 vote, Peter McCallion was owner of 16 WCD shares. Leo Couprie would transfer those 16 shares to Peter.

Hazel McCallion claims her son’s World Class Developments share-interest was not part of her knowledge on October 4, 2007.

Atherton submits that the WCD “cast of characters” were well-known to the Mayor. Included were son Peter, his friend, Leo, long-time McCallion family friend, Murray Cook and Tony DeCicco.

Atherton points out that the Mayor knew Murray Cook would lead the hotel project and that Leo Couprie would be the investor.

Atherton states that In November 2007 Cook and DeCicco met at Mayor’s house to resolve differences.

Under cross-examination, Leo Couprie said that he was strictly a silent partner in WCD.

Couprie mentioned that he had just one meeting with the Mayor and that was around the time of the Cook/DeCicco disagreement.

Their disagreement centred around various bills that had become due.

Peter McCallion wanted Couprie to give Hazel McCallion his opinion/advice regarding the deteriorating relationship between Cook and DeCicco.

Couprie said that he told the Mayor that he didn’t know either Murray Cook or Tony DeCicco so he had no opinion, that he trusted Peter to whatever he thinks is best.

It was Peter McCallion who arranged the meeting with Cook, DeCicco and the Mayor.

Couprie said it was a two-minute meeting with Hazel at her house. In cross-examination Couprie was asked if the Mayor is a hands-on mayor? Couprie responded, No opinion. Didn’t know her.

Atherton then introduces the Issue of “remote interest”….

The remote test also applies to Peter McCallion’s interest in World Class Developments. Requires that his interest is also remote. If Peter’s interest is so remote and insignificant, Atherton argues, then how was the Mayor so certain that she would have to declare conflict of interest back in 2005?

The remote test asks “Would a reasonable electorate apprised of all circumstances likely conclude that Peter’s interest might influence the Mayor’s voting/actions?”WI

Judge Sproat asks intriguing question. He says assume the Mayor believes he’s an agent and will get a commission, (hypothetical) if the Mayor thinks her son has a financial interest (true or not), if she votes then she’s doing something wrong. Assuming she THOUGHT, does it really matter if it’s incorrect.

Does it really matter? In the real world, Sproat points out that people can have an imperfect understanding of their children’s interests. Could turn out later that interest is different than what it was thought to be.

RECESS TIL 11:55.

COURT RESUMES at 12:00

Richardson up.

Focusing on Section 10 of the Act, Subsection 1. Where subsection 5 contravened, you shall declare the seat vacant.

Richardson reminds the court that there are two savings provisions in the Municipal Conflict of Interest Act. And that these provisions only kick in IF there’s been a finding of conflict of interest.

Inadvertence or Error in Judgement .

Richardson says inadvertence is failure to direct one’s mind to an issue. Error in Judgement is paying attention but you make a mistake in your decision.

Richardson says that if the Mayor had a belief that her son had an interest, case law says there’s an obligation of a member not to be willfully blind.

So Sproat’s earlier hypothetical question, re if Mayor thought the son had a conflict, it was her obligation to determine his interest. Not just declare but also declare the nature of that conflict.

Richardson says that a councillor cannot shut his/her eyes. That at the very least he’s obligated to make the kind of  inquiries that a reasonable person in a similar situation would do.

Case law court concluded that “willful blindness or reckless disregard” can’t be characterized as inadvertence. Example, when the Mayor concluded that Peel’s Development Charges bylaw had  “general application” McCallion admitted that she didn’t turn her mind to the Act.

While arriving at “general application” in her interpretation of the Muncipal Conflict of Interest Act, McCallion did not consult/investigate —essentially do her homework.

Re Ford and inadvertence: Court said that while Mayor Ford may have honestly believed his interpretation of the Municipal Conflict of Interest Act was correct, such belief would undermine the Act. Willful blindness to legal obligations, it was argued, can’t be regarded as inadvertence.

Richardson then turns his attention to Error in judgement defense. The Mayor says her actions were premised on the honest belief that Development Charges bylaw was general application.

Richardson says that to reach that conclusion, Hazel McCallion would first have to gauge her son’s pecuniary interest to see if it had general application to the public’s interests.

Richardson says that “honest, frank conduct, done in good faith” should not result in vacating a seat. Perfection not expected of members but good faith is.

Richardson says, “One may not shut his eyes and make reasonable inquiries which a prudent man would do to avoid consequences”

Sproat clarifies that  “reasonable inquiries” would be status of project and interests in WCD.

Richardson continues that the Mayor had the obligation to take active steps to determine her Municipal Conflict of Interest Act duties as a member.

Richardson says that reliance on a legal opinion can be evidence of error in judgement.

In cross-examination, Hazel McCallion said she arrived at general application because “I think from a common sense point of view…. it affects… etc etc.”

Richardson asks, what did the Mayor do to inform herself? She relied on common sense.

In cross-examination he asks McCallion about the Municipal Conflict of Interest Act. McCallion replied No and it “never entered her mind”.

Richardson now addresses motive and intent.Re motive, there’s a logical inference that Mayor’s conduct at Peel was motivated by the desire to help her son.  For example, her stand on the 2007 development transition provision in not consistent to her stand before 2007 or her 2012 vote.

In her cross-examination Hazel McCallion made it clear that the supplemental amendment to the 2007 Peel Development Bylaw was Brampton Mayor Susan Fennell’s idea.

McCallion’s attitude in June 2007 seemed to be that “Developments in Mississauga and Caledon should not be forced to pay for roads in Brampton”.

At the very least Hazel McCallion was “reckless” in voting on [Ed. …missed it.]

Richardson points out that the nature and degree of experience of a member should also be taken into account when assessing breaches in conflict of interest.

In 1982 a court concluded that Mayor McCallion committed an error in judgement –so she was not subject to penalties. Atherton points out that Hazel McCallion’s latest conflict of interest case would be the second time in her career and second time she’s relied on community of interest as well as the second time she’d invoke error in judgement to avoid consequences.

In cross-examination Hazel McCallion says that she didn’t review the results of 1982 re common interests.

Richardson presents the following conclusions

  1. Peter McCallion had pecuniary interest in World Class Developments
  2. The pecuniary interest was known to his mother
  3. She voted on three occasions at Peel on issues affecting WCD.
  4. The Mayor contravened the Municipal Conflict of Interest Act
  5. Her actions are not the result of error in judgement or inadvertent according to Act.

Judge Sproat

JUDGE WILL NOW RULE on whether evidence of the Mayor’s activities from October 5, 2007 through May 31, 2008 are admissible.

Sproat says sometimes evidence can shed light onto credibility. If a child keeps business confidential and if at a later date, the parent acted differently, that’s potentially relevant.

Sproat concludes that evidence after the September Peel vote is relevant. It shows that World Class Developments engaged pro planners and switched architects all to position itself to take advantage of Peel’s transitional provisions.

Post Peel vote evidence, Sproat says, may shed light as to proper understanding of the contract.

Finds Singaro (sp?) opinion relevant regarding the steps taken by World Class Developments to avail itself to Peel’s transitional provisions. At a minimum, Sproat says, this evidence has some relevance to shed light into understanding how World Class Developments viewed its rights.

Sproat now asks if there are any additional considerations. Richardson says no.

Hazel McCallion’s lawyer, Freya Kristjanson now asks… [Ed. can’t hear her.]

Judge Sproat asks that 100 pages from Inquiry be removed.

COURT NOTES END

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