Toronto councillor removed from office again over campaign expenses after court overturns decision

TORONTO -- Councillor Jim Karygiannis has once again been removed from office in a months-long legal saga stemming from his 2018 campaign expenses.

In a decision handed down Wednesday, an appeal court overturned a decision that returned him to office last year, just two weeks after he was removed from his post by the city.

In November 2019, City Clerk Ulli Watkiss said that she had no choice but to remove the Ward 22 councillor after a review found that he overspent on his 2018 campaign by nearly $26,000, most of it related to a post-election party for donors at Santorini Grill in Thornhill.

According to a release from Watkiss’ office at the time, the campaign spending limit for Ward 22 in the 2018 election was $61,207.95, with a maximum of 10 per cent to be spent for "parties and other expressions of appreciation" after voting day.

That meant a total allowance of $6,120.80 for parties after election day. However a review of Karygiannis’ expenses found that he spent $32,083.50 on parties and other expressions of appreciation, nearly five times the limit.

The Municipal Elections Act states that a person automatically forfeits their office if found to have exceeded their campaign spending limit.

Karygiannis blamed a “clerical error” in his paperwork for the apparent overspending and went to court to argue his case.

Just weeks later on November 25, a Superior Court judge returned Karygiannis to office, finding that he “acted in good faith” with respect to disclosing his post-election party and also found that there was no attempt to hide the expense. The judge wrote that removing Karygiannis under the circumstances would produce an “absurd” result.

However at the time, the judge rendered no decision as to whether the party at Santorini Grill should have qualified as a fundraising expense.

The judge at the time also noted that the ruling did not affect the ongoing compliance audit Karygiannis was facing, or “the committee’s discretion to determine whether to commence legal proceedings against Mr. Karygiannis following receipt of the auditor’s report.”

Toronto resident Adam Chaleff subsequently appealed the decision to reinstate Karygiannis, arguing that the judge had no leeway to reinstate the councillor and that even if he did, he shouldn’t have based on the details of the case.  

In the decision released Wednesday, a three-judge panel on the Court of Appeal for Ontario agreed with Chaleff and set aside the previous ruling.

“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 exceeded the expense limits,” the judges wrote in their decision. “The respondent concedes that his Supplementary Financial Statement shows he exceeded his spending limit for the 2018 election by a significant amount and contrary to the rules.”

They said the law in the case is clear.

“The wording of this penalty provision is express and clear,” the ruling stated.

The judges also disputed the idea that Karygiannis’ improper paperwork amounted to a simple mistake.

“The respondent has not clearly demonstrated to this court that this was a mere ‘clerical error’” the judges wrote.

They also pointed out that while honest errors can occur, Karygiannis could have withdrawn and resubmitted a corrected supplementary financial statement if it had been submitted earlier instead of on the day of the deadline.

While the ruling acknowledged that the penalty “may be harsh in some cases” it said forfeiture of office is clearly what the legislators intended in such a case.

The judges said 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.”

Karygiannis has not yet publicly responded to the decision. However it is effective today.

Mayor John Tory told CP24 on Wednesday that he has spoken with Karygiannis and is sorry that things have unfolded the way they have.

“I’m always sorry to see these things, but it is why we have laws and it’s why we have courts and courts also have appeals,” Tory said. “I spoke with Councillor Karygiannis this morning and he was going to be talking to his lawyers today about all of this. I don’t know where it goes from here. It’s a matter that’s still a legal matter before the courts.

“You’re always sorry to see somebody’s career interrupted or come to an end in this way. You’d rather get defeated because at least it’s the voters who have spoken, or retire.  But the law is the law. He will have to see where this goes from there for him and we will proceed forward with our business because we have lots to do.”

In a statement, the city said that while Karygiannis is no longer the councillor for Scarborough-Agincourt as of today, his office and staff will continue to support residents in the ways that they normally would.

The city clerk will report to council on June 29 on the next steps to fill the vacancy. When a council seat is vacated, it can either be filled by appointment or through a byelection.

Tory told CP24 that given the timing, he thinks council would lean toward a byelection.

“Assuming he doesn’t get a stay – in other words assuming he can’t stay for a period of time while he appeals if that’s what happens – then within a certain period of time we have to declare the seat vacant and then there’s a 60-day period that passes during which time we have to decide do you appoint someone or do you have a byelection,” Tory said. “Given that we are less than half way through the term I think the odds heavily favour a byelection.”

Municipal lawyer John Mascarin told CP24 that while Karygiannis can appeal the decision, he may have a tough road ahead.

“He can appeal. I have to say though, I was really surprised by the original decision that granted him relief from forfeiture,” Mascarin said. “The argument was essentially that the legislation created an absurdity and that there should be some leniency to the council member and that’s been dispelled completely by the Ontario court of appeal.”

Mascarin added that there may be little room left for a counter-argument.

“The actual reasons that he was let off at the lower court – his own lawyers agreed that those were incorrect and they argued on a different basis today,” he said. “So it’s left him with little room to maneuver going forward. Clearly the court said it wasn’t a clerical error.

“If you’re a candidate you have to file audited financial statements. You have to get an accountant to actually file these things so you’re not doing it on your own. I admit they’re complicated. The actual error here was not complicated. It was a blatant on the face error that anyone should have discovered.”

Karygiannis has not responded to calls for comment so far.

Read the full decision here: