Zebian v. Gerrard, 2023 NSSC 49

SUPREME COURT OF Nova Scotia Citation: Zebian v. Gerrard , 2023 NSSC 49 Date: 20230209 Docket: Kentville , No. 512096 Registry: Kentville Between: Andrew Zebian Applicant v. Craig Gerrard Respondent Judge: The Honourable Justice Gail L. Gatchalian Heard: October 19, 2022, in Kentville, Nova Scotia Counsel: Richard W. Norman, for the Applicant John T.

Shanks, for the Respondent By the Court: Introduction [ 1 ] The Applicant, Andrew Zebian, is a member of the municipal council of the Town of Kentville, the owner and director Mike’s Clothing Limited, and an “elector” in the Town of Kentville within the meaning of the Municipal Conflict of Interest Act , R.S.N.S. 1989, c.299 . The Respondent, Craig Gerrard, is also a member of the municipal council of the Town of Kentville. [ 2 ] In his capacity as an elector, Mr. Zebian has filed an Application under the Act for an order declaring Mr.

Gerrard’s council seat vacant and disqualifying him from being a member of Council for at least three years. Mr. Zebian says that Mr. Gerrard had a pecuniary interest in a matter that was the subject of a Council meeting on November 29, 2021, and that Mr. Gerrard violated s.6(1) of the Act when he participated in the discussion and vote that took place at that meeting. [ 3 ] The matter that was the subject of the November 29, 2021 meeting and vote was the development of a vacant piece of land on Main Street in Kentville.

The parties refer to the property as “the Robinson property.” The property is owned by Mike’s Clothing. Mike’s Clothing purchased the property from the Town in the fall of 2019. The plan of Mike’s Clothing was to construct a building on the property with five residential units and four commercial units. The agreement required Mike’s Clothing to meet certain construction deadlines. The deadlines included a deadline to complete the footings of the building on or before June 30, 2020. The agreement allowed the Town to buy back the property if the construction deadlines were not met.

The Town agreed to extend those deadlines three times. Mike’s Clothing did not meet the construction deadlines. [ 4 ] In the fall of 2021, Mr. Zebian, on behalf of Mike’s Clothing, requested a fourth extension to the construction deadlines. At a meeting on October 25, 2021, Council voted against the extension request, and in favour of enforcing the buy-back provisions of the agreement. At the November 29, 2021 meeting, Council voted against a motion to reconsider its October 25, 2021 decision. [ 5 ] Mr. Zebian alleges that Mr.

Gerrard had a pecuniary interest in the subject-matter of the November 29, 2021 meeting and vote because Mr. Gerrard and his family own or have an ownership interest in several commercial and residential properties in the Town of Kentville, including on Main Street (the “Gerrard properties”). Mr. Zebian says that the building that Mike’s Clothing intended to construct on the Robinson property would have competed for current and prospective tenants of the Gerrard properties. Mr. Zebian also says that his commercial tenants would have competed with the businesses located in the Gerrard properties. [ 6 ] Mr.

Gerrard says that: • The Application is untimely. • Mr. Zebian has failed to prove that Mr. Gerrard and/or his family members were in competition with the residential and commercial units planned by Mike’s Clothing for the property; • If it is found that Mr. Gerrard did have a pecuniary interest in the Robinson property, it is so remote or insignificant in its nature

that it cannot reasonably be regarded as likely to have influenced him and is therefore exempted from the operation of the Act under s.5(1)(k); and • Even if he had a pecuniary interest in the matter, which he denies, the court should exercise its discretion to relieve against forfeiture of office under s.10(1) of the Act because this was a bona fide error on the part of Mr. Gerrard, who did not believe that he had a pecuniary interest in the Robinson property. [ 7 ] In order to determine whether Mr. Zebian is entitled to the relief he requests, I will consider: 1. Whether the Application was filed on time. 2.

If so, whether Mr. Zebian has established that Mr. Gerrard had a pecuniary interest in the subject-matter of the November 29, 2021 meeting and vote. 3. If so, whether Mr. Gerrard’s pecuniary interest is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to have influenced him. 4. If Mr. Gerrard is found to have violated s.6(1) of the Act , whether his contravention of the Act was the result of a bona fide error on his part, justifying relief against forfeiture of his office. 5. If not, what is the appropriate remedy.

Timeliness [ 8 ] Section 9(4) of the Act states that “[a]n application shall be made within sixty days after the fact comes to the attention of the applicant that the member may have contravened this Act.” [ 9 ] Under s.6(1) of the Act , if a council member has a pecuniary interest in a matter and they are present at a council meeting at which the matter is the subject of consideration, they are required to:

a) disclose their interest;

b) withdraw from the meeting;

c) refrain from taking

part in consideration of, or voting on, any question on the matter; and

d) refrain from attempting in any way to influence the council’s decision on the matter. [ 10 ] Under s.10(1) of the Act , if a judge determines that a member has contravened the Act , the judge shall declare the seat of the member vacant and direct that the vacancy be filled in the manner prescribed by law. [ 11 ] Mr. Gerrard says that the Application was filed out of time because Mr. Zebian knew at the time that Mike’s Clothing bought the Robinson property that Mr. Gerrard and his family owned or had ownership interests in commercial and residential properties in the Town of Kentville, and Mr.

Zebian knew that Mr. Gerrard had participated in several Council meetings concerning the development of the Robinson property by Mike’s Clothing: • On September 25, 2019, Mr. Gerrard voted in favour of the Town negotiating an agreement of purchase and sale with Mike’s Clothing. • On July 27, 2020, Mr. Gerrard voted in favour of the first extension request. • At the December, 2020 meeting of Council, Mr. Gerrard voted in favour of the second extension request. • On June 28, 2021, Mr. Gerrard voted against the third extension request. • On October 25, 2021, Mr.

Gerrard voted against the fourth extension request. • On November 29, 2021, Mr. Gerrard voted against the reconsideration motion. [ 12 ] Mr. Zebian acknowledges that he knew that Mr. Gerrard and his family owned or had ownership interests in commercial and residential properties on Main Street in Kentville, close to and across from the Robinson property, at the time Mike’s Clothing brought the property in the fall of 2019. However, Mr. Zebian says that Mr.

Gerrard contravened the Act each time he voted in respect of the Robinson property, and that the time did not start to run for purposes of this Application until November 29, 2021. [ 13 ] I agree with Mr. Zebian that the 60 day time limit started to run for the purpose of this Application after the November 29, 2021 meeting. The alleged breach here is that Mr. Gerrard was present at that meeting and participated in the discussion and vote concerning a matter in which he had a pecuniary interest, contrary to s.6(1). The alleged breach is therefore not only connected to the subject-matter, but to Mr.

Gerrard’s attendance at and participation in a meeting of Council in respect of that subject-matter. It was on November 29, 2021 that the fact came to the attention of Mr. Zebian that Mr. Gerrard may have contravened the Act by participating in the November 29, 2021 meeting. The 60 day time limit in s.9(4) therefore did not start to run until after that meeting. [ 14 ] The Application was filed on time. Pecuniary Interest

[15] Mr. Zebian only has to show that Mr. Gerrard had some level of pecuniary interest in the development of the Robinsonproperty. The court will not weigh the extent of the pecuniary interest or the amount involved in determining the issue. See ReWanamaker and Patterson (1973), 1973 ALTASCAD 60 , 37 D.L.R. (3d) 575 (Alta C.A.) at p.579, cited in Moll v Fisher, (ON SC), [1979] O.J. No.4113 (Div. Ct.) at para.12; and see Calkin v.

Dauphinee, 2014 NSSC 452 at para.60. [16] The extent of or the amount of the pecuniary interest does not matter because the purpose of the Act is to maintain publicconfidence in the electoral process in democratic institutions. Public confidence in its elected representatives demands that councilmembers’ economic self-interest not conflict with their public duty. The Act must therefore be construed broadly, in a manner that bestachieves its purpose. The amount involved does not make any difference to whether there has been a breach of this public duty. See Mollv.

Fisher, supra at paras.9-12; Re Wanamaker and Patterson, supra at pp.581-583; and Calkin v. Dauphinee, supra at para.60. [17] Nonetheless, Mr. Zebian has to prove the existence of Mr. Gerrard’s pecuniary interest on a balance of probabilities: see Lorellov. Meffe, 2010 ONSC 1976 (Ont. S.C.J.) at paras.63-64 and Calkin v. Dauphinee, supra at paras.77, 91 and 97. [18] The Act does not define “pecuniary interest.” The term “indirect pecuniary interest” is described in s.3 of the Act as includingan interest that a member has a director of a corporation.

A “deemed pecuniary interest” is described in s.4 of the Act as including thepecuniary interest of a member’s spouse and parent. [19] Mr. Gerrard, his wife and his parents own or have an ownership interest in more than 60 residential and more than 8commercial units in Kentville. [20] The Gerrard properties that are near the Robinson property include the following: • Mr. Gerrard is a director of a company that owns a commercial property on Main Street, directly across the street from theRobinson property, occupied by a Lawton’s Drug store. Mr. Gerrard has an indirect pecuniary interest in this property. • Mr.

Gerrard’s mother owns a property on Main Street across from the Robinson property that has residential and commercial units.The businesses are a flower shop, a book store and a graphic designer. Mr. Gerrard is deemed to have a pecuniary interest in thisproperty • Mr. Gerrard’s mother owns a commercial property, occupied by an accounting firm, on Main Street that is separated from theRobinson property by one building. Mr. Gerrard is deemed to have a pecuniary interest in this property. • Mr.

Gerrard’s parents, through their company Stagecoach Properties, own a large residential complex on Main Street,approximately one kilometre away from the Robinson property. Stagecoach also operates landscaping and self-storage services. Mr.Gerrard is deemed to have a pecuniary interest in this property and the Stagecoach businesses. [21] There is no question that the nature of Mr. Gerrard’s interest in the Gerrard properties is pecuniary. [22] The question is whether Mr.

Gerrard’s pecuniary interest in the Gerrard properties is a pecuniary interest in the development ofthe Robinson property, the matter that was the subject of the November 29, 2021 Council discussion and vote. [23] Mr. Zebian’s primary argument is that Mr. Gerrard and his family members benefit from the decision of Council not toreconsider the rejection of the extension request or its decision to enforce reconveyance of the property because the decision eliminatesor delays a potential competitor for the existing and prospective tenants of the Gerrard properties. Mr.

Zebian points out that theproposed residential and commercial units for the Robinson property would be new and therefore different from those available in theGerrard properties. [24] Mr. Gerrard’s uncontradicted evidence, which I accept, is that there are no vacancies in the Gerard properties’ residential orcommercial units, that prospective tenants have to be turned away, that Mr.

Gerrard provides prospective tenants with the contactinformation for other landlords, that as soon as a unit is vacated there is another tenant to take the previous tenant’s place, there is nocost to such turnover, and that this has been the case for at least the last five years. [25] I conclude, based on the evidence, that this state of affairs was likely to remain the same. This is despite the evidence of Mr.Zebian that the five apartments planned for the Robinson property were going to be new, and therefore different from the apartments inthe Gerrard properties. Mr.

Zebian acknowledged that his plan was to charge around $1500 per month for the two-bedroom apartments,whereas the Gerrard properties charge $750 to $1100 for their two-bedroom apartments. Mr.

Gerrard’s evidence in cross-examinationwas that there is a shortage of residential and commercial properties in the Town, and that this is why the Town wanted the Robinsonproperty development to proceed quickly in order to meet the demand for such properties. [26] There was an insufficient evidentiary basis to conclude that the commercial spaces planned for the Robinson property would bea draw for the commercial tenants of the Gerrard properties, or that the future commercial tenants of the Robinson property wouldcompete with the businesses located at the Gerrard properties. It is not clear whether Mr.

Zebian was also saying that the proposeddevelopment for the Robinson property would compete with the Stagecoach businesses, but there was an insufficient evidentiary basisfor this argument as well. Mike’s Clothing had not yet determined whether the commercial units on the Robinson property were going tobe for offices, retail, or for other uses. There were no leases signed for those commercial units. [27] I have carefully considered the evidence. I have taken into account the purpose of the Act, which must be construed broadly toensure that public confidence in our democratic institutions is maintained.

I am mindful of the fact that, in order to determine whetherMr. Gerrard had a pecuniary interest in the development of the Robinson property, I am not to consider the extent or amount of theinterest, even if the amount is trifling. The evidence simply does not support a finding that the proposed building for the Robinsonproperty would have been in competition with the Gerrard properties or their commercial tenants. [28] Mr. Zebian advocated for a lower standard of proof, stating that proof of a mere possibility of competition between the

proposed Robinson development and the Gerrard properties, rather than proof on a balance of probabilities, was sufficient for the Court to find that Mr. Gerrard had a pecuniary interest. Mr. Zebian would also fail on such a standard. Based on the evidence, there was no possibility of competition. Was Pecuniary Interest Likely to Have Influenced Mr. Gerrard? [ 29 ] In the event that I am wrong in concluding that Mr. Zebian has failed to establish that Mr. Gerrard had a pecuniary interest in the matter that was the subject of the November 29, 2021 council meeting, I will go on to consider whether Mr.

Gerrard’s pecuniary interest “is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence [him]”: s.5(1)(

k) of the Act . [ 30 ] Mr. Zebian must prove, on a balance of probabilities, that, if Mr. Gerrard had a pecuniary interest in the subject-matter of the November 29, 2021 Council vote, his interest was not so remote or insignificant as to cause a reasonably-well informed person to conclude that it likely influenced the member: see Calkin v. Dauphinee , supra at paras.77 and 97. [ 31 ] A reasonably-well informed person is someone who is aware of the relevant circumstances.

Those circumstance include the fact, as I have found, that the proposed development for the Robinson property would not have competed with the Gerrard properties or their commercial tenants, as well as the following facts: • Mr. Gerrard voted in favour of negotiating an agreement of purchase and sale with Mike’s Clothing. • Mike’s Clothing was required to meet construction deadlines set out in the agreement of purchase and sale. • Council agreed to extend those construction deadlines three times. • Mr.

Gerrard voted in favour of the first two extensions. • Mike’s did not meet the extended construction deadlines. • When Council agreed to the third extension, the parties signed an Amending Agreement which stated that that there would be no further extensions to the construction deadlines: Affidavit of Mr.

Gerrard, sworn on July 4, 2022, paras.53 and 61. • At the time of the fourth extension request, not only had Mike’s Clothing not completed construction of the footings, but no construction work on the property had taken place at all, including any excavation in preparation for the installation of the footings: Affidavit of Mr. Gerrard, sworn on July 4, 2022, para.57. • Council rejected the fourth extension request on October 25, 2021. • Mr.

Gerrard voted in favour of the motion to deny a further extension based on the lack of compliance with all of the previous deadlines and based on the wording of the June, 2021 Amending Agreement, which indicated that no further extensions would be granted: Affidavit of Mr. Gerrard, sworn on July 4, 2022, para.61. • Mr. Gerrard voted against the motion for reconsideration on November 29, 2021, as he did not believe that anything had changed since the October 25, 2021 motion and because of the wording of the June, 2021 Amending Agreement. [ 32 ] Based on the above, I conclude that, if Mr.

Gerrard had a pecuniary interest in the development of the Robinson property, it was so remote or insignificant in its nature that a reasonably well-informed person would not regard it as likely to have influenced him when he voted against the reconsideration motion on November 29, 2021. Bona Fide Mistake? [ 33 ] Having found that Mr. Gerrard did not have a pecuniary interest in the development of the Robinson property, and that even if he did, it is exempted from the Act under s.5(1)(k), it is not necessary for me to consider whether Mr.

Gerrard’s contravention was committed as a result of a bona fide error in judgment. Conclusion [ 34 ] Mr. Zebian’s Application is dismissed, with costs to Mr. Gerrard. If the parties cannot agree on the amount of costs, I will receive written submissions from Mr. Gerrard within two weeks of the date of this decision, and from Mr. Zebian within one month of the date of this decision. Gatchalian, J.