Mayor accused of corruption and fraud must pay for own defence, rules appeal court

The former mayor of a Montreal bedroom community facing corruption-related charges will have to foot her own legal defence bills after the Quebec Court of Appeal held that the municipality did not have to pay for her defence because the alleged acts did not take place while she was performing duties of an elected member.

The precedent-setting ruling sends a clear message to elected municipal councillors who were counting on jurisprudence and the seemingly clear-cut wording of the Quebec Cities and Towns Act to compel municipalities to cover their legal fees when faced with criminal proceedings, according to municipal law experts.

“It’s an important judgment because it will provide guidance to municipalities who face similar circumstances,” remarked Daniel Bouchard, the managing partner of the Quebec City office for Lavery, de Billy. “Municipalities will now systematically refuse to pay.”

Numerous Quebec mayors and municipal councillors face criminal charges. Former Montreal mayor Michael Applebaum faces a battery of corruption-related charges while Laval’s Gilles Vaillancourt, former long-time mayor of Quebec’s third-largest city, was charged with fraud and gangsterism. Quebec’s anti-corruption squad also charged the former mayors of several rapidly growing Montreal bedroom communities, including Sylvie Saint-Jean. A former mayor of the north-shore Montreal suburb of Boisbriand from 2005 to 2009, Saint-Jean faces eight charges of corruption, fraud and breach of trust. After she plead not guilty to the charges in 2011, she turned to the municipality to have her legal fees be paid out of taxpayers’ funds, but her request was rebuffed by the municipality. She then tried to force the municipality to pay her legal fees by mounting a legal challenge before Quebec Superior Court, and lost as she did before the Quebec Court of Appeal.

In a decision described as “pragmatic” by legal observers, the appeal court reaffirmed the legal protection granted to elected municipal councillors under the Quebec Cities and Towns Act but held that an elected municipal official accused of breach of trust, corruption or fraud against the municipality does not have the right to demand the municipality to cover their legal expenses for criminal proceedings. The three-member panel judge, rather unusually, each wrote their reasons in the 49-page ruling, probably because it is the first time the appeal court examined the issue. “It demonstrates that each of the judges had a different vision of the problem,” noted Jean Hétu, a law professor at the Université de Montréal whose books on Quebec municipal law were cited numerous times in the judgment.

Under the Quebec Cities and Towns Act, a municipality shall assume the defence of a member of muncipal council who is the defendant, respondent or accused “impleaded in judicial proceedings” due to an alleged act or omission in the performance of his duties. However, under Article 604.7 of the Act, it also states that a municipal councillor shall reimburse all or a portion of the legal expenses if the alleged act or omission that gave rise to the proceedings is a gross or intentional fault or a “fault separable” from the performance of his duties. But until the Quebec Court of Appeal ruling, Quebec courts almost always liberally interpreted the Act in favour of municipal councillors, pointed out Hétu.

“Judges were very reticent to even want to hear arguments that the act committed by the municipal councillor was not related to the performance of his duties,” said Hétu. “They interpreted the Act as saying it existed to protect elected members, and that municipal councillors had a right to for their defence to be paid. It was extremely difficult for municipalities to avoid paying legal defense bills for municipal councillors.”

Bouchard concurs, and adds that in the “strict sense of the law,” both Quebec Superior Court and the Quebec Court of Appeal should have ordered the municipality of Boisbriand to pay the legal fees of its former mayor and then seek reimbursement. “But the Quebec Court of Appeal said that that would have been completely illogical,” said Bouchard. “To come to its conclusions, it had to interpret the law rather liberally.”

Quebec Court of Appeal Justice Allan Hilton notes that while it is “true” that the legislator did not stipulate conditions governing the application of the protection regime outlined under the Act, “it does not mean that none exist.” It is well established that it is up to the courts to determine its application by interpreting the provisions of the law, he added. Justice Hilton found that while the former mayor “must be presumed to be innocent until a judgment declares her guilty,” the accusations she faces did not stem from her duties as an elected representative. “The cornerstone of the protection regime remains the compatibility of an act or the omission of an act in her role as a mayor or as an elected municipal representative,” said Justice Hilton in his 30-page ruling.

Quebec Court of Appeal Justice Pierre Dalphond gave slightly different reasons in his 14-page ruling. He held that the fact that a municipal councillor faces an allegation in a civil suit that he committed a gross or intentional fault or is accused of committing an illegal act in a criminal proceeding does not preclude him from benefitting from the protection granted under the Act. “Otherwise, the elected representative would be placed in a vulnerable position,” wrote Justice Dalphond in his 14-page ruling. That is why the legislator specified that a municipality can demand reimbursement of the legal fees only after the elected representative was found guilty and that the evidence revealed that there was no reasonable grounds to believe that his conduct complied with the law, added Justice Dalphond.

But Justice Dalphond proposes that in cases where there may be doubt that a municipal councillor should be granted the protection granted under the Act, the “finality and pertinence” of the act committed or allegedly committed by the elected representative must be examined. An act committed in the interests of the municipality should be covered while one that was perpetrated for personal motives should not.

“What is really interesting about the ruling is that the Court of Appeal reiterated the principle that the Act exist to protect an elected representative from things that he did while exercising his duties,” said Martin Bouffard, Esq., a municipal lawyer with Morency Société d’Avocats in Quebec City. “But the appeal court also says that if the alleged act had nothing to do with their duties as elected officials, then the municipality does not have to pay to defend them.”

In her succinct three-page ruling, Justice Dominique Bélanger seems to have left municipal councillors with a small window of opportunity. She held that a member of a municipal counsel accused of committing fraud against the municipality does not have the right to demand the municipality to pay for his legal defence fees, unless “there is an exceptional situation.”

“Appeal court judges are prudent, and in this case they wanted to keep their options open,” observed Bouchard.

P.S. The former mayor plead earlier this year guilty to four charges, including fraud.

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