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Mississauga Mayor Hazel McCallion has been found not guilty of violating a conflict of interest law in a case that involved her son’s development proposal for a downtown hotel, June 14, 2013.

Fernando Morales/The Globe and Mail

Mississauga Mayor Hazel McCallion has been found not guilty of violating a conflict of interest law in a case that involved her son's development proposal for a downtown hotel.

Superior Court Justice John Sproat, in a ruling Friday, dismissed an application by Elias Hazineh, who alleged Ms. McCallion broke the law in September, 2007, when she seconded a motion and voted for an amendment to a new by-law raising development fees.

"In my opinion," said Judge Sproat, "a reasonable elector would not regard the deemed financial interest of Mayor McCallion as likely to have influenced her in seconding ... [the] motion and and voting on Sept. 13, 2007.

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"As such, I conclude that Mayor McCallion did not contravene the MCIA [Municipal Conflict of Interest Act]."

The amendment was to introduce a transition period of 18 months when developers could submit their applications and qualify for the older and lower fees.

Ms. McCallion had testified that she thought her son was merely a real estate agent representing the developer. But Justice John Sproat concluded that she must have known her son was a principal at the firm. Although he deemed that Ms. McCallion "was wilfully blind to the status of" development, he ruled that she "demonstrated greater concern for the public interest" than her son's interest when she suggested conditions to the land owner that would have hampered development.

The judge also dismissed the application because he concluded Mr. Hazineh did not file his court application within six weeks of learning about the mayor's actions on council, in accordance with the Municipal Conflict of Interest Act. As the trial unfolded, Mr. Hazineh gave conflicting evidence about when he first obtained his information. Judge Sproat decided Mr. Hazineh learned about the amendment in a July 2010 National Post article - more than a year before the application was filed in November 2011.

Moreover, the judge ruled that the mayor's son, did not benefit from the amendment because he failed to submit a complete site plan along with a $500,000 application fee before the deadline for the 18-month transition period.

The ruling means that Ms. McCallion, 92, one of Canada's oldest and longest-serving mayors,  avoids the potential prospect of being removed  from office before she retires.

"I am glad the lawsuit is over even though it has not affected my work on behalf of the people of Mississauga," Ms. McCallion told a news conference.

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Mr. Hazineh is unsure if he will appeal the judge's decision at this time.

"I am discussing with my counsel. If there are grounds for appeal, it will be appealed," he said.

The mayor said the case has cost her $500,000 in legal costs, which she expects to recuperate from Mr. Hazineh. Mr. Hazineh said that the financial burden should not rest "on a citizen acting in good faith" as it would discourage others from taking similar actions.

Ms. McCallion told reporters Friday that  the Municipal Conflict of Interest Act must be reviewed. She called the legislation a "blunt instrument" that people with a political agenda can use to oust a politician from office. She said she intends to speak with Ontario Premier Kathleen Wynne about changes to the act.

Zack Taylor, an assistant professor at the University of Toronto and an expert on urban politics and regional governance, said he finds Ms. McCallion's characterization of the MCIA intriguing.

"The way the system works is that potential conflicts are identified and ruled on when people bring them to light," Mr. Taylor said. "Some people may do this vexatiously, but that's up to the court to decide."

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Tom Urbaniak, an author of three books on the history and politics of Mississauga and Peel region including a biography of Ms. McCallion, said the MCIA is an "awkwardly worded act" because it places responsibility on private citizens. These lawsuits cannot be brought forward by Crown counsel or a public investigating body. Moreover, the Act does not give judges a range of penalties, such as suspension, to choose from. The only penalty is a an automatic dismissal from elected office.

"There are definitely legal gaps when it comes to governing the conduct of municipal politicians," Mr. Urbaniak said. "In some ways, the Regional Council votes are sidelines to a larger issue -- the need for some form of sanction for those instances where a public official uses his or her public office to advance a family member's company, a company in whose establishment and internal affairs the public official has played a major role."

This is not the first time that the mayor, who is serving her 12th and final term, has faced a conflict of interest accusation. In 1982, she was found guilty after voting on releasing land, some of which she owned for development. She stayed in office because the judge ruled that Ms. McCallion had made a judgment error.

In 2011, a Mississauga judicial inquiry which cost taxpayers $7-million found Ms. McCallion had a "real and apparent" conflict of interest when she supported a land deal for the same downtown hotel proposed by her son. The deal eventually fell through and Ms. McCallion remained in office because she was not deemed to have violated the MCIA  only common-law principles. It was during this inquiry that the mayor found out her son was a principal of the development firm, she said.

- With a report from Dakshana Bascaramurty

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