This article is an excerpt from Government Procurement, which is available for purchase.
In its November 2015 decision in Kruse v. Santer, the Saskatchewan Court of Queen’s Bench rejected an applicant’s municipal conflict of interest challenge after finding that any potential contracting transgressions by the city councillors in question were minor and inadvertent. The case dealt with a legal challenge brought by a resident of Welwyn, Saskatchewan, a village of approximately 100 citizens near the Manitoba border, to remove all three members of municipal council from office for breaches of the conflict of interest provisions of The Municipalities Act.
The first complaint involved allegations of conflict of interest over municipal work performed by a city councillor at the village recycling bin at a rate of $12.00 per hour. The second involved a complaint against another councillor over a $15.00 per hour municipal sewage works operation contract performed by her spouse. The third involved a snow removal contract awarded to the mayor and another individual for $3700. In all three instances, the applicants alleged that the members of council failed to recuse themselves from the contract award votes, as required by section 144 of The Municipalities Act for matters involving personal financial interests.
The court found that the council meeting minutes were not clear regarding whether the members had recused themselves from the relevant votes. However, as the court noted, the statute ultimately gave the court the discretion not to remove elected officials from office for inadvertent breaches of the disclosure and recusal requirements. It also found that the statute was ambiguous regarding the recusal obligations and whether they only applied to initial contract award decisions or also applied to each decision to make a payment under a previously awarded contract. The court also noted that it is not always reasonable to expect strict compliance with the relevant statutory provisions from a small municipality:
78 The applicants have repeatedly shown an expectation of exacting precision from the Village in its administrative operations, notwithstanding that a village council with one mayor, two councillors and a part-time administrator must necessarily struggle to maintain the same level of regulatory compliance as large municipalities with significantly more resources. Expecting an error-free set of minutes is an ideal, but persons should not lose elected positions because of an error. The applicants, by their own conduct, illustrate that errors can be made. In his affidavit respecting Mr. Santer’s alleged non-compliance with disclosure of his pecuniary interest, Mr. Kruse refers to “the adopted Minutes of December 12, 2012.” I find no minutes of a December 12 meeting, only a meeting on December 10, 2012. In refusing to yield in face of Mr. Santer’s and Ms. Pethick’s explanation of an error in the recording of the minutes and by continuing to seek the unseating of the village members, the applicants should be cautious of judging others by exacting standards.
The court ultimately rejected the application after stating that “One can imagine the mayhem that the village would be occasioned if it were to lose the entirety of its council.” As this case illustrates, elected officials can be subject to close scrutiny for compliance with applicable conflict of interest codes. While legal challenges are not always successful, municipal council members would be wise to avoid such challenges by ensuring strict compliance with their disclosure and recusal duties when contract decisions involving their personal financial interests are brought to a vote.
