Background
James Karygiannis is a Toronto City Councillor. He was re-elected in the 2018 municipal election. As required by Ontario's MunicipalElections Act, 1996 ("MEA"), he filed a financial statement reporting his campaign expenses. However, a compliance audit revealed that Karygiannis had exceeded the spending limit for expressions of appreciation by over $25,000 (para 42), primarily due to a post-election dinner event held at Santorini Grill (paras 30-31).
There are strict caps on various categories of campaign expenses, including a specific limit on "expressions of appreciation"to supporters (para 15). Section 88.23(2) of the MEA imposes automatic forfeiture of office when a candidate files a statement that, on its face, shows expenses above the statutory limits (paras 25-26, 66). Upon reviewing Karygiannis's supplementary financial statement (filed October 28, 2019), the City Clerk determined he breached this provision and informed him on November 6, 2019, that he had forfeited his council seat (paras 39-43).
Karygiannis applied to the Ontario Superior Court for relief from forfeiture, arguing the overspending resulted from a categorization error by his auditor (para 45).
The application judge accepted his explanation, treated the error as inadvertent, and ruled that the good faith exception in s. 92(2) of the MEA could be applied to avoid automatic forfeiture under s. 88.23 (paras 47-50).
Toronto voter Adam Chaleff appealed, asserting the judge had no jurisdiction to grant relief in this case (paras 1, 8).
Outcome
The Ontario Court of Appeal allowed the appeal and reinstated the automatic forfeiture of Karygiannis's office (paras 10, 121). Writing for a unanimous panel, Thorburn J.A. held that the application judge erred in law by importing a good faith exception from s. 92(2) into s. 88.23, which provides for strict, automatic penalties whenever overspending is disclosed on the face of a financial statement (paras 59, 66-68).
The Court emphasized that the statutory framework deliberately excludes judicial discretion for relief from forfeiture under s. 88.23. This was a legislative choice made in 2002, when Ontario removed the saving provision that had previously allowed courts to excuse inadvertent errors in campaign finances (paras 75-80, 86).
Further, the Court rejected the alternative argument that relief could be granted under s. 98 of the Courts of Justice Act,which allows courts to relieve against penalties and forfeitures in civil matters. The Court concluded that s. 88.23 constitutes a true statutory penalty, and granting relief would undermine the Legislature's intent to create a fast, cost-effective, and automatic enforcement mechanism for campaign finance breaches (paras 88-97, 109).
Key Takeaways
- No Relief from Automatic Forfeiture under s. 88.23:
Section 88.23 of the MEA imposes automatic consequences (forfeiture of office and ineligibility to run again) when financial disclosures show excessive spending. The Court held there is no authority to grant relief, even where the error was made in good faith (paras 59, 66-68). - Good Faith Exception Is Limited to Criminal Proceedings under s. 92:
Section 92(2) provides relief only where a candidate is prosecuted and convicted of a campaign finance offence and the court finds the error was made in good faith. It does not apply to administrative forfeitures under s. 88.23 (paras 72-74). - Section 98 of the Courts of Justice Act Cannot Override the MEA:
Because s. 88.23 is a statutory penalty, s. 98 cannot be invoked to relieve against its automatic consequences. Allowing such relief would conflict with the MEA’s structure and policy objective to ensure expeditious and economical enforcement (paras 88-97, 106-109). - Legislative Intent and Policy Matter:
The decision underscores that courts will defer to the legislative choice to exclude judicial discretion from certain statutory schemes. Here, debates in the Ontario Legislature revealed a clear intent to eliminate case-by-case judicial review of forfeitures in favour of a rigid, automatic system (paras 75-86). - Candidates Bear the Burden of Accuracy:
Even if the error was the fault of an accountant or auditor, it is the candidate who bears the ultimate responsibility for the accuracy of the financial statement. Karygiannis’s failure to file a corrected statement before the deadline proved fatal (paras 45, 116).
The ruling in Karygiannis v. Toronto reaffirms a strict liability regime for campaign finance violations under Ontario’s MEA, sending a clear message: precise compliance is mandatory, and courts will not excuse breaches, even if made innocently.
Notably, Karygiannis sought to appeal this ruling up to the Supreme Court, but was rejected.