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  • Writer's pictureDouglas W. Judson

Town of Fort Frances paid Bay Street lawyers over $42K to defend a $13K lawsuit

Newly released freedom of information productions from the Town of Fort Frances reveal that the municipality spent over $42,000 in legal fees to defend a $13,000 lawsuit brought against it in Small Claims Court in 2023.

Background to the Lawsuit

The plaintiff in the proceeding, former councillor Douglas W. Judson, sued the defendant municipality for repayment of $13,297.84 in expenses he incurred to respond to a complaint made against him to the integrity commissioner by Kevin Douse (a person who did not even reside in Fort Frances). Douse's complaint took issue with Judson's criticism of anti-Indigenous racism in the community. It was dismissed by council at a meeting on October 25, 2021.

Following the October 2021 council meeting, Judson sought reimbursement of his expenses pursuant to the code of conduct by-law, the general terms of indemnification set out in the Municipal Act, 2001, and the past practice of the former CAO of the municipality. The amounts he requested repayment for consisted of legal fees he incurred by hiring a lawyer to respond to the year-long complaint proceeding. By June 2022, both then-CAO Faisal Anwar and council itself had unlawfully refused to reimburse Judson's expenses.

Information later obtained by Judson revealed that Town staff had not only refused to indemnify him, but had previously, without any authorization from council, arranged for the Town's lawyers at Wishart Law Firm LLP to represent former mayor June Caul in various code of conduct and conflict of interest matters before the integrity commissioner. All of the complaints against the former mayor were substantiated and endorsed by council.

July 2022 freedom of information records appear to show that Wishart was directly paid approximately $80,000 for the mayor's legal fees, despite the outcome of the complaints against her. It remains unclear how Wishart was able to act for the mayor after previously having assisted the Town and the integrity commissioner in relation to the code of conduct.

The Town's Legal Spend

To defend Judson's proceeding in Small Claims Court, the municipality took the unusual step of retaining the Bay Street law firm Aird & Berlis LLP. Bay Street law firms are generally among the largest and most expensive in Canada.

The law firm's invoices, produced as part of the Town's freedom of information disclosure, show that the firm's lawyers charged the municipality a total of $42,819.15. The Aird & Berlis invoices also disclose that the Town paid the lawyers who worked on the file hourly rates of between $395 (for a lawyer called to the bar in 2020) and $825 (for a 1989 call). It is unclear why lawyers in Northwestern Ontario, with more economical rates, were not retained instead.

Importantly, the Courts of Justice Act limits the costs payable to a successful party in Small Claims Court to 15 percent of the claim amount. In this case, that's just $1,994.68. That is the most the Town was ever going to recover from the plaintiff even if they had won at trial. Aird & Berlis' invoices show that they burned through this sum after their first 4.7 hours of work on the file. A total of 87.7 hours were charged to taxpayers.

The court file for the Small Claims Court matter shows that the Town brought a motion early in the proceeding (prior to attending the usually-required settlement conference) to try to have the proceeding dismissed. Deputy Judge K. G. Cleghorn dismissed the motion in a written decision and ordered the Town to pay costs to the plaintiff.

Shortly thereafter, the Town settled Judson's lawsuit. The settlement proceeds paid to Judson are not included in the amounts described in the freedom of information productions.

A Pattern of Waste on Litigation?

As council deliberations on the Town's 2024 budget continue, it is unclear how successive tax increases and service reductions can be justified to the public in the face of recurrent examples of irresponsible and wasteful spending on litigation.

Notably, in January 2024, the Town lost a motion against the provincial and federal governments and the Agency One First Nations in the Point Park litigation. As the losing party on the motion, the municipality is likely on the hook for tens of thousands of dollars in costs payable to each of the successful parties. The Town may also be on course to see its claim thrown out of court following December 2024's summary judgment hearings in that proceeding. Information about the Point Park proceeding is available here.

It would appear that the poor stewardship of the Town's legal budget is a result of either a lack of oversight by council or council's own spiteful direction of these litigation campaigns. In either case, the results are not in the public interest, and are certainly not serving the financial interests of taxpayers.

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