Don’s Dialogue – Furniss vs Nishikawa Litigation

DON’S DIALOGUE: REQUEST FOR A JUDICIAL OPINION ON THE ALLEGED VIOLATION OF THE MUNICIPAL CONFLICT OF INTEREST ACT BY COUNCILLOR NISHIKAWA

Today almost every organization provides employees and directors with liability insurance coverage. No one should be cowed from doing their job by the threat of litigation and financial ruin. The Township of Muskoka Lakes provides councillors and employees with indemnification insurance on the assumption that they are always acting honestly and in the best interests of the Township, until proven otherwise.

No municipality provides indemnification insurance to protect councillors or employees, who harass members of the public, act dishonestly or contrary to the best interests of the municipality.  

In 2014, Councillor Brent requested an apology from Councillor Nishikawa for a written comment made to a member of the public during the 2014 election campaign.     The member of the public advised Nishikawa that she was mistaken in her written comments. Nishikawa failed to own up to her error and apologize to Brent.   Brent subsequently filed a law suit against Nishikawa requesting an apology. None was given and financial compensation for damage to his reputation and business were subsequently demanded.

In 2016, Justice McKinnon, found Nishikawa guilty of lying, dishonesty and malicious liable.   He awarded Brent damages of $30,000 and court costs of $14,000.   The Townships insurance company paid this amount plus Nishikawa’s legal costs, less the Townships $25,000 deductible.   Councillors and citizens expressed outrage to me that taxpayer dollars were being spent to support this type of conduct that was obviously not in the best interests of the Township.   They wanted Nishikawa to repay the money.

Note – Closed Session information released via Judicial Order – Council meet on two occasions in closed session, this was an opportunity for Nishikawa and her lawyer to explain any extenuating circumstances that could justify this expenditure of tax dollars. Nishikawa could provide no justification for her actions, nor did her lawyer attend either meeting. Based on due consideration of the facts, Council determined that Nishikawa’ dishonesty and conviction for malicious liable disqualified her from any coverage that the Indemnification By Law could have provided. Since the insurance had paid all the expenses, Council decided that Nishikawa should reimburse the Township for the $25,000 of taxpayers money paid for the deductible.   Nishikawa voted in closed session against personally paying the deductible.  I believe under Section 4 (l) of the Municipal Conflict of Interest Act she possibly could have participated in this vote, because it is a right given to every councillor. However, ethically in my opinion she should have abstained from granting herself a direct pecuniary benefit.

My grave concern is that the Municipal Conflict of Interest Act (MCIA) was violated when the resolution to have Nishikawa repay the $25,000 insurance deductible was read in the Open Session of Council and a recorded vote requested.  Council had previously determined Nishikawa did not qualify for coverage under the Townships Indemnification By- Law, Nishikawa knew this and knew the content of the resolution to be read in Open Session. She was not entitled to indemnification coverage and no longer had a benefit in common with all other council members. Nishikawa did not recuse herself from the Council Table. She sat at the table and abstained from voting which she knows full well is a NO Vote to repay the $25,000.   This is a direct financial benefit to Nishikawa and a violation of the MCIA.   Judge Wood and I agree to disagree on the issue. Nishikawa was entitled to this benefit like all councillors, up until the point Council determined she did not meet the threshold for coverage under our indemnification by law, because she acted dishonestly and not in the best interests of the Township.

After the recorded vote in Open Session to have Nishikawa repay the deductible, (which to date has not been repaid), I was inundated with requests from councillors and many members of the public demanding that this obvious conflict of interest be addressed. They were incensed that taxpayer dollars were at stake.

I sought legal advice and was told that Nishikawa very definitely had a direct pecuniary interest in the matter and was in violation of the Municipal Conflict of Interest Act.

I waited and expected that Nishikawa would render an apology to council in September. I was optimistic that she would do it in October, when the Clerk so advised me that an apology was forthcoming and Nishikawa wanted it on the October Agenda.   Unfortunately, what was forthcoming was a letter from her lawyer justifying her actions and claiming she had been victimized by council and the mayor.   At this point I determined if no member of the public was going to hold Nishikawa accountable, then I would initiate the request for a judicial opinion at my personal expense. I believed this was necessary as the head elected official, to preserve the public confidence in the integrity of our council. I had nothing to personally gain from my actions.

After almost two years, Judge Wood rendered his decision that Nishikawa did not violate the MCIA, because she was entitled to vote on any matter that is common to all members of council (similar to salary increases for councillors or repaving a road in front of a councillors home). He made no allowance for the fact that Council had determined and passed a resolution in Closed Session censuring Nishikawa for dishonestly and not acting in the best interest of the Township. These actions excluded her from coverage under the Indemnification By Law.

The personal cost to me for legal expenses is just under $40,000. Good Governance of the Township by elected officials is a sacred trust that runs with each council members oath of office.   I believe I did the right thing to seek a judicial opinion and the public now has some level of confidence that the mayor took significant action to address public concerns on the integrity of council members and the use of taxpayer monies for personal benefit.

I want to personally thank all the people who provided both verbal and financial support to me in this protracted process.

I personally regret that it was necessary to take this action to preserve the probity of our council.   What is even more appalling to me is that a few simple words four years ago by Nishikawa -“ I am sorry, I made a mistake” could have negated all the ill will and huge waste of time and money that these liable and conflict of interest issues have caused.  Was the failure to apologize perpetuated by Nishikawa, to besmirch Brent’s character and negatively impact his 2014 election bid for District Council, which he lost by 22 votes? It is the only logical conclusion I can draw from this fiasco.

 

Don Furniss

Sept 2018