Councillor loses appeal, must pay city $541K
Ontario’s top court has ordered Coun. Hilary Payne to pay more than half a million dollars and upheld the dismissal of his multimillion-dollar lawsuit against the city for malicious prosecution. The 12-year legal fight with the city he represents dates back to a fire in 2006 in a rooming house that Payne and his wife Gloria owned on Mill Street near the University of Windsor. The blaze injured two people, one critically.
A tenant was charged with arson but acquitted at trial.
But the Paynes were also charged with arson by negligence after an investigation revealed that the house violated several fire code provisions. The violations allowed the blaze to spread rapidly, forcing two occupants to jump to safety from the roof, and contributed to the injuries of another person trapped in a main-floor bedroom. The charge against Gloria Payne was withdrawn because she wasn’t involved with the management of the house. A preliminary inquiry dismissed the charge against Hilary Payne.
The Paynes and their daughter then filed a $2.25-million lawsuit against the city, its police and fire departments, then-chief building official Mario Sonego and the Ontario Fire Marshal’s office for negligent investigation, malicious prosecution and abuse of process. They claimed that charging them was “malicious, high-handed, outrageous, reckless.” The $2.25 million was for “loss of reputation, humiliation and disgrace, pain and suffering.”
Months later, in the midst of the lawsuit, Payne, a former city CAO, ran for city council in Ward 9 and won.
Superior Court Justice Thomas Heeney dismissed the lawsuit last year, and Payne, then in his second term as a councillor, took the city to court again, appealing the ruling.
The Court of Appeal for Ontario heard the case last month and released its decision Tuesday. “I’m not making any comment,” Payne said Wednesday, referring calls to his lawyer, Raymond Colautti.
Colautti did not respond to calls. The issue in the appeal was whether police had “reasonable and probable grounds” to charge the Paynes. They argued that they didn’t start the fire and believed they had observed all the laws. The two-storey house, which the Paynes bought in 1996, had been classified by the city as a duplex but was being used as a rooming house. There were seven bedrooms that were rented to students.
The fire in 2006 was the second blaze. After the first one, in 1999, several violations of the provisions for duplexes were found, but the Paynes never received the report on the violations or the order to comply, and the city never followed up.
But Chief Justice George Strathy, in the decision by the Appeal Court’s panel of three judges, referred to a Criminal Code provision for arson that cites a “marked departure from the standard of care that a reasonably prudent person would use to prevent or control the spread of fires,” including failing to comply with the law. Payne owned the house. He controlled the house. It violated the fire code, the decision stated. “Based on the evidence before him and the statutory inference, (Windsor police Det. Richard) Cote had reasonable and probable grounds to believe that the appellants had committed an offence,” Strathy wrote.
Strathy notes that the preliminary hearing dismissed the charge against Payne because there was no evidence he had been informed that the house was a rooming house or that it violated the more stringent fire code for rooming houses. But, he wrote, police “had no obligation to determine whether the charge would succeed at trial.” Payne will end up paying much more in costs than he would have received in damages if he had won. Heeney had cut the claim for $2.25 million to $153,574, which the Appeal Court would have had to consider if it had ruled in favour of Payne.
The Appeal Court also upheld costs Payne was ordered to pay to cover the legal expenses of the defendants — $260,000 to the city and $231,100 to the Fire Marshal. It added Appeal Court costs of $30,000 to the city and $20,000 to the fire marshal, for a total of $541,000.
The ruling comes little more than two weeks before nominations close for the municipal election Oct. 22.
Payne has not registered to run for re-election, though he said last week he is “certainly leaning toward” running. He said Wednesday he expects to decide by next week. Owing the city hundreds of thousands of dollars will not preclude him from running, city CAO Onorio Colucci said.
This isn’t the first time Payne has sued the city. Before he was elected to council, he headed the Boarded-Up Houses Demolition Action Group. In 2010, the group appealed city bylaws that prevented demolition of the houses that the Ambassador Bridge had bought and boarded up. The company that owns the bridge joined the lawsuit. Superior Court Justice Richard Gates dismissed it.