By Gerry Barker
September 18, 2019
Today is my 89th birthday.
My wife, Barbara Barker, and I have lived in Guelph since March 2003. We have paid our taxes and service fees on time and been responsible and peaceful citizens.
However, today is special. I have filed, with the guidance of counsel, an appeal to the Ontario Court of Appeals. It is based on Superior Court Justice Cynthia Peterson’s denial of my motion to dismiss the defamation lawsuit launched in 2016, by former Deputy Administrative Officer, Mark Amorosi.
The following is the real story why taxpayers, including my wife and I, are paying the legal expenses of a former employee. It has been a 33-month legal journey to which no citizen should ever be subjected.
I will leave it to citizens to judge what really happened to cause this hugely expensive and frivolous lawsuit and why.
In the beginning we moved to a new home in Guelph 16 years ago
I became interested in municipal politics when I was invited to assist former Mayor Kate Quarrie in her re-election bid in 2006. I remember that just before the election, Kate welcomed people coming to the new Wal-Mart store on Woodlawn. It was the end of a long and costly legal battle to prevent the store from opening.
The opposition came from a consortium of trade unions that over 11 years, campaigned and financed the effort to stop Wal-Mart from opening stores in Canada, not just Guelph. In my view, the unions were close to restricting trade in claiming that Wal-Mart was a low paying operation for employees.
Just prior to the 2006 civic election, I approached the Guelph Mercury to write a column on the editorial page every three weeks called “Between the Lines.” It developed into a commentary that was critical of the city administration and operations. I was fired in 2011. The management of the paper did not like my new online blog. For that matter, neither did the Mayor or her administration.
Today, over a period of almost five years, I have written many columns for the Mercury and more that 1,000 posts on my blog, guelphspeaks.ca.
The City loses lawsuit against Urbacon Buildings Group Inc.
In 2014, I commented frequently on the case of Urbacon Buildings Group Inc. versus the City of Guelph. Simply, the city fired Urbacon September 18, 2008 ordering the company off the new city hall project. The building was 95 per cent completed. Still to be completed was the renovations to the old city hall into a provincial offenses court.
It was easy to remember that firing because it was my birthday.
Urbacon sued the city for $19.2 million. The city countersued for $5 million. The trial started in Superior Court January 2013 in Brampton.
As a result, the city lost the lawsuit in March 2014 brought by Urbacon. CAO Ann Pappert announced following the civic election in October, that the new city hall project cost $23 million more than the original contract of $42 million. The whole affair took more than six years to settle.
Mayor Karen Farbridge and some of her supporting councillors were either defeated or retired.
It was a shock to numbers of supporters that their leader was defeated.
This set the stage for revenge, and finger-pointing as to why it happened.
2015 became the year of administrative chaos
Two events occurred that affected taxpayers. First, there was the finalizing of the 2015 budget in which council approved a property tax increase of 3.96 per cent. This was done by a majority of councillors despite the new Mayor’s pledge to keep property tax increases to that of the Consumer Price Index. It was 1.11 per cent in 2014.
The second event was the launching of an investigation of a Ward 6 candidate who reported receiving $400 from the citizen’s activist group GrassRoots Guelph. Susan Watson, an NDP supporter and friend of the former Mayor, brought the action. The city committee hired an independent Toronto lawyer to investigate whether the GRG donation was legal or not. My wife and I were ordered to appear before him. His decision was conclusive and ruled the donation was legal.
The decision cost the city an estimated $11,000 and the initiator of the charge aimed at GrassRoots Guelph, Ms. Watson, was not held responsible.
Newly elected Mayor, Cam Guthrie, was forced to deal with a major problem that had not surfaced during the 2014 election. He also inherited a majority of council who were supporters of the Farbridge leadership and agenda.
Taking over as chair of Guelph Municipal Holdings Inc. (GMHI), he discovered that under the former mayor’s GMHI leadership of four years, there was evidence that it had lost millions. During the course of secret progress, GMHI also absorbed Guelph Hydro and its subsidiary, Envida Community Energy Inc.
For four years, two people were in complete control of the city Corporation, GMHI and Guelph Hydro Electric Services; the control corporation of all Guelph Hydro assets. Mayor Karen Farbridge and CAO Ann Pappert held all the lines of power. The downside was that most of the GMHI Board of Director’s meetings were conducted in closed-sessions.
There was no accountability, transparency or open government. Worse, nobody knew what was going on except for a clutch of chosen officials, including four members of city council, all Farbridge loyalists, who kept their mouths shut including, Councillors June Hofland, Karl Wettstein, Todd Dennis and Lise Burcher.
The irony was that many senior city staff was not aware of the GMHI situation. In July 2016, the city staff presented a devastating report detailing the true picture of the GMHI collapse and financial disaster.
GMHI was responsible for a variety of projects including installation of solar panels on public buildings, installing natural gas-driven pumps in the Sleeman Centre and Hanlon Business Park. The plan was to generate electricity and pump hot and cold water to five nearby buildings to the Sleeman Centre, from geo-thermal underground sources.
Later, GMHI purchased land from the city to build a natural gas, generating plant to help make Guelph self sufficient in power, currently sourced off the provincial grid.
The Guthrie administration held 42 closed-session council meetings in 2015 in the first year. What was discussed has never been revealed, nor has Ann Pappert’s participation.
Here’s what we do know
FACT: In August 2015, the General Manager of Human Resources said that Ms. Pappert requested payment of her unused sick day and vacation benefits. The GM, when asked by city Coun. Cathy Downer in August 2016 said that Pappert received a $27,000 retroactive performance bonus that was applied to her 2015 salary package. Ms. Pappert had left the city job May 26,2016.
FACT: We now know that Ann Pappert, Derrick Thomson, and Mark Amorosi divided $98,202 in 2015 with the bulk of it going to Ms. Pappert of some $37,000 over her 2014 salary. Not included in these figures are the taxable benefits that each received.
FACT: All these amounts were approved at a closed-session council meeting December 10, 2015. They were retroactive for 2015. DCAO Mark Amorosi confirmed this date. He later stated in a sworn affidavit, that council did not approve staff salary increases. Only the CAO performed that task. Who was the CAO December 10, 2015? It was Ann Pappert.
I attempted to obtain the minutes of that meeting and four months after making the request it was denied by the city’s special closed-session investigator. So much for accountability.
FACT: in late December, council, again in closed-session, approved a bylaw that indemnified all employees and elected officials by paying their legal expenses in their capacity as public employees or elected officials. To be clear, this bylaw, in my opinion, does not cover the case where the employee is paid to sue a citizen.
That being the case, that interpretation of the bylaw’s purpose was approved by the administration and used by Mr. Amorosi in his lawsuit against me. This precedent opens the door to become open season on anyone publicly criticizing the performance or disagreeing with public policies. Any employee or elected official could sue anyone with all legal expenses paid by the taxpayers.
FACT: Details of both these closed-session council meetings were not revealed to the public. The bylaw wording was available but no details of the discussions or a record of the votes cast.
Only a judicial inquiry into the GMHI failure and merger of Guelph Hydro with Alectra Utilities could reveal the answers. In my considered opinion, it is the only way to get at the truth of the mismanagement of the city’s business.
FACT: The three senior managers, in the 2015 provincial Sunshine List, published March 2016, were compared to the three salary levels in 2014 that revealed the $98,202 salary increases and taxable benefits.
FACT: CAO Ann Pappert resigned in April 2016 and vacated her job May 26, 2016.
FACT: Two devastating reports in May and July 2016 by GMHI and city staffs revealed the serious financial status of GMHI. It is noted that Ms. Pappert co-signed the May 16 report presented by Pankaj Sardana, her successor at GMHI as Chief Executive Officer with financial responsibilities.
The report was blunt in that it declared that GMHI was no longer a viable city-owned asset chiefly due to gross mismanagement and an unrealistic business plan. Just ten days later, Ms. Pappert gave notice of resignation.
FACT: In June 2016, Derrick Thomson was named Chief Administrative Officer of the city of Guelph. He announced he had agreed to a three-year contract earning $230,000 plus a taxable benefit of $11,300.
GMHI audit by KPMG shows a $66 million shareholder’s liability
Later, the accounting firm, KPMG audited the consolidated finances of GMHI and reported there was a $66 million shareholder’s liability. This was how the citizens of Guelph, through their council acting as shareholders, had financed GMHI for more than four years.
Both staff reports used the accounting term “impaired assets.” This meant that there was no possible way that GMHI could recover that $66 million because it operated at a loss and never repaid the principal or any interest advanced by the shareholders, that is city council. One curious wrinkle GMHI claimed was that it provided a dividend to the city for $1,500 annually.
Is it possible that the city was involved in a version of a Ponzi scheme, taking funds from one pocket and returning some of it back to another pocket?
Recapping the story so far
In 2010, following Ms. Farbridge’s re-election, GMHI, whose assets included ownership of the Guelph Junction Railroad right of way, became the corporation reflecting the mayor’s vision driven agenda.
This included creating changes in power sources, waste collection, delivering underground heating and cooling of water to five buildings, restricting vehicles to eliminate fossil-fueled emissions to help save the planet from destruction by humans.
One might say those ideas were admirable, ambitious but not affordable, as it turned out.
In fact, the cost was losing Guelph Hydro, an efficient, profitable and successful asset, to a private, third party organization for pennies on the dollar. The Guthrie administration stubbornly never explained why this asset was sold or the details of the so-called merger. While details of the deal were never disclosed, the deal closed in January, this year.
Simply put, this was a convoluted, secret operation controlled by the two top leaders of the city administration from 2011 to 2014. There were no checks or balances to oversee what was happening to GMHI, or Guelph Hydro. The city staff reacted as some of the details came out but it was too late.
A surprising pay out for services
FACT: Ms. Pappert, according to the March 2017 Sunshine List, was paid $263,000 for 2016 when she was employed for only five months.
FACT: In January 2016, prior to the publishing of his 2015 salary, Derrick Thomson resigned to take a job with the Town of Caledon.
FACT: In August 2016, I was served with a notice demanding an apology for comments made in guelphspeaks.ca, that was critical of Mark Amorosi’s role in the secret payout of $98,202 for Ms. Pappert, Mark Amorosi and Derrick Thomson. I declined, despite being threatened with a defamation lawsuit.
FACT: At the time of receiving the demand for an apology from Amorosi’s lawyer, I was not aware of the city’s indemnification bylaw of employees that was passed in closed-session in December 2015 and not made public.
Eventually, my counsel received a copy and it was clear that it applied only when an employee or elected representatives were faced with legal action as a result of their performance. Specifically, it did not cover any employee suing a citizen for defamation.
Comment: Accordingly, the citizens of Guelph are paying the legal bills of a former employee thereby supporting a lawsuit initiated by Amorosi against a citizen who has had to spend thousands of dollars to defend himself.
Is this the role of the city administration? To use public funds to support an employee who knew in advance his legal expenses would be paid by the city? Further, why are his legal bills being paid after being fired for cause? That occurred just two and one half months after filing his lawsuit.
Just wondering. Did the city pay former Chief Building Inspector Brice Poole’s legal expenses when he was forced to sue the city for wrongful dismissal? Guess that indemnification bylaw did not apply in that case.
Why do I get the feeling that the city did pay Mr. Poole a substantial settlement?
Begins a 32-month journey
FACT: On November 16, 2016. Mark Amorosi announced in a FrontPage story in the Mercury Tribune newspaper, that he was suing me for $500,000 for defamation and that the city of Guelph was paying his legal expenses.
The missing part was the city’s explanation why it was paying Amorosi’s legal costs.
FACT: Just 79 days later, Mr. Amorosi was fired for cause failing to oversee the leak of some 50,000 corporate and private emails to a Kitchener lawyer.
The lawyer represented Mr. Bruce Pool, whom the city fired because he questioned why some 50 city building projects did not apply for a building permit. He sued the city for $1 million for wrongful dismissal.
The Poole case was settled within three weeks once the errant emails were returned.
Wasn’t that in the public interest? Not so, a confidentiality agreement denied the results of the settlement.
Judgment Day Arrives
FACT: August 9, Justice Peterson, in her judgment denying the motion to dismiss the Amorosi claim, stated that the defamation evidence “outweighed” our argument that it was in the public interest.
FACT: The city is indemnifying an employee who didn’t like what was being written about his performance as Deputy Chief Administrative Officer (DCAO) as head of Finance and Human Resources.
Are public employees now immune from criticism or commentary?
Regardless, Chief Administrative Officer, Derrick Thomson, fired Amorosi, and then confirmed that the city would continue to pay his legal expenses regarding the lawsuit that he initiated, not the city.
FACT: Mr. Thomson was one of the three senior employees who divided the $98,202 in 2015. He left the city in March 2019 that was described as a “parting of the ways” by the city.
His unexplained departure followed the 2018 Sunshine List that showed his salary as $335,000. It was a $67,000 increase in one year. The List also revealed he received a taxable benefit of some $11,000.
Mayor Cam Guthrie described this bonus was in recognition of his work on the give away of Guelph Hydro to Alectra Utilities. But, Mr. Mayor, wasn’t that his job?
Now I’m asking anyone living in Guelph, who pays taxes and user fees to this city, if this lawsuit is fair, reflecting good management? Or was it revenge against a citizen blogger who questioned and commented on the administration for 13 years?
What possible precedent exists in Canada that makes such a guarantee to an employee dismissed immediately for cause? Amorosi’s sworn statement to the Judge was that he agreed to leave. If so, did CAO Thomson promise to keep paying his legal fees or other departure perks?
We’ll never know, as Thomson is no longer employed by the city.
Epilogue: in February 9, 2017, 85 days after launching the lawsuit, his former colleague, Derrick Thomson, fired Mark Amorosi. Ambrose’s sworn version of that day is that he agreed to leave.
Justice Peterson noted that three major news outlets, National Post, CBC Radio and Global News reported Amorosi was fired.
So, who benefited from this noble gesture? Why it’s Mark Amorosi.
What is this journey costing?
As of May 2018, in closed-session, council was advised the city had paid $30,000 toward Amorosi’s legal costs. That figure has increased as events occurred.
Today, it has cost me $71,000 to defend myself against a deep-pocketed corporation.
Together, the estimated costs today could total between $130,000 and $150,000.
This whole story is about the misuse of power, using public funds to destroy the reputation of a citizen who dared to criticize the elected officials who bungled their responsibilities. The enormity of the cost of this spiteful and dangerous attack is unprecedented in Ontario.
In my opinion, having been intimately involved in a lawsuit for almost three years, I am appalled that my adversary is being financed by the City of Guelph.
The city position is untenable. Despite claiming the lawsuit was a private matter between Amorosi and me, there is no doubt that the city administration supported this decision b because Mr. Amorosi stated in a newspaper article announcing the lawsuit that the city was paying for it.
The minutes of these closed-session meetings that council conducted are not available.
I don’t know who authorized the payments, even after he was fired. In his sworn testimony, Amorosi said that city council does not approve staff salary increases. If that is true, then who did agree to pay Amorosi’s legal expenses?
A senior member of the city administration had to be involved. According to Amorosi, the Chief Administrative Officer’s bylaw covering his responsibilities and rights to manage is permitted to approve or disapprove staff salaries.
The CAO appointed in June 2016 was Derrick Thomson, a colleague of Amorosi and former CAO Ann Pappert in sharing the $98,202 salary increases in 2015.
It should be noted that it wasn’t until March 2016, when the provincial Sunshine List published the 2015 salaries of every public employee in Ontario earning more than $100,000
All three of these senior managers made the list. When compared to the 2014 List, the increases were revealed.
I contend that this event was well known among members of city council, including Mayor Guthrie. The decision to support Mr. Amorosi was designed to shut me down.
I contend that these details were contained in my sworn affidavit requesting the lawsuit to be dismissed.
What do you think? I’d appreciate hearing from anyone regarding this situation.
I am the victim of this lawsuit, not Mr. Amorosi, (even though my taxes, and yours too, have been paying Amorosi’s legal expenses.)
There is a law in Ontario titled Strategic Litigation Against Public Participation or SLAPP. My motion to dismiss was based on the parameters of the SLAPP legislation.
The bottom line is we all lose. My only hope to recover our legal expenses is to have the Ontario Court of Appeals overturn Justice Peterson’s dismissal of my motion.
Stay tuned for more information