Court File No.

310-15
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:

THE CORPORATION OF THE CITY OF PETERBOROUGH

Plaintiff
- and -

MURRAY RODD and TIM FARQUHARSON

Defendants
STATEMENT OF DEFENCE
1.

The Defendants deny that the Plaintiff is entitled to the relief sought in Paragraphs 1 and
2 of the Plaintiffs Amended Statement of Claim.

2.

The Defendants admit the allegations contained in paragraphs 3-6, 8, 10-13, 26, 36 and
41-43 of the Plaintiffs Amended Statement of Claim.

3.

The Defendants deny the remaining allegations contained in the Plaintiffs Amended
Statement of Claim, except as explicitly admitted herein.

The Parties
4.

The Defendant, Chief Murray Rodd (Chief Rodd), is the Chief of the Peterborough
Police Service (the Service). At all material times prior to January 1, 2015, Chief Rodd
was the Chief of the Peterborough Lakefield Community Police Service (the
Predecessor Service).

5.

The Defendant, Deputy Chief Tim Farquharson (Deputy Chief Farquharson), is the
Deputy Chief of the Service. Deputy Chief Farquharson was sworn in as Deputy Chief of
the Predecessor Service on June 21, 2013.

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6.

The Plaintiff (hereinafter referred to as the City) is a City incorporated pursuant to the
Municipal Act, 2001. The City is not the employer of either of the Defendants.

Overview
7.

The Defendants current employer is the Peterborough Police Services Board (hereinafter
referred to as the Board).

8.

The City is responsible for funding the operations of the Board including debts owing by
the Board.

9.

The Board owes the Defendants over $460,000.00 pursuant to two awards of an arbitrator
made pursuant to the Arbitration Act, 1991, and a Judgment dated October 14, 2015,
from the Ontario Superior Court of Justice enforcing those awards (the Judgment).

10.

Weeks after the Judgment was granted, the City commenced this Action in an effort to
avoid paying the Judgment.

11.

The Action should be dismissed with costs payable on a substantial indemnity basis, for
the following reasons and as set out below:
(a)

the allegations contained in the Citys Amended Statement of Claim are false,
cannot be proven, and are made with the intention of publicly discrediting the
Defendants;

(b)

the Action is an abuse of process as the City is seeking to achieve what it was
unable to achieve in the arbitrations cited above; and

(c)

the Action is statute-barred by reason of the limitation period.

Background
12.

At all material times prior to January 1, 2015, the Defendants employer was the
Peterborough Lakefield Police Services Board (the Predecessor Board).

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13.

From January 1, 1999 until December 31, 2014, policing services in Peterborough were
provided by the Predecessor Board, which was responsible for the Predecessor Service.
The Predecessor Board provided policing services both to the City of Peterborough and to
the Township of Selwyn (Selwyn), under an Amalgamation Agreement.

14.

The City appointed members of both the Predecessor Board and the Board at all material
times, in order to represent its interests.

15.

At various points in time certain members of these boards, who have been appointed by
the City, have exhibited a pattern of threatening or vexatious conduct toward the
Defendants. For example, the current Mayor of the City (the Mayor) was a member of
the Predecessor Board in 2011 and 2012. Following an investigation, the Ontario Civilian
Police Commission (the Commission) released a decision on April 22, 2015, removing
the Mayor for 11 counts of inexcusable misconduct, including his ceaseless
undignified attacks on the Predecessor Board, the Predecessor Service and Chief Rodd.

16.

Other members appointed by the City have made remarks of a threatening nature with
respect to the Defendants.

17.

It is the Defendants belief that the within Claim constitutes a continuation of this
campaign of vexatious conduct that has been directed toward them.

Contractual History and Dissolution of Service Clauses

18.

Chief Terrence McLaren was Chief of the Predecessor Service immediately prior to the
appointment of Chief Rodd to that role. Chief McLarens 2007-2008 contract of
employment provided that if the Predecessor Service was to cease to exist, and Chief
McLaren was not offered a post at the rank of Inspector or above, he would be entitled to
a payment equal to 24 months salary. Chief McLarens contract further provided that,
additionally, Chief McLaren would receive a payment equal to 12 months salary in the
event that the Predecessor Service was to cease to exist and he was to lose the rank of
Chief of Police.

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19.

Deputy Chief Stephen Streeter was the Deputy Chief of the Predecessor Service from on
or about June 1, 2009 up to on or about June 30, 2013. From on or about June 8, 2010
until the termination of his employment as Deputy Chief, each of Deputy Chief Streeters
contracts of employment incorporated severance terms that were similar in all material
respects to those included in the contracts of employment of Chief Rodd from 2010
onwards, and of Deputy Chief Farquharson.

20.

The Predecessor Board was aware of the existence of the dissolution of service clauses in
Deputy Chief Streeters contracts. In a report addressed to the Predecessor Board in
March 2013, it was noted that the same clause would be included in Deputy Chief
Farquharsons contract. It was also noted that such clauses were becoming increasingly
common. Garth Wedlock, the Citys citizen appointee to the Predecessor Board, was
present at the meeting during which the Predecessor Board received such report. The
Mayor was absent from this meeting as a result of the above-noted investigation into his
conduct.

21.

On or about July 9, 2008, the Predecessor Board and Chief Rodd entered into a contract
of employment, under which Chief Rodd was appointed Chief of Police with effect from
August 15, 2008. This contract of employment incorporated dissolution of service clauses
that were materially different from those that appeared in the contract of employment of
Chief McLaren, referred to above. Notably, if the Predecessor Service was to cease to
exist and Chief Rodd was appointed to a new position with the new police service, Chief
Rodd would receive the difference between his previous salary and the salary of such new
position for 24 months or for the balance of the contract, whichever occurred first.
Additionally, if the position offered to Chief Rodd with the new service was not the
position of Chief of Police, or if Chief Rodd was offered a position and did not accept
such position, Chief Rodd would receive 12 months salary. In the event that Chief Rodd
was not offered a position with the new service, he would receive two years salary.

22.

During the negotiation of his contract of employment with the Predecessor Board dated
April 13, 2010, Chief Rodd requested amendments to the dissolution of service
provisions in order to bring his overall terms and conditions of employment more broadly

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in line with those that had been enjoyed by Chief McLaren, with appropriate changes
given Chief Rodds age and length of service. Throughout these negotiations, the
Predecessor Board was represented by legal counsel. This contract was signed by Dr.
Thomas H.B. Symons, C.C., O.Ont., F.R.S.C., LL.D., Chair of the Predecessor Board and
the Citys citizen appointee.
23.

The Mayor and the Citys citizen appointee, Robert Lightbody, a retired lawyer, were
present at the meeting of the Predecessor Board during which it considered and approved
Chief Rodds contract of employment dated April 12, 2011. That contract incorporated
materially similar dissolution of service terms to those that appeared in Chief Rodds
April 2010 contract.

24.

The Citys citizen appointee, Garth Wedlock, was present at the meetings of the
Predecessor Board during which it considered Chief Rodds contract of employment
dated April 16, 2014. That contract incorporated materially similar dissolution of service
terms to those that appeared in Chief Rodds April 2010 and April 2011 contracts. The
Mayor was absent from this meeting as a result of the above-noted investigation into his
conduct. Mr. Wedlock and Councillor Dan McWilliams, the Citys appointee to the
Predecessor Board, were present at the meeting when Chief Rodds April 2014 contract
was approved.

25.

Deputy Chief Farquharson entered into a contract of employment dated April 29, 2013
with the Predecessor Board. The terms regarding dissolution of service in such contract
were similar in all material respects to those that had been included in the contracts of
employment of Chief Rodd and Deputy Chief Streeter from 2010 onwards. Garth
Wedlock, the Citys citizen appointee to the Predecessor Board, was present at the
meeting during which the Predecessor Board considered and approved Deputy Chief
Farquharsons contract dated April 29, 2013. The Mayor was absent from this meeting as
a result of the above-noted investigation into his conduct.

26.

Mr. Wedlock and Councillor McWilliams were present at the meetings of the Predecessor
Board during which the Predecessor Board considered and approved Deputy Chief
Farquharsons contract of employment dated August 6, 2014, which incorporated

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materially similar dissolution of service terms to those that appeared in Deputy Chief
Farquharsons April 2013 contract.
27.

As will be explained below, the City was, or ought to have been, aware of the existence
of terms in the Defendants contracts of employment providing for severance payments
upon dissolution of the Predecessor Service, well before October 2014.

De-amalgamation of the Predecessor Service & Lack of Due Diligence

28.

In the course of 2012, the City considered terminating the Amalgamation Agreement
under which the Predecessor Board provided policing services in both Peterborough and
Selwyn.

29.

The City failed to properly examine the costs associated with termination of the
Amalgamation Agreement and the associated de-amalgamation of the Predecessor
Service.

30.

On or about November 21, 2012, Chief Rodd advised the Citys Director of Corporate
Services that the proposed de-amalgamation would result in a significant decrease in
revenue, in the form of lost contributions to the policing budget from Selwyn. This
decrease in revenue would not be offset by any savings. Nevertheless, in December 2012,
the City gave notice terminating the Amalgamation Agreement. This termination was to
take effect no later than December 31, 2014.

31.

Following the Citys decision to terminate the Amalgamation Agreement, the Defendants
were aware of rumours that, despite any outward assurances to the contrary, the City
intended to reduce the size of the police service once the Predecessor Service was
replaced.

32.

The City did not give meaningful assurances as to whether any member of the
Predecessor Service would be dismissed as a result of the de-amalgamation. The City was
not in a position to give assurances relating to labour and employment issues involving
the Predecessor Service or the Service. Municipal governments are not the employers of
municipal police officers. Rather, municipal police services boards are the employers of

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those officers. Such boards appoint members of the police force, including the Chief and
Deputy Chief, and make decisions regarding the size of the police force.
33.

The Police Associations reasonably voiced their concerns about severance issues to the
Commission. The Predecessor Board also raised concerns about such issues with the
Commission.

34.

Sandra Clancy, Director of Corporate Services of the City, wrote to Chief Rodd on
October 22, 2013, attaching a document entitled 2014-2023 Capital Budget
Justification. Ms. Clancy drew Chief Rodds attention to the Citys estimate of the costs
of de-amalgamating the Predecessor Service, which was $250,000. She asked whether
Chief Rodd was comfortable with the Citys statement in the section of that document
entitled Effects on Future Operating Budgets. That section outlined the fact that the
revenue stream related to Selwyns contribution to the Citys policing budget would
cease upon de-amalgamation and that there would be no significant reduction in
expenditures.

35.

Chief Rodd replied to Ms. Clancy on October 22, 2013, through his assistant, and advised
that he was comfortable with what [was] being said and that [it reflected] the truth of the
matter. It is denied that Chief Rodds reply to Ms. Clancy was deficient or deceitful in
any way. In particular, it is denied that Chief Rodd deliberately, wilfully and purposely
failed to bring the provisions in his and in Deputy Chief Farquharsons contracts of
employment relating to severance payments on dissolution of the Predecessor Service to
Ms. Clancys attention. In this regard:
(a)

The uncertainty inherent in the $250,000 estimate was reflected in the document
itself, as that estimate was expressly stated to be an early estimate that may be
refined as detailed discussions occur during 2014.

(b)

At the time Chief Rodds email to Ms. Clancy was written, neither of the
Defendants was aware that the proposed de-amalgamation would trigger the
severance payment clauses in their contracts of employment.

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(c)

At the time, the City was outwardly stating that the only change occurring was a
change in the name of the Predecessor Service. There was no indication from the
City that the Predecessor Service and the Predecessor Board would be dissolved.
Accordingly, Chief Rodd had no reason to contemplate or address any issues
relating to severance-related costs in his reply.

(d)

The comments made by Chief Rodd were, in any event, focused on the statements
regarding the significant drop in revenue that was projected to result from the deamalgamation. Ms. Clancy had specifically requested his confirmation that he was
comfortable with the remarks in that section of the document.

36.

The Defendants are not responsible for any failure on the part of the City and/or the
Predecessor Board to prepare proper estimates of the cost of de-amalgamation, as alleged
or at all. In this regard:
(a)

As set out above at paragraph 35, Chief Rodd did not deliberately fail to mention
any costs associated with de-amalgamation.

(b)

The Predecessor Board was statutorily responsible for budgeting matters,

including the submission of estimates in a format, and according to a timetable, to
be determined by the City. These matters were not the responsibility of either of
the Defendants.

(c)

The City was aware at all material times that:

(i)

the $250,000 figure was an early estimate; and

(ii)

that there were expenses relating to de-amalgamation that did not fall
within that estimate. For example, Ms. Clancy stated in a letter to the
Predecessor Board dated February 18, 2013 that the estimate did not cover
any legal fees.

(d)

The Predecessor Board was the employer of the Defendants at all material times
up to and including December 31, 2014. The Predecessor Board negotiated and
agreed to the Defendants contracts of employment. The Predecessor Board was

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aware of both the presence of the dissolution of service provisions in the

Defendants contracts of employment and of the potential liabilities associated
with those provisions. The potential liabilities were specifically discussed at the
Predecessor Boards meeting on October 25, 2013. The Predecessor Board noted
that the City was unaware of such liabilities. To the extent that the City made any
decisions on the basis of incomplete information about the dissolution of service
clauses, it is the City itself and/or the Predecessor Board, which are responsible
for any such ignorance.
(e)

The City failed to communicate with the Predecessor Board in or about the
autumn of 2013 in relation to de-amalgamation budgeting matters. This was the
case despite the fact that the City was reminded by the Defendants and the
Executive Assistant to the Predecessor Board that the Predecessor Board was
responsible for budget matters and needed to be included in communications
concerning budgeting in June 2013.

(f)

The City had access to the Defendants contracts of employment at all material
times. At any given time, up to two members of the Predecessor Board were
appointed by the City. Such appointees included the Mayor, who sat on the
Predecessor Board in 2011 and 2012 before he was removed for misconduct. The
Mayor has publicly conceded that any member of the Predecessor Board had the
ability to view the contracts of employment of the Chief and Deputy Chief. In
fact, members of the Predecessor Board participated in the negotiation of the
Defendants contracts of employment. Further, Mr. Wedlock was present during
the part of the meeting on October 25, 2013 pertaining to the liabilities associated
with the dissolution of service clauses; the Defendants were absent during that
part of the meeting. The Mayor was absent from this meeting as a result of the
above-noted investigation into his conduct.

37.

The Predecessor Board put the City on notice of the potential liability associated with the
dissolution of service clauses in the Defendants contracts of employment on or about
November 21, 2013. In a letter bearing that date, David Migicovsky, counsel to the

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Predecessor Board, advised Brian Horton, Chief Administrative Officer of the City, that
the Defendants had severance entitlements that were additional to any severance that
would be owing to other employees of the Predecessor Board. Mr. Migicovskys letter
specifically alerted Mr. Horton to the Citys responsibility to ensure that the Predecessor
Board had sufficient resources to cover future severance costs associated with deamalgamation, and that such costs may be significant. Mr. Migicovsky invited Mr.
Horton to contact Mr. Migicovsky with any questions. There is no question that the City
was or ought to have been aware that severance entitlements of the Defendants may be
triggered by the proposed de-amalgamation from the time of Mr. Migicovskys letter.
38.

On or about March 6, 2014, the Predecessor Board met and acknowledged that the
$250,000 estimate of the costs of de-amalgamation was inadequate. The Predecessor
Board specifically considered the dissolution of service clauses in the Defendants
contracts of employment in the course of discussing this matter. Mr. Wedlock was
present during such meeting. The Mayor was absent from this meeting as a result of the
above-noted investigation into his conduct.

39.

On or about May 30, 2014, representatives of the City, the Predecessor Board, and the
Police Associations representing certain employees of the Predecessor Board, attended a
meeting to discuss the de-amalgamation. The Defendants also attended the meeting on
that date. In the course of this meeting, Mr. Migicovsky again raised the issue of the
severance provisions in the Defendants contracts of employment, and stated that the
Predecessor Board had unbudgeted obligations. Peter Thorup, counsel to the City,
refused to discuss issues related to the Defendants contracts of employment during the
meeting.

40.

On or about June 9, 2014, Mr. Thorup sent a letter to Mr. Migicovsky in which Mr.
Thorup requested that the Predecessor Board provide agreements setting out conditions of
employment for non-union employees of the Predecessor Board. This request explicitly
contemplated that the Predecessor Board would obtain the consent of the employees for
such information to be provided. At no time was the consent of either Defendant to the
provision of such agreements sought by the Predecessor Board. At no point were the

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Defendants asked by the City directly for their contracts. In any event, on or about June
17, 2014, Mr. Migicovsky wrote to Mr. Thorup and declined to provide copies of those
agreements, on the basis that the Board had not yet been appointed.
41.

On or about September 9, 2014, the Defendants attended a meeting of the Predecessor

Board, which was also attended by Mr. Wedlock and Councillor McWilliams. It is denied
that during such meeting, the Defendants deliberately or wilfully failed to advise the
Predecessor Board of their alleged entitlements under the dissolution of service
provisions in their contracts of employment. In this regard:
(a)

In the circumstances, there was no need for the Defendants to draw such terms to
the Predecessor Boards attention. Notably:
(i)

the Predecessor Board was the employer of both Defendants, was a party
to each Defendants contract of employment and negotiated such
contracts. As such the Predecessor Board was, at all material times, fully
aware of the Defendants conditions of employment, including the terms
relating to dissolution of service; and

(ii)

the Predecessor Board had specifically noted that the de-amalgamation of

the Predecessor Service might trigger the dissolution of service provisions
in the Defendants contracts of employment in October of 2013.

(b)

At the meeting on September 9, 2014, the Predecessor Board considered

severance arrangements relating to unionized members of the Predecessor
Service, and to the Executive Assistant. The Defendants terms and conditions of
employment fell outside the scope of such meeting, and it would not have been
appropriate to discuss such terms and conditions on that occasion.

42.

Regarding the in camera meeting of the Predecessor Board on October 14, 2014, which
was attended by Councillor McWilliams:

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(a)

The Defendants delivered letters dated October 9, 2014 to the Predecessor Board,
claiming their entitlements under the dissolution of service provisions in their
contracts.

(b)

In the course of the meeting, Chief Rodd said that Chief McLaren, Deputy Chief
Streeter and Deputy Chief Ken Jackman, who was Deputy Chief of the
Predecessor Service prior to the appointment of Deputy Chief Streeter, also had
dissolution of service provisions in their contracts of employment. It is denied that
the Defendants misled the Predecessor Board in any way.

(c)

At all material times, the Predecessor Board was, or ought to have been, aware of
the terms of employment of the Defendants and their predecessors, as it was a
party to their contracts of employment. Further, the Predecessor Board was aware
that the de-amalgamation might trigger the dissolution of service provisions in
those contracts .

(d)

It is denied that Chief Rodd made the amendments to his employment contract
resulting in the Dissolution of Service Clauses. These clauses were the result of
negotiations between each of the Defendants and the Predecessor Board, which
freely agreed to such clauses with the benefit of independent legal advice.

43.

It is denied that Chief Rodd presented a budget for the Service for the 2015 budget year
to the Citys Council in or about the autumn of 2014. The Services 2015 budget was
presented to City Council by the Boards Finance Committee Chair. Chief Rodds role in
the course of the meeting was to answer operational questions. Further:
(a)

Preparation of the Services budget is the statutory responsibility of the Board and
the City. Chief Rodd is not responsible for the preparation of the Services
budget.

(b)

Both the Predecessor Board and the Board were operating in the autumn of 2014.
At that time both were aware of the terms relating to dissolution of service in the
Defendants contracts of employment. To the extent that provision for any
severance payments connected to those terms was absent from the 2015 budget

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for the Service, that absence is attributable to the Board or Predecessor Board. In
any event, the 2015 budget was not finalized until well into 2015, by which time
the potential liabilities related to such payments were abundantly clear since the
matter had been referred to arbitration.
(c)

Further or in the alternative, in the autumn of 2014, the City was aware for some
time that the Defendants contracts of employment contained terms providing for
severance payments upon dissolution of the Predecessor Service. Accordingly, to
the extent that provision for any severance payments arising as a result of such
terms was absent from the 2015 budget for the Service, such absence is
attributable to the City.

44.

The Defendants did not breach any obligation to report costs relating to the dissolution of
service clauses in their contracts of employment during deliberations relating to the 2013,
2014 and 2015 budgets of the Predecessor Service and the Service, as alleged or at all. In
this regard:
(a)

The preparation of the Services budget is the responsibility of the Board and the
City. The Defendants are not, and never have been, responsible for the
preparation of the budgets of the Predecessor Service or of the Service.

(b)

Neither of the Defendants was certain that any payment might be triggered by the
proposed de-amalgamation until May 30, 2014, when it became apparent that the
City was going to proceed with a disbandment of the Predecessor Service.

(c)

Since at least November 2013, the City was aware of the existence of terms
relating to dissolution of service in the Defendants contracts of employment.
Further, the Predecessor Board and the Board were at all material times aware of
such terms. Accordingly, to the extent that provision for any severance payments
was absent from the 2014 budget for the Predecessor Service or the 2015 budget
for the Service, this absence is attributable to the Board or Predecessor Board, or
to the City.

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(d)

To the extent that it was necessary or appropriate to provide for any severance
payments arising as a result of the proposed de-amalgamation in the 2013 budget
for the Predecessor Service, it was the responsibility of the Predecessor Board and
the City to do so.

45.

It is denied that, had the City been aware of the terms relating to dissolution of service in
the Defendants contracts of employment, such awareness would have affected the Citys
decisions. As set out above, the City knew or ought to have known about the existence of
the terms relating to dissolution of service in the Defendants contracts of employment
from, at the latest, November 21, 2013. The City carried on with its de-amalgamation
plans regardless of its awareness of the potential severance costs, and in the face of the
explicit warning from Chief Rodd that de-amalgamation would lead to a significant
reduction in revenue.

Arbitration Proceedings
46.

On or about December 17, 2014, each of the Defendants entered into employment
contracts with Board with effect from January 1, 2015. Such contracts incorporated
dissolution of service terms that were materially similar to those that appeared in the
Defendants contracts of employment with the Predecessor Board executed earlier in
2014. The Board also agreed to assume any liabilities arising in relation to the dissolution
of service clauses in the Defendants contracts of employment with the Predecessor
Board. Further, the parties agreed to refer any disputes relating to such clauses to
mediation/arbitration.

47.

A dispute arose between each of the Defendants and the Board relating to the
interpretation of the dissolution of service clauses in the Defendants contracts of
employment with the Predecessor Board. The Defendants wrote to the Board on or about
January 29, 2015 to express their desire to refer such disputes to arbitration. The
arbitration of this matter took place on May 6 and June 8, 2015 before Arbitrator Richard
McLaren.

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48.

Arbitrator McLaren dismissed the Citys application for standing to intervene in the
arbitration proceedings. Chief among the Arbitrators reasons for dismissing the Citys
application was that there was no evidence that the Citys interests were not represented
by the Board, of whom the City appointed three of five members, and that the City was
excluded under the PSA from interfering with the contractual relationship between the
Board and the Defendants. It is denied that the City did not have representation on the
Board or the Predecessor Board. The City had at least one appointed representative on the
Board or the Predecessor Board at all material times, and has had two or more
representatives on such boards for the majority of the period from 2010 to late 2015. As
mentioned above, the Mayor was a member of the Predecessor Board before his removal
by the Commission for misconduct.

49.

On June 22, 2015, Arbitrator McLaren issued his award, finding that the Defendants were
entitled to severance payments under the dissolution of service clauses in their contracts
with the Predecessor Board. On July 17, 2015, Arbitrator McLaren issued a
supplementary award quantifying the payments the Board was required to make to the
Defendants.

50.

Following the release of Arbitrator McLarens decision, representatives of the City made
several statements to the media. On or about July 29, 2015, the Defendants held a press
conference to discuss the now very public outcome of the arbitration proceedings. The
Defendants statement at such press conference to the effect that the parties to the
Defendants employment contracts were aware of the terms of those contracts was not
misleading to the public, nor was the Defendants statement that the Predecessor Board
had attempted to bring the Defendants contracts of employment to the attention of the
City as early as November 2013. The press conference held by the Defendants was for
media organizations. Representatives of the City, which is not a media organization,
attended the press conference uninvited. As a gesture of goodwill, the Defendants
permitted the Citys representatives to attend the press conference. The Defendants were
unable to provide media packages to the Citys representatives, as the Defendants had
only prepared sufficient copies of such package for the invited media organizations.

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51.

After the Board informed the Defendants that it would be refusing to pay the amounts
ordered by Arbitrator McLaren, the Defendants brought an application before this
Honourable Court to enforce Arbitrator McLarens award and supplementary award.
Such application was heard on September 25, 2015 and, as noted above, the Judgment, in
favour of the Defendants, was granted on October 14, 2015. The Board has not complied
with this Judgment and has shown no intentions of doing so.

52.

The Board has brought an application for judicial review of Arbitrator McLarens award
and supplementary award, notwithstanding the private nature of the award. This
application has yet to be listed for a hearing, despite a request by the Defendants counsel
for the Board to agree to dates for a hearing.

Response to Specific Allegations in the Citys Amended Statement of Claim

53.

For the reasons given above, the City was or ought to have been aware of the potential
liabilities arising from the dissolution of service provisions in the Defendants contracts
of employment from November 2013 at the latest. In any event, any failure on the part of
the City to inform itself as to the costs of de-amalgamation is not attributable to the
Defendants.

54.

There has been significant negative media coverage of the Defendants, as well as the
City. This includes the reporting of negative remarks made about the Defendants by the
Mayor.

55.

The Defendants have not brought discredit upon the City or upon the Service. Rather, as
the Commission found, it is the conduct of the Mayor that has undermined confidence in
policing in Peterborough.

56.

The Defendants did not deliberately or wilfully conceal payments arising out of the
dissolution of service clauses from the City.

57.

The Defendants are dedicated and proud police officers. Each of the Defendants has acted
consistently with his Oath of Office at all material times. At no time has either Defendant
failed to carry out his duties faithfully and impartially.

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No Misfeasance in Public Office

58.

Neither of the Defendants has engaged in deliberate or unlawful conduct in their

capacities as public office holders, knowingly or otherwise. Any liabilities incurred by
the City arising from the dissolution of service clauses in the Defendants contracts of
employment were triggered by the Citys decision to de-amalgamate the Predecessor
Service. Further, such clauses were negotiated and agreed with the Predecessor Board and
the Board, both of which had the benefit of independent legal advice.

No Breach of Fiduciary Duties or Duty of Good Faith

59.

Neither of the Defendants has breached any fiduciary duty or any duty of good faith, as
alleged or at all. In this regard:
(a)

The Defendants acted in good faith at all material times.

(b)

At no time was either Defendant in a conflict of interest.

(c)

The Defendants did not breach any fiduciary obligation, whether owed to the City
or to any other person or entity, as alleged or at all.

(d)

The Defendants did not breach any duty of good faith, whether owed to the City
or to any other person or entity, as alleged or at all.

(e)

(f)

Further or in the alternative:

(i)

Neither of the Defendants owes any fiduciary obligation to the City.

(ii)

Neither of the Defendants owes any duty of good faith to the City.

Further or in the alterative, the City was on notice that its proposals might trigger
the dissolution of service clauses in the Defendants contracts of employment. It
was open to the City to conduct due diligence with respect to this, including
making appropriate enquiries about the terms and conditions of the Defendants
contracts of employment, at any time. To the extent that the City chose not to

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conduct this minimal due diligence and instead made decisions in ignorance, it is
the City who is responsible for any such ignorance.
(g)

Further or in the alternative, the Predecessor Board and the Board are the
guardians of the Citys interests in matters relating to the employment of the
Defendants. The Predecessor Board and the Board negotiated the Defendants
contracts of employment and were, at all material times, aware of the terms of
such contracts, including the dissolution of service provisions. To the extent that
the City made any decisions in ignorance of the dissolution of service provisions
in the Defendants contracts of employment, which in any event is denied, it is the
Predecessor Board and the Board who were responsible for any such ignorance,
and not the Defendants.

No Breach of the PSA

60.

Neither of the Defendants has committed misconduct under the PSA, nor has either of the
Defendants breached the PSA, or the Code of Conduct in Regulation 268/10 thereunder,
as alleged or at all.

61.

Further or in the alternative, this Honourable Court has no jurisdiction to make any
determination relating to alleged misconduct under the PSA.

62.

The Defendants rely on the Police Services Act, RSO 1990, c P.15 and Regulation 268/10
thereunder.

No Damages
63.

The City has not suffered the damages alleged, or any damages. The City is put to strict
proof in this regard. Further or in the alternative, if the City has suffered any losses,
which is denied, such losses are attributable to one or both of the following:
(a)

the Citys failure to inform itself of the liabilities associated with the dissolution
of service clauses in the Defendants contracts of employment; and

- 19 -

(b)

the failure of the Predecessor Board and the Board to inform the City of the
liabilities associated with the dissolution of service clauses in the Defendants
contracts of employment.

64.

In the event that this Honourable Court finds that the City has suffered any damages,
which is denied:
(a)

the Predecessor Board or the Board are vicariously liable for torts committed by
either or both of the Defendants; and

(b)

the councils of the City and/or the Township of Selwyn are responsible for
liabilities for which the Predecessor Board or the Board are vicariously liable,

and in this regard, the Defendants rely on the Police Services Act, RSO 1990, c P.15.
65.

In the event that this Honourable Court finds that the City has suffered any damages,
which is denied, the City has failed to mitigate those damages.

66.

The City is not entitled to punitive damages, or to any damages, as alleged or at all. The
misconduct alleged in the Citys Amended Statement of Claim, which in any event is
denied, does not amount to high handed or capricious disregard of the Citys interests.

Claims Are Statute Barred

67.

As noted above, all of the claims in the Citys Amended Statement of Claim are denied.
Further, the limitation period for parts of the Citys claim has now lapsed.

68.

All of the allegations contained in the Citys Amended Statement of Claim that pertain to
conduct that occurred on or before December 23, 2013 are statute-barred.

69.

The City knew or ought to have known of facts that could ground a cause of action well
before December 23, 2013. To the extent that the City was aware of the dissolution of
service provisions in the Defendants contracts of employment, it was also aware of the
alleged misconduct on the part of the Defendants, notably of their alleged concealment of
such provisions, which misconduct is denied. In this regard:

- 20 -

(a)

The Citys claim that it only became aware of the Defendants entitlement under
the dissolution of service clauses on October 22, 2014 is denied.

(b)

Further or in the alternative, any member of the Predecessor Board, including

those members appointed by the City, could have viewed the Defendants
contracts of employment at any time.

70.

The Defendants rely on the Limitations Act, 2002, SO 2002, c 24, Schedule B, as
amended.

71.

The Defendants ask that this action be dismissed with costs on a substantial indemnity
basis.

February 4, 2016

JOHNSTONE & COWLING LLP

441 Jarvis Street
Toronto, Ontario M4Y 2G8
Ian B. Johnstone
LSUC No. 41356B
Alexander J. Sinclair
LSUC No. 62028U
Tel: (416) 546-2103
Fax: (416) 546-2104
Lawyers for the Defendants

TO:

FILION WAKELY THORUP ANGELETTI LLP

620A Richmond Street, 2nd Floor
London, Ontario N6A 5J9
Peter J. Thorup
LSUC No. 21886L
Tel: (519) 433-7270
Fax: (519) 433-4453
Casey M. Dockendorff
LSUC No. 51391E
Tel: (519) 433-7270
Fax: (519) 433-4453
Lawyers for the Plaintiff