Jim Karygiannis lost his city council seat due to clerical error, lawyer tells court

Former Scarborough city councillor Jim Karygiannis's lawyer appeared in court Thursday after his client was removed from council earlier this month over an election expense violation. Coun. Karygiannis has called the issue a "clerical error."

Former councillor was kicked out in early November after exceeding expense limit by over $25K

Jim Karygiannis is fighting to win back his seat on Toronto city council after being removed earlier this month over an election expense violation. (Rob Krbavac/CBC)

An Ontario Superior Court judge heard Jim Karygiannis's bid to win back his Toronto city council seat on Thursday, about two weeks after he was removed for overspending during last year's municipal election.

Earlier this month, Ulli Watkiss, the city's clerk, served notice to Karygiannis stating he is no longer the councillor for Ward 22, Scarborough-Agincourt, due to the supplementary financial statement he filed following last October's election.

That statement included spending that the clerk says exceeded his expense limit by almost $25,000. Karygiannis has said it was for a fundraising dinner party that took place after the 2018 municipal election. 

Karygiannis's lawyer, Sean Dewart, argued in court that the dinner was miscategorized and the former councillor merely listed it incorrectly. Dewart said there was no attempt to hide the spending, a clear sign that Karygiannis wasn't trying to deceive anyone. Karygiannis was not in court Thursday.

Provincial rules set a limit on the amount of candidates can spend in an election. For Ward 22 last year, that total was $61,207.95, with a maximum of 10 per cent — or $6,120.80 — to be spent for "parties and other expressions of appreciation" after voting day.

Watkiss said Karygiannis filed expenses under "parties and other expressions of appreciation" showing that he spent $32,083.50, which exceeds the expense limit by $25,962.70.

That overspending led to Karygiannis's immediate removal from office. 

Adam Challef filed the application for a compliance audit of Karygiannis' expenses that led to his removal, pointing out Karygiannis raised over $217,000 during the election.

Challef, the City of Toronto and Watkiss are listed as respondents in the case. 

Not 'an isolated infraction' 

According to the respondents' argument, Karygiannis's removal from office "was not the result of an isolated infraction." 

Karygiannis had a pattern of violations in which he "disregarded campaign finance laws," the respondents' affidavit alleges.

It claims Karygiannis was being kicked out for three offences in particular: failure to file a return, overspending, and not remitting a campaign surplus. 

The respondents' court application notes that Karygiannis may have been given incorrect information from the city clerk regarding raising funds and remitting a surplus, but says he has not produced any evidence from his accountant that the expenses were misclassified. 

Mismatched expenses

Karygiannis says he had a dinner party on Dec. 21, 2018 for people who wanted to contribute to his campaign. He calls the dinner party a fundraiser. 

The expenses of the party totalled $27,803, according to the court filing. Karygiannis also apparently held a victory party upon winning the election which totalled $5,000. 

In his court application obtained by CBC Toronto, Karygiannis claims "some expenses are not subject to the spending limits, including expenses incurred for the purpose of raising campaign funds." Under the Municipal Elections Act, candidates were allowed to raise funds after the election campaign ended on Dec. 31, 2018. 

The former councillor argues that the expenses for the party should be considered as fundraising, and not a part of the general spending limit. Karygiannis claims he was audited by his own accountant, who verified his financial statements.

However, Chaleff says dinner expenses "were subject to the spending limit of appreciation after voting day."

Once the compliance audit was conducted, Karygiannis says he filed a a supplementary financial statement. He says he had to re-open his campaign for one week to raise funds related to the compliance audit.

The supplementary financial statement saw the dinner costs moved to a line for parties and "other expressions of appreciation." That category has a spending limit of $6,120.80.

He further claims that the supplementary financial statement contained an error that made it seem that the "total expenses for the parties and other expressions of appreciation were $32,083.50," which included the sum of the $5,000 for the victory party and the December dinner party." 

Karygiannis claims only his victory party expenses should have appeared on that line, with the dinner party expenses appearing on the line for fundraising.

In court Thursday, city lawyers said the decision to remove Karygiannis isn't negotiable, since the expense violated provincial legislation. 

Justice William Chalmers said he would "endeavour" to reach a decision by Tuesday  — the same day city council is set to discuss the vacancy. 

"But I'm not making any promises," he said. 

with files from Nick Boisvert