Repeated conflict-of-interest breaches won’t cost RM councillor his seat

Despite those findings, Sinclair concluded the breaches resulted from “inadvertence or honest mistake” – a finding that required the application to be dismissed under The Municipalities Act.

The case also exposed a broader issue with how the RM had been handling conflicts of interest.

Much of the dispute centred on Steen Lake Ventures, a company for which Degenhardt performed seasonal winter work and which received gravel-hauling contracts and payments from the RM.

Sinclair found Steen Lake Ventures was Degenhardt’s employer for the purposes of the Act during the relevant periods, including the off-season. The judge found council’s decisions involving the company were substantive and could materially benefit Degenhardt’s employer.

On several occasions, Degenhardt declared a conflict and did not vote on matters involving Steen Lake Ventures but remained in the room. He also failed to declare conflicts on two occasions when council approved payments to the company.

The court also found Degenhardt breached the Act during a February 2023 text-message conversation with council members by sending messages that were at least implicitly supportive of Steen Lake Ventures’ gravel-hauling bid while he had a conflict of interest.

Another breach involved a $650 compensation request for brushing near land Degenhardt rented and shared with his father. The court found he stood to benefit financially from the decision. Degenhardt declared a conflict and did not vote but remained in the room.

Under the Act, councillors with a conflict must declare it, disclose its general nature, abstain from voting and refrain from participating in discussion. With limited exceptions, they must also leave the room until discussion and voting are finished. They cannot try to influence the matter.

Evidence before the court showed the RM had a longstanding practice in which councillors with conflicts would abstain from voting and decision-making but generally did not physically leave the room unless a matter involved direct personal gain.

Degenhardt’s account of that practice was consistent with affidavits from four others, according to the judgment.

“Obviously, the RM’s customs and practices were inconsistent with the Act,” Sinclair wrote.

“I accept though that Mr. Degenhardt did not understand what was required by the Act. He took many of the steps set out in the Act but failed to take the last required step of leaving the room.”

Sinclair also accepted Degenhardt believed his text messages concerning the gravel-hauling bid were limited to factual information and did not understand that, while in a conflict, he should say nothing about the matter being considered.

The judge found Degenhardt’s failures to declare conflicts on the two payment matters were the product of ignorance rather than an attempt to gain an advantage for himself or others.

Not all of Sawatzky’s allegations resulted in findings of conflict.

The court found no conflict involving a $750 brushing compensation request from Degenhardt’s uncle. It also found Degenhardt’s interest in the RM’s application for Provincial Disaster Assistance Program funding following a storm that affected his property was incidental, remote and broadly shared within the community.

Sinclair said it was unnecessary to determine what order would otherwise have been appropriate after finding the breaches resulted from inadvertence or honest mistake.

The judge added that he would not have disqualified Degenhardt in any event, saying removal would have been disproportionate to the “relatively minor transgressions.”

Sawatzky’s application nevertheless brought forward “legitimate concerns,” Sinclair wrote, adding that Degenhardt’s own mistakes led to the court proceeding.

“The RM would be well-served in changing its practices and procedures moving forward,” Sinclair wrote.

No costs were awarded, and any money Sawatzky paid into court as security for costs may be released back to him.

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Kenneth.Cheung@pattisonmedia.com

by Kenneth Cheung

Repeated conflict-of-interest breaches won’t cost RM councillor his seat

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