Freedom of Information Request reveals continuation of MV’s vendetta against The Current

Editorial

As previously reported, The Current requested the Financial Services Regulatory Authority of Ontario (FSRAO) to investigate the conduct of Madawaska Valley Township’s insurer, Intact Public Entities (Intact). The reason was its massive and grossly disproportionate expenditure over almost four years of legal costs to defend The Current’s claim against MV and its former Council. See LINK: Is this unjust enrichment of MV lawyers a gift that will keep on giving? For reasons which have never been explained, it rejected four invitations to use mediation to end its relentless hemorrhaging of legal fees. This followed it having previously approved MV’s rejection of an offer of settlement before the lawsuit was begun made on behalf of The Current by lawyer Robert Howe that would have required only a $500 charitable donation and an apology.

Why a vendetta?

Readers are reminded that our legal claim was based on evidence of a vendetta against The Current and its owners. (Above: an extract of an email from former Councillor Bromwich referred to in the Decision of Justice Doyle dated August 6th 2021.) That vendetta was motivated by our investigative reporting about questionable conduct on the part of MV’s former Council, as well as in retaliation for a successful Human Rights Tribunal claim by The Current’s Editor against former Councillor Ernie Peplinski and MV Township. That ended with an apology from Peplinski, compensation, and the requirement that Township staff undergo Human Rights training. Intact forked out about $100,000 in legal fees despite a specialist Human Rights investigator retained by MV having confirmed, to hardly anyone’s surprise, Peplinski’s misconduct before the Tribunal proceeding began.

As recorded in a joint media release dated February 7th 2024, the legal action was settled on terms that included revocation of the defamatory Resolution passed by Council in August 2019 targeting The Current’s publisher.

FSRAO confirms Court misled about insurance policy

The FSRAO recently issued a report following our complaint that confirmed the Township’s municipal insurance policy contained exclusions barring coverage for the claims made against the Township by The Current. Unsurprisingly it is considered contrary to public policy for elected and public officials to have their legal fees paid for defending lawsuits that allege only abuse of power motivated by malice. This did not stop CAO Suzanne Klatt from giving testimony that the Defendants were covered under the “Errors & Omissions” Section of the Township’s policy. Despite our objections, Intact did not dispute this and then proceeded to finance the defence of the Defendants to the tune of a sum amounting to 1,000 times the sum Howe had offered to make the claims go away.

This meant that the two Sault Ste. Marie law firms who represented MV ended up receiving a total of approximately half a million dollars in legal fees contrary to the express terms of the policy. The Township’s lawyer, Paul Cassan, who triggered the attack on The Current in the first place, is a partner of one of those firms, Wishart Law.

FSRAO provided with false and defamatory information by Intact

During our dealings with the FSRAO we became suspicious that it had been supplied with false information intended to damage our reputation. We therefore served it with a Freedom of Information Request seeking copies of all its relevant records. This proved to be very fruitful as it confirmed that false information as well as defamatory accusations against The Current’s owners had been given to the Regulator by Intact. Further investigation led to the conclusion that the source of that false information was the Township through its lawyers. The Current wrote to Intact identifying the false statements and accusations, and invited it to correct them as well as to identify their source. It did not reply.

We then invited the Township to comment on its role in these latest defamatory allegations, but it also did not reply. This prompted us to serve CAO Suzanne Klatt with a Freedom of Information Request in response to which she promised several months ago to provide the Township records we requested. However, she has reneged on that promise and her conduct is now the subject of an expedited adjudication by the Information and Privacy Commissioner (IPC).

Insurance policy weaponized

The implications of this chain of events for MV residents and ratepayers should be self-evident. Not only do they include the financial consequences of this plundering of the Township’s insurance contract (its premiums have increased recently by almost 50 percent), but also the evidence of yet more abuse of power on the part of our elected representatives.

Perhaps an even more disturbing pronouncement in the FSRAO’s report was that it also justified Intact’s conduct by suggesting that an insurer could donate coverage under the policy despite the existence of specific exclusions. The Current views this as just the latest example of the FSRAO shirking its obligations to consumers through declining to censure multinational businesses that fall under its regulatory regime. In response to such criticism in the past, in June 2023 it issued a media release entitled “FSRA identifies P&C insurance as priority supervision area to ensure Ontario consumers are treated fairly.” This appears to us to be a promise honoured more in the breach than in the observance.

Surely the free ride given to MV and the members of its Council is contrary to the public interest as it encourages elected officials to use their bully pulpits to make false and defamatory statements motivated by malice, without fear of any personal financial consequences. It also gives carte blanche to local insurance representatives to ignore the terms of a municipal insurance contract as a favour to their friends on Council. As well it means that the FSRAO has turned a blind eye to blatant “weaponization” of an insurance policy. This describes the cynical strategy whereby insurers allow their deep pockets to be used to financially intimidate opposing parties who do not have insurance to cover their legal costs. The prevalence of this resulted in a major overhaul of the civil procedure rules in the United Kingdom some years ago. New rules were introduced that penalized parties if they rejected resort to alternative dispute resolution including mediation. As the Lord Justice who spearheaded the reforms stated, it ensured a level playing field.

Readers who are unfamiliar with the full history can read about it in previous articles:

Court dismisses MV’s request to gag The Current and its owners August 17, 2021

Assisted by a complicit CAO, MV Council flouts its obligations of transparency, accountability and integrity September 6, 2021

Court of Appeal confirms MV not entitled to gagging order against The Current June 9, 2022

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