Naheed Nenshi vs. Six-Million Dollar Man

Colby Cosh on the latest chapter in a Calgary drama

Did you hear?—Calgary Mayor Naheed Nenshi is being sued for SIX! MILLION! DOLLARS! Lawyers and journalists who have absolutely any experience of lawsuits know that there is zero meaning to this attention-getting arbitary number in housebuilder Cal Wenzel’s statement of claim for defamation [readable here courtesy of CBC News]; indeed, it says right in the statement, as a reminder to the gormless, that the amount demanded is $6 million “or such other amount to be proven at trial.”

Nonetheless, everyone in the news biz is making sure SIX! MILLION! DOLLARS! is in the lede. And who am I to swim against the current?

Wenzel’s lawsuit is the latest chapter in a drama that began Nov. 27, 2012, when the builder addressed a small secret conclave of cronies belonging to the housing industry and related trades. Wenzel, CEO of Shane Homes, outlined a political action strategy for rich Calgarians dependent on endlessly growing suburbs. Mayor Nenshi, Wenzel acknowledged, would be unbeatable in the 2013 election; but if the beneficiaries of sprawl could get eight reliable council votes, it would matter little who the mayor was.

A video of Wenzel’s talk surfaced on Global News and then YouTube in April of this year and became an issue in the Oct. 21 election. Some people found it sinister and objectionable; I personally did not see much wrong with it, although Wenzel’s warning that he would definitely find out who recorded the footage was a little creepy. Mayor Nenshi is now being sued because of some comments he made about Wenzel’s summit on CBC radio about two weeks before the election.

We had a scene right out of—out of the movie Godfather. We had a guy admitting that he broke the law in 2010 in favour of one candidate, Ward 7’s Kevin Taylor, running again. We realize the law cannot actually be enforced. It has no enforcement ability. We had a guy telling people in the room how to break the law in this election and going through every single race saying “This is the councillor that will oppose Nenshi” …

There is, in my non-lawyer’s opinion, a fair amount of squid-ink in Wenzel’s statement of claim, as is usual in defamation actions. Readers should remember several characteristics of such suits: they are never brought by poor people; they very, very rarely get even as far as the pre-trial discovery stage; when they get before a judge his first move is typically to strip away a mass of irrelevancies; and actual damages rarely exceed the low six figures. An award of SIX! MILLION! DOLLARS! would blast the Canadian record to kingdom come, as Jason Markusoff helpfully observed in the Calgary Herald.

Moreover, political speech receives the very highest level of protection under the Charter of Rights, and the late trend in defamation law has been to strengthen that protection. Plus: if the suit proceeds, it may expose Wenzel’s financial and political communications and records to discovery by Mayor Nenshi and his lawyers.

I would therefore anticipate a quiet, solemn end to this fracas before it ever sees the inside of a courtroom. But the passage quoted above from the CBC interview is probably the most serious and interesting part of Wenzel’s claim. Nenshi said that Wenzel “broke the law” in the 2010 election and told other people how to break it. He is not the first to make that assertion: in April, when the video of Wenzel’s meeting came out, Kelly Ernst of Calgary’s Sheldon Chumir Foundation for Ethics in Leadership wrote:

… the comments in the video seemed to suggest that one small, special interest group was trying to control the outcome of an election for its own benefit. The apparent claim that some political contributions in the last civic election exceeded the campaign donation limits set out in Alberta law was also of serious concern.

In the November 2012 video, Wenzel had mentioned helping Kevin Taylor against incumbent Druh Farrell in Ward 7:

Druh Farrell: in case anyone doesn’t know, she doesn’t like me and I don’t particularly like her. I had 13 trucks out last election delivering signs and then assembling them and I got called by Druh and the Elections [?] because they said I’d given five thousand in cash, so therefore my trucks that were out delivering put me over the five thousand and so they were gonna take us to court. So. Druh and I don’t see eye to eye on this.

The “five thousand” refers to the annual maximum donation to a municipal campaign in Alberta by a person or a corporation: $5,000, including the value of uncompensated “personal property, real property, or service… [provided] without fair market compensation”. So did Wenzel admit to having illegally donated above the limit to Taylor? Wenzel believes not, but it is not entirely up to him. On the other hand, there has been no judicial or regulatory finding of illegality. In Alberta the provincial elections authority can only investigate if a rival candidate files a complaint and litigates.

Wenzel’s defence of the activity, which he says Nenshi was made aware of after the video of his meeting got loose in the wild, is given in his statement of claim.

Shane Homes donated the maximum permissible campaign contribution of $5,000 to Mr. Taylor’s campaign in 2010. Several employees of Shane Homes, who had the regular use of Shane Homes’ vehicles during off-work hours, volunteered their time and services to assist in Mr. Taylor’s campaign during their off-work hours, without receiving any compensation from Shane Homes for their volunteered time and services, and used the Shane Homes’ vehicles in their respective possession when so volunteering. In turn, Mr. Taylor’s campaign issued gas cards to the volunteers as reimbursement for the cost of fuel used in the Shane Homes’ vehicles while these Shane Homes’ employees provided volunteer services.

Employees made use of Shane Homes trucks to assist Taylor’s campaign. Their own “services” as drivers count as innocuous volunteer activity under the law. They were reimbursed for gas. But the use of the trucks themselves, and the wear and tear placed on them thereby, has cash value.

Do the trucks count as employee property under election law just because employees are allowed to use them “regularly” as personal vehicles in their spare time? And if they do, why is it relevant that the fuel was paid for by the campaign? If the fuel was paid for, shouldn’t the rental of the Shane Homes-owned trucks have been paid for too?

Of such fine, intricate lace is campaign-spending law made. Mayor Nenshi made this whole business a little harder on himself by claiming flat-out, on the spur of the moment, that Cal Wenzel “broke the law.” It’s a good example of Nenshi’s political style, illustrating its risks as well as its attractive directness. An ordinary politician would probably have been pretty reluctant to say even that Wenzel was offending the spirit of the law. But if the mayor can show a sincere, defensible, rational belief that Wenzel did violate the Local Authorities Election Act, there is surely no question of defamation—not on that particular point anyway.

Wenzel, meanwhile, must be given credit for a sort of bravery, even if his lawsuit is motivated by cynicism or stupidity. His son was just named president of his company. They have a lot of business planned for Calgary and neighbouring Airdrie, and no doubt they have long-term plans to build elsewhere in southern Alberta, as they have done in the past. It is hard to see how using the courts as a weapon in a political controversy can serve the interests of the firm, and easy to see how it might harm them. Who likes doing business with a party both sensitive and litigious?

So this obviously isn’t about financial gain in the way that Wenzel’s funding of un-Nenshioid council candidates was. (Wenzel makes this explicit in the video, telling his housing-industry fellows that their investment of $5,000 on a friendly candidate’s campaign might save some of them millions.) Wenzel may legitimately feel that there is a higher principle at stake. And, in fact, it would be a genuine wrong for an office-holder to use his privileged media access to tell untruths about an opponent.

[Related material: Nenshi’s official response to the lawsuit, including a discussion of the legal merits by his lawyer. No decision has been reached yet on whether the city will be on the hook for Nenshi’s legal fees.]