http://www.neesoncourtreporting.com

·1

·2

·3

·4

·5· · · · · ·ELLIOT LAKE COMMISSION OF INQUIRY

·6

·7· · · · · · · · · · · ·--------

·8

·9

10

11· · ·--- This is DAY 15 in the Inquiry proceedings held

12· ·before the Honourable Justice P.R. Bélanger,

13· ·Commissioner, taken at the White Mountain Academy

14· ·of the Arts, 99 Spine Road, Elliot Lake, Ontario, on

15· ·Tuesday, the 26th day of March, 2013, commencing

16· ·at 9:00 a.m. ---

17

18

19

20

21· · · · · · · REPORTED BY:· Lisa Barrett

22· · · · · · · · · · ·CSR, CRR, RPR

23

24

25

·1· ·A P P E A R A N C E S:

·2

·3· · ·Peter K. Doody, Esq.,· · · · · · · for the Commission

·4· · ·Nadia Effendi, Esq.,· · · · · · · ·for the Commission

·5· · ·Natalia Rodriquez, Esq.,· · · · · ·for the Commission

·6· · ·Leo Longo, Esq.,· · · · · · · · · ·Ontario Building

·7· · · · · · · · · · · · · · · · · · · · Officials Association

·8· · ·Douglas Elliott, Esq,· · · · · · · ELMAC/SAGE

·9· · ·Alexandra Carr, Esq.,· · · · · · · ELMAC

10· · ·Joseph Bisceglia, Esq.,· · · · · · Gregory Saunders

11· · ·Robert MacRae, Esq.,· · · · · · · ·Robert Wood

12· · ·Paul Cassan, Esq.,· · · · · · · · ·City of Elliot Lake

13· · ·Matthew Shoemaker, Esq.,· · · · · ·City of Elliot Lake

14· · ·Douglas Kearns, Esq.,· · · · · · · Retirement Living

15· · · · · · · · · · · · · · · · · · · · and NorDev

16· · ·Kristin Smith, Esq.,· · · · · · · ·Government of Ontario

17

18

19

20

21

22

23

24

25

·1· · · · · · · · · · · ·I N D E X

·2· · · · · · · · · · · · · · · · · · · · · · · ·PAGES

·3· ·WITNESS: FRED CHRISTIAN BAUTHUS: SWORN

·4

·5· ·EXAMINATION-IN-CHIEF

·6· ·CONTINUED BY MR. DOODY ................ 2918 - 3061

·7· ·EXAMINATION IN CHIEF BY MR. CASSAN .... 3061 - 3064

·8· ·CROSS-EXAMINATION BY MR. ELLIOTT ...... 3064 - 3082

·9· ·CROSS-EXAMINATION BY MR. KEARNS ....... 3082 - 3103

10· ·CROSS-EXAMINATION BY MR. MacRAE ....... 3103 - 3127

11· ·CROSS-EXAMINATION BY MS. SMITH ........ 3127 - 3133

12· ·CROSS-EXAMINATION BY MR. BISCEGLIA .... 3133 - 3134

13· ·CROSS-EXAMINATION BY MR. LONGO ........ 3134 - 3149

14· ·RE-EXAMINATION BY MR. CASSAN .......... 3149 - 3158

15· ·RE-EXAMINATION BY MR. DOODY ........... 3158 - 3172

16

17· ·WITNESS: BARBARA CLOUGHLEY: SWORN

18

19· ·EXAMINATION IN-CHIEF BY MS. EFFENDI .... 3172 - 3202

20· ·CROSS-EXAMINATION BY MR. BISCEGLIA ..... 3202 - 3204

21· ·CROSS-EXAMINATION BY MS. SMITH ......... 3205 - 3220

22· ·CROSS-EXAMINATION BY MS. CARR .......... 3220 - 3225

23· ·CROSS-EXAMINATION BY MR. SHOEMAKER ..... 3225 - 3226

24

25

·1

·2· · · · · · · · · · ·INDEX OF EXHIBITS

·3

·4· ·NUMBER/DESCRIPTION· · · · · · · · · · · · · ·PAGE

·5

·6· ·NO. 3268· · ·Ontario Ministry of Labour· · · 3223

·7· · · · · · · · Gas Sampling Report,

·8· · · · · · · · OPP_E0000056275

·9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

·1· ·-- Upon commencing at 9:02 a.m. on Tuesday, March

·2· · · 26, 2013

·3· · · · · · · · · THE CLERK:· This hearing of the

·4· ·Elliot Lake Commission Inquiry is now in session.

·5· ·Please be seated.

·6· · · · · · · · · THE COMMISSIONER:· Good morning,

·7· ·everybody.· Mr. Bauthus, you are still under oath.

·8· ·What's the origin of the name "Bauthus"?

·9· · · · · · · · · THE WITNESS:· Norwegian.

10· · · · · · · · · THE COMMISSIONER:· Norwegian.· Okay.

11· ·Thank you.

12· · · · · · · · · FRED CHRISTIAN BAUTHUS: ON FORMER OATH.

13· · · · · · · · · EXAMINATION IN-CHIEF BY MR. DOODY

14· · · · · · · · · (CONTINUED):

15· · · · · · · · · Q.· ·Thank you, Mr. Commissioner.· If

16· ·I could have Exhibit No. 274.

17· · · · · · · · · That's tab 82 in Volume 2, Mr.

18· ·Bauthus.

19· · · · · · · · · A.· ·And that's tab 84?

20· · · · · · · · · Q.· ·Tab 82.· Sir, this is a letter

21· ·to Mr. Liautaud, the mall manager from --

22· · · · · · · · · THE COMMISSIONER:· Exhibit number,

23· ·please --

24· · · · · · · · · MR. DOODY:· I'm sorry, that's Exhibit

25· ·No. 274.

·1· · · · · · · · · THE COMMISSIONER:· Thank you.

·2· · · · · · · · · BY MR. DOODY:

·3· · · · · · · · · Q.· ·So it's a letter to Mr.

·4· ·Liautaud, the mall manager, from Janet Taylor, the

·5· ·chair of the Public Library Board dated April 25th,

·6· ·1991.

·7· · · · · · · · · And it has been copied to the Mayor

·8· ·and Council, and down at the bottom left-hand side,

·9· ·there is handwriting there; is that yours, sir?

10· · · · · · · · · A.· ·No, it is not.

11· · · · · · · · · Q.· ·Oh, that's Mr. Burling's?

12· · · · · · · · · A.· ·Yes, that's Mr. Burling's.

13· · · · · · · · · Q.· ·Would this have come to your

14· ·attention, sir?

15· · · · · · · · · A.· ·If Mr. Burling had have intended

16· ·it to come to my attention, he would have noted that

17· ·on the bottom and cc'd to myself, so in a direct

18· ·sense, it didn't come.

19· · · · · · · · · Now, indirectly, I can't say whether

20· ·I've seen it or not, as being part of what was sent to

21· ·Council or the council members or not, I just don't

22· ·recall whether it came across my desk specifically.

23· · · · · · · · · Q.· ·In the ordinary course,

24· ·a document that's copied to members of Council,

25· ·would you expect to see it?

·1· · · · · · · · · A.· ·Not always, if it's --

·2· · · · · · · · · Q.· ·Do you recall this issue that

·3· ·was raised by Ms. Taylor in the letter?

·4· · · · · · · · · In the letter, she writes in the

·5· ·second paragraph:

·6· · · · · · · · · · ·"As you are aware, one of the

·7· · · · · · · · · ·main reasons for this move was

·8· · · · · · · · · ·the deplorable condition of the

·9· · · · · · · · · ·former location.· Since the

10· · · · · · · · · ·library opened in the mall,

11· · · · · · · · · ·a major portion of the

12· · · · · · · · · ·collection has had to be

13· · · · · · · · · ·covered by plastic in order

14· · · · · · · · · ·that the books are not damaged,

15· · · · · · · · · ·the floor is littered with

16· · · · · · · · · ·buckets, and many of the

17· · · · · · · · · ·ceiling tiles are missing.· The

18· · · · · · · · · ·hoses which hang from the

19· · · · · · · · · ·ceiling can be seen the whole

20· · · · · · · · · ·length of the mall and negate

21· · · · · · · · · ·any value which the art

22· · · · · · · · · ·displays might contribute to

23· · · · · · · · · ·the library's visual appeal."

24· · · · · · · · · Were you aware, sir, of the issues of

25· ·which Ms. Taylor complained in this letter?

·1· · · · · · · · · A.· ·I can't tell you exactly when

·2· ·I became aware of it, you know, given that I had

·3· ·started with the municipality in February of '90,

·4· ·but, yes, I was aware that there were water issues.

·5· · · · · · · · · Q.· ·Were you aware that those issues

·6· ·had been brought to the attention of the Mayor and

·7· ·Council in April, May of 1991?

·8· · · · · · · · · A.· ·To say specifically, with regard

·9· ·to this, no, I can't say, specifically that it was

10· ·done through my office in that way.

11· · · · · · · · · Q.· ·Did you ever speak with the

12· ·Chief Building Official, the Property Standards

13· ·Officer, Mr. Pigeau, about the issue of leaks at the

14· ·mall or the library?

15· · · · · · · · · A.· ·I can't recall any specific

16· ·discussions that would jump out that I could say on

17· ·such and such a date that I had this discussion with

18· ·Mr. Pigeau.

19· · · · · · · · · Q.· ·Well that's -- do you recall

20· ·ever doing so, whether you can point them to

21· ·a specific date or not, do you recall ever having

22· ·discussions with Mr. Pigeau about the issue of leaks

23· ·at the mall or the library?

24· · · · · · · · · A.· ·At this time, I can't say

25· ·specifically.

·1· · · · · · · · · Q.· ·Do you have any recollection,

·2· ·general or specific, about such a discussion?

·3· · · · · · · · · A.· ·Nothing jumps out at me in terms

·4· ·of ...

·5· · · · · · · · · Q.· ·So the answer is "no"?

·6· · · · · · · · · A.· ·No.

·7· · · · · · · · · Q.· ·Sir, would this letter

·8· ·constitute a complaint, such as to allow or -- not

·9· ·allow, but rather authorize Mr. Pigeau to carry out

10· ·an investigation under the enforcement policy that

11· ·we looked at yesterday?

12· · · · · · · · · A.· ·I would take it that it would be

13· ·a complaint, and I would take it, as is indicated

14· ·here, that Mr. Pigeau would follow up with the

15· ·parties concerned, and given that they were

16· ·undertaking work to attempt to remediate it, that

17· ·they were working on that problem.

18· · · · · · · · · So, I guess, in terms of looking at it,

19· ·that that would be a complaint, and Mr. Pigeau had

20· ·addressed it in following up with the parties to see

21· ·that they were working to address that problem.

22· · · · · · · · · Q.· ·Let's take this one step at

23· ·a time.· Do you agree that this would be a complaint

24· ·under that enforcement policy we looked at

25· ·yesterday?

·1· · · · · · · · · A.· ·I would say it would be -- could

·2· ·be construed as that, yes.

·3· · · · · · · · · Q.· ·And yesterday we talked about

·4· ·whether the policy allowed the Property Standards

·5· ·Officer to investigate and take action if he or she

·6· ·came -- obtained knowledge of his or her own accord

·7· ·about a breach, and I'm not going to go back there,

·8· ·but now -- what I'm interested in asking you now,

·9· ·sir, is when the policy said that enforcement of

10· ·this by-law was complaint driven, did that mean that

11· ·if there was a complaint, there was a requirement to

12· ·investigate on the part of the Property Standards

13· ·Officer?

14· · · · · · · · · A.· ·I would make that assumption,

15· ·yes, that they would want to follow up on it, if

16· ·there was a complaint.

17· · · · · · · · · Q.· ·That was your understanding of

18· ·what the policy required?

19· · · · · · · · · A.· ·Yes, sir.

20· · · · · · · · · Q.· ·And in Mr. Pigeau's notes in

21· ·this letter, down at the bottom of the page, that's

22· ·Mr. Pigeau's writing, and it says:

23· · · · · · · · · · ·"May 1, '91 met with Larry

24· · · · · · · · · ·Liautaud and he advised

25· · · · · · · · · ·an engineer has been hired to

·1· · · · · · · · · ·analyze problem and report was

·2· · · · · · · · · ·forthcoming."

·3· · · · · · · · · Would you have expected Mr. Pigeau to

·4· ·ask Algoma for a copy of that report?

·5· · · · · · · · · A.· ·I would have assumed that he

·6· ·would have followed up with that, yes.

·7· · · · · · · · · Q.· ·And if Mr. Pigeau asked for

·8· ·a copy of the report, and was refused, and that

·9· ·request was refused, what would you have expected

10· ·him to do?

11· · · · · · · · · A.· ·Well, I guess if it was

12· ·a question of an outright refusal, I would question

13· ·why they were refusing.· If it was just, I guess,

14· ·a stonewalling tactic, that it wasn't ready, or

15· ·whatever the case may be, and not given to him,

16· ·I would presume that he would continue to pursue

17· ·that.

18· · · · · · · · · Q.· ·That's what you would expect him

19· ·to do?

20· · · · · · · · · A.· ·I would presume that, yes.

21· · · · · · · · · Q.· ·That's what you would expect him

22· ·to do?

23· · · · · · · · · A.· ·Uh-hmm.

24· · · · · · · · · Q.· ·Right?

25· · · · · · · · · A.· ·Uh-hmm.

·1· · · · · · · · · Q.· ·Correct?

·2· · · · · · · · · A.· ·Yes.

·3· · · · · · · · · Q.· ·Thank you.· If I could ask you

·4· ·to turn up Exhibit No. 35 at tab 83.

·5· · · · · · · · · This, sir, is the first report

·6· ·prepared by the Trow Engineering firm, and it's the

·7· ·report that was referred to in Mr. Pigeau's note

·8· ·that we just looked at.

·9· · · · · · · · · Sir, had you seen this report before

10· ·preparing for this Commission of inquiry?

11· · · · · · · · · A.· ·No, sir, I did not.

12· · · · · · · · · Q.· ·Had you reviewed it prior to

13· ·testifying today?

14· · · · · · · · · A.· ·Yes, I have looked at it as part

15· ·of the documentation you had provided to me.

16· · · · · · · · · Q.· ·If I could ask you to turn to

17· ·page 13 of the report.· There is a list of

18· ·conclusions there, and item number 6 at the bottom

19· ·of the page, is that -- it says:

20· · · · · · · · · · ·"It is our opinion that the

21· · · · · · · · · ·design used for this roof slab

22· · · · · · · · · ·is inappropriate in achieving

23· · · · · · · · · ·a watertight condition over

24· · · · · · · · · ·commercial areas."

25· · · · · · · · · Sir, my first question to you is, if

·1· ·you had read that in May of 1991, would that have been

·2· ·a surprise to you?

·3· · · · · · · · · A.· ·Not having an engineering

·4· ·background, I would have wondered as to why such

·5· ·a design would have been used at the time of

·6· ·construction.

·7· · · · · · · · · Q.· ·What I'm trying to understand,

·8· ·sir, and you may or may not be able to assist is,

·9· ·put it this way: Did you believe that the roof at

10· ·the mall was watertight in May of 1991?

11· · · · · · · · · A.· ·No, I did not, because there was

12· ·infiltration.

13· · · · · · · · · Q.· ·And if I could ask you to turn

14· ·to page 14, the next page of the report, the

15· ·engineers give two options.

16· · · · · · · · · The first option is to put

17· ·a waterproofing system -- a waterproofing membrane,

18· ·as they call it, over top of the existing concrete

19· ·topping, and then a new surface on top of that.

20· · · · · · · · · Or Option 2, to remove the concrete

21· ·topping and put a membrane over the concrete core

22· ·slabs that were under underneath the poured concrete

23· ·topping.

24· · · · · · · · · That was their two options.

25· · · · · · · · · And then if you turn to page 17 of

·1· ·the report, you'll see that they're -- they -- first

·2· ·of all, actually, page 16.

·3· · · · · · · · · They recommend Option 2 which is to

·4· ·take off the poured concrete topping and put

·5· ·a membrane on top of the core slabs, and then under

·6· ·"Repair Priority", they write, second paragraph from

·7· ·the bottom:

·8· · · · · · · · · · ·"In considering the repair

·9· · · · · · · · · ·recommendations outlined in

10· · · · · · · · · ·Section 13.0 and the size of

11· · · · · · · · · ·the parking structure above the

12· · · · · · · · · ·shopping mall, we would

13· · · · · · · · · ·recommend that the repairs be

14· · · · · · · · · ·carried out as soon as possible

15· · · · · · · · · ·in order to maintain the

16· · · · · · · · · ·structural integrity of the

17· · · · · · · · · ·slab and to reduce the

18· · · · · · · · · ·potential for further

19· · · · · · · · · ·deterioration, leakage and

20· · · · · · · · · ·probable insurance claims for

21· · · · · · · · · ·water damaged property inside

22· · · · · · · · · ·the stores."

23· · · · · · · · · And then on the next page, they set out

24· ·the price of their estimate of the cost of their

25· ·Option No. 2, and as you can see, it -- if you go

·1· ·right to the bottom of the page -- it's $1.3 to

·2· ·$1.6 million.

·3· · · · · · · · · Sir, if you had seen this report, in

·4· ·May of 1991, what would you have done as the CAO of

·5· ·the City?

·6· · · · · · · · · A.· ·I can only presume that it would

·7· ·have led to discussions with the owner, Algo

·8· ·Central, as to how they purported to address the

·9· ·issue in order to remediate the water problems,

10· ·given this report, how and when they would be

11· ·undertaking to do that.

12· · · · · · · · · Q.· ·Would you have considered using

13· ·or -- would you have considered using the City's

14· ·powers, regulatory powers under the Property

15· ·Standards by-law?

16· · · · · · · · · A.· ·That would probably ensue,

17· ·assuming that they chose not to do this, or

18· ·otherwise, some other avenue to correct the water

19· ·problems.

20· · · · · · · · · I think the first thing, as is

21· ·indicated, is that there would be discussion and

22· ·seeing if they would -- they are going to prepare to

23· ·undertake that work, and get it done.

24· · · · · · · · · If there was a reluctance on their part

25· ·to do that, then there would be the responsibility

·1· ·then to issue an order.

·2· · · · · · · · · Q.· ·That would be the responsibility

·3· ·of the City?

·4· · · · · · · · · A.· ·At that point in time, yes.

·5· · · · · · · · · Q.· ·And --

·6· · · · · · · · · A.· ·After we had talked to the

·7· ·owner, to determine what their direction would be.

·8· · · · · · · · · Q.· ·Would you have referred this

·9· ·report, had you learned of it, would you have

10· ·referred it to the Chief Building Officer at the

11· ·time?

12· · · · · · · · · A.· ·Yes, definitely.

13· · · · · · · · · Q.· ·If I could ask you to turn up

14· ·Exhibit No. 611, which is tab 102, Mr. Bauthus.

15· · · · · · · · · This is -- these are notes taken by

16· ·a gentleman by the name of Rod Caughill, who worked

17· ·for Algoma Properties, and they are notes taken

18· ·during the course of an inspection by the Trow

19· ·Engineering firm on August the 25th, 1994.· And this

20· ·was during the course of a second retainer by Algoma

21· ·following the report we just looked at.

22· · · · · · · · · And if you look at the second page, Mr.

23· ·Caughill has written:

24· · · · · · · · · In general:

25· · · · · · · · · · ·"Iamonico does not believe

·1· · · · · · · · · ·that we have a structural

·2· · · · · · · · · ·problem yet ..."

·3· · · · · · · · · And "yet" is underlined:

·4· · · · · · · · · · ·"But he cautions that the

·5· · · · · · · · · ·corrosion seen will accelerate

·6· · · · · · · · · ·exponentially, if the leakage

·7· · · · · · · · · ·is not treated."

·8· · · · · · · · · And, sir, can you tell me, what would

·9· ·you have done in 1994, as the CAO, if you had known

10· ·that that was the advice that was being given to the

11· ·owner by the engineer they'd retained?

12· · · · · · · · · MR. KEARNS:· Excuse me, Mr.

13· ·Commissioner, I wonder if I might object here.

14· · · · · · · · · The issue we have is the unfortunate

15· ·practice of Commission Counsel and others of showing

16· ·documents to people that document events that they

17· ·were not presented for, that are documents that they

18· ·did not prepare, documents that they did not see at

19· ·the time, and documents that they did not see until

20· ·today, and then being asked to go off on a "What if"

21· ·journey.

22· · · · · · · · · And I just wonder, as we -- you know,

23· ·Mr. Bauthus indicated he hadn't seen the Trow Report.

24· · · · · · · · · We have ten minutes of questions on

25· ·that.

·1· · · · · · · · · We are now into 1994 meetings that he

·2· ·wasn't at and we are into questions about that.

·3· · · · · · · · · I just wonder to what extent, Mr.

·4· ·Commissioner, this type of "what if" information is

·5· ·assisting you in coming to the decisions that you will

·6· ·need to make and if you find, as I would submit, that

·7· ·it's really of no value to you what Mr. Bauthus'

·8· ·opinion is of documents and events that he wasn't

·9· ·party to, that -- for the sake of relevance,

10· ·Commission Counsel be asked to move on to relevant

11· ·issues that deal specifically with Mr. Bauthus'

12· ·knowledge of events during this period of time for

13· ·which he's being examined.

14· · · · · · · · · THE COMMISSIONER:· Well, I'll hear

15· ·from Commission Counsel, but I'm not convinced that

16· ·I agree with you, Mr. Kearns.

17· · · · · · · · · We're not asking the witness to comment

18· ·on the veracity of the documents, or identifying them

19· ·in any way, but providing a scenario to him to

20· ·understand what the City's policy would have been, had

21· ·certain information been provided.· The manner in

22· ·which that is presented to him is by showing him

23· ·documents.

24· · · · · · · · · We're not asking him to say whether or

25· ·not that document is true.· Not asking -- he's not

·1· ·being asked to comment on the -- on its accuracy, but

·2· ·simply being asked what City policy would have been at

·3· ·that particular time.

·4· · · · · · · · · So I have trouble with your objection.

·5· ·Mr. Doody may wish to put it in a more elegant way.

·6· ·I don't know.

·7· · · · · · · · · MR. DOODY:· I'm sure that's

·8· ·impossible, Mr. Commissioner, but I would simply put

·9· ·it this way.

10· · · · · · · · · At the end of the day, in my

11· ·submission, you will be asked -- or at least you will

12· ·consider -- whether you should review the facts which

13· ·appear to be unfolding, which is that certain

14· ·information was in the hands of one or more parties

15· ·about the state of the mall and not in the hands of

16· ·other parties.

17· · · · · · · · · And in determining, what happened and

18· ·why, and perhaps more importantly, what could be done

19· ·in the future to prevent these things from happening,

20· ·one of the issues you may wish to consider is: What

21· ·would have happened if that information had been

22· ·shared more broadly?

23· · · · · · · · · And, in my submission, asking the

24· ·people who were in the positions at the time what

25· ·would have happened if the information had been shared

·1· ·more broadly, is one of the better kinds of evidence

·2· ·which will be available to you in answering that

·3· ·question.

·4· · · · · · · · · And so, of course, as Mr. Kearns knows,

·5· ·this document is not seen by Mr. Bauthus for the first

·6· ·time today, lest people hearing him think that's what

·7· ·he meant.· I know that is not what he meant, but Mr.

·8· ·Bauthus has seen this document for quite some time now

·9· ·and we have interviewed him about it, so he is not

10· ·being caught unawares.

11· · · · · · · · · This is a matter about which he would

12· ·have had an opportunity to think before he got in the

13· ·box this morning.

14· · · · · · · · · THE COMMISSIONER:· It seems to me,

15· ·Mr. Kearns, that I'll be asked to consider what the

16· ·consequences are, in a general way, of the absence

17· ·or lack or paucity of information in relation to

18· ·a particular problem, in the hands of municipal

19· ·officials.

20· · · · · · · · · There have been suggestions, as we have

21· ·progressed through this inquiry, about creating

22· ·a statutory obligation to share this type of

23· ·information.

24· · · · · · · · · And in that sense, I think that the

25· ·issue is not irrelevant to my consideration and to my,

·1· ·potentially in any event, eventual recommendations

·2· ·that there be an obligation to share or an obligation

·3· ·to inform.

·4· · · · · · · · · And in that sense, the consequence of

·5· ·a lack of information being provided to a City

·6· ·officer, a City and Municipal officer is of some

·7· ·importance to me.

·8· · · · · · · · · So, I acknowledge your objection, but

·9· ·I overrule it at this point.· Thank you.

10· · · · · · · · · MR. CASSAN:· Mr. Commissioner,

11· ·I wonder if I might comment on the matter.

12· · · · · · · · · I understand you've made a ruling with

13· ·respect to the objection.· With respect to the way the

14· ·question is being asked, however, perhaps it's more

15· ·beneficial for the Commission to understand what the

16· ·available options were to the City, rather than what

17· ·would have happened -- it's hard to go back and I can

18· ·certainly recall as a kid growing up my mom telling

19· ·me, "You can never 'should have done something'."

20· · · · · · · · · And there seems to be a flavour of that

21· ·with respect to the questioning.

22· · · · · · · · · I think that if we examine the options

23· ·that were available and the City policy, as you have

24· ·said, that that would be more beneficial than saying,

25· ·"Well, what would you have done?"

·1· · · · · · · · · It is impossible to go back in time to

·2· ·where we were, and so I just make that suggestion with

·3· ·respect to the question.

·4· · · · · · · · · THE COMMISSIONER:· I understand,

·5· ·I understand that hindsight is a wonderful thing,

·6· ·but if there are misconceptions that you feel arise

·7· ·out of the manner in which the problem or the issue

·8· ·was put to the witness, that's why we allow counsel

·9· ·to cross-examine, to set the record straight.

10· · · · · · · · · And obviously I understand it's being

11· ·put in a particular way, but I still think that it's

12· ·not inappropriate, and as I say, we are not -- you are

13· ·not, the Commission is not bereft of tools to

14· ·understand the issue better.

15· · · · · · · · · Thank you.

16· · · · · · · · · BY MR. DOODY:

17· · · · · · · · · Q.· ·Mr. Bauthus, if you had learned

18· ·in August of 1994, that the engineer had given

19· ·Trow -- sorry, that the engineer had given Algoma

20· ·the advice set out at the second page of Exhibit No.

21· ·611 that I just read to you, what do you believe you

22· ·would have done at the time?

23· · · · · · · · · A.· ·Had this information come across

24· ·my desk, I probably would have turned it over to the

25· ·Chief Building Official to review and comment on,

·1· ·and take appropriate action and get back to me and

·2· ·advise what we could and should be doing.

·3· · · · · · · · · Q.· ·Okay.· And in terms of the

·4· ·options that were available to Mr. Pigeau at that

·5· ·time, am I right he could have conducted

·6· ·an inspection on his own; correct?

·7· · · · · · · · · A.· ·Yes, and that would have formed

·8· ·the basis of an inspection, yes.

·9· · · · · · · · · Q.· ·And he could have retained

10· ·an engineer to conduct the inspection, had he wished

11· ·to do so?

12· · · · · · · · · A.· ·That is an option available to

13· ·him, yes.

14· · · · · · · · · Q.· ·And he could have ordered the

15· ·owner, Algoma, to make the building watertight, as

16· ·it was required to do in accordance with the

17· ·Property Standards by-law?

18· · · · · · · · · A.· ·Yes, that is an option.

19· · · · · · · · · Q.· ·And would you have expected Mr.

20· ·Pigeau to consider all of those options, had you

21· ·referred this matter to him at that time?

22· · · · · · · · · A.· ·Yes.

23· · · · · · · · · Q.· ·If I could ask you to turn up

24· ·the next tab, sir, Exhibit No. 11-12, tab 103.

25· · · · · · · · · Sir, this is a letter dated

·1· ·September 12th, 1994 to you from Ms. Fazekas, the

·2· ·Librarian.

·3· · · · · · · · · In it, the "Re" line is "Safety of

·4· ·Library Patrons and Collection".

·5· · · · · · · · · And she complains about the fact that

·6· ·ceiling tiles were dangling from the ceiling, with

·7· ·the t-bars, that is the bars into which the ceiling

·8· ·tiles were set as part of the suspended ceiling

·9· ·system, the t-bars loose in the children's area, and

10· ·she writes in the third paragraph -- in the second

11· ·paragraph she writes:

12· · · · · · · · · · ·"Since 1989, some of the

13· · · · · · · · · ·glue ..."

14· · · · · · · · · That is the glue holding the t-bars to

15· ·the underside of the core slabs:

16· · · · · · · · · · ·"... has weakened due to the

17· · · · · · · · · ·moisture in the ceiling area,

18· · · · · · · · · ·causing the tile loosening.

19· · · · · · · · · · ·My concern is that the rest

20· · · · · · · · · ·of the ceiling is similarly

21· · · · · · · · · ·attached and the whole ceiling

22· · · · · · · · · ·is in jeopardy.· When requested

23· · · · · · · · · ·to determine the safety of the

24· · · · · · · · · ·rest of the ceiling, the mall

25· · · · · · · · · ·manager and maintenance staff

·1· · · · · · · · · ·rushed to tell me not to panic.

·2· · · · · · · · · ·I then called the City's

·3· · · · · · · · · ·Chief Building Official for

·4· · · · · · · · · ·an opinion on the subject.

·5· · · · · · · · · ·Although he did visit the site

·6· · · · · · · · · ·to ensure that the ceiling

·7· · · · · · · · · ·damage was fixed, he did not

·8· · · · · · · · · ·share my concerns regarding the

·9· · · · · · · · · ·rest of the ceiling."

10· · · · · · · · · Do you recall getting this letter, sir?

11· · · · · · · · · A.· ·Having seen it, yes, it came

12· ·across my desk and I turned it over to Mr. Pigeau to

13· ·act on, and according to the notes affixed hereto,

14· ·the Chief Building Official met with the Librarian,

15· ·and I understood that the issues with regard to the

16· ·ceiling -- ceiling tiles and that were fixed.

17· · · · · · · · · Q.· ·Well, what it says in the bottom

18· ·note by Mr. Pigeau is, I believe:

19· · · · · · · · · · ·"September 14, '94.· Met with

20· · · · · · · · · ·Fred and advised why a grid --

21· · · · · · · · · ·why the grid along the wall is

22· · · · · · · · · ·a problem and that Algo

23· · · · · · · · · ·management will repair if City

24· · · · · · · · · ·agrees to lower a CB" -- which

25· · · · · · · · · ·is a catch basin -- "on their

·1· · · · · · · · · ·property."

·2· · · · · · · · · What I understood that to mean, sir,

·3· ·from Ms. Fazekas' and Mr. Pigeau's testimony, is that

·4· ·the management of the mall agreed to replace the

·5· ·ceiling tiles and re-glue the grid, the t-bar grid, if

·6· ·the City, in return, agreed to lower a catch basin.

·7· ·Sort of a quid pro quo.

·8· · · · · · · · · Was that your understanding at the

·9· ·time?

10· · · · · · · · · A.· ·I'm trying to recall.· That

11· ·might be the case and I guess given that the City

12· ·had some resources and if that was going to help,

13· ·that may have been done.

14· · · · · · · · · I did not, and I can't respond

15· ·specifically that I gave those instructions to the

16· ·public works manager, you know, to assist in that.

17· · · · · · · · · I can't recall that specifically.

18· · · · · · · · · Q.· ·Do you agree with me, that

19· ·that -- what I've just described to you, doesn't

20· ·solve the leaks problem; it solves the symptoms, but

21· ·doesn't provide a cure; to use a medical analogy;

22· ·would you agree with that?

23· · · · · · · · · A.· ·Yes, it --

24· · · · · · · · · Q.· ·It cleans up the mess but it

25· ·doesn't stop the water.

·1· · · · · · · · · A.· ·By adjusting the catch basin and

·2· ·working with that, it hopefully may not -- while it

·3· ·may not remediate the thing in total, it would

·4· ·assist by removing some of the water through the

·5· ·lower catch basin.

·6· · · · · · · · · Q.· ·The catch basin in question, was

·7· ·it on the roof?· I didn't understand it was on the

·8· ·roof.

·9· · · · · · · · · A.· ·I'm not sure which one --

10· ·I can't recall which one this is specifically

11· ·referring to.

12· · · · · · · · · Q.· ·Okay.· So you will agree with me

13· ·that the -- that the -- what is described here, does

14· ·not indicate that the leaks are being fixed?

15· · · · · · · · · A.· ·That is correct, yes.

16· · · · · · · · · Q.· ·Did you ask Mr. Pigeau, given

17· ·that this problem was caused by leaks, to do

18· ·something about the leaks?

19· · · · · · · · · A.· ·I can't recall any specific

20· ·direction being given to him on that --

21· ·(Simultaneous speakers - unclear ...)

22· · · · · · · · · Q.· ·Do you recall any general

23· ·direction being given to him, or any direction

24· ·at all?

25· · · · · · · · · A.· ·I can't recall.

·1· · · · · · · · · Q.· ·If I could ask you to turn up

·2· ·the next tab, sir, which is Exhibit No. 44.· This is

·3· ·the report produced by Trow for Algoma, dated

·4· ·November 9th, 1994.

·5· · · · · · · · · And, sir, prior to preparing for this

·6· ·Commission of inquiry, had you seen this document?

·7· · · · · · · · · A.· ·Prior to you providing them to

·8· ·me, no.

·9· · · · · · · · · Q.· ·If I could ask you to turn to

10· ·the third page -- it's the page with the letter

11· ·numbered "A" at the bottom right-hand corner --

12· ·letter "A" rather, in the bottom right-hand corner.

13· ·This is the abstract, and in the last three

14· ·paragraphs of the abstract the authors write:

15· · · · · · · · · · ·"The soffit of the suspended

16· · · · · · · · · ·roof slab was generally in good

17· · · · · · · · · ·condition but indicated

18· · · · · · · · · ·evidence of excessive leakage

19· · · · · · · · · ·through the joints of the

20· · · · · · · · · ·precast hollow slabs above the

21· · · · · · · · · ·mall level.· The steel beams

22· · · · · · · · · ·were noted to be rusted at

23· · · · · · · · · ·locations where evidence of

24· · · · · · · · · ·leakage was observed.· Some

25· · · · · · · · · ·water stains were also noted on

·1· · the soffit of the pedestrian

·2· · walkway slabs.· Some metal pans

·3· · and pails were noted above the

·4· · false ceiling in the stores to

·5· · divert the water leakage.

·6· · · The structural steel members

·7· · are sound with some surface

·8· · corrosion.· The chloride ion

·9· · content is generally higher in

10· · the concrete topping and

11· · contamination of the precast

12· · slab is at its initial stage.

13· · Corrosion of the embedded

14· · reinforcement can be expected

15· · to continue at all areas of

16· · leakage.

17· · · A structural review and

18· · analysis is recommended to

19· · determine the capacity of the

20· · roof slab and to provide the

21· · necessary data in order to

22· · discuss the various options for

23· · the placement of the

24· · waterproofing system."

25· ·Sir, if you had seen this report at the

·1· ·time, what would you have done?

·2· · · · · · · · · A.· ·I would have -- if that had come

·3· ·across my desk, I would have turned it over to the

·4· ·Chief Building Official to review and take

·5· ·appropriate action.

·6· · · · · · · · · Q.· ·Thank you.

·7· · · · · · · · · Sir, if I could ask you to turn up

·8· ·tab 114, please.· Exhibit No. 51.

·9· · · · · · · · · Sir, this is the third report that

10· ·the Trow Engineering firm provided to Algoma, to Mr.

11· ·Caughill, and it's dated November 6th, 1995.

12· · · · · · · · · And if you turn to page 3 of the

13· ·report, the authors write under the question:

14· · · · · · · · · · ·"'What is the estimated life

15· · · · · · · · · ·of the composite roof deck?'"

16· · · · · · · · · They write:

17· · · · · · · · · · ·"The roof deck presently

18· · · · · · · · · ·contains areas of de-bonded

19· · · · · · · · · ·concrete topping.· These areas

20· · · · · · · · · ·need to be removed and a new

21· · · · · · · · · ·bonded topping installed to

22· · · · · · · · · ·maintain the structural

23· · · · · · · · · ·integrity of the slab.· This

24· · · · · · · · · ·should be carried out as soon

25· · · · · · · · · ·as possible.

·1· · · · · · · · · · ·If the de-bonded topping is

·2· · · · · · · · · ·not repaired, the core slabs

·3· · · · · · · · · ·will not be able to safely

·4· · · · · · · · · ·carry the dead load of the

·5· · · · · · · · · ·topping since the topping and

·6· · · · · · · · · ·core slabs must be bonded.

·7· · · · · · · · · ·Ongoing leakage through the

·8· · · · · · · · · ·joints in the topping and core

·9· · · · · · · · · ·slabs will continue to cause

10· · · · · · · · · ·deterioration of the topping

11· · · · · · · · · ·and core slabs due to

12· · · · · · · · · ·freeze/thaw cycles and chloride

13· · · · · · · · · ·contamination of the core slabs

14· · · · · · · · · ·and subsequent corrosion of the

15· · · · · · · · · ·pre-stress strands in the core

16· · · · · · · · · ·slabs and the supporting steel

17· · · · · · · · · ·beams."

18· · · · · · · · · Then if you turn to page 5 of the

19· ·report -- actually the next page, page 4 -- they

20· ·identify two options, one of which is to remove the

21· ·de-bonded concrete topping, and put a waterproof

22· ·membrane on the entire deck, and the other is to

23· ·identify leaking cracks, locally remove concrete

24· ·topping which has been de-bonded, repair it, put a new

25· ·expansion joint in and caulk the joints in the repair

·1· ·areas, and install a roof canopy structure over part

·2· ·of the roof.

·3· · · · · · · · · Then under the heading

·4· ·"Recommendations", they note at the bottom of page 4

·5· ·that they recommend Option 1, which is to remove and

·6· ·replace the de-bonded concrete topping and install

·7· ·a waterproofing membrane over the entire deck.

·8· · · · · · · · · Then if you go to the next page, sir,

·9· ·they give their cost estimate for what they recommend,

10· ·which is $1.25 million to $1.47 million.

11· · · · · · · · · Sir, if you had seen this report at the

12· ·time it was produced, what would you have done?

13· · · · · · · · · A.· ·Again, as I said, it would have

14· ·been turned over to the Chief Building Official to

15· ·undertake the review, comment and act according to

16· ·his authority under the Act.

17· · · · · · · · · Q.· ·Under the Property Standards --

18· · · · · · · · · A.· ·Under either the Property

19· ·Standards or the Building Code.

20· · · · · · · · · Q.· ·Thank you.· Sir, returning to

21· ·the issue of the library, did you have

22· ·an understanding during your tenure at the City, the

23· ·first tenure, did you have an understanding of why

24· ·the library was in the mall?

25· · · · · · · · · A.· ·Yes, I --

·1· · · · · · · · · Q.· ·What was your understanding?

·2· · · · · · · · · A.· ·My understanding -- well, going

·3· ·back is, as the Librarian had indicated, is that the

·4· ·previous facilities on Mary Walk were insufficient

·5· ·to house the library structurally as well, and it

·6· ·was decided -- and that was before my tenure and I'm

·7· ·just going by what I learned after -- is that to

·8· ·move it to the mall would be beneficial to both

·9· ·parties, in that the mall would have a major tenant,

10· ·and also the library would have adequate space, and

11· ·given the traffic, it would be convenient for the

12· ·library in that patrons visiting the mall would then

13· ·have access, easy access to the library and vice

14· ·versa.

15· · · · · · · · · So, in -- and it was of benefit to both

16· ·parties to move there and, particularly in view of

17· ·what ultimately happened in Elliot Lake with regard to

18· ·the closure of the mines.

19· · · · · · · · · Q.· ·How was the closure of the mines

20· ·related to the moving of the library into the mall?

21· · · · · · · · · A.· ·Well, I'm -- I don't know, in

22· ·terms of -- I wasn't aware of all the economic

23· ·issues, in terms of the mall at the time, but -- so

24· ·I'm not sure -- they didn't know about that but I'm

25· ·just saying it was -- after-the-fact it turned out

·1· ·to be a good move, from the point of supporting the

·2· ·mall.

·3· · · · · · · · · Q.· ·What was the view of the City

·4· ·staff and Council, as to the importance of the mall

·5· ·to the community?

·6· · · · · · · · · A.· ·It was felt that it was

·7· ·an integral part of the economic fabric of the

·8· ·community.

·9· · · · · · · · · Q.· ·And why was that?

10· · · · · · · · · A.· ·It provided a shopping facility

11· ·for the people.· It was a major centre and

12· ·employment -- provided employment and so forth.

13· · · · · · · · · Q.· ·Was the presence of the enclosed

14· ·shopping mall in the City of Elliot Lake seen as

15· ·important to the goal of changing the economic focus

16· ·from mines to retirement?

17· · · · · · · · · A.· ·That -- at the -- at the time of

18· ·the review that was integral to the marketing, if

19· ·you will, of the City of Elliot Lake.

20· · · · · · · · · Q.· ·They needed a mall?

21· · · · · · · · · A.· ·Well, they needed a major

22· ·commercial centre that would work for them, yes.

23· · · · · · · · · Q.· ·And what was the view of the

24· ·City staff and Council of the importance of the

25· ·library to the wellbeing of the mall?

·1· · · · · · · · · A.· ·Oh, the library occupied

·2· ·a significant amount of space, compared to the other

·3· ·areas, and it provided, again, rent to assist the

·4· ·mall, in that if the library were not there, I can't

·5· ·say as to how easy it would have been for them to

·6· ·market that space, in that there were other

·7· ·vacancies in the mall at the time.

·8· · · · · · · · · Q.· ·Would I be fair in concluding

·9· ·that there was a view then, on the part of City

10· ·staff and Council, that the mall was important to

11· ·the community and the library was important to the

12· ·mall?

13· · · · · · · · · A.· ·I think that would be safe to

14· ·say, yes.

15· · · · · · · · · Q.· ·Do you know what those views, if

16· ·any -- what those views had to do with the decision

17· ·to put the library into the mall?

18· · · · · · · · · A.· ·In 1989?

19· · · · · · · · · Q.· ·Yes.

20· · · · · · · · · A.· ·Given that I wasn't privy or

21· ·part of those discussions, outside of what I saw and

22· ·what happened after-the-fact that I arrived in

23· ·Elliot Lake, I just saw what -- how it worked after.

24· · · · · · · · · I wasn't, as I said, part of the

25· ·discussions at the time.

·1· · · · · · · · · Q.· ·You weren't part of the

·2· ·discussions at the time because you weren't there --

·3· · · · · · · · · A.· ·That's right.

·4· · · · · · · · · Q.· ·-- but you did arrive within

·5· ·a year, and so what I'm asking you is, did people

·6· ·who were involved in the discussions, tell you what

·7· ·they believed those views had to do with the

·8· ·decision to put the library into the mall?

·9· · · · · · · · · A.· ·At the time, it had been

10· ·mentioned to me that they felt it was a good move.

11· · · · · · · · · Q.· ·Who told you that?

12· · · · · · · · · A.· ·Well, at the time I know in part

13· ·from the discussions in talking with the Mayor of

14· ·the day.

15· · · · · · · · · Q.· ·Mr. Farkouh?

16· · · · · · · · · A.· ·Mayor Farkouh, yes.

17· · · · · · · · · Q.· ·Did you ever understand that the

18· ·importance of the mall to the community and the

19· ·importance of the library to the mall, should

20· ·influence, in any way, the manner in which you or

21· ·City staff should deal with the issue of leaks in

22· ·the mall?

23· · · · · · · · · A.· ·No, there was nothing ever

24· ·intimated or stated specifically on that respect.

25· · · · · · · · · Q.· ·And just to be clear, do

·1· ·I understand from your evidence that there was no

·2· ·understanding on the part of City staff that they

·3· ·ought to treat the mall differently with respect to

·4· ·the leaks because of the importance of the mall to

·5· ·the community and the library to the mall?

·6· · · · · · · · · A.· ·No, there was no direction or

·7· ·discussion on my part that we should treat the mall

·8· ·differently and I know I did not direct staff to do

·9· ·that otherwise.

10· · · · · · · · · Q.· ·Okay.· If I could ask you to

11· ·turn up Exhibit No. 11-3, which is tab 205, which is

12· ·in Volume 4, sir.

13· · · · · · · · · Sir, this is -- it's an exhibit which

14· ·is a -- which contains a number of letters spanning

15· ·a period of time and I am just going to take you to

16· ·some of them.

17· · · · · · · · · If I could have, Ms. Kuka, page 3972

18· ·which is the fifth page of the exhibit.

19· · · · · · · · · This is a memorandum to Ms. Fazekas,

20· ·the Librarian, from P Butler, Phil Butler, the

21· ·secretary of the JHSC, that's the Joint Health and

22· ·Safety Committee.

23· · · · · · · · · A.· ·Yes, sir.

24· · · · · · · · · Q.· ·And the Joint Health and Safety

25· ·Committee, as I understand it, is a committee

·1· ·mandated by the Occupational Health and Safety Act

·2· ·which all employers are required to have; correct?

·3· · · · · · · · · A.· ·That's correct, yes.

·4· · · · · · · · · Q.· ·And Mr. Butler writes to Ms.

·5· ·Fazekas and advises her that:

·6· · · · · · · · · · ·"An inspection of the library

·7· · · · · · · · · ·was conducted on August 26,

·8· · · · · · · · · ·1998 by members of the ...

·9· · · · · · · · · ·Committee."

10· · · · · · · · · And he attaches a list of the items

11· ·that the committee would like brought to Ms. Fazekas'

12· ·attention.

13· · · · · · · · · If you turn over to the next page, you

14· ·can see that item number 1 is:

15· · · · · · · · · · ·"Numerous ceiling tiles,

16· · · · · · · · · ·fluorescent lights and light

17· · · · · · · · · ·covers are missing.· To ensure

18· · · · · · · · · ·proper lighting, heating and

19· · · · · · · · · ·ventilation, it is recommended

20· · · · · · · · · ·these items be installed.· The

21· · · · · · · · · ·JHSC was also advised that the

22· · · · · · · · · ·Fire Code requires all ceiling

23· · · · · · · · · ·tiles to be in place."

24· · · · · · · · · And item number 3 is:

25· · · · · · · · · · ·"Two electrical receptacles

·1· · · · · · · · · ·require replacement.· One

·2· · · · · · · · · ·damaged plug which had loose

·3· · · · · · · · · ·wires were covered with tape.

·4· · · · · · · · · ·These items should be replaced

·5· · · · · · · · · ·or properly capped."

·6· · · · · · · · · Then if you turn to the next page, this

·7· ·is a memorandum from Ms. Fazekas to Mr. Butler dated

·8· ·December 9th, 1998, so just over a month after his

·9· ·memo to her and it is in response to his memo to her,

10· ·and under item (1), she writes:

11· · · · · · · · · · ·"Ceiling tiles: Discussion

12· · · · · · · · · ·with Mr. Bauthus on October 9.

13· · · · · · · · · ·He had met with Mr. Liautaud,

14· · · · · · · · · ·Mall Manager, earlier that day

15· · · · · · · · · ·without resolution of the

16· · · · · · · · · ·issue.· Mr. Bauthus seems

17· · · · · · · · · ·reluctant to pressure the mall

18· · · · · · · · · ·on this issue.· Later in the

19· · · · · · · · · ·month, I discussed the issue

20· · · · · · · · · ·with Mr. Bishop who suggested

21· · · · · · · · · ·that the Board withhold their

22· · · · · · · · · ·rent in protest."

23· · · · · · · · · Do you recall this discussion with Ms.

24· ·Fazekas, sir?

25· · · · · · · · · A.· ·Specifically, I don't, but given

·1· ·that she had said she had talked to me and I know

·2· ·I did talk to her about a number of issues,

·3· ·that's -- it would have and could have been part of

·4· ·our discussions.

·5· · · · · · · · · I know I take a look at it.· And

·6· ·meeting with Mr. Liautaud, I know I had met with him

·7· ·on a number of times on different issues and I know

·8· ·I had talked to him with regard to the issues of the

·9· ·library and the water and that he -- and he indicated

10· ·that he had been working -- the mall had been working

11· ·to attempt to remediate the water infiltration and,

12· ·I guess, in terms of looking at the issue of

13· ·withholding rent, and I look at this as part of the

14· ·expenses that the library incurred, Mr. Liautaud would

15· ·have pointed out very directly to me that under the

16· ·terms of the lease between the mall and the library,

17· ·that those maintenance items were the responsibility

18· ·of the tenant, and to withhold rent or otherwise,

19· ·would be contrary to the terms of the lease.

20· · · · · · · · · Q.· ·Well, that's what he said the

21· ·lease meant; right?

22· · · · · · · · · A.· ·Yeah, and I had -- I can't speak

23· ·to the timing but I know I had -- at some point in

24· ·time, whether it was in the time of that tenure or

25· ·later, I had talked to our solicitor and she had

·1· ·confirmed that interpretation.

·2· · · · · · · · · Q.· ·The City though -- am I right --

·3· ·wore two hats in respect of this issue?

·4· · · · · · · · · The City, at least the Library Board

·5· ·was a tenant, and the City was also a regulator;

·6· ·correct?

·7· · · · · · · · · A.· ·That's correct, yes.

·8· · · · · · · · · Q.· ·And so what you've just told me

·9· ·about, as I understand it, is your discussions with

10· ·Mr. Liautaud in respect of your ability as a tenant,

11· ·to deal with this issue; correct?

12· · · · · · · · · A.· ·Uh-hmm.· Yes.

13· · · · · · · · · Q.· ·Did you refer -- in October of

14· ·1998, did you refer the issue of the leaks to Mr.

15· ·Pigeau so that he could deal with it as a breach of

16· ·the Property Standards by-law which required the

17· ·mall to be watertight?

18· · · · · · · · · A.· ·No, I don't recall at that time

19· ·that I did.· I don't think I did, but I can't

20· ·recall.

21· · · · · · · · · Q.· ·Can you explain to me why you

22· ·did not do that?

23· · · · · · · · · A.· ·I guess part of it was the

24· ·discussion with Mr. Liautaud and seeing the activity

25· ·that they were working on or attempting to stop up

·1· ·or reduce the impact of the leaks and there was

·2· ·ongoing work in that regard.

·3· · · · · · · · · Q.· ·Did you ever ask Mr. Liautaud,

·4· ·or anybody else from Algoma, if they had obtained

·5· ·professional advice with respect to the issue of the

·6· ·leaks?

·7· · · · · · · · · A.· ·I don't recall that

·8· ·I specifically asked that.

·9· · · · · · · · · Q.· ·Okay.· Can you -- let me put it

10· ·this way: Ms. Fazekas wrote that you seemed

11· ·reluctant to pressure the mall on that issue, that

12· ·is the issue of the leaks.

13· · · · · · · · · Can you -- is that your -- is that

14· ·consistent with your recollection, sir?

15· · · · · · · · · A.· ·I can't -- I don't know why she

16· ·would have commented in such a way.

17· · · · · · · · · Q.· ·Were you reluctant to press Mr.

18· ·Liautaud?

19· · · · · · · · · A.· ·No, I was not.

20· · · · · · · · · Q.· ·If I could ask you to turn two

21· ·pages along.· This is a letter dated December 30th,

22· ·1998.· It's in the same exhibit.

23· · · · · · · · · And in the letter -- this is a letter

24· ·from Ms. Fazekas to Mr. Burling, the clerk.· She

25· ·writes to tell him that at the November 12th

·1· ·meeting -- this is a letter that was dated December

·2· ·30th, 1998, and she writes to say that:

·3· · · · · · · · · · ·"At the November 12th meeting

·4· · · · · · · · · ·of the Library Board ... the

·5· · · · · · · · · ·Board passed the following

·6· · · · · · · · · ·resolution ...

·7· · · · · · · · · · ·Whereas the Library is

·8· · · · · · · · · ·constantly subject to water

·9· · · · · · · · · ·damage from the leaky roof,

10· · · · · · · · · · ·Whereas, this water affects the

11· · · · · · · · · condition of the collection,

12· · · · · · · · · presents health and safety problems

13· · · · · · · · · and presents an unpleasant aesthetic

14· · · · · · · · · appearance in a public building,

15· · · · · · · · · · ·Whereas, the Library Board has

16· · · · · · · · · repeatedly approached the landlord

17· · · · · · · · · but has not received a positive

18· · · · · · · · · response,

19· · · · · · · · · · ·Whereas, there is concern that

20· · · · · · · · · municipal insurance coverage may be

21· · · · · · · · · affected by lack of action.

22· · · · · · · · · · ·Be it resolved that the City

23· · · · · · · · · Council be approached to increase

24· · · · · · · · · the Library's operating budget

25· · · · · · · · · sufficiently that the Library Board

·1· · · · · · · · · can address these ongoing

·2· · · · · · · · · maintenance concerns."

·3· · · · · · · · · And she attaches a report which is at

·4· ·the next page of the same exhibit.· And the report,

·5· ·LIB99-1, if we go over to the next page, outlines

·6· ·under the heading "Background", the report indicates

·7· ·that:

·8· · · · · · · · · · ·"In 1989, the Library was

·9· · · · · · · · · ·moved to the ... mall and ...

10· · · · · · · · · ·At the time of negotiation, the

11· · · · · · · · · ·Library Board was assured that

12· · · · · · · · · ·the mall's chronic problem with

13· · · · · · · · · ·a leaky roof had been dealt

14· · · · · · · · · ·with.· From that time on, the

15· · · · · · · · · ·library has had problems with

16· · · · · · · · · ·water damage, poor air quality

17· · · · · · · · · ·and decrease in the aesthetic

18· · · · · · · · · ·quality of the library's

19· · · · · · · · · ·appearance."

20· · · · · · · · · And then moving down to the fourth

21· ·paragraph, the report indicates:

22· · · · · · · · · · ·"The water damage created by

23· · · · · · · · · ·the leaky roof does not always

24· · · · · · · · · ·occur in the same place;

25· · · · · · · · · ·however, almost every time it

·1· · · · · · · · · ·rains, the roof does leak

·2· · · · · · · · · ·somewhere in the library.· When

·3· · · · · · · · · ·the staff is aware that it is

·4· · · · · · · · · ·raining, they try to cover

·5· · · · · · · · · ·possible spots with plastic

·6· · · · · · · · · ·where rain might come in as it

·7· · · · · · · · · ·has come in previously.

·8· · · · · · · · · ·Usually, the staff is trying to

·9· · · · · · · · · ·protect computer equipment,

10· · · · · · · · · ·video and/or book collections

11· · · · · · · · · ·and audio-visual equipment.

12· · · · · · · · · ·The latest water damage

13· · · · · · · · · ·sustained was along the wall

14· · · · · · · · · ·beside the circulation desk

15· · · · · · · · · ·when three balls of water

16· · · · · · · · · ·collected under the latex to

17· · · · · · · · · ·flow down the wall."

18· · · · · · · · · Sir, then if you turn to the next

19· ·page of the report, you can see that the report

20· ·concludes under the heading "Summary":

21· · · · · · · · · · ·"The Mall Management should

22· · · · · · · · · ·be made aware that the damage

23· · · · · · · · · ·to the library location's

24· · · · · · · · · ·ceiling is not within

25· · · · · · · · · ·'reasonable' limits.· Their

·1· · · · · · · · · ·responsibility to their tenants

·2· · · · · · · · · ·is to provide a dry and safe

·3· · · · · · · · · ·environment."

·4· · · · · · · · · Sir, did you see this report when it

·5· ·was submitted to Mr. Burling?

·6· · · · · · · · · A.· ·Yes, sir.

·7· · · · · · · · · Q.· ·And when you got the report,

·8· ·sir, and before it was presented to the council, did

·9· ·you refer it to Mr. Pigeau?

10· · · · · · · · · A.· ·I don't think so, no.

11· · · · · · · · · Q.· ·Can you tell me why not?

12· · · · · · · · · A.· ·At this point, I can't answer

13· ·that.

14· · · · · · · · · Q.· ·If you turn to the next tab,

15· ·sir, Exhibit No. 2016, tab 206.

16· · · · · · · · · A.· ·206.

17· · · · · · · · · Q.· ·That's it.· This is a letter to

18· ·Ms. Fazekas from Mr. Burling in which Mr. Burling

19· ·writes:

20· · · · · · · · · · ·"At a regular meeting of the

21· · · · · · · · · ·council, held Monday, January

22· · · · · · · · · ·11th, 1999, the following

23· · · · · · · · · ·resolutions were passed

24· · · · · · · · · ·concerning the ... resolution

25· · · · · · · · · ·of the Library Board."

·1· · · · · · · · · And:

·2· · · · · · · · · · ·"That resolution 37/98 of the

·3· · · · · · · · · ·Public Library Board dated

·4· · · · · · · · · ·November 12, 1998 concerning

·5· · · · · · · · · ·a request for an increase in

·6· · · · · · · · · ·their operating budget to deal

·7· · · · · · · · · ·with maintenance concerns, be

·8· · · · · · · · · ·received."

·9· · · · · · · · · And stopping there, sir, that was the

10· ·resolution Council passed; correct?

11· · · · · · · · · A.· ·That's right, yes.

12· · · · · · · · · Q.· ·And what does it mean when a --

13· ·in Council jargon, when the resolution says they

14· ·have "received" a report about a request?

15· · · · · · · · · A.· ·It means that it's received

16· ·information and at that point the council is not

17· ·making any further direction with regard to the

18· ·specific request.

19· · · · · · · · · However, looking at the timing of that

20· ·request, that would be coming in the same time period

21· ·that staff are working on the budget for Council

22· ·consideration, and that request would have been

23· ·included with the other issues that we consider when

24· ·we're doing the budget.

25· · · · · · · · · Both, I would anticipate, the Librarian

·1· ·and the City Treasurer would have that as part of

·2· ·their notes and knowing the process, when we sat down

·3· ·with the Librarian to go over her budget, that would

·4· ·be done by the Treasurer and myself.

·5· · · · · · · · · As to what amount should be included,

·6· ·for the library requisition, this would have been

·7· ·included as part of those discussions so that the

·8· ·final numbers presented to Council would have included

·9· ·amounts necessary to meet those requirements, as

10· ·identified by the Librarian.

11· · · · · · · · · And I think if you look further in

12· ·terms of the financial reports, additional funds were,

13· ·in fact, allocated for the library overall, because if

14· ·you go through the financial -- not the financial, but

15· ·the municipal environment at that time, we were going

16· ·through the impact of the Provincial "Who does what?"

17· ·program, I guess, looking at the downloading and the

18· ·uploading and the impact on the municipalities, and if

19· ·you go back through the '98/2000 period, the

20· ·municipality was cutting back significantly because of

21· ·the downloading issues.

22· · · · · · · · · However, if you look at what happened

23· ·with the library, they, in fact, got more -- more

24· ·money during this period for their operations.

25· · · · · · · · · So, they did not suffer the attrition

·1· ·or the reductions that were dictated by the "Who does

·2· ·what?"

·3· · · · · · · · · So, in terms of -- without looking at

·4· ·this and saying this exact amount was allocated, and

·5· ·specifically the library did receive additional funds,

·6· ·and when you look at the monies expended, those monies

·7· ·were allocated and expended by the library.

·8· · · · · · · · · Q.· ·So just -- just break this down.

·9· ·The first thing that I just want to be clear on, is

10· ·that the effect of a resolution that a report be

11· ·received, is that the council has received the

12· ·report, but has made no decision; is that correct?

13· · · · · · · · · A.· ·That is correct.

14· · · · · · · · · Q.· ·And that's what happened in this

15· ·case?

16· · · · · · · · · A.· ·That is correct.

17· · · · · · · · · Q.· ·And what you've told us is that

18· ·subsequently the board got some more money, in

19· ·accordance with their request; correct?

20· · · · · · · · · A.· ·Yes.

21· · · · · · · · · Q.· ·And what the Library Board was

22· ·asking was money to clean up the mess caused by the

23· ·leaks; correct?

24· · · · · · · · · A.· ·That's correct, yes, sorry --

25· ·yes.

·1· · · · · · · · · Q.· ·And as the letter from Mr.

·2· ·Burling indicates, this is what I -- the next thing

·3· ·underneath the "Formal Resolution," Mr. Burling

·4· ·wrote:

·5· · · · · · · · · · ·"During the discussion, the

·6· · · · · · · · · ·administration was directed to

·7· · · · · · · · · ·formally approach the Landlord

·8· · · · · · · · · ·for the purpose of seeking

·9· · · · · · · · · ·a resolution of the issues."

10· · · · · · · · · That was what Council directed you to

11· ·do?

12· · · · · · · · · A.· ·Yes.

13· · · · · · · · · Q.· ·Did you do that?

14· · · · · · · · · A.· ·I would imagine that the

15· ·Chief Building Official would have taken and

16· ·continued discussions with the mall people -- the

17· ·mall management.

18· · · · · · · · · Q.· ·Well, we -- a few moments ago we

19· ·discussed the fact that you -- the City was wearing

20· ·two hats here.· You were both a tenant and

21· ·a regulator.

22· · · · · · · · · When you took this -- when you read

23· ·this or heard this direction that I've just quoted

24· ·to you from Mr. Burling's letter, did you understand

25· ·that to be a direction to deal with it as a tenant

·1· ·or as a regulator?

·2· · · · · · · · · A.· ·I would presume under both --

·3· ·both hats.

·4· · · · · · · · · Q.· ·So, as a tenant you'd try to get

·5· ·the landlord to fix the roof, and as a regulator you

·6· ·would expect Mr. Pigeau to consider his options

·7· ·under the Property Standards by-law; is that

·8· ·correct?

·9· · · · · · · · · A.· ·Yeah, and meet with the -- and

10· ·meet with the owner to determine what they were

11· ·doing and how they're --

12· · · · · · · · · Q.· ·Do you recall having that

13· ·discussion with Mr. Pigeau?

14· · · · · · · · · A.· ·At this point in time, I don't

15· ·recall that specific discussion.

16· · · · · · · · · MR. KEARNS:· Excuse me, Mr.

17· ·Commissioner, I wonder if we might clear up whether,

18· ·in fact, the City is the tenant or whether the

19· ·Library Board is the tenant.

20· · · · · · · · · Because I'm not sure and I think it's

21· ·important.

22· · · · · · · · · MR. DOODY:· Mr. Commissioner,

23· ·I think -- if my friend reads the transcript, he

24· ·will see that I've said the Library Board, but I'm

25· ·happy to clear that up.

·1· · · · · · · · · I'm not sure that's an objection or

·2· ·more the kind of thing you'd hear in a discovery, but

·3· ·in any event I'm happy to clear it up.

·4· · · · · · · · · THE COMMISSIONER:· Clarify it again

·5· ·for all of our --

·6· · · · · · · · · BY MR. DOODY:

·7· · · · · · · · · Q.· ·As I understand it, Mr. Bauthus,

·8· ·the lease was between the Library Board and the

·9· ·mall -- Algo Property; right?

10· · · · · · · · · A.· ·Yes, sir.

11· · · · · · · · · Q.· ·And we're talking about the

12· ·first lease; correct?

13· · · · · · · · · A.· ·Yes, sir.

14· · · · · · · · · Q.· ·And when you next come back,

15· ·we'll hear evidence about the second lease, but

16· ·perhaps this would be an opportune time.

17· · · · · · · · · Can you explain to me, sir, how the

18· ·library functioned, vis-a-vis the City, during

19· ·your -- we'll talk now about your first tenure, the

20· ·first ten years?

21· · · · · · · · · A.· ·Oh, I guess legally the library

22· ·is a separate board from the municipality.

23· · · · · · · · · They operate under the Ontario

24· ·Libraries Act and they -- and it has a board set up to

25· ·which Council appoints some members.· However, the

·1· ·number of members on the board is discretionary so

·2· ·long as -- the Act identifies a minimum and a maximum

·3· ·and so long as Council members are not a majority on

·4· ·the board.

·5· · · · · · · · · And they operate separate from the

·6· ·municipality.· However, the municipality is

·7· ·responsible for the majority of funding for the

·8· ·library.

·9· · · · · · · · · In the early '90s there was a small

10· ·grant for municipal libraries.· However, the majority

11· ·of the funding came from the municipality.

12· · · · · · · · · And it was the Library Board's

13· ·responsibility to take that and deliver the services

14· ·as identified under the Act.

15· · · · · · · · · Our relationship with the Library Board

16· ·was very much that, except that the City, because it

17· ·had the resources and infrastructure to undertake the

18· ·accounting, payroll, human resources, health and

19· ·safety, insurance, a number of other things along

20· ·those lines, did -- took on that responsibility on

21· ·behalf of the library operation, and my involvement

22· ·for the better part, with regard to the library, came

23· ·primarily at budget time.

24· · · · · · · · · I worked with -- I worked with the

25· ·Chief Librarian to develop the budgets and as to what

·1· ·the amounts of the annual allocation would be, based

·2· ·on the library budget, and I guess when we take a look

·3· ·at -- during that period, there was a fair bit of

·4· ·communication between myself and the Librarian

·5· ·because, as I had explained earlier, the City had gone

·6· ·through the restructuring necessitated by the mines

·7· ·closure in the first instance and the reductions that

·8· ·were needed to address the reduction in tax revenues

·9· ·there, and then were effaced through the '98/2000

10· ·period, the reductions that were caused by the

11· ·Provincial policy under the "Who does what?" program.

12· · · · · · · · · Q.· ·To whom did Ms. Fazekas report?

13· · · · · · · · · A.· ·She reported to the board.

14· · · · · · · · · Q.· ·The Library Board?

15· · · · · · · · · A.· ·Yes, sorry.

16· · · · · · · · · Q.· ·Did she report to somebody in

17· ·the City administration?

18· · · · · · · · · A.· ·For the day-to-day, the

19· ·accounting things, I guess she had interaction with

20· ·the City staff and the City Treasurer.

21· · · · · · · · · As I had said to you, she didn't report

22· ·to me per se, with regard to operations or anything.

23· ·However, in terms of arriving at a budget that's

24· ·acceptable, we worked together because the way we had

25· ·done it, because of the -- because of the cuts, we had

·1· ·undertaken setting financial objectives for all

·2· ·departments, and in going through the budget process

·3· ·we met with the library, setting out what their

·4· ·financial objective would be in setting the budget and

·5· ·whether or not -- or how they might achieve that.

·6· · · · · · · · · Q.· ·And in that process was the

·7· ·library treated any differently from another

·8· ·department of the City?

·9· · · · · · · · · A.· ·In that process?· No.

10· · · · · · · · · Q.· ·And we saw earlier the Joint

11· ·Health and Safety Committee dealt with issues of the

12· ·library.· Am I correct that that committee was a

13· ·committee staffed by employees of the City, as well

14· ·as Ms. Fazekas as the Librarian?

15· · · · · · · · · A.· ·Yes, there was representation

16· ·from about the library on that and we treated --

17· · · · · · · · · Q.· ·Well, Ms. Fazekas was from the

18· ·library?

19· · · · · · · · · A.· ·Yes.

20· · · · · · · · · Q.· ·Mr. Butler worked for the City?

21· · · · · · · · · A.· ·Yes.

22· · · · · · · · · Q.· ·Later we'll see other reports

23· ·from the Joint Health and Safety Committee from Ms.

24· ·Tania Lee Williams?

25· · · · · · · · · A.· ·Tania Lee Williams, yes.

·1· · · · · · · · · Q.· ·And a Ms. Leddy, they were

·2· ·employees of the City; correct?

·3· · · · · · · · · A.· ·Yes.

·4· · · · · · · · · Q.· ·Am I correct that with respect

·5· ·to the Joint Health and Safety Committee, the

·6· ·library was treated essentially in the same way as

·7· ·another department of the City?

·8· · · · · · · · · A.· ·Yes.

·9· · · · · · · · · Q.· ·And the City -- the library

10· ·employees were paid by the City?

11· · · · · · · · · A.· ·Yes, they were.

12· · · · · · · · · Q.· ·And they were part of the same

13· ·pension and benefit scheme as the City?

14· · · · · · · · · A.· ·Yes, sir.

15· · · · · · · · · Q.· ·But, from what I understand from

16· ·your evidence so far, is that the City understood

17· ·that the library was a separate legal entity and

18· ·therefore there were some differences in the way

19· ·that you dealt with it?

20· · · · · · · · · A.· ·Yes, in terms of the operations.

21· · · · · · · · · As I said, I did not provide direction

22· ·in terms of the operations of the library and, in

23· ·fact, even with the budget process, that while I would

24· ·work with Ms. Fazekas, and subsequently the other

25· ·librarians, in terms of the budget, it was still the

·1· ·responsibility of the Librarian to go back to the

·2· ·board and recommend the budget to the board and then

·3· ·that budget would be recommended back to be included

·4· ·in suggesting that this be the allocation that the

·5· ·City provides for library operations.

·6· · · · · · · · · Q.· ·So, to go back to Mr. Kearns'

·7· ·point, when you were talking to Mr. Liautaud -- and

·8· ·we saw in the notes from Ms. Fazekas that you did

·9· ·from time to time, and you told us you spoke to Mr.

10· ·Liautaud from time to time, did you consider

11· ·yourself to be speaking as a tenant, or at least

12· ·a representative of a tenant, that is the Library

13· ·Board?

14· · · · · · · · · A.· ·Yeah, at that time I would have.

15· · · · · · · · · I didn't view it is as a regulatory

16· ·officer.

17· · · · · · · · · Q.· ·Right.· And so now returning to

18· ·this letter, Exhibit No. 2016 where Mr. Burling

19· ·notes that:

20· · · · · · · · · · ·"The administration was

21· · · · · · · · · ·directed to formally approach

22· · · · · · · · · ·the Landlord for the purpose of

23· · · · · · · · · ·seeking a resolution of the

24· · · · · · · · · ·issues."

25· · · · · · · · · I think you told me earlier that you

·1· ·saw that as a direction to deal with it in both

·2· ·ways, both as a tenant and as a regulator; is that

·3· ·correct?

·4· · · · · · · · · A.· ·I would look at that, yes.

·5· · · · · · · · · Q.· ·Okay.· Did you subsequently ask

·6· ·Mr. Pigeau what, if any, steps he'd taken as

·7· ·a result of your referral of this issue to him?

·8· · · · · · · · · A.· ·I don't recall any discussion on

·9· ·that regard.

10· · · · · · · · · Q.· ·And, sir, would you consider

11· ·this report of the Library Board to Council, as

12· ·a complaint within the meaning of the by-law

13· ·enforcement policy that we discussed yesterday?

14· · · · · · · · · A.· ·It could be construed as

15· ·a complaint for the water leaks.

16· · · · · · · · · Q.· ·You say, "It could be construed

17· ·as a complaint."

18· · · · · · · · · A.· ·Yes.

19· · · · · · · · · Q.· ·Could you explain to me how it

20· ·could not be construed as a complaint; isn't it

21· ·pretty obviously a complaint?

22· · · · · · · · · A.· ·Yes, I would say so.· Yes.

23· · · · · · · · · Q.· ·It's a formal resolution of the

24· ·board, saying that they've had leaks for years;

25· ·that's a complaint; correct?

·1· · · · · · · · · That's correct?

·2· · · · · · · · · A.· ·Yes, sir.

·3· · · · · · · · · Q.· ·If I could ask you to turn up

·4· ·Exhibit No. 11-3 at tab 205, sir.

·5· · · · · · · · · This would be -- if I can find it

·6· ·here -- this would be the third -- one, two, three,

·7· ·fourth page of this exhibit.

·8· · · · · · · · · This is a memorandum to Bonnie

·9· ·DeBortoli from Ms. Fazekas dated July 19th, 1999.

10· ·And she writes:

11· · · · · · · · · · ·"Please find enclosed

12· · · · · · · · · ·previous correspondence with

13· · · · · · · · · ·Phil Butler ..."

14· · · · · · · · · First of all, I should ask, who is

15· ·Bonnie DeBortoli?

16· · · · · · · · · A.· ·She is an administration

17· ·assistant to the police inspector, or at that time

18· ·the police chief, for the Elliot Lake Police.

19· · · · · · · · · Q.· ·And she was on the Joint Health

20· ·and Safety Committee of the City?

21· · · · · · · · · A.· ·Yes.

22· · · · · · · · · Q.· ·And so Ms. Fazekas writes to her

23· ·and says:

24· · · · · · · · · · ·"Also, there is a package of

25· · · · · · · · · ·information which was

·1· · · · · · · · · ·distributed to City Council at

·2· · · · · · · · · ·their meeting in January of

·3· · · · · · · · · ·this year.· To date, no action

·4· · · · · · · · · ·has been taken by Mr. Bauthus

·5· · · · · · · · · ·in this regard.· He had

·6· · · · · · · · · ·suggested that we wait until

·7· · · · · · · · · ·the work was completed,

·8· · · · · · · · · ·approaching Mr. Liautaud then

·9· · · · · · · · · ·with the invoices."

10· · · · · · · · · Do you recall -- well, first of all, is

11· ·Ms. Fazekas correct when she wrote in July of 1999

12· ·that no action had been taken by Mr. Bauthus in

13· ·respect of the matters set out in the report to

14· ·Council that we just looked at?

15· · · · · · · · · A.· ·I don't think that that would be

16· ·wholly correct in that she's saying, "He had

17· ·suggested that we wait until the work was

18· ·completed."· I'm not -- I can't relate specifically

19· ·what the work is there, but I would anticipate that

20· ·it would be -- or assume that it would be work that

21· ·the mall was undertaking in terms of attempting to

22· ·stop up the water issues.

23· · · · · · · · · Q.· ·Well, sir, the sentence that you

24· ·refer to in its entirety is this:

25· · · · · · · · · · ·"He" -- that is you -- "had

·1· · · · · · · · · ·suggested that we wait until

·2· · · · · · · · · ·the work was completed,

·3· · · · · · · · · ·approaching Mr. Liautaud then

·4· · · · · · · · · ·with the invoices."

·5· · · · · · · · · And you will recall that what the

·6· ·library had been asking was that the City assist them

·7· ·with paying for the clean-up.

·8· · · · · · · · · And one could read that sentence to

·9· ·have Ms. Fazekas saying that you had suggested that

10· ·the library wait until the work, cleaning up the mess,

11· ·had been completed so that you could then take Mr.

12· ·Liautaud the invoices and ask him to pay for it?

13· · · · · · · · · A.· ·That could be an interpretation,

14· ·yes, sir.

15· · · · · · · · · Q.· ·Well, can you explain to me,

16· ·sir, how the sentence could be interpreted to refer

17· ·to "the work", as being fixing the roof, because the

18· ·City wasn't fixing the roof and wouldn't get any

19· ·invoices for it, would it?

20· · · · · · · · · A.· ·No, it would not.

21· · · · · · · · · Q.· ·So do you agree with me that

22· ·the -- that the -- that what that sentence has to

23· ·mean is what I indicated to you, firstly?

24· · · · · · · · · A.· ·Uh-hmm, well, I would -- in

25· ·looking at that in totality, yes, sir.

·1· · · · · · · · · Q.· ·Does that refresh your memory

·2· ·with respect to the conversation which you had with

·3· ·Ms. Fazekas at that time about this issue?

·4· · · · · · · · · A.· ·No, unfortunately I can't

·5· ·recall.

·6· · · · · · · · · Q.· ·You can't recall.· Okay.

·7· · · · · · · · · Sir, at the time -- at this time in

·8· ·1999, throughout this time, but particularly in

·9· ·1999, when you were -- when you were privy to the

10· ·formal report of the Library Board, did you think

11· ·about the potential effect of the leaks on the

12· ·structure of the building?

13· · · · · · · · · A.· ·No, sir, I -- you know, I guess

14· ·if I look at that, I did not draw a straight line

15· ·relationship between the leaks and the structural

16· ·integrity of the mall.· And you know, on that,

17· ·I think in terms of my view of this -- I did not

18· ·draw that direct inference at any time.

19· · · · · · · · · And I would suggest to you, you know,

20· ·when you -- when we go back and look at this, neither

21· ·did any of the engineers -- and there were a whole

22· ·number of them through those years that had examined

23· ·the water issue, and none of them had felt at that

24· ·time that the water issue created an imminent safety

25· ·issue.

·1· · · · · · · · · None of them had felt at any time --

·2· ·and I guess if you take a look at the engineers that

·3· ·looked at this, and when I go back, you know, in

·4· ·hindsight and look at the reports, you know, they have

·5· ·a professional obligation, as well.

·6· · · · · · · · · In fact, you know, that if they felt

·7· ·that there was an issue -- an imminent safety issue in

·8· ·a public building, they are required under their

·9· ·professional standards to report that.· However, none

10· ·of those individuals had done that.

11· · · · · · · · · I look at here, the issue, in that the

12· ·Ministry of Labour had come in on a number of

13· ·occasions and addressed the leaks, and they came in

14· ·and they just worried about at that time and reported

15· ·on two instances, through the material that I've seen

16· ·here, with regard to the air quality and the mold, and

17· ·they too are mandated with the responsibility of

18· ·workplace safety and they did not draw a direct line

19· ·between the water and the structural safety.

20· · · · · · · · · And these people, the engineers and

21· ·that, these people are trained in that.· Myself, I'm

22· ·a financial person.

23· · · · · · · · · Q.· ·Sir, my question to you was not

24· ·"imminent structural issues", but rather, did you

25· ·ever consider there might be structural issues

·1· ·either imminent or in the future as a result of the

·2· ·leaks?

·3· · · · · · · · · A.· ·I did not draw that immediate

·4· ·resolution -- correlation at that time.

·5· · · · · · · · · Q.· ·And to be fair to the engineers,

·6· ·you will agree with me that all of the reports that

·7· ·we've gone through this morning, that you have

·8· ·reviewed prior to testifying today, all of those

·9· ·reports indicated that there was potential for

10· ·structural damage in the future if the leaks were

11· ·not fixed, and recommended that the leaks be fixed

12· ·as soon as possible?

13· · · · · · · · · A.· ·Uh-hmm.

14· · · · · · · · · Q.· ·Right?

15· · · · · · · · · A.· ·Yes.· But they did not report to

16· ·any other body than the individual that hired them.

17· · · · · · · · · Q.· ·I understand that, sir.

18· ·I simply wanted to make the record clear, because

19· ·you indicated to me in your answer to my question

20· ·that the engineers had not seen a problem.

21· · · · · · · · · You will agree with me they did

22· ·identify a potential problem?

23· · · · · · · · · A.· ·Yes, sir, and --

24· · · · · · · · · MR. CASSAN:· Just -- if I can object,

25· ·that question slightly misstates the evidence.

·1· · · · · · · · · Mr. Commissioner, Mr. Bauthus did not

·2· ·indicate that the structural engineers did not find

·3· ·a structural problem.· What he said -- and we could

·4· ·read back the transcript, I suppose -- is that they

·5· ·didn't see a structural problem sufficient to alert

·6· ·the City about imminent damage.

·7· · · · · · · · · So, it is just mischaracterizing what

·8· ·he said, and I'd like that clarified, please.

·9· · · · · · · · · THE COMMISSIONER:· I think he was in

10· ·the process of clearing that up.

11· · · · · · · · · I agree with you, Mr. Cassan, that

12· ·without the necessity of looking at the transcript,

13· ·you are probably right.

14· · · · · · · · · Go ahead.

15· · · · · · · · · BY MR. DOODY:

16· · · · · · · · · Q.· ·Yes, and just to make it clear

17· ·none of the reports -- and I am now referring to

18· ·what my friend Mr. Cassan said about the engineers

19· ·not thinking it was important enough to notify the

20· ·City, none of the reports, I think we can agree,

21· ·even discuss the possibility of notifying the City;

22· ·correct?

23· · · · · · · · · A.· ·No, none of the reports discuss

24· ·that.· But however, I guess I'm looking at it with

25· ·the questions that I'm being held to a standard that

·1· ·I have to make that type of a decision, when I don't

·2· ·have the background and the people that do have the

·3· ·background did not draw that inference and felt that

·4· ·it was of sufficient importance to report to

·5· ·a regulatory authority so that appropriate action

·6· ·could be taken.

·7· · · · · · · · · Q.· ·And just so that you understand

·8· ·my role in this, Mr. Bauthus, I'm not holding you to

·9· ·any standard at all.· I'm just asking you questions

10· ·so that the entire story can be laid out at the end

11· ·of the day.

12· · · · · · · · · After your lawyer has had

13· ·an opportunity to question you, and the Commissioner

14· ·has had an opportunity to hear from all of the

15· ·lawyers, the Commissioner will make a decision, so

16· ·I don't want you to take from my questions that

17· ·any -- any conclusion has been reached by me or

18· ·anybody else, but the nature of the process is

19· ·simply one in which I'm required by my duty to ask

20· ·the questions.

21· · · · · · · · · If I could turn now, sir, to the

22· ·question of Retirement Living's purchase of the

23· ·mall.

24· · · · · · · · · And if I could ask you to turn up

25· ·Exhibit No. 3224 which is tab 151, Volume 3, Mr.

·1· ·Bauthus.

·2· · · · · · · · · These are notes of -- I understand,

·3· ·notes taken of a gentleman by the name of Robert

·4· ·Leistner; do you know who Mr. Leistner is, sir?

·5· · · · · · · · · A.· ·Yes, I do.

·6· · · · · · · · · Q.· ·And at the time he was -- in

·7· ·1997, he was the vice-president of Algoma Central

·8· ·Properties; correct?

·9· · · · · · · · · A.· ·Yes.

10· · · · · · · · · Q.· ·And he effectively ran that

11· ·company; that was your understanding of it?

12· · · · · · · · · A.· ·Yes.

13· · · · · · · · · Q.· ·And these notes, say, as

14· ·I understand them, as I've deciphered them and

15· ·I believe this will be confirmed -- reading from the

16· ·top on the right-hand corner there is a date there.

17· · · · · · · · · It says "97/12/05", or December 5,

18· ·1997.· And then it says "Meeting ACP office" and

19· ·then the next line is very hard to read because of

20· ·the fax blackening of the paper, but it says:

21· · · · · · · · · · ·"Mayor George Farkouh, Fred

22· · · · · · · · · ·Bauthus (CAO), Richard

23· · · · · · · · · ·Kennealy, Retirement Living".

24· · · · · · · · · And then there is initials there that

25· ·I can't make out, it might be "TS", and "REL".· ·"REL"

·1· ·are Mr. Leistner's initials.

·2· · · · · · · · · And then it says, "Gen" -- general --

·3· ·"talk about Algo Centre/mall/".· I can't read what's

·4· ·after the "/".

·5· · · · · · · · · And then it says, "and E.L. retail and

·6· ·off" -- for office.

·7· · · · · · · · · And then it says, "and ACP would

·8· ·recommend closing Inn next year if nothing changes.

·9· ·Gave copies of -- "packages."· It may be "franchise",

10· ·I'm not sure.

11· · · · · · · · · Then it says, "Fred to send up next

12· ·week terms of ref" -- it looks like terms of reference

13· ·-- "and CVs".

14· · · · · · · · · And then the next line is, "ACP would

15· ·suggest retail consultants once those terms of

16· ·reference were found", I think it says.

17· · · · · · · · · Sir, can you tell us or do you recall

18· ·this meeting?

19· · · · · · · · · A.· ·Yes, sir.

20· · · · · · · · · Q.· ·Can you tell us what led to this

21· ·meeting?

22· · · · · · · · · A.· ·I think just a general

23· ·discussion as to what the future of the mall and the

24· ·hotel would be in Elliot Lake and Mr. Kennealy,

25· ·Mayor Farkouh and myself went down to talk to Mr.

·1· ·Leistner about it.

·2· · · · · · · · · Q.· ·Who instigated the meeting,

·3· ·Algoma or somebody in Elliot Lake?

·4· · · · · · · · · A.· ·I don't know who would have

·5· ·instigated that meeting.

·6· · · · · · · · · Q.· ·What was your understanding of

·7· ·the issue?· What were you going down there to talk

·8· ·about?

·9· · · · · · · · · A.· ·Oh, there was concern about the

10· ·future of the mall and the hotel and I -- I know --

11· ·I can remember the meeting but I don't have notes or

12· ·the specifics of that, and you know, that we were

13· ·looking at what might happen with the mall and the

14· ·hotel.

15· · · · · · · · · We were seeing, you know, through the

16· ·time, that there is a deterioration in maintenance

17· ·and -- general maintenance in the mall itself.

18· · · · · · · · · Q.· ·And did the City have concerns

19· ·about the deterioration in the hotel?

20· · · · · · · · · A.· ·In the mall and that, yes.

21· · · · · · · · · Q.· ·What were your concerns?

22· · · · · · · · · A.· ·Well, that it would continue to

23· ·be a viable entity within the City.

24· · · · · · · · · Q.· ·Because that was important to

25· ·the City?

·1· · · · · · · · · A.· ·Yes, sir.

·2· · · · · · · · · Q.· ·And why was Mr. Kennealy at this

·3· ·meeting?

·4· · · · · · · · · A.· ·As general manager of Retirement

·5· ·Living, I would take it he was integral in the --

·6· ·integral in terms of what was happening in the city

·7· ·because Retirement Living was the major economic

·8· ·thrust in the city so, of course, anything negative

·9· ·happening to the city and the ability to market the

10· ·city and its services would, of course, have

11· ·a negative impact on his operation as being the

12· ·major operation in the city.

13· · · · · · · · · Q.· ·Okay.· And before the -- before

14· ·the discussion with Mr. Leistner in Sault Ste.

15· ·Marie, did you, the Mayor and Mr. Kennealy have

16· ·a discussion about your approach to this issue?

17· · · · · · · · · A.· ·I'm sure that we would have, but

18· ·I don't recall the details at this time.

19· · · · · · · · · Q.· ·Do you recall whether -- prior

20· ·to this meeting -- there was any discussion about

21· ·Retirement Living purchasing either the hotel or the

22· ·mall?

23· · · · · · · · · A.· ·There might have been.· I can't

24· ·speak specifically to that.

25· · · · · · · · · Q.· ·Okay.· What -- the notes talk

·1· ·about you sending up, next week, the terms of

·2· ·reference.

·3· · · · · · · · · What terms of reference were being

·4· ·discussed there?· And we'll look at them in

·5· ·a minute; I'm sure you've looked at them, but before

·6· ·we just go there, what's your recollection of the

·7· ·terms of reference you were discussing?

·8· · · · · · · · · A.· ·That would be the terms of

·9· ·reference related to the retail study for the city.

10· · · · · · · · · THE COMMISSIONER:· I'm sorry, sir,

11· ·I just didn't hear you.

12· · · · · · · · · THE WITNESS:· The retail study for

13· ·the city and -- we were undertaking and how the mall

14· ·works and that, and so forth.

15· · · · · · · · · BY MR. DOODY:

16· · · · · · · · · Q.· ·What was -- tell us about the

17· ·retail study, what was the retail study?

18· · · · · · · · · A.· ·We wanted to understand what the

19· ·various issues are with regard to retail in the

20· ·city, the type of retail, and what was required, and

21· ·how the mall works into that, and if -- anything

22· ·that we could do to attempt to improve it.

23· · · · · · · · · MR. DOODY:· Okay, and --

24· · · · · · · · · THE COMMISSIONER:· Mr. Doody, it's

25· ·10:30.· We've been going for an hour and a half.

·1· · · · · · · · · MR. DOODY:· Certainly.

·2· · · · · · · · · THE COMMISSIONER:· Is this a good

·3· ·time to break or do you have a few more questions

·4· ·before we do?

·5· · · · · · · · · MR. DOODY:· This is a fine time to

·6· ·break, Mr. Commissioner.

·7· · · · · · · · · THE COMMISSIONER:· We'll take our

·8· ·morning break now.

·9· · · · · · · · · THE CLERK:· Order.· All rise.

10· · · · · · · · · This hearing will recess for 20

11· ·minutes.

12· · · · · · · · · --- RECESS AT 10:30 A.M.

13· · · · · · · · · --- RESUMED AT 10:51 A.M.

14· · · · · · · · · THE COMMISSIONER:· Mr. Doody.

15· · · · · · · · · MR. DOODY:· Thank you,

16· ·Mr. Commissioner.

17· · · · · · · · · Mr. Bauthus, I wonder if you could turn

18· ·up Exhibit No. 400, which is at tab 153.

19· · · · · · · · · And, sir, this -- we just looked, just

20· ·before the break, we looked at the notes that

21· ·Mr. Leistner had made following the meeting in his

22· ·office in Sault Ste. Marie on December the 5th, 1997,

23· ·which was a Friday.

24· · · · · · · · · And then this is a fax cover sheet

25· ·from you to Mr. Leistner of the following Monday,

·1· ·December the 8th; correct?

·2· · · · · · · · · A.· ·That's correct.· Yes, sir.

·3· · · · · · · · · Q.· ·And you say in it:

·4· · · · · · · · · · ·"Enclosed is a copy of the

·5· · · · · · · · · ·Terms of Reference and the CV's

·6· · · · · · · · · ·of the individuals undertaking

·7· · · · · · · · · ·the study."

·8· · · · · · · · · And the study you're talking about is

·9· ·what you just told us about, the retail study?

10· · · · · · · · · A.· ·Yes, sir.

11· · · · · · · · · Q.· ·And I wonder if I could have

12· ·Exhibit No. 2098.

13· · · · · · · · · And, Mr. Bauthus, if our system has

14· ·worked properly, there is a loose page behind the

15· ·document at tab 153.· Is there?

16· · · · · · · · · A.· ·Yeah, there's a number of loose

17· ·pages.· Yes, sir.

18· · · · · · · · · Q.· ·Yeah.· Good.· It's worked,

19· ·thanks to Ms. Kuka, again.

20· · · · · · · · · So this is -- if I could have Exhibit

21· ·No. 2098.

22· · · · · · · · · And so the first page of this

23· ·document, which is attached, I'll note the number at

24· ·the bottom of the page -- we got these documents

25· ·from Algoma -- and the number at the bottom of the

·1· ·page ends in 1244.

·2· · · · · · · · · The previous document we looked at,

·3· ·which was Exhibit 400, ended in 1243, so this is the

·4· ·next document in the package.

·5· · · · · · · · · And the first page is headed "Our

·6· ·Profile: An Experienced Team."

·7· · · · · · · · · And it says:

·8· · · · · · · · · · ·"The people selected to serve

·9· · · · · · · · · ·the City of Elliot Lake have

10· · · · · · · · · ·been chosen based on the unique

11· · · · · · · · · ·requirements of this

12· · · · · · · · · ·engagement.· The team

13· · · · · · · · · ·collectively provides the

14· · · · · · · · · ·experienced technical expertise

15· · · · · · · · · ·to ensure that the engagement

16· · · · · · · · · ·is performed in the most

17· · · · · · · · · ·efficient manner possible."

18· · · · · · · · · And this is a document prepared by

19· ·KPMG; if you go down to the bottom of the page, you

20· ·can see the KPMG logo.

21· · · · · · · · · And do I take it that you had -- that

22· ·the City had spoken to KPMG about this retail study

23· ·you've told us about?

24· · · · · · · · · A.· ·Yes, sir.

25· · · · · · · · · Q.· ·And if you turn to the next --

·1· ·first of all, before you turn the page -- if you go

·2· ·to the bottom of the page, Ms. Kuka -- you will see

·3· ·that beside the KPMG logo is the page number 4, and

·4· ·the number of this document is 1244.

·5· · · · · · · · · And then if you go to the next page,

·6· ·there is -- the number at the bottom of the page is

·7· ·1245, and the number beside the KPMG logo is 6.

·8· · · · · · · · · So we don't have page 5, so there's a

·9· ·page missing.· And we've asked the City if they can

10· ·locate it, and so far we've not been able to locate

11· ·it.· To be fair to the City, we only asked them a

12· ·few days ago.· I'm not criticizing them, but I'm

13· ·just simply pointing that out so that the -- there

14· ·is a page missing.

15· · · · · · · · · If you go to the top of this page, it

16· ·says "Engagement Methodology, Phase II."

17· · · · · · · · · So what I conclude from that, sir, is

18· ·that Phase I is missing and Phase I is probably the

19· ·retail study that you talked about; does that make

20· ·sense to you?

21· · · · · · · · · A.· ·Yes, it would.

22· · · · · · · · · Q.· ·So then we go to Phase II, and

23· ·it says:· "Phase II - Physical Building Inspection

24· ·and Analysis of Information."· And it says:

25· · · · · · · · · · ·"Given that the physical

·1· · · · · · · · · ·state of the property will have

·2· · · · · · · · · ·an impact on all other factors

·3· · · · · · · · · ·of the review, the inspection

·4· · · · · · · · · ·of the building will be

·5· · · · · · · · · ·undertaken immediately

·6· · · · · · · · · ·following the planning stage.

·7· · · · · · · · · ·Once the physical inspection is

·8· · · · · · · · · ·completed, the results will be

·9· · · · · · · · · ·compiled and analyzed so that

10· · · · · · · · · ·their impact can be considered

11· · · · · · · · · ·during the review.· While the

12· · · · · · · · · ·consulting engineers are

13· · · · · · · · · ·conducting their review of the

14· · · · · · · · · ·building, financial and other

15· · · · · · · · · ·information concerning the Algo

16· · · · · · · · · ·Mall and Algo Inn will be

17· · · · · · · · · ·accumulated and analyzed.· The

18· · · · · · · · · ·analysis of past and current

19· · · · · · · · · ·financial operating results,

20· · · · · · · · · ·occupancy rates and lease

21· · · · · · · · · ·information is critical in

22· · · · · · · · · ·determining the future

23· · · · · · · · · ·viability of the property."

24· · · · · · · · · Sir, who drafted the terms of

25· ·reference?· Was that done by you or someone from the

·1· ·City?

·2· · · · · · · · · A.· ·I -- I can't specifically state

·3· ·who did it.

·4· · · · · · · · · I know in terms of work along these

·5· ·lines, I have done terms of reference.· And probably

·6· ·these terms of reference were done in consultation

·7· ·with Mr. Kennealy.

·8· · · · · · · · · Q.· ·So this is likely a result of a

·9· ·combination of your work and Mr. Kennealy's work?

10· · · · · · · · · A.· ·I'm assuming that.

11· · · · · · · · · I may have taken the lead to make

12· ·sure -- to do -- do that, but I -- I'm just going by

13· ·the fact that -- that I had, in my capacity as CAO, I

14· ·had done a number of terms of reference for various

15· ·studies over the years.

16· · · · · · · · · Q.· ·And can you -- and these, am I

17· ·correct in concluding that what we see here is what

18· ·the City wanted?

19· · · · · · · · · A.· ·That would be a correct

20· ·assumption, yes, sir.

21· · · · · · · · · Q.· ·And can you tell me, sir, why

22· ·was the City interested in a physical building

23· ·inspection?

24· · · · · · · · · A.· ·In looking at all of the

25· ·information that had been provided, and that -- that

·1· ·the mall, as we'd indicated, was integral to the

·2· ·future of the City, and -- and it was being

·3· ·considered at the time to be acquired for -- to

·4· ·ensure that it -- it continues.

·5· · · · · · · · · Now, in terms of the discussions on the

·6· ·acquisition and so forth, I just can't recall details

·7· ·at this time.

·8· · · · · · · · · Q.· ·And you say it was being

·9· ·considered to be acquired for the good of the City.

10· · · · · · · · · By whom was it considered being

11· ·acquired?· Who was -- who was thinking about buying

12· ·it?

13· · · · · · · · · A.· ·Well, that would be Elliot Lake

14· ·Retirement Living.

15· · · · · · · · · Q.· ·And that discussion had been

16· ·held at the time that you were preparing and sending

17· ·off these terms of reference?

18· · · · · · · · · A.· ·I would assume so, yes, sir.

19· · · · · · · · · Q.· ·That's your recollection?

20· · · · · · · · · A.· ·Mm-hmm.

21· · · · · · · · · Q.· ·Is that a "yes"?

22· · · · · · · · · A.· ·Yes, sir.

23· · · · · · · · · Q.· ·The -- was the City itself

24· ·interested in the assessment of the condition?· Or

25· ·was that something that only Retirement Living would

·1· ·be interested in, as the proposed purchaser?

·2· · · · · · · · · A.· ·I would -- I would assume at the

·3· ·time that the purpose of that analysis and review

·4· ·would be done as part of the due diligence in the

·5· ·acquisition of a major asset, similar to you buying

·6· ·a house.

·7· · · · · · · · · Q.· ·And so would that be -- would

·8· ·the City be interested in that, or would that be

·9· ·simply something that Retirement Living was

10· ·interested in?

11· · · · · · · · · A.· ·I would -- I would take it that

12· ·that would be the primary request of Retirement

13· ·Living, that the asset was -- was sound that they

14· ·were acquiring.

15· · · · · · · · · Q.· ·The next item in the terms of

16· ·reference that you sent to Mr. Leistner is -- it's

17· ·described as:· "Phase III(a) - Determination of a

18· ·Current Fair Value of the Property."

19· · · · · · · · · And it says:

20· · · · · · · · · · ·"Once the physical inspection

21· · · · · · · · · ·of the building is completed

22· · · · · · · · · ·and any deficiencies

23· · · · · · · · · ·identified, the appraisal of

24· · · · · · · · · ·the property will be

25· · · · · · · · · ·undertaken.· Based on the

·1· · · · · · · · · ·current occupancy of the

·2· · · · · · · · · ·property, selling prices of

·3· · · · · · · · · ·similar properties, if any, and

·4· · · · · · · · · ·the results of the physical

·5· · · · · · · · · ·building inspection, a

·6· · · · · · · · · ·supportable estimate of value

·7· · · · · · · · · ·will be determined.· This will

·8· · · · · · · · · ·assist in determining a

·9· · · · · · · · · ·possible offering price for the

10· · · · · · · · · ·property."

11· · · · · · · · · And sir, as between the City and

12· ·Retirement Living, who was interested in the

13· ·determination of the fair value?

14· · · · · · · · · A.· ·That would have been the

15· ·prospective purchaser, and I would imagine that

16· ·would have been Retirement Living, that they were

17· ·looking at that opportunity.

18· · · · · · · · · Q.· ·And, sir, can you tell me why

19· ·were you telling Algoma that you were going to have

20· ·an appraisal of the fair value of the property?

21· · · · · · · · · Algoma was the vendor.

22· · · · · · · · · A.· ·Well, the purchaser would be

23· ·wanting to determine whether or not the price being

24· ·considered or negotiated was fair, in view of the --

25· ·all the conditions that are identified here

·1· ·vis-a-vis the physical condition, the market and --

·2· ·and commercial viability of it.

·3· · · · · · · · · Q.· ·So had you discussed with

·4· ·Mr. Leistner at the meeting in his office on

·5· ·December the 5th, had you discussed with him the

·6· ·fact that Retirement Living was considering buying

·7· ·the property?

·8· · · · · · · · · A.· ·I don't know if that discussion

·9· ·happened.· I don't recall those details, yes or no.

10· · · · · · · · · Q.· ·But it was certainly -- it would

11· ·have been clear to him that somebody was looking at

12· ·buying it, because you told them three days later

13· ·that you were getting him an appraisal?

14· · · · · · · · · A.· ·Yes.

15· · · · · · · · · Q.· ·-- of the property?

16· · · · · · · · · A.· ·I -- I would assume based on the

17· ·information.

18· · · · · · · · · It's just I don't recall right at this

19· ·point in time the -- the details of the discussions at

20· ·that meeting.

21· · · · · · · · · Q.· ·Was the City ever considering

22· ·buying it on its own account?

23· · · · · · · · · A.· ·No.

24· · · · · · · · · Q.· ·Was the City interested in the

25· ·physical building inspection for -- to be used for

·1· ·Property Standards by-law purposes?

·2· · · · · · · · · A.· ·Not to the best of my knowledge.

·3· ·That -- that was a part of the consideration through

·4· ·this exercise.

·5· · · · · · · · · Q.· ·So the only reason that the

·6· ·physical building condition assessment was being

·7· ·proposed was to assist in the purchase?

·8· · · · · · · · · A.· ·That's my understanding, yes,

·9· ·sir.

10· · · · · · · · · Q.· ·When you were working with

11· ·Mr. Kennealy in December, in preparing the terms of

12· ·reference, did the City have the intention that the

13· ·reports -- that is the physical standards report,

14· ·the physical standards inspection, and the fair

15· ·market value appraisal -- be provided to the City?

16· · · · · · · · · A.· ·I can't recall whether that

17· ·discussion came up specifically.

18· · · · · · · · · Q.· ·Can you tell me, sir -- you've

19· ·indicated that -- let me back up.· Maybe you didn't.

20· · · · · · · · · I noted that page 5 was missing,

21· ·which was the -- apparently the page that dealt with

22· ·the retail study.

23· · · · · · · · · Do you believe that the intent was to

24· ·send that to Algoma?· Because it may have been -- it

25· ·may be a problem created by double-sided paper not

·1· ·being copied, if you know what I mean.· Sometimes

·2· ·when double-sided paper is faxed, the back is not

·3· ·copied.

·4· · · · · · · · · A.· ·I appreciate your comment.

·5· · · · · · · · · No, I -- I would think that the terms

·6· ·of reference for the RFP would have been sent, in

·7· ·totality, to Mr. Leistner.

·8· · · · · · · · · Q.· ·And what would Mr. Leistner's

·9· ·interest be in the retail study?

10· · · · · · · · · A.· ·Probably very, very limited in

11· ·terms of the -- the specifics on the retail study.

12· ·But given that it was a part of the terms of

13· ·reference, it was provided to him.

14· · · · · · · · · Q.· ·Did Mr. Leistner, to your

15· ·recollection, in these initial discussions, did he

16· ·say anything about what Algoma's intention was with

17· ·respect to either the mall or the hotel or both, in

18· ·terms of continuing to operate them, other than what

19· ·we saw in the notes?

20· · · · · · · · · A.· ·What -- what I've seen here, and

21· ·I remember, you know, the discussion, they were

22· ·talking about the fact that the hotel was not -- was

23· ·not viable, and that may be a consideration, is to

24· ·raze the hotel because it was a -- a drain on the

25· ·budget and not self-sufficient.

·1· · · · · · · · · Q.· ·And what about the mall?· Do you

·2· ·recall any discussion about their continued interest

·3· ·in operating the mall, in owning and operating the

·4· ·mall?

·5· · · · · · · · · A.· ·I can't -- I can't recall

·6· ·anything in terms of the discussion, but I do recall

·7· ·some discussions that -- that were had amongst

·8· ·myself, Mr. Kennealy and the Mayor, Mayor Farkouh at

·9· ·the time, and that there was concern with the mall

10· ·that given that they don't have a -- a potential

11· ·purchaser for the mall, that they might continue to

12· ·operate it as long as their cash-flow was positive,

13· ·and then either then raze it or whatever, but allow

14· ·it -- allow it to go downhill.

15· · · · · · · · · Q.· ·By "raze it" you don't mean --

16· · · · · · · · · A.· ·R-A-Z --

17· · · · · · · · · Q.· ·-- lift it up?

18· · · · · · · · · A.· ·No.

19· · · · · · · · · Q.· ·You mean R-A-Z-E; correct?

20· · · · · · · · · A.· ·Yes, sir.

21· · · · · · · · · Q.· ·All right.· And what was -- had

22· ·the three of you -- that is the Mayor, Mr. Kennealy

23· ·and yourself -- come to any tentative conclusion

24· ·about what ought to be done about that?

25· · · · · · · · · A.· ·Well, I think that as part of

·1· ·the discussions at that time -- I -- I'm looking at

·2· ·what has transpired -- I can only assume, based on

·3· ·what has -- what actually transpired is that

·4· ·Retirement Living would take over ownership,

·5· ·assuming, of course, the review was positive, that

·6· ·it was a viable concern, going forward.

·7· · · · · · · · · Q.· ·And that's your recollection of

·8· ·the --

·9· · · · · · · · · A.· ·That's the best that I -- that's

10· ·the best that I can recollect at this time.

11· · · · · · · · · Q.· ·That's your recollection as to

12· ·why Retirement Living was part and parcel of this

13· ·process; is that fair?

14· · · · · · · · · A.· ·Yes.· You know, given they --

15· ·they were -- Retirement Living was considered -- and

16· ·I may have mentioned it earlier -- an economic

17· ·corporation, if you will, or an economic engine for

18· ·the City, in terms of assisting the City in

19· ·diversifying and moving ahead.

20· · · · · · · · · Q.· ·And was this seen as part of

21· ·that mission?

22· · · · · · · · · A.· ·Yes, I would say that.· Yes.

23· · · · · · · · · Q.· ·If I could ask you to turn up

24· ·tab 155, sir, this is Exhibit No. 3226.

25· · · · · · · · · This is Mr. Leistner's response to

·1· ·your fax of December the 8th; it is a letter dated

·2· ·December 11th, 1997 from Mr. Leistner to you.· And

·3· ·in it, he thanks you for the terms of reference in

·4· ·the CVs, and then he says -- and I quote:

·5· · · · · · · · · · ·"With respect to the part of

·6· · · · · · · · · ·the study which is specifically

·7· · · · · · · · · ·directed at the Algo Centre, as

·8· · · · · · · · · ·noted previously,

·9· · · · · · · · · ·confidentiality is utmost

10· · · · · · · · · ·important, therefore my

11· · · · · · · · · ·comments are as follows:

12· · · · · · · · · · ·1.· KPMG a consultants -

13· · · · · · · · · acceptable.

14· · · · · · · · · · ·2.· i) Consultants from Sudbury -

15· · · · · · · · · acceptable.

16· · · · · · · · · · ·2. ii) Consultants from Sault

17· · · · · · · · · Ste. Marie or Elliot Lake - not

18· · · · · · · · · acceptable."

19· · · · · · · · · And then turning over the page at item

20· ·number 7, after dealing with the necessity for the

21· ·KPMG team to sign individual nondisclosure agreements,

22· ·Mr. Leistner writes:

23· · · · · · · · · · ·"With respect to the Physical

24· · · · · · · · · ·Building Inspection, certain

25· · · · · · · · · ·reporting requirements will

·1· · · · · · · · · ·have to be implemented, but we

·2· · · · · · · · · ·can set the same up once you

·3· · · · · · · · · ·have retained an engineer."

·4· · · · · · · · · What can you tell us about discussions

·5· ·that you had with Mr. Leistner at that time about the

·6· ·confidentiality issue?

·7· · · · · · · · · A.· ·I'm trying to recall the -- any

·8· ·discussions.· And I can only -- you know, in terms

·9· ·of going back, is that they were concerned,

10· ·obviously, that any -- any detailed information with

11· ·regard to the Algo Mall or the Algo Hotel be

12· ·maintained confidential because of marketing and

13· ·public issues.

14· · · · · · · · · With regard to item number 7, I don't

15· ·know if there was any specific discussion on my part

16· ·with regard to that.

17· · · · · · · · · Q.· ·Did you understand why he was

18· ·concerned about confidentiality relating to the

19· ·physical building inspection?

20· · · · · · · · · A.· ·No, I don't.

21· · · · · · · · · Q.· ·Did you ask him?

22· · · · · · · · · A.· ·I -- I --

23· · · · · · · · · Q.· ·Did you talk to him about it?

24· · · · · · · · · A.· ·-- don't recall.· I don't recall

25· ·that I did ask that specific question.

·1· · · · · · · · · Q.· ·Did you -- did you consider the

·2· ·issue of why he was concerned about confidentiality

·3· ·of the physical building inspection?

·4· · · · · · · · · A.· ·I can't recall any discussion on

·5· ·that, whether it was done or not.

·6· · · · · · · · · Q.· ·If I could ask you to turn to

·7· ·tab -- the next tab, 156, which is Exhibit No. 397,

·8· ·this is a letter dated January 30th, 1998, from

·9· ·Rhona -- sorry, from Nicholls Yallowega Belanger,

10· ·which is an architectural firm retained by

11· ·Retirement Living, to Rhona Guertin, dated

12· ·January 30th, 1998.

13· · · · · · · · · And right here, we have only the

14· ·first page of that letter, but in it, he is --

15· ·Mr. -- the author of the letter is providing a

16· ·proposal for the preparation of a building condition

17· ·assessment.

18· · · · · · · · · Do you recall, did you see this

19· ·letter?· Were you privy to any of the discussions or

20· ·arrangements between Nicholls Yallowega Belanger and

21· ·Elliot Lake Retirement Living?

22· · · · · · · · · A.· ·No, sir.· I -- I did not -- I

23· ·did not see any of those.

24· · · · · · · · · In fact, I guess as a result of the

25· ·nondisclosure agreements, I was specifically

·1· ·mentioned, and any of the documents respecting Algo

·2· ·Central were not presented to me.

·3· · · · · · · · · Q.· ·And we'll get to that in a

·4· ·moment.· Just one second, sorry.

·5· · · · · · · · · Sir, what was the role of the City in

·6· ·terms of the design of the study after you set

·7· ·the -- you sent the curriculum vitae and the draft

·8· ·terms of reference to Mr. Leistner?· Was the City

·9· ·involved after that point in time in drafting the

10· ·terms?

11· · · · · · · · · A.· ·I'm not sure as to all the

12· ·details, but I know the City, that we undertook to

13· ·enter into an agreement with Retirement Living to

14· ·undertake the full phase of that study, and -- and

15· ·turned that part over to Retirement Living, pursuant

16· ·to -- to our agreement.

17· · · · · · · · · And the purpose for that was that it

18· ·was felt that, particularly on the -- the retail study

19· ·part, that Retirement Living would achieve a higher

20· ·degree of success in being able to get information

21· ·from the local businesses in terms of their -- their

22· ·sales, employment, et cetera, et cetera, and their

23· ·direction than the City would, because of the level of

24· ·confidentiality.· The perception, of course, the City,

25· ·anything that comes into the City becomes public

·1· ·domain.· And the businesses did not -- I can

·2· ·understand.· They would not want to see details of

·3· ·their business in -- in the community, in the public

·4· ·domain.

·5· · · · · · · · · So the undertaking of the study,

·6· ·pursuant to the terms of reference, was turned over to

·7· ·Retirement Living under the terms of that contract.

·8· · · · · · · · · Q.· ·And what you've just told me

·9· ·about is the -- as I understand it, is the reticence

10· ·of businesses to disclose financial information

11· ·which might become public; is that fair?

12· · · · · · · · · A.· ·That is correct.

13· · · · · · · · · That -- that was my understanding at

14· ·the time in the discussions that we had, because the

15· ·nature of the study was in understanding the -- the

16· ·retail business in the community.· And that was going

17· ·to require quite a bit of detail -- detailed

18· ·information.

19· · · · · · · · · And I can certainly understand their

20· ·reticence, again, given the public persona of the

21· ·Municipality.

22· · · · · · · · · Q.· ·And I understand or I take from

23· ·Mr. Leistner's letter of December the 11th that

24· ·Algoma had the same concerns as did the local

25· ·businesses about the risk of their financial

·1· ·information being disclosed to the public if they

·2· ·dealt directly with the City; is that right?

·3· · · · · · · · · A.· ·That is correct, yes.

·4· · · · · · · · · Q.· ·Did you understand what the

·5· ·reticence of Algoma was with respect to the physical

·6· ·condition of the building being shared with the

·7· ·City?· Do you understand the basis for that concern?

·8· · · · · · · · · A.· ·At this time, I don't have any

·9· ·comment on that.

10· · · · · · · · · Q.· ·At that time, did you understand

11· ·it?

12· · · · · · · · · A.· ·I can't recall what the

13· ·discussions went around that at this time.

14· · · · · · · · · Q.· ·I wonder if you could turn up

15· ·tab 157, and this is Exhibit No. 3227.

16· · · · · · · · · And these are -- if you turn to the

17· ·third page, this is -- these are the minutes of the

18· ·annual general meeting of Retirement Living, which

19· ·took place on the 31st of January, 1998.

20· · · · · · · · · And you will see that among those

21· ·present are Mr. Farkouh and Mr. -- I think it's

22· ·Mr. Croteau?

23· · · · · · · · · A.· ·Yes.· Mr. Croteau, yes.· He --

24· · · · · · · · · Q.· ·Croteau, sorry.

25· · · · · · · · · A.· ·Croteau.

·1· · · · · · · · · Q.· ·And both the Mayor and

·2· ·Mr. Croteau are described as representatives of the

·3· ·City of Elliot Lake.· And under the heading "Report

·4· ·of the Corporate Secretary" it says:

·5· · · · · · · · · · ·"Mr. Kearns confirmed the

·6· · · · · · · · · ·election of ... (two

·7· · · · · · · · · ·individuals, Messrs. Trepanier

·8· · · · · · · · · ·and Long) ...· as members

·9· · · · · · · · · ·representing the Community at

10· · · · · · · · · ·Large and Tenants."

11· · · · · · · · · And then it says:

12· · · · · · · · · · ·"The Board's attention is

13· · · · · · · · · ·drawn to the fact (that) this

14· · · · · · · · · ·would be the final year of

15· · · · · · · · · ·eligibility for Senior ..."

16· · · · · · · · · A.· ·"Sister Sarah."

17· · · · · · · · · Q.· ·"Sister," sorry.

18· · · · · · · · · · ·"... Sr. (Sarah) Quackenbush

19· · · · · · · · · ·and Mayor (George) Farkouh."

20· · · · · · · · · So two things, as I understand it.

21· ·This means that, as the minutes indicate, Mayor

22· ·Farkouh and Mr. Croteau were the two representatives

23· ·of the City in 1998, throughout 1998, and Mayor

24· ·Farkouh, that was the last year.

25· · · · · · · · · I guess there must have been a term

·1· ·limit of some sort; is that right?

·2· · · · · · · · · A.· ·Yes, that's what I understood.

·3· ·Yes, sir.

·4· · · · · · · · · THE COMMISSIONER:· The Mr. Kearns in

·5· ·question is yourself, sir?

·6· · · · · · · · · MR. KEARNS:· I'm sorry,

·7· ·Mr. Commissioner?

·8· · · · · · · · · THE COMMISSIONER:· The Mr. Kearns as

·9· ·corporate secretary is yourself?

10· · · · · · · · · MR. KEARNS:· Yes.

11· · · · · · · · · THE COMMISSIONER:· Okay.

12· · · · · · · · · BY MR. DOODY:

13· · · · · · · · · Q.· ·And, sir, did Mayor Farkouh or

14· ·Mr. Croteau at any time report to you or Council

15· ·about the development of the study, the physical

16· ·condition assessment, or the fair market value

17· ·appraisal that we've been discussing?

18· · · · · · · · · A.· ·No, sir.

19· · · · · · · · · Q.· ·I wonder if you could turn to --

20· ·at the bottom of the page -- the page which ends in

21· ·.17.· It is about five pages along, and it's

22· ·entitled:· "Community Retail and Hotel Study."

23· · · · · · · · · And it says in the second-last

24· ·paragraph -- well, first of all, it says:

25· · · · · · · · · · ·"In addition, we have had

·1· · · · · · · · · ·on-going discussions with the

·2· · · · · · · · · ·City of Elliot Lake and ACP in

·3· · · · · · · · · ·relation to the following:

·4· · · · · · · · · · ·- Vacancy rates in the Mall;

·5· · · · · · · · · · ·- Limited retail operations in

·6· · · · · · · · · the Mall.

·7· · · · · · · · · · ·- Physical condition in the mall.

·8· · · · · · · · · · ·As a result of these discussions,

·9· · · · · · · · · the three parties have agreed to

10· · · · · · · · · initiate a comprehensive review of

11· · · · · · · · · the entire Algo Centre Mall and

12· · · · · · · · · Hotel Complex.

13· · · · · · · · · Elliot Lake Retirement Living's role

14· · · · · · · · · will be to aid the city to

15· · · · · · · · · co-ordinate resources such as KPMG

16· · · · · · · · · and the Laurentian Field Station..."

17· · · · · · · · · Stop there.· The "Laurentian Field

18· ·Station" refers to an entity or arm of Laurentian

19· ·University?

20· · · · · · · · · A.· ·That's correct.· They had a -- a

21· ·facility here.

22· · · · · · · · · Q.· ·To assist with the retail study?

23· · · · · · · · · A.· ·Well, they assisted with the

24· ·retail study.

25· · · · · · · · · They did various research.· They were

·1· ·into that type of thing, and we had engaged them in a

·2· ·number of different things for research.

·3· · · · · · · · · Q.· ·It goes on to say:

·4· · · · · · · · · · ·"... to gather the necessary

·5· · · · · · · · · ·data and information.· There

·6· · · · · · · · · ·will be no cost involved for

·7· · · · · · · · · ·Retirement Living other than

·8· · · · · · · · · ·the time investment of our

·9· · · · · · · · · ·General Manager and

10· · · · · · · · · ·Controller."

11· · · · · · · · · And then if you could go two pages into

12· ·the slides --

13· · · · · · · · · MR. DOODY:· And you are going to have

14· ·rotate these; they're sideways.· That's excellent.

15· · · · · · · · · BY MR. DOODY:

16· · · · · · · · · Q.· ·So the agenda for the slide show

17· ·is:

18· · · · · · · · · · ·" - What has initiated the

19· · · · · · · · · ·study?

20· · · · · · · · · · · · - Why undertake the study

21· · · · · · · · · · · · - Structure of study.

22· · · · · · · · · · · · - Roles and responsibilities."

23· · · · · · · · · And then the next page:

24· · · · · · · · · · ·"- ACP has expressed a desire

25· · · · · · · · · ·and intention to get out of the

·1· · · · · · · · · ·hotel business.· · · ·-

·2· · · · · · · · · ·Vacancies/closures at the mall.

·3· · · · · · · · · · · ·- ACP inability to attract quality

·4· · · · · · · · · · ·retail tenants.

·5· · · · · · · · · · · ·-· ACP expressed intent to bleed

·6· · · · · · · · · · ·down mall profits.

·7· · · · · · · · · · · ·- Growing concern of citizens

·8· · · · · · · · · · ·(with respect to) shopping

·9· · · · · · · · · · ·alternatives."

10· · · · · · · · · Are those things consistent with your

11· ·understanding of the situation at the time, sir?

12· · · · · · · · · A.· ·Yes, sir.

13· · · · · · · · · Q.· ·What can you tell us about the

14· ·fourth bullet, the "expressed intent by Algoma to

15· ·bleed down" the mall profits?

16· · · · · · · · · A.· ·That's as I had said to you,

17· ·that they will continue operating the mall in some

18· ·capacity until they go into a negative cash-flow.

19· · · · · · · · · Q.· ·"Bleed down" seems to me to be a

20· ·little -- slightly different than that.

21· · · · · · · · · It sounds like they're intentionally

22· ·taking out what the mall needs to survive.· That's

23· ·usually what the term "bleed down" means?

24· · · · · · · · · A.· ·Well, I -- as I said earlier,

25· ·that they -- it appeared that they were reducing

·1· ·their general maintenance in the -- in the building,

·2· ·and so forth.· And then, as I said, it was -- you

·3· ·know, as long as, from an operational point of view,

·4· ·the rents received exceeded the -- the expenses,

·5· ·their cash-flow was positive and it covered

·6· ·interest.· Probably didn't cover depreciation and

·7· ·that, but as long as it was moving in that

·8· ·direction.

·9· · · · · · · · · And obviously, we go back to the

10· ·previous bullet -- "inability to attract quality

11· ·retail"" -- well, obviously, if they are not doing any

12· ·work in terms of maintenance -- and I'm just making

13· ·this assumption looking at this -- that they're not

14· ·going to be doing a lot of work to market the mall and

15· ·attract quality clients either.

16· · · · · · · · · Q.· ·And that was your understanding,

17· ·I think, from your answers earlier?

18· · · · · · · · · A.· ·Generally, that was my

19· ·understanding through this time period.

20· · · · · · · · · Q.· ·Right.· If I can have the next

21· ·slide, please:

22· · · · · · · · · · ·"What has initiated this

23· · · · · · · · · ·study?"

24· · · · · · · · · The slide goes on to say:

25· · · · · · · · · · ·"- Growing concern of

·1· · · · · · · · · ·citizens over appearance of

·2· · · · · · · · · ·Mall, vacancies and aesthetics.

·3· · · · · · · · · · ·-· Growing concern over non-mall

·4· · · · · · · · · · ·shopping and appearance."

·5· · · · · · · · · · ·And again, that was your consistent

·6· ·with your understanding of the situation?

·7· · · · · · · · · A.· ·Yes, sir.

·8· · · · · · · · · Q.· ·And the next slide:

·9· · · · · · · · · · ·"Why undertake the study?

10· · · · · · · · · ·- Community is at mercy of ACP.

11· · · · · · · · · ·- We do not have meaningful

12· · · · · · · · · ·information concerning

13· · · · · · · · · ·financials, lease terms, market

14· · · · · · · · · ·and other data relating to the

15· · · · · · · · · ·retail and hotel industries in

16· · · · · · · · · ·Elliot Lake.

17· · · · · · · · · ·- ACP will move on hotel,

18· · · · · · · · · ·therefore community must put

19· · · · · · · · · ·itself in position of knowledge

20· · · · · · · · · ·as soon as possible."

21· · · · · · · · · And, again, is that consistent with

22· ·your understanding of the reason for undertaking the

23· ·study?

24· · · · · · · · · A.· ·Yes, sir.

25· · · · · · · · · Q.· ·And do I understand, then, that

·1· ·the provision of the information to Retirement

·2· ·Living was, in the viewpoint of the City, the

·3· ·provision of it to the community?

·4· · · · · · · · · A.· ·Uh...

·5· · · · · · · · · Q.· ·The last bullet there says:

·6· · · · · · · · · · ·"The community must itself in

·7· · · · · · · · · ·the position of knowledge (as

·8· · · · · · · · · ·soon as possible)."

·9· · · · · · · · · The community -- the person who was

10· ·going to get the knowledge was Retirement Living;

11· ·correct?

12· · · · · · · · · A.· ·Yes.

13· · · · · · · · · Q.· ·And so I'm asking you if that

14· ·was the City's understanding of the way that the

15· ·community would put itself in the position of

16· ·knowledge.

17· · · · · · · · · A.· ·Yes.· I would take it that

18· ·Retirement Living being integral, and if -- integral

19· ·to the -- to the City and getting the knowledge, and

20· ·decisions are made to either purchase the mall

21· ·because it was viable, or you have the information

22· ·to turn around and say, at the end of the day:· It's

23· ·just not going to work, and therefore we should let

24· ·this go the way it's going.

25· · · · · · · · · Q.· ·And the intention was that those

·1· ·decisions would be made by Retirement Living, not by

·2· ·the City?

·3· · · · · · · · · A.· ·Yes.

·4· · · · · · · · · Q.· ·And we go to the next page under

·5· ·the heading "Structure of the Study" it says:

·6· · · · · · · · · · ·"Research,

·7· · · · · · · · · · · ·-· Inventory of Retail and commercial

·8· · · · · · · · · · · · · spaces.

·9· · · · · · · · · · · ·-· Study of shopping 'habits' and

10· · · · · · · · · · · · · concerns of citizens.

11· · · · · · · · · · · ·-· Scan of Retail industry in

12· · · · · · · · · · · · · Northern Ontario.

13· · · · · · · · · · · ·-· Review of Chain store

14· · · · · · · · · · · · · requirement profiles.

15· · · · · · · · · · · ·-· Scan of Hotel industry

16· · · · · · · · · · · · · in Northern Ontario."

17· · · · · · · · · Again, that's what you were -- that's

18· ·what the City was expecting would be produced;

19· ·right?

20· · · · · · · · · A.· ·Yes, sir.

21· · · · · · · · · Q.· ·And did the City expect to get

22· ·that, to get the study?

23· · · · · · · · · A.· ·In terms of the information and

24· ·the issues related to the -- the retail part, the --

25· ·let's put it this way -- the macro part of the study

·1· ·dealing with the commercial part in -- of retail in

·2· ·the City, yes, that's what we anticipated, and --

·3· · · · · · · · · Q.· ·And that's what you got?

·4· · · · · · · · · A.· ·And that's what we got.

·5· · · · · · · · · Q.· ·And that was -- and the study,

·6· ·absent the -- as you said, on a macro level, so

·7· ·absent the detailed financial information, which

·8· ·would have been commercially confidential to the

·9· ·businesses?

10· · · · · · · · · A.· ·Yes, that was the assumption.

11· ·And I don't -- and I think at the end of the day

12· ·with that, the City was interested in -- in the

13· ·results, not in the specific health or otherwise of

14· ·the businesses in the community.

15· · · · · · · · · In terms of knowing it, certainly the

16· ·City would be interested -- you know, at the end of

17· ·the day -- that we have a healthy retail sector.

18· · · · · · · · · Q.· ·Right.· And then the next slide

19· ·says, under the same heading, "Structure of Study":

20· · · · · · · · · · ·"Valuation of ACP Mall and

21· · · · · · · · · ·Hotel.

22· · · · · · · · · · · ·-· Detailed financials on mall.

23· · · · · · · · · · · · · and hotel.

24· · · · · · · · · · · ·- Review of inplace leases.

25· · · · · · · · · · · ·- financial.

·1· · · · · · · · · · · ·- qualitative review.

·2· · · · · · · · · · · ·- Review of physical structure."

·3· · · · · · · · · Was the City interested in that

·4· ·information, sir?

·5· · · · · · · · · A.· ·There was no express interest,

·6· ·as that delay was related to the acquisition of the

·7· ·mall.

·8· · · · · · · · · I guess in terms of a larger sense --

·9· ·again, on the macro -- we would be interested in the

10· ·sense of:· Is the mall a viable entity going forward?

11· · · · · · · · · But again, in looking at the details of

12· ·it, not specifically, the same as any other business.

13· ·The only thing is -- is this is focused, because that

14· ·happens to be the -- the largest entity and the one

15· ·that is subject to consideration of purchase.

16· · · · · · · · · Q.· ·By Retirement Living?

17· · · · · · · · · A.· ·By Retirement Living, yes, sir.

18· · · · · · · · · Q.· ·So the answer to the question of

19· ·was the City interested in it, do I take from your

20· ·answer the City was not so much interested in it as

21· ·Retirement Living was interested in it?· Is that

22· ·fair?

23· · · · · · · · · A.· ·In terms of the situation, yes,

24· ·sir.

25· · · · · · · · · Q.· ·The next slide, sir, is called:

·1· ·"Roles and responsibilities."

·2· · · · · · · · · And it says:

·3· · · · · · · · · · ·"Study Group.· ELRL GM."

·4· · · · · · · · · That's the general manager, Mr.

·5· ·Kennealy; correct?

·6· · · · · · · · · A.· ·Yes, sir.

·7· · · · · · · · · Q.· ·And "Controller," that's Rhona

·8· ·Guertin?

·9· · · · · · · · · A.· ·Yes, sir.

10· · · · · · · · · Q.· ·And then "City of Elliot Lake

11· ·CAO"; that would be you?

12· · · · · · · · · A.· ·Yes.

13· · · · · · · · · Q.· ·And "EDO" is the Economic

14· ·Development Officer; do you recall who that was at

15· ·that time?

16· · · · · · · · · A.· ·That was Carol Lister at the

17· ·time.

18· · · · · · · · · Q.· ·Carol Lister, L-I-S-T-E-R?

19· · · · · · · · · A.· ·Yes, sir.

20· · · · · · · · · Q.· ·And then KPMG as a resource?

21· · · · · · · · · A.· ·Yes, sir.

22· · · · · · · · · Q.· ·Sir, was a study group created

23· ·with those people on it?

24· · · · · · · · · A.· ·Yes, sir.

25· · · · · · · · · Q.· ·And what was the purpose of the

·1· ·study group?

·2· · · · · · · · · A.· ·Well, I guess that was to look

·3· ·at and assist in terms of the -- the retail part of

·4· ·the study, in terms of looking at -- as far as my

·5· ·participation and Ms. Lister's participation.

·6· · · · · · · · · Q.· ·Did the -- did the study group

·7· ·meet regularly?

·8· · · · · · · · · A.· ·I'm sure it did.

·9· · · · · · · · · I -- I don't have any documentation

10· ·that says it did or didn't.· I don't --

11· · · · · · · · · Q.· ·Do you recall meetings?

12· · · · · · · · · A.· ·I can't recall anything

13· ·specific.· I -- you know, at that time there was a

14· ·lot of activity happening, and this could be, you

15· ·know, one of the meetings that I participated with.

16· · · · · · · · · I -- and if I was included, I was

17· ·there.· I made a point.

18· · · · · · · · · Q.· ·But --

19· · · · · · · · · A.· ·But I don't recall that, on such

20· ·and such a date, we had a meeting.

21· · · · · · · · · Q.· ·But is it fair to conclude that

22· ·there were discussions amongst this group with --

23· ·that is with both Retirement Living and the City

24· ·representation, with respect to, as you've said, the

25· ·retail study?

·1· · · · · · · · · A.· ·Yes, sir.

·2· · · · · · · · · Q.· ·Were there similar discussions

·3· ·with respect to the other two issues that were being

·4· ·done; that it is the physical property assessment

·5· ·and the fair market value appraisal?

·6· · · · · · · · · A.· ·No.· There's nothing that comes

·7· ·to my mind that I was party to any discussions that

·8· ·had to do with the details on the mall or hotel.

·9· · · · · · · · · Q.· ·At the bottom of the slide, it

10· ·says:

11· · · · · · · · · · ·"ELRL --" that's Retirement

12· · · · · · · · · ·Living -- "General Contractor."

13· · · · · · · · · Do you -- I know that you didn't see

14· ·this slide, but to your mind, was Elliot Lake

15· ·Retirement Living the general contractor?· Does that

16· ·mean they were subcontracting out portions of the

17· ·study?

18· · · · · · · · · We'll get to a document later that I

19· ·think may assist, if you don't recall.

20· · · · · · · · · A.· ·Well, again, as I say, Elliot

21· ·Lake, for the reasons that I mentioned earlier, was

22· ·engaged under -- under a contract to undertake this

23· ·total study.· So I would look at them as -- as being

24· ·the general contractor and the one that was managing

25· ·the contract.· And then you look at the resources,

·1· ·KPMG, and then there was reference in terms of a --

·2· ·engineering and architectural consultant.· And that

·3· ·would have been, again, the -- under the auspices of

·4· ·Retirement Living.

·5· · · · · · · · · Q.· ·Why don't we go to those

·6· ·documents?· If you turn to the next tab, sir,

·7· ·tab 150 (sic), Exhibit No. 249, and this is a

·8· ·memorandum...

·9· · · · · · · · · A.· ·Which tab is that, Mr. Doody?

10· · · · · · · · · Q.· ·160.

11· · · · · · · · · A.· ·160?

12· · · · · · · · · Q.· ·The very next tab.

13· · · · · · · · · A.· ·All right.

14· · · · · · · · · Q.· ·This is a memorandum from

15· ·Mr. Burling to you.

16· · · · · · · · · And he is reporting -- and I assume

17· ·this is by matter of form, because I'm sure you were

18· ·there -- reporting that:

19· · · · · · · · · · ·"At a regular meeting of

20· · · · · · · · · ·Council on Monday, March 9,

21· · · · · · · · · ·1998, the following resolution

22· · · · · · · · · ·was passed with respect to the

23· · · · · · · · · ·above-noted matter..."

24· · · · · · · · · · ·"That the Municipality enter into

25· · · · · · · · · an agreement with Non-Profit

·1· · · · · · · · · Retirement Residences... to perform

·2· · · · · · · · · a Mall/Retail Survey study at a cost

·3· · · · · · · · · not to exceed $48,150.00 as

·4· · · · · · · · · recommended by the..."

·5· · · · · · · · · CAO in his report.· And he asks you

·6· ·to prepare the necessary contract.

·7· · · · · · · · · And if you turn over, sir, two pages,

·8· ·there is there -- this is your report; correct?

·9· · · · · · · · · A.· ·That is correct.· Yes, sir.

10· · · · · · · · · Q.· ·And the process, as I understand

11· ·it, is you prepare the report.

12· · · · · · · · · It goes to the Council.· Council then

13· ·approves it by way of resolution, and issues a

14· ·direction, in this case, to prepare the contract.

15· · · · · · · · · And then before the contract is

16· ·executed, you return to Council with an executed --

17· ·partially executed version of the contract; in other

18· ·words, the other side has signed it.· And Council

19· ·then, by by-law, approves the execution of the

20· ·contract.

21· · · · · · · · · Is that the normal process?

22· · · · · · · · · A.· ·Yes, sir.· If -- it depends on

23· ·the situation.· There are some instances where

24· ·we're -- if it's a normal type of contract, we would

25· ·have at the same meeting the report recommending the

·1· ·contract and the contract executed by the other

·2· ·party, so that when Council approves it, we go

·3· ·ahead.

·4· · · · · · · · · However, in this situation, I think --

·5· ·if I look at the dates -- the recommendation is there.

·6· ·We then complete the agreement, have the other party

·7· ·execute it, and that is presented on the next Council

·8· ·agenda for adoption by by-law, thereby putting the

·9· ·contract into force.

10· · · · · · · · · Q.· ·So, if we can just take a look

11· ·at your report, you say that the objective of this

12· ·review of the retail, commercial market in Elliot

13· ·Lake, the objective is:

14· · · · · · · · · · ·"To undertake a detailed

15· · · · · · · · · ·review of the commercial/retail

16· · · · · · · · · ·sector in order to position the

17· · · · · · · · · ·City in its effort to attract

18· · · · · · · · · ·and retain business to Elliot

19· · · · · · · · · ·Lake and to determine long term

20· · · · · · · · · ·viability of the Algo Mall and

21· · · · · · · · · ·Hotel operations."

22· · · · · · · · · And then if you turn to the next page,

23· ·under the heading "Background" you talk about the

24· ·situation with vacancies in the mall, the state of the

25· ·Algo Mall, the surplus of retail space in Elliot Lake,

·1· ·the state of the Algo Mall and how that impacts

·2· ·marketing of the City and Retirement Living.

·3· · · · · · · · · Then in the third paragraph, you write:

·4· · · · · · · · · · ·"At the 'Town Hall meeting at

·5· · · · · · · · · ·the Civic Centre, January 28,

·6· · · · · · · · · ·1998', a number of people had

·7· · · · · · · · · ·raised the issue of not having

·8· · · · · · · · · ·access to certain retail stores

·9· · · · · · · · · ·in the City and that there was

10· · · · · · · · · ·considerable leakage due to out

11· · · · · · · · · ·of town shopping."

12· · · · · · · · · They're referring to retail leakage?

13· · · · · · · · · A.· ·Yes, sir.

14· · · · · · · · · Q.· ·That is people are buying things

15· ·elsewhere?

16· · · · · · · · · A.· ·That's correct.

17· · · · · · · · · Q.· ·And then under the heading --

18· ·you then note that, because of that, you've had

19· ·discussions with Retirement Living:

20· · · · · · · · · · ·"... to undertake a detailed

21· · · · · · · · · ·review of the ...

22· · · · · · · · · ·retail/commercial space in

23· · · · · · · · · ·Elliot Lake... the retail

24· · · · · · · · · ·habits of the consumer in

25· · · · · · · · · ·Elliot Lake..."

·1· · · · · · · · · And the:

·2· · · · · · · · · · ·"... long term viability of

·3· · · · · · · · · ·the Algo Mall..."

·4· · · · · · · · · And Hotel.· And under the heading

·5· ·"Analysis," you write:

·6· · · · · · · · · · ·"While all of the concerns

·7· · · · · · · · · ·are valid and expressed by a

·8· · · · · · · · · ·number of people, we do not

·9· · · · · · · · · ·have the detailed information

10· · · · · · · · · ·to support or refute the

11· · · · · · · · · ·perceptions and to determine

12· · · · · · · · · ·what, if anything, can be done

13· · · · · · · · · ·to address the concerns.

14· · · · · · · · · ·Because of this we need to need

15· · · · · · · · · ·to structure and undertake a

16· · · · · · · · · ·study that will provide the

17· · · · · · · · · ·information we need.· It is

18· · · · · · · · · ·only from this base that we can

19· · · · · · · · · ·move ahead to address and

20· · · · · · · · · ·perhaps remedy the concerns.

21· · · · · · · · · ·As indicated, the review will

22· · · · · · · · · ·be broken down into three major

23· · · · · · · · · ·components and each will be

24· · · · · · · · · ·discussed individually."

25· · · · · · · · · And then under the heading "Retail

·1· ·Commercial Space," you wrote:

·2· · · · · · · · · · ·"As part of this review, we

·3· · · · · · · · · ·wish to develop an

·4· · · · · · · · · ·inventory/database of all

·5· · · · · · · · · ·retail space in the City of

·6· · · · · · · · · ·Elliot Lake to identify not

·7· · · · · · · · · ·only vacant space but what the

·8· · · · · · · · · ·state of all the retail space,

·9· · · · · · · · · ·whether vacant or occupied,

10· · · · · · · · · ·is."

11· · · · · · · · · And then under the heading "Retail

12· ·survey" on the next page, you write:

13· · · · · · · · · · ·"As stated, there are

14· · · · · · · · · ·concerns raised by the current

15· · · · · · · · · ·store retail operators and

16· · · · · · · · · ·residents related to the amount

17· · · · · · · · · ·of leakage in shopping that

18· · · · · · · · · ·presently occurs."

19· · · · · · · · · And you want to undertake a detailed

20· ·survey to deal with -- to understand that.

21· · · · · · · · · And then under the heading "Algo

22· ·Mall/Hotel," you write:

23· · · · · · · · · · ·"There are increasing

24· · · · · · · · · ·comments and concerns regarding

25· · · · · · · · · ·the aesthetics and non retail

·1· · use of the mall.· Discussions

·2· · with Algo Central Properties

·3· · have not provided us with an

·4· · understanding that much more

·5· · than what is presently being

·6· · done to maintain the facilities

·7· · is going to happen."

·8· ·You go on to say:

·9· · · "Given these circumstances,

10· · it is necessary for us to

11· · undertake a detailed review of

12· · the mall and hotel operations

13· · to determine the long term

14· · viability of the mall and the

15· · impact it has on the community

16· · as well as an alternative to

17· · the closure of the hotel."

18· ·And on the next page, you write:

19· · · "Based on our experience in

20· · dealing with the retail sector

21· · in the past when we undertook

22· · the socio-economic study in

23· · 1991, we are aware that there

24· · is some reluctance to turn over

25· · information to the City related

·1· · to business operations due to

·2· · the desire to maintain

·3· · confidentiality.· In order to

·4· · address this, the City entered

·5· · into discussions with Elliot

·6· · Lake Retirement Living to act

·7· · as the contractor on our behalf

·8· · in dealing with the community

·9· · and the gathering of

10· · information.· This is

11· · particularly true related to

12· · the information related to the

13· · mall operations.· Accordingly,

14· · we will be entering into a

15· · contract with Retirement Living

16· · for the delivery of the

17· · appropriate reports dealing

18· · with the information mentioned

19· · above.· This process has been

20· · discussed with Mr. Richard

21· · Kennealy at Retirement Living

22· · and he is in agreement with the

23· · Retirement Living undertaking

24· · the lead in this project."

25· ·You then go on, under the heading

·1· ·"Funding," to say:

·2· · · · · · · · · · ·"The study is estimated to

·3· · · · · · · · · ·cost in the area of $48,150

·4· · · · · · · · · ·comprised of:

·5· · · · · · · · · · ·Retail Space Analysis $3,000

·6· · · · · · · · · · ·Retail Patterns Survey $8,000

·7· · · · · · · · · · ·Algo Mall/Hotel Review $30,000"

·8· · · · · · · · · And you summarize by recommending that

·9· ·this be done.

10· · · · · · · · · Sir, from the documents we've looked at

11· ·so far in your evidence this morning, I understand

12· ·that it was always intended that there be a physical

13· ·condition assessment of the mall as part of this

14· ·exercise for which you were seeking funding, and that

15· ·there would be a fair market value appraisal.

16· · · · · · · · · Can you tell me, sir, why there is

17· ·nothing in this document that describes those two

18· ·things specifically?

19· · · · · · · · · A.· ·I can't -- in terms of looking

20· ·at the -- at the amounts in terms of the review, I

21· ·don't know that they would be described

22· ·specifically, other than the discussion that there

23· ·was the possibility that Retirement Living might

24· ·acquire the -- the hotel and mall.· And in so making

25· ·that consideration, steps would be taken to

·1· ·undertake the appropriate due diligence, which would

·2· ·include a detailed review of the -- the mall itself.

·3· · · · · · · · · I think that would be assumed, as

·4· ·opposed to being stated specifically.

·5· · · · · · · · · Q.· ·Correct me if I'm wrong -- I may

·6· ·have missed it -- but is there something in here

·7· ·that refers to Retirement Living considering buying

·8· ·the mall?

·9· · · · · · · · · A.· ·There's nothing in here.

10· · · · · · · · · Q.· ·Was Council advised of that at

11· ·that time?

12· · · · · · · · · A.· ·I don't know if Council

13· ·specifically was advised of that in the way of a

14· ·formal document. I don't know.

15· · · · · · · · · Q.· ·Were they -- was there an

16· ·understanding, do you believe, on the part of

17· ·Council that that was under consideration by

18· ·Retirement Living?

19· · · · · · · · · Certainly the Mayor understood?

20· · · · · · · · · A.· ·The -- the Mayor understood

21· ·that.· And I would have to assume, as part of his

22· ·communications with his Councillors, that at some

23· ·point in time that may have been mentioned.

24· · · · · · · · · Q.· ·If I could ask you to turn to

25· ·tab 164, sir, this is the by-law which was passed at

·1· ·a meeting two weeks later on the 23rd.· The

·2· ·resolution was passed on the 9th day of March; this

·3· ·was passed on the 23rd day of March.

·4· · · · · · · · · And --

·5· · · · · · · · · THE COMMISSIONER:· Exhibit?

·6· · · · · · · · · MR. DOODY:· Sorry, Exhibit No. 3233.

·7· ·I apologize, Mr. Commissioner.

·8· · · · · · · · · BY MR. DOODY:

·9· · · · · · · · · Q.· ·And the by-law is simply that

10· ·the corporation enter into an agreement, a copy of

11· ·which is attached as Schedule "A."

12· · · · · · · · · And then if you turn over to the next

13· ·page you can see the agreement itself, and in

14· ·paragraph numbered 1, it says:

15· · · · · · · · · · ·"ELRL (Retirement Living)

16· · · · · · · · · ·shall perform Services set out

17· · · · · · · · · ·in Schedule "A" ... attached

18· · · · · · · · · ·hereto.· Et cetera.

19· · · · · · · · · And then if you turn over two pages,

20· ·you get to Schedule "A," which is the terms of

21· ·reference which form -- which Retirement Living is

22· ·contracting to do; correct?

23· · · · · · · · · A.· ·Yes, sir.

24· · · · · · · · · Q.· ·And if you go to -- if you just

25· ·go -- going down through that, the first item at the

·1· ·top of the page -- sorry, Ms. Kuka -- at the top of

·2· ·the page, is headed "Retail/commercial Space

·3· ·Database":

·4· · · · · · · · · · ·"A complete review of all

·5· · · · · · · · · ·commercial retail space in City

·6· · · · · · · · · ·of Elliot Lake providing but

·7· · · · · · · · · ·not limited to the elements, as

·8· · · · · · · · · ·per the attached list on a

·9· · · · · · · · · ·computerized data base to be

10· · · · · · · · · ·provided to the City."

11· · · · · · · · · And the deliverable is to:

12· · · · · · · · · · ·"Analyse the data to produce

13· · · · · · · · · ·a summary of the relative state

14· · · · · · · · · ·of the retail/commercial market

15· · · · · · · · · ·in Elliot Lake."

16· · · · · · · · · And a:

17· · · · · · · · · · ·"Computerized data base for

18· · · · · · · · · ·use by the City."

19· · · · · · · · · And then under the heading "Retail

20· ·Survey," it says:

21· · · · · · · · · · ·"ELRL will contract with the

22· · · · · · · · · ·Elliot Lake Research Field

23· · · · · · · · · ·Station to undertake a consumer

24· · · · · · · · · ·(study)."

25· · · · · · · · · To identify, what's set out there:

·1· · · · · · · · · · ·"- Local spending habits and

·2· · · · · · · · · ·patterns."

·3· · · · · · · · · Et cetera, relating to leakage.

·4· · · · · · · · · And then the deliverables is to:

·5· · · · · · · · · · ·"Analyse the data to produce

·6· · · · · · · · · ·a summary of the relative size

·7· · · · · · · · · ·of the local retail market and

·8· · · · · · · · · ·a review of potential retail

·9· · · · · · · · · ·product/service gaps in the

10· · · · · · · · · ·local market."

11· · · · · · · · · And both of those deliverables were met

12· ·and provided to the City; correct?

13· · · · · · · · · A.· ·Yes, sir.

14· · · · · · · · · Q.· ·Then under the heading "Algo

15· ·Mall/Hotel," it says that Retirement Living is to:

16· · · · · · · · · · ·"Undertake an assessment of

17· · · · · · · · · ·the Mall and Hotel to determine

18· · · · · · · · · ·the:

19· · · · · · · · · · ·(i) Physical building condition

20· · · · · · · · · of the hotel and mall facilities."

21· · · · · · · · · And a:

22· · · · · · · · · · ·"Determination of fair market

23· · · · · · · · · ·value of the property."

24· · · · · · · · · And the deliverables were:

25· · · · · · · · · · ·"Summary of the physical

·1· · · · · · · · · ·building condition."

·2· · · · · · · · · And:

·3· · · · · · · · · · ·"A value of the facility."

·4· · · · · · · · · And then under the heading "Contract

·5· ·Value," it breaks down the cost of the various items,

·6· ·and the building -- the retail space analysis is

·7· ·$3,000, the retail patterns survey is $8,000, and the

·8· ·building condition evaluation is $30,000, which --

·9· ·with disbursements of 4,000 -- amounts to a total of

10· ·$45,000.

11· · · · · · · · · Sir, was the expectation that -- at the

12· ·time this contract was approved by Council, was the

13· ·expectation that the two deliverables related to the

14· ·mall -- that is a summary of the physical building

15· ·condition and a value of the facility -- was the

16· ·expectation that they be given to the City?

17· · · · · · · · · A.· ·I would assume that at the time,

18· ·yes.

19· · · · · · · · · Q.· ·And, sir, were they given to the

20· ·city?

21· · · · · · · · · A.· ·No, sir.

22· · · · · · · · · Q.· ·Can you tell me why not?

23· · · · · · · · · A.· ·I can't at this time, other

24· ·than -- unless we refer to the -- I'd have to look

25· ·at the timing of the preparation of this and the

·1· ·nondisclosure agreement.

·2· · · · · · · · · Q.· ·Was the -- sorry, just bear with

·3· ·me.

·4· · · · · · · · · I wonder if I could ask you to take a

·5· ·look at Exhibit No. 3234, which is at tab 166,

·6· ·please.

·7· · · · · · · · · These are minutes of the board of

·8· ·directors of Elliot Lake Retirement Living of

·9· ·May 28th, 1998.

10· · · · · · · · · And if you go to the third page --

11· ·that's it -- you can see that Mr. Croteau was

12· ·present, Mr. Farkouh was not.

13· · · · · · · · · And if you go to the fourth -- fifth

14· ·page of the document under the heading "General

15· ·Manager's Comments," you can see this is a report --

16· ·next page -- this is a report from the general

17· ·manager, Mr. Kennealy, to the board.

18· · · · · · · · · And under the heading "Hotel/Retail

19· ·Study," he reports:

20· · · · · · · · · · ·"This project is moving along

21· · · · · · · · · ·quite well.· Considerable time

22· · · · · · · · · ·has been invested in

23· · · · · · · · · ·negotiating acceptable

24· · · · · · · · · ·confidentiality agreements with

25· · · · · · · · · ·Algoma Central Properties,

·1· · · · · · · · · ·Elliot Lake Retirement Living

·2· · · · · · · · · ·and the City of Elliot Lake to

·3· · · · · · · · · ·ensure all parties have a clear

·4· · · · · · · · · ·understanding of what can and

·5· · · · · · · · · ·can not be disclosed to who."

·6· · · · · · · · · Sir, I assume you had not seen these --

·7· ·this document before preparation for this exhibit?

·8· · · · · · · · · A.· ·No.· This is the first time I've

·9· ·seen this document.

10· · · · · · · · · Q.· ·Right.· Sir, were you involved

11· ·in negotiating a confidentiality agreement among the

12· ·three parties, Algoma, Retirement Living and the

13· ·City?

14· · · · · · · · · A.· ·Not myself directly, no.

15· · · · · · · · · Q.· ·Would you -- do you know of

16· ·anybody on the part of the City who was involved in

17· ·negotiating such a confidentiality agreement?

18· · · · · · · · · A.· ·No.· I don't know.

19· · · · · · · · · Q.· ·As CAO, would you expect to have

20· ·been advised and privy to such discussions?

21· · · · · · · · · A.· ·Yeah, I would have expected --

22· ·expected that.· However, I guess in view of how it

23· ·came out at the end of the day, that I was one of

24· ·the excluded parties.

25· · · · · · · · · Q.· ·But --

·1· · · · · · · · · A.· ·As was Ms. Lister.

·2· · · · · · · · · Q.· ·But just to put the question

·3· ·clearly:· Are you aware of any confidentiality

·4· ·agreement among the City -- among all of the City,

·5· ·Algoma Central Properties, and Retirement Living?

·6· · · · · · · · · A.· ·Not -- outside of this one, no,

·7· ·I'm not aware of...

·8· · · · · · · · · Q.· ·Right.· And --

·9· · · · · · · · · A.· ·And I don't recall any

10· ·participation at this time.· I...

11· · · · · · · · · Q.· ·And I'm not telling you I've

12· ·seen it.

13· · · · · · · · · A.· ·Mm-hmm.

14· · · · · · · · · Q.· ·I've not seen any such

15· ·agreement.

16· · · · · · · · · A.· ·No.· I don't recall.· And I -- I

17· ·certainly, when it came out at the end of the day,

18· ·I -- I don't know that I made any comment one way or

19· ·the other, other than taking the situation that,

20· ·Algo Centre being, again, the major party, major

21· ·retail party in the -- or service party in the City,

22· ·were very -- wanted to be very specific that nobody

23· ·on Council and myself and Ms. Lister received any

24· ·information.

25· · · · · · · · · Q.· ·You are referring to the

·1· ·nondisclosure agreement?

·2· · · · · · · · · A.· ·Yes, sir.

·3· · · · · · · · · Q.· ·And we'll get to that in a

·4· ·minute.

·5· · · · · · · · · But just so that we're clear, as I

·6· ·understand your evidence, you were not and are not

·7· ·aware of any agreement among the three parties --

·8· ·Algoma, Retirement Living and the City -- with

·9· ·respect to confidentiality?

10· · · · · · · · · A.· ·Nothing that I'm aware of right

11· ·now, no.

12· · · · · · · · · Q.· ·And you don't recall ever having

13· ·been aware of it in the past?

14· · · · · · · · · You have to say -- you have to make a

15· ·verbal response.

16· · · · · · · · · A.· ·No, I don't.· I'm sorry.

17· · · · · · · · · Q.· ·Thank you.

18· · · · · · · · · If I could just ask you to turn back

19· ·to Exhibit No. 3233, which is at tab 164, sir, and

20· ·the second page of that, which is the agreement

21· ·itself, item -- article 6, it says:

22· · · · · · · · · · ·"ELRL will not assign this

23· · · · · · · · · ·Agreement or retain

24· · · · · · · · · ·sub-contractors without the

25· · · · · · · · · ·prior written consent of the

·1· · · · · · · · · ·City.· No assignment or

·2· · · · · · · · · ·sub-contract will relieve ELRL

·3· · · · · · · · · ·from the obligations under this

·4· · · · · · · · · ·Agreement."

·5· · · · · · · · · Sir, as I understand what happened,

·6· ·Retirement Living retained the architectural firm of

·7· ·Nicholls Yallowega Belanger and the engineering firm

·8· ·of Halsall to provide reports with respect to the

·9· ·physical condition of the building.

10· · · · · · · · · Did they seek the prior written consent

11· ·of the City to retain these firms?

12· · · · · · · · · A.· ·I don't recall that there was

13· ·any specific request for approval that would have

14· ·hit the Council table.

15· · · · · · · · · Q.· ·Did you know that those

16· ·particular firms had been retained, or were going to

17· ·be retained?

18· · · · · · · · · A.· ·At this point in time I don't

19· ·recall the discussion surrounding that and if I was

20· ·involved.

21· · · · · · · · · Q.· ·Do you recall any discussions

22· ·whatsoever with Retirement Living about who they

23· ·were going to retain, or what they were going to

24· ·retain them specifically to look at?

25· · · · · · · · · A.· ·No.· I don't recall.

·1· · · · · · · · · Q.· ·Was everything left in the hands

·2· ·of Retirement Living?

·3· · · · · · · · · A.· ·Everything was left in the hands

·4· ·of Retirement Living.

·5· · · · · · · · · Q.· ·If I could ask you to turn up

·6· ·tab 165, sir, it's Exhibit No. 390.

·7· · · · · · · · · This is the nondisclosure agreement

·8· ·of which we've been speaking; correct?

·9· · · · · · · · · A.· ·Yes.

10· · · · · · · · · Q.· ·And if I could just take you

11· ·through it, first of all, it is an agreement between

12· ·Algoma Central Properties and Non-Profit Retirement

13· ·Residences of Elliot Lake.· And if you go to the

14· ·third page, it was executed on May 12th by

15· ·Mr. Kennealy on behalf of Retirement Living and by

16· ·Mr. Leistner on the 15th of May, 1998, on behalf

17· ·of -- on behalf of Algoma; right?

18· · · · · · · · · A.· ·That's correct, yes, sir.

19· · · · · · · · · Q.· ·And, sir, prior to preparation

20· ·for this Inquiry, had you ever seen this

21· ·nondisclosure agreement?

22· · · · · · · · · A.· ·No, I don't --

23· · · · · · · · · Q.· ·Did you know any --

24· · · · · · · · · A.· ·-- recall seeing it.

25· · · · · · · · · Q.· ·Did you know anything about it?

·1· · · · · · · · · A.· ·Not prior to execution.

·2· · · · · · · · · Q.· ·Not prior to execution of the

·3· ·agreement?

·4· · · · · · · · · A.· ·Yes.

·5· · · · · · · · · Q.· ·So did you learn about the

·6· ·nondisclosure agreement at some time after it was

·7· ·executed on May the 12th and 15th of 1998?

·8· · · · · · · · · A.· ·Anecdotally, I did.

·9· · · · · · · · · Q.· ·And when --

10· · · · · · · · · A.· ·And I think -- i think -- I'm

11· ·just trying to recall that there was some discussion

12· ·with some of the Councillors about it, but I can't

13· ·recall the details.

14· · · · · · · · · I'm just -- you know, this is --

15· · · · · · · · · Q.· ·You can help us with when that

16· ·discussion was?

17· · · · · · · · · A.· ·I can't.· I'm saying -- I'm

18· ·going -- we're going back here 15 years.

19· · · · · · · · · Q.· ·Oh, I understand.

20· · · · · · · · · A.· ·And -- and going back and trying

21· ·to recall the circumstances around this event, if

22· ·you will, I seem to recall that there was some

23· ·discussion with some of the Councillors about it and

24· ·the fact that there was -- they were not privy to

25· ·the information, or be allowed to be privy to the

·1· ·information.

·2· · · · · · · · · Q.· ·Do you recall which

·3· ·Councillors --

·4· · · · · · · · · A.· ·No, I don't.

·5· · · · · · · · · Q.· ·-- had those concerns?

·6· · · · · · · · · A.· ·No, I'm sorry.

·7· · · · · · · · · Q.· ·Did you discuss this issue with

·8· ·the Mayor?

·9· · · · · · · · · A.· ·I can't recall any discussion.

10· · · · · · · · · Q.· ·Did you discuss this issue with

11· ·Mr. Kennealy?

12· · · · · · · · · A.· ·Again, I can't recall any.

13· · · · · · · · · Q.· ·And have you told us everything

14· ·you can recall about what the issue was, as you

15· ·understood it at the time?

16· · · · · · · · · A.· ·That's what I understood at the

17· ·time, as I have related.· And -- and just to

18· ·reiterate, was the concerns of Algocen with regard

19· ·to proprietary financial information and so forth.

20· · · · · · · · · Q.· ·From your recollection now --

21· ·and I appreciate the difficulty going back in

22· ·time -- do you recall that the concerns about

23· ·confidentiality extended to the physical condition

24· ·of the mall?

25· · · · · · · · · A.· ·I don't recall specific

·1· ·discussions on that regard.

·2· · · · · · · · · Q.· ·If we could just go through the

·3· ·terms of the agreement, if you go to the first page,

·4· ·in the paragraph numbered 1, it provides that

·5· ·Retirement Living will not:

·6· · · · · · · · · · ·"... disclose or use, at any

·7· · · · · · · · · ·time, any information acquired

·8· · · · · · · · · ·by it as a result of its

·9· · · · · · · · · ·investigation ..."

10· · · · · · · · · And then it -- in the last sentence,

11· ·it says:

12· · · · · · · · · · ·"More specifically, but not

13· · · · · · · · · ·limited to the following, ELRL

14· · · · · · · · · ·agrees:

15· · · · · · · · · · ·I) all information presented,

16· · · · · · · · · verbally or in print form, to ELRL

17· · · · · · · · · is strictly confidential and will

18· · · · · · · · · not be reported to any other party

19· · · · · · · · · in any form, without the prior

20· · · · · · · · · written approval of the Corporation.

21· · · · · · · · · Notwithstanding the above, if the

22· · · · · · · · · Corporation withholds its written

23· · · · · · · · · approval for the following

24· · · · · · · · · persons ..."

25· · · · · · · · · And then it lists Mayor Farkouh, you,

·1· ·and all of the Councillors of the town Council; right?

·2· · · · · · · · · A.· ·That's correct.· And the EDO,

·3· ·Ms. Carol Lister.

·4· · · · · · · · · Q.· ·Ah.· Thank you.· And Ms. Lister.

·5· · · · · · · · · And it says:

·6· · · · · · · · · · ·"... if the Corporation

·7· · · · · · · · · ·withholds its ... approval for

·8· · · · · · · · · ·the following persons ..."

·9· · · · · · · · · And going over to the next page:

10· · · · · · · · · · ·"... to receive a written

11· · · · · · · · · ·report containing.

12· · · · · · · · · · ·A) a summary of the physical

13· · · · · · · · · building condition, and

14· · · · · · · · · · ·B) a value of the facility, and

15· · · · · · · · · an oral explanation of the data

16· · · · · · · · · leading to written reports."

17· · · · · · · · · · ·Then the Corporation agrees to

18· · · · · · · · · reimburse ELRL as follows:

19· · · · · · · · · · ·C) the cost paid by ELRL to a

20· · · · · · · · · reputable engineering firm for the

21· · · · · · · · · summary of the physical building

22· · · · · · · · · condition, to a maximum of

23· · · · · · · · · $12,000.00, and

24· · · · · · · · · · ·D) the cost paid by ELRL to a

25· · · · · · · · · reputable commercial appraiser for

·1· · · · · · · · · the determination of the value of

·2· · · · · · · · · the facility, to a maximum of

·3· · · · · · · · · $8,000.00."

·4· · · · · · · · · It goes on to list a number of other

·5· ·conditions.

·6· · · · · · · · · In (iv), it says:

·7· · · · · · · · · · ·"Any and/or all information,

·8· · · · · · · · · ·whether prepared, compiled or

·9· · · · · · · · · ·completed by ELRL or otherwise,

10· · · · · · · · · ·will be immediately returned

11· · · · · · · · · ·and/or given, as the case may

12· · · · · · · · · ·be, to the Corporation

13· · · · · · · · · ·forthwith upon demand."

14· · · · · · · · · In (v), it says:

15· · · · · · · · · · ·"The representatives of ELRL

16· · · · · · · · · ·will be made up of only those

17· · · · · · · · · ·persons which have the prior

18· · · · · · · · · ·written approval of the

19· · · · · · · · · ·Corporation."

20· · · · · · · · · That being Algoma.

21· · · · · · · · · And (vi):

22· · · · · · · · · · ·All representatives of ELRL

23· · · · · · · · · ·will provide an executed

24· · · · · · · · · ·statement to the Corporation

25· · · · · · · · · ·acknowledging their

·1· · · · · · · · · ·understanding of this

·2· · · · · · · · · ·confidentiality agreement and

·3· · · · · · · · · ·further, their covenant to

·4· · · · · · · · · ·strictly abide by its terms and

·5· · · · · · · · · ·conditions."

·6· · · · · · · · · Sir, you've already indicated that

·7· ·you -- that you knew nothing of this.

·8· · · · · · · · · Can you tell me, sir, why -- sorry,

·9· ·if you had known of this confidentiality agreement

10· ·with respect to the summary of the physical building

11· ·condition and providing it to members of Council or

12· ·yourself, what, if anything, would you have done at

13· ·the time?

14· · · · · · · · · A.· ·Well, I guess -- hindsight being

15· ·what it is -- I would have pursued the -- the

16· ·specifics of the physical condition as to why they

17· ·were not prepared to provide that information on a

18· ·broader scale, because I'm not -- I -- I'm not sure,

19· ·you know, subject to explanation, as to what that

20· ·might have in terms of the business sense of the --

21· ·the building.

22· · · · · · · · · Q.· ·And I appreciate hindsight is

23· ·20/20, but can you think now of a reason why -- that

24· ·the City would understand and accept why the

25· ·physical building condition assessment ought to have

·1· ·been kept secret from the City?

·2· · · · · · · · · A.· ·No, I can't.· I didn't draw any

·3· ·conclusions on that regard.

·4· · · · · · · · · Q.· ·I wonder if you could turn up

·5· ·Exhibit No. 2090.

·6· · · · · · · · · A.· ·Tab?

·7· · · · · · · · · Q.· ·Tab -- sorry, tab 176, sir.

·8· · · · · · · · · A.· ·176.

·9· · · · · · · · · Q.· ·And this is a fax from

10· ·Ms. Guertin to Mr. Leistner, dated October the 7th,

11· ·1998.

12· · · · · · · · · And the "re" line is:· "City Council

13· ·Meeting," and she writes -- if I could just have

14· ·that blown up a bit:

15· · · · · · · · · · ·"Dear Bob:

16· · · · · · · · · · ·Attached is a statement we wish

17· · · · · · · · · to make to Council next week.· As

18· · · · · · · · · you can see the only information we

19· · · · · · · · · want to tell Council is the fact

20· · · · · · · · · that the hotel is in a loss

21· · · · · · · · · position, where we believe the break

22· · · · · · · · · even point will be and the

23· · · · · · · · · occupancy.· Any other information we

24· · · · · · · · · discuss with Council will relate to

25· · · · · · · · · what we feel can and cannot be done

·1· · · · · · · · · with the hotel and what our

·2· · · · · · · · · recommendations are.· The words

·3· · · · · · · · · which I end up using will probably

·4· · · · · · · · · be different but the content will

·5· · · · · · · · · remain the same.· The meeting we are

·6· · · · · · · · · going to have with Council is not a

·7· · · · · · · · · regular meeting of Council or a

·8· · · · · · · · · caucus meeting.· We will remind

·9· · · · · · · · · Council of the sensitive nature of

10· · · · · · · · · the information and that it is not

11· · · · · · · · · to be disclosed to any one after the

12· · · · · · · · · meeting.· Please let me know if I

13· · · · · · · · · have your approval."

14· · · · · · · · · And then if you turn to the next tab,

15· ·sir, 177, which is Exhibit -- oh, my system may be

16· ·failing.

17· · · · · · · · · Exhibit No. 2091.

18· · · · · · · · · This was the next -- we got both these

19· ·documents, both this one and the last document, from

20· ·Retirement Living, and they are sequentially numbered.

21· · · · · · · · · And this, therefore, we conclude was

22· ·what was attached to what she sent to Mr. Leistner.

23· · · · · · · · · And it's headed:· "Verbal report to

24· ·City Council, Algo Inn."· And is sets out they have

25· ·reviewed the financial performance, and she writes:

·1· · · · · · · · · · ·"We have reviewed the

·2· · · · · · · · · ·financial performance of the

·3· · · · · · · · · ·Algo Inn and have undertaken a

·4· · · · · · · · · ·building condition assessment

·5· · · · · · · · · ·of the property with the intent

·6· · · · · · · · · ·of determining its long term

·7· · · · · · · · · ·viability.· The hotel has

·8· · · · · · · · · ·operated in a loss position for

·9· · · · · · · · · ·several years."

10· · · · · · · · · And she goes on to discuss the

11· ·financial issues related to the hotel and then she

12· ·concludes by saying:

13· · · · · · · · · · ·"Based on this information,

14· · · · · · · · · ·this is what we propose ..."

15· · · · · · · · · And the words "our strategy" are

16· ·written in brackets.

17· · · · · · · · · Sir, this memorandum to Mr. Leistner is

18· ·dated October 7th, 1998 and indicates that Ms. Guertin

19· ·proposes to make that statement to Council next -- the

20· ·following week.

21· · · · · · · · · We've checked the City records and can

22· ·find no record of a meeting of Council the following

23· ·week.

24· · · · · · · · · Do you recall a meeting of Council

25· ·where these issues were discussed?

·1· · · · · · · · · A.· ·Nothing -- I don't recall

·2· ·anything specific at this time.

·3· · · · · · · · · MR. DOODY:· I wonder if I could have

·4· ·the ELMO operational.· Does that work?

·5· · · · · · · · · BY MR. DOODY:

·6· · · · · · · · · Q.· ·This is a -- the provisions of

·7· ·the Municipal Act which was in force in 1998.· And

·8· ·pursuant to subsection -- if you move it down a

·9· ·little, I can see what the number is -- 55(3), the

10· ·Municipal Act provided that:

11· · · · · · · · · · ·"Except as provided in this

12· · · · · · · · · ·section, all meetings shall be

13· · · · · · · · · ·open to the public."

14· · · · · · · · · And then under the heading "Closed

15· ·meetings," subsection (5) sets out seven circumstances

16· ·in which closed meetings would be legal.

17· · · · · · · · · And, sir, you will agree with me that

18· ·based on your understanding of the Municipal Act at

19· ·the time, the meeting which was proposed by

20· ·Ms. Guertin would not be one which qualified to be

21· ·held in private; is that right?

22· · · · · · · · · A.· ·Yes, sir.

23· · · · · · · · · Q.· ·And do you know of any meeting

24· ·where these issues were discussed?

25· · · · · · · · · A.· ·No, I don't -- I don't recall

·1· ·any specific meeting.

·2· · · · · · · · · Q.· ·If I could turn up...

·3· · · · · · · · · Well, sir, let me ask you this:· It

·4· ·appears from the documents we've gone through that

·5· ·extensive steps were taken to provide that the City

·6· ·would pay for this physical building condition

·7· ·assessment and not receive it, and it would not come

·8· ·to the attention of either the City or the public.

·9· · · · · · · · · Can you comment on that in any way?

10· · · · · · · · · A.· ·Not -- no, I can't comment.· The

11· ·only thing I can consider is that when it was

12· ·under -- when the original report was undertaken,

13· ·that was prior to the NDA.· And that came up later,

14· ·and I guess it was accepted, to get this work done,

15· ·that the City agreed to it.

16· · · · · · · · · Q.· ·Did the City agree to it?

17· · · · · · · · · A.· ·Well, by not -- by nonaction, I

18· ·guess, it would be reviewed.

19· · · · · · · · · Q.· ·So the City agreed to pay for

20· ·the report, specifically, and that was in the

21· ·March 23rd by-law; correct?

22· · · · · · · · · A.· ·That's correct, yes.

23· · · · · · · · · Q.· ·And do you recall any discussion

24· ·as to whether the City ought to receive the report?

25· · · · · · · · · A.· ·I don't recall any specific

·1· ·discussion at this time.

·2· · · · · · · · · Q.· ·So if the City were to have

·3· ·agreed to it not receiving the report, can you help

·4· ·us as to how that agreement, first of all, would

·5· ·have been made?

·6· · · · · · · · · Who in the City would have concurred

·7· ·with that agreement?

·8· · · · · · · · · A.· ·Oh, I'm -- I think just with the

·9· ·nonaction in this, that they accepted the -- the

10· ·report coming in and that Retirement Living would be

11· ·getting the report.

12· · · · · · · · · Q.· ·Did you have any discussions

13· ·with any member of Council about the report which

14· ·had been authorized and paid for by the City,

15· ·pursuant to the March 23rd by-law?

16· · · · · · · · · A.· ·I don't recall that.

17· · · · · · · · · Q.· ·So when you say the "nonaction"

18· ·by the City, whose nonaction are you talking about?

19· · · · · · · · · A.· ·Well, that would be, I guess, in

20· ·terms of -- as my sitting on the committee, that I

21· ·didn't pursue it; nor did the Mayor at the time.

22· · · · · · · · · Q.· ·Sir, I wonder if you could turn

23· ·to tab 179, which is Exhibit No. 67.

24· · · · · · · · · Sir, this is the November 12th, 1998

25· ·report of Nicholls Yallowega Belanger, to which is

·1· ·attached to the November 11th of report of Halsall.

·2· · · · · · · · · And I'm just going to take you -- so

·3· ·this is the report, as I understand it, which was

·4· ·paid for by the monies approved by the City on March

·5· ·the 23rd.

·6· · · · · · · · · And if I could just take you to

·7· ·page 11 of the report, under the heading "Parking

·8· ·Deck Structure," the authors write, and this is the

·9· ·third sentence:

10· · · · · · · · · · ·"It is our understanding that

11· · · · · · · · · ·the integrity of the

12· · · · · · · · · ·waterproofing ability of this

13· · · · · · · · · ·structure has been a continuous

14· · · · · · · · · ·maintenance issue.· From our

15· · · · · · · · · ·review of the existing drawings

16· · · · · · · · · ·and visual inspection, the

17· · · · · · · · · ·presence of an integral

18· · · · · · · · · ·waterproofing membrane could

19· · · · · · · · · ·not be determined.· Based on

20· · · · · · · · · ·the extent of surface applied

21· · · · · · · · · ·sealants on the concrete

22· · · · · · · · · ·topping wear layer, we suspect

23· · · · · · · · · ·that the structure was

24· · · · · · · · · ·constructed without an integral

25· · · · · · · · · ·waterproofing membrane.

·1· ·Maintenance staff confirmed the

·2· ·absence of a waterproofing

·3· ·membrane during repair work

·4· ·that has been recently executed

·5· ·for their parking deck

·6· ·maintenance and concrete repair

·7· ·program.· A more detailed

·8· ·review of the parking deck

·9· ·structure is provided in

10· ·Appendix "A".· Note there are

11· ·concerns and recommendations

12· ·expressed by the structural

13· ·consultant regarding the

14· ·structural integrity of the

15· ·concrete slabs.

16· ·Recommendations are provided

17· ·for conducting additional

18· ·inspection and testing to

19· ·accurately assess the extent of

20· ·any deterioration.· The results

21· ·of this additional inspection

22· ·and testing may have

23· ·significant cost implications

24· ·if the structural integrity of

25· ·the slabs has been affected.

·1· · · · · · · · · ·Concerns and restrictions

·2· · · · · · · · · ·regarding live loadings and

·3· · · · · · · · · ·structural capacities are also

·4· · · · · · · · · ·indicated."

·5· · · · · · · · · Then if you turn to page 25 of the

·6· ·report, there is set out the recommendations of the

·7· ·architects for dealing with the parking structure, and

·8· ·on the bottom of the page, under "Waterproofing

·9· ·Repairs - Option A," it is 550,000; turning to the

10· ·next page, with the other items, that would be

11· ·606,000.

12· · · · · · · · · And Option B is 1.8 million.

13· · · · · · · · · And then if you turn to page 30, it

14· ·says in the last paragraph:

15· · · · · · · · · · ·"It should be noted that any

16· · · · · · · · · ·waterproofing repair costs

17· · · · · · · · · ·associated with the roof top

18· · · · · · · · · ·parking structure do not

19· · · · · · · · · ·include any remedial work to

20· · · · · · · · · ·the precast concrete core

21· · · · · · · · · ·slabs.· At this time we are

22· · · · · · · · · ·unable to provide an evaluation

23· · · · · · · · · ·of the condition of the precast

24· · · · · · · · · ·slabs and any potential repair

25· · · · · · · · · ·costs until further inspection

·1· · · · · · · · · ·and testing procedures are

·2· · · · · · · · · ·carried out.· The results of

·3· · · · · · · · · ·this additional inspection and

·4· · · · · · · · · ·testing could lead to

·5· · · · · · · · · ·conclusions that there might be

·6· · · · · · · · · ·significant additional costs

·7· · · · · · · · · ·associated with any repair and

·8· · · · · · · · · ·restoration requirements.· We

·9· · · · · · · · · ·recommend that this additional

10· · · · · · · · · ·work be conducted in order to

11· · · · · · · · · ·more accurately assess the

12· · · · · · · · · ·condition of the existing

13· · · · · · · · · ·structure."

14· · · · · · · · · And then if you turn to the Halsall

15· ·report which follows, starting three pages on, and

16· ·page -- page 2 of the Halsall report.· The page

17· ·numbering, the last page at the bottom is .35.· That's

18· ·it.

19· · · · · · · · · The last paragraph under the heading

20· ·"Parking Deck Structure," the engineers write:

21· · · · · · · · · · ·"From the underside of the

22· · · · · · · · · ·parking deck, we observed some

23· · · · · · · · · ·corrosion of the structural

24· · · · · · · · · ·steel beams and columns,

25· · · · · · · · · ·indicating past leaking of the

·1· · · · · · · · · ·deck.· We were unable to review

·2· · · · · · · · · ·the condition of the underside

·3· · · · · · · · · ·of the precast concrete slab

·4· · · · · · · · · ·panels as they were covered

·5· · · · · · · · · ·with foiled insulation and wire

·6· · · · · · · · · ·mesh."

·7· · · · · · · · · And then the next page, second

·8· ·paragraph:

·9· · · · · · · · · · ·"The cause of corrosion is

10· · · · · · · · · ·usually chlorides in the

11· · · · · · · · · ·concrete (from various sources

12· · · · · · · · · ·but primarily road salt)

13· · · · · · · · · ·combined with water and oxygen.

14· · · · · · · · · ·Chloride contamination acts to

15· · · · · · · · · ·break down the protection

16· · · · · · · · · ·against corrosion which

17· · · · · · · · · ·concrete normally provides for

18· · · · · · · · · ·steel.· At this time we cannot

19· · · · · · · · · ·render an opinion as to what

20· · · · · · · · · ·the true state of the deck is,

21· · · · · · · · · ·nor what long term cost could

22· · · · · · · · · ·be expected.· However, given

23· · · · · · · · · ·the age of the structure,

24· · · · · · · · · ·deterioration of the concrete

25· · · · · · · · · ·slabs may begin to occur now or

·1· · · · · · · · · ·in the near future.· This could

·2· · · · · · · · · ·result in significant

·3· · · · · · · · · ·maintenance costs for the

·4· · · · · · · · · ·remainder of the building

·5· · · · · · · · · ·life."

·6· · · · · · · · · And then on the next page, under the

·7· ·heading "Waterproofing Protection Systems," the

·8· ·engineers write:

·9· · · · · · · · · · ·"Should the further testing

10· · · · · · · · · ·of the parking structure

11· · · · · · · · · ·indicate that there is minimal

12· · · · · · · · · ·risk of deterioration of the

13· · · · · · · · · ·structure due to chlorides in

14· · · · · · · · · ·the slab, then a more positive

15· · · · · · · · · ·form of protection of the slab

16· · · · · · · · · ·should be considered.· A

17· · · · · · · · · ·rubberized membrane covered

18· · · · · · · · · ·with an asphaltic wear course

19· · · · · · · · · ·could be installed above the

20· · · · · · · · · ·concrete topping.· The existing

21· · · · · · · · · ·concrete topping should be

22· · · · · · · · · ·sounded and repaired prior to

23· · · · · · · · · ·applying the rubberized

24· · · · · · · · · ·membrane.· There is potential

25· · · · · · · · · ·for future concrete

·1· · · · · · · · · ·deterioration of the existing

·2· · · · · · · · · ·concrete topping with this

·3· · · · · · · · · ·protection system."

·4· · · · · · · · · Sir, if you had seen this report at

·5· ·the time, can you tell us what you would have done?

·6· · · · · · · · · A.· ·Again, I would have turned it

·7· ·over to the Chief Building Official, and looked at

·8· ·the opportunities suggesting that we proceed with

·9· ·additional studies to verify or amplify the

10· ·information that they're recommending.

11· · · · · · · · · Q.· ·And if I could ask you to turn

12· ·up tab 199, which is Exhibit No. 3250?

13· · · · · · · · · A.· ·199?

14· · · · · · · · · Q.· ·Oops.· Exhibit No. 70.· I was

15· ·close.· This is it.

16· · · · · · · · · If you could turn to page 4 of the

17· ·report, the last digit is .008.· That's it.

18· · · · · · · · · This is the report, the second

19· ·report, prepared by Halsall.· This is the one dated

20· ·May 10th, 1999, given to Retirement Living after

21· ·they had signed the Agreement of Purchase and Sale,

22· ·but before they closed as part of their due

23· ·diligence.

24· · · · · · · · · And in the report, the engineers

25· ·wrote under the heading "Recommendations" they

·1· ·recommend the following:

·2· · · · · · · · · · ·"-· Rout and seal all joints

·3· · · · · · · · · ·and cracks in the parking deck

·4· · · · · · · · · ·topping and walkway canopies,

·5· · · · · · · · · ·ensuring a proper joint profile

·6· · · · · · · · · ·and surface preparation prior

·7· · · · · · · · · ·to placing the sealant;

·8· · · · · · · · · · ·-· Remove sealant from the

·9· · · · · · · · · underside of the joints in the

10· · · · · · · · · walkways;

11· · · · · · · · · · ·-· Clean and paint all exterior

12· · · · · · · · · structural steel ...

13· · · · · · · · · · ·-· Reinstate spray-applied

14· · · · · · · · · fireproofing to the structural

15· · · · · · · · · steel;

16· · · · · · · · · · ·-· Replace corroded suspended

17· · · · · · · · · ceiling hangers (as part of regular

18· · · · · · · · · maintenance); and

19· · · · · · · · · · ·-· Reinstate all batt insulation

20· · · · · · · · · at the underside of the parking

21· · · · · · · · · deck."

22· · · · · · · · · And they note in the second-last

23· ·paragraph that:

24· · · · · · · · · · ·"An alternative to sealing

25· · · · · · · · · ·joints ... would be to provide

·1· · · · · · · · · ·a waterproofing membrane ..."

·2· · · · · · · · · And they note that:

·3· · · · · · · · · · ·"Either method introduces

·4· · · · · · · · · ·maintenance requirements in the

·5· · · · · · · · · ·form of crack sealing."

·6· · · · · · · · · Sir, if you had seen -- first of all,

·7· ·did you see this report prior to preparation for this

·8· ·Inquiry?

·9· · · · · · · · · A.· ·No, sir.· And to the best of my

10· ·knowledge, I -- I can't recall seeing this report.

11· · · · · · · · · The only thing, as I mentioned to you

12· ·when we met, is the numbers ring a bell, and whether I

13· ·received those anecdotally or not, that there were a

14· ·couple of options.

15· · · · · · · · · And I'm not sure if this is a result of

16· ·this report, or having discussed -- and that was in my

17· ·second term, not -- I had no information or knowledge

18· ·on this up to 2000.

19· · · · · · · · · Q.· ·Thank you.

20· · · · · · · · · And if you had seen this report at

21· ·the time, what would you have done, sir?

22· · · · · · · · · A.· ·Well, again, it would have been

23· ·turned over to the CBO to follow up and ensure that

24· ·that work of some nature was done to remediate

25· ·the -- the water.

·1· · · · · · · · · Q.· ·And, sir, from a public policy

·2· ·perspective, can you assist us?

·3· · · · · · · · · Do you think it would be beneficial

·4· ·if these kinds of reports -- the two Halsall

·5· ·reports, the Nicholls Yallowega Belanger report of

·6· ·November 1998, and the Trow reports that I took you

·7· ·through -- do you think it would be a benefit if

·8· ·there was a requirement that, for buildings of this

·9· ·nature, they be given to the City?

10· · · · · · · · · A.· ·Yeah, I can -- I can see the --

11· ·the importance of that, because you've -- here, it

12· ·is up to the owner, and in terms of, depending on

13· ·what the information is, the regulatory authority

14· ·may not receive information that might cause that

15· ·authority to act.

16· · · · · · · · · So I can see that there would be some

17· ·merit to ensuring that the appropriate regulatory

18· ·authority had the information given to them.

19· · · · · · · · · Q.· ·Can you think, sir, of any

20· ·reason why there ought not to be such a requirement?

21· · · · · · · · · A.· ·Right at this point in time, in

22· ·terms of public safety, no, that should be -- be

23· ·expected.

24· · · · · · · · · MR. DOODY:· Thank you very much, sir,

25· ·for taking the time.

·1· · · · · · · · · My friends may have some questions.

·2· · · · · · · · · THE COMMISSIONER:· Let's take five

·3· ·minutes.

·4· · · · · · · · · --- RECESSED AT 12:20 P.M.

·5· · · · · · · · · --- RESUMED AT 12:26 P.M.

·6· · · · · · · · · THE COMMISSIONER:· Mr. Cassan, you're

·7· ·going to go first?

·8· · · · · · · · · MR. CASSAN:· Thank you,

·9· ·Mr. Commissioner.· And I am mindful of Rule 40, so I

10· ·don't have very many questions in-chief.

11· · · · · · · · · EXAMINATION-IN-CHIEF BY MR. CASSAN:

12· · · · · · · · · Q.· ·Mr. Bauthus, did you ever --

13· ·we've heard about the water complaints and the

14· ·issues.

15· · · · · · · · · Did you ever heard receive any

16· ·complaints dealing with the structure of the mall?

17· · · · · · · · · A.· ·Nothing that has come across my

18· ·desk.

19· · · · · · · · · Q.· ·And you talked a little bit

20· ·about the reporting structure with respect to

21· ·department heads reporting to you and attending

22· ·Council.

23· · · · · · · · · Tell us about how the CBO's office

24· ·worked in that regard.

25· · · · · · · · · A.· ·The CBO reported during this

·1· ·period to the City Clerk, Mr. Burling, and as such,

·2· ·unless there was a specific issue, was not required

·3· ·to attend and sit at Council meetings.

·4· · · · · · · · · It was only the -- the director, senior

·5· ·level that came to Council, and that would have been

·6· ·the fire chief, the Treasurer, the CAO, obviously the

·7· ·City Clerk, and the maintenance supervisor.

·8· · · · · · · · · Q.· ·All right.· Now, taking you to

·9· ·the issue of the closure of the mines and the

10· ·establishment of Elliot Lake Retirement Living, tell

11· ·me about the ownership of homes in Elliot Lake prior

12· ·to the closure of mines.

13· · · · · · · · · Who owned them?

14· · · · · · · · · A.· ·Well, at the -- at the time of

15· ·the closure, there was -- if my memory serves me --

16· ·about 6,400 housing units, comprised of

17· ·single-family detached townhouses, semis and

18· ·multi-residential units.

19· · · · · · · · · And at the time of the transfer of

20· ·ownership to Retirement Living, I think the numbers

21· ·were 1,500 and change in terms of the number of units

22· ·that went over to Retirement Living.

23· · · · · · · · · Now, whether or not some of the mines

24· ·owned some additional houses that they sold to their

25· ·tenants at that time, I don't know what numbers that

·1· ·would be, but that gives you an indication of the --

·2· ·the order of magnitude that the mines owned and what

·3· ·was in the City at the time.

·4· · · · · · · · · Q.· ·But specifically with respect to

·5· ·the ownership of the mines, you've indicated that in

·6· ·some cases, perhaps the mines sold the houses to

·7· ·their tenants.

·8· · · · · · · · · Do I take it from that that most of

·9· ·the housing was owned by the mining companies and

10· ·rented to the miners?

11· · · · · · · · · A.· ·Looking at the numbers, I

12· ·wouldn't have anticipated that, no.· Not -- not

13· ·the -- the majority of housing in town.

14· · · · · · · · · Q.· ·But this 1,500 that went to --

15· · · · · · · · · A.· ·15 -- as I said, at the end of

16· ·the day, there was 1,500 and change -- if I remember

17· ·the numbers correctly -- that ultimately went over

18· ·to Retirement Living.

19· · · · · · · · · Q.· ·And were you involved in any

20· ·consideration of the market effect that those --

21· ·that number of houses being put on the market would

22· ·have?

23· · · · · · · · · A.· ·Well, I know in terms of the

24· ·discussion with those houses going to Retirement

25· ·Living, as opposed to going on the market, that

·1· ·precluded a meltdown in terms of the market price,

·2· ·because if you have that many housing units, or even

·3· ·if you take the single-family, take the -- the

·4· ·multi-use, the multi-residential out, that number of

·5· ·units coming on the market -- especially, I guess,

·6· ·what one would perceive as an isolated market in

·7· ·Elliot Lake -- would have had a detrimental effect.

·8· · · · · · · · · So those people that owned housing in

·9· ·Elliot Lake, in all likelihood would have suffered a

10· ·loss, a significant loss on their value.

11· · · · · · · · · MR. CASSAN:· Thank you, Mr. Bauthus.

12· ·Those are my questions in-chief.

13· · · · · · · · · THE COMMISSIONER:· Thank you.

14· · · · · · · · · CROSS-EXAMINATION BY MR. ELLIOTT:

15· · · · · · · · · Q.· ·Mr. Bauthus, my name is Douglas

16· ·Elliot.· I am also a former resident of Elliot Lake,

17· ·and I represent the Elliot Lake Mall Action

18· ·Committee and SAGE, both committee groups.

19· · · · · · · · · Mr. Bauthus, would you agree with me

20· ·that Elliot Lake has been through a number of boom

21· ·and bust cycles over the years?

22· · · · · · · · · A.· ·Yes.· That is quite true.

23· · · · · · · · · Q.· ·And the time period that you

24· ·were speaking about, when you were looking at the

25· ·cutbacks at the City of Elliot Lake, that was at a

·1· ·time when Elliot Lake was going through a bust

·2· ·cycle; correct?

·3· · · · · · · · · A.· ·That would have been, yes, sir,

·4· ·after the --

·5· · · · · · · · · Q.· ·Right.

·6· · · · · · · · · A.· ·-- the last of the mines closed.

·7· · · · · · · · · Q.· ·And that was the time when you

·8· ·were talking about the City Council implementing

·9· ·what I've heard variously referred to as the

10· ·"passive enforcement policy" or the

11· ·"complaint-driven policy."

12· · · · · · · · · That was the Exhibit No. 6-8 that was

13· ·passed in 1995 by the City Council; right?· That was

14· ·during the bust cycle, when the mines were closing?

15· · · · · · · · · A.· ·Yes, sir.

16· · · · · · · · · Q.· ·All right.· But the mall wasn't

17· ·built during a bust cycle, was it?· It was built

18· ·during a boom cycle?

19· · · · · · · · · A.· ·I'm -- yes.

20· · · · · · · · · Q.· ·Right.

21· · · · · · · · · A.· ·Looking at the timing, yes.

22· · · · · · · · · Q.· ·It was a different time.

23· · · · · · · · · Would you agree with me, as a --

24· ·administrative -- a Chief Administrative Officer of

25· ·a city, that the only way a city can have an

·1· ·official policy is to be passed by the City Council?

·2· · · · · · · · · A.· ·Yes.

·3· · · · · · · · · Q.· ·Right.

·4· · · · · · · · · A.· ·Unless it is otherwise dictated

·5· ·in legislation directly.

·6· · · · · · · · · Q.· ·Right.· So a Chief Building

·7· ·Official could not create a city policy; he would

·8· ·have to have that policy passed by the City Council?

·9· · · · · · · · · A.· ·Yes, sir.

10· · · · · · · · · Q.· ·Right.· Now, you came on

11· ·February 7th, 1990; am I right?

12· · · · · · · · · A.· ·Yeah.

13· · · · · · · · · Q.· ·And you gave evidence -- if I

14· ·understood your evidence correctly -- and your

15· ·evidence was similar to that of Mr. Pigeau, that

16· ·although the passive enforcement or complaint-driven

17· ·policy was only officially enacted in 1995, that, in

18· ·fact, that had always been the policy of the City of

19· ·Elliot Lake?

20· · · · · · · · · A.· ·Yes.

21· · · · · · · · · Q.· ·And the building department?

22· · · · · · · · · A.· ·I -- I can't relate to see if

23· ·their -- that policy had been adopted or a similar

24· ·policy adopted by previous Councils.

25· · · · · · · · · I know at that time it was necessary

·1· ·for us, because of the significant reduction in

·2· ·staffing, that we provide to Council the policy

·3· ·statement that would reflect the City's ability to

·4· ·respond.

·5· · · · · · · · · Q.· ·Right.· And when you were giving

·6· ·that evidence, were you simply relying on your

·7· ·memory as to what had been going on when you were in

·8· ·the City of Elliot Lake?· Or did you make inquiries

·9· ·of others, in preparation for giving your testimony,

10· ·in order to inform yourself as to what the previous

11· ·policies had been?

12· · · · · · · · · A.· ·Well, to the best of my

13· ·knowledge, the -- I was going by memory as to how we

14· ·undertook the procedures and protocols within the

15· ·City.

16· · · · · · · · · Q.· ·All right.· Would you be

17· ·surprised to learn that in 1977 or '78, that the

18· ·building department actually expanded by hiring a

19· ·Senior Building Inspector?

20· · · · · · · · · A.· ·Would I be surprised --

21· · · · · · · · · Q.· ·Yes.

22· · · · · · · · · A.· ·-- in 1977?

23· · · · · · · · · Q.· ·That that had happened in 1978,

24· ·that they were actually expanding the building

25· ·department instead of contracting it?

·1· · · · · · · · · A.· ·Yes.· I -- in looking at the

·2· ·history, there was a -- a period of time when there

·3· ·was a significant spurt in building activity, in

·4· ·anticipation of successful future contracts on the

·5· ·part of the mines.

·6· · · · · · · · · Q.· ·And I'm going to suggest to you

·7· ·that at that time that the building department

·8· ·was -- in contrast to the more difficult economic

·9· ·times that you were coping with in 1995, that in the

10· ·'70s there was quite a different atmosphere in the

11· ·building department at the City of Elliot Lake.

12· · · · · · · · · You were in an expansive mood, and

13· ·financial constraints were really not the

14· ·difficulty.

15· · · · · · · · · The difficulty was finding officials

16· ·to police all of the building activity that was

17· ·going on?

18· · · · · · · · · A.· ·I would assume that, looking at

19· ·the numbers, yes.

20· · · · · · · · · Q.· ·All right.· And so would you

21· ·agree with me that a person who was working in the

22· ·building department at that time, such as a Senior

23· ·Building Inspector, would be in a better position

24· ·than you to comment at what the policies and

25· ·practices would be in the building department of the

·1· ·City of Elliot Lake at that time?

·2· · · · · · · · · A.· ·I guess in terms of the bodies

·3· ·that -- that were there and having worked through

·4· ·that, they -- they would have an intimate knowledge

·5· ·of how they conducted their business.

·6· · · · · · · · · It was -- and how it was done, yes.

·7· · · · · · · · · Q.· ·So I just want to review with

·8· ·you some of the people who were working for the City

·9· ·of Elliot Lake back then, and who might have been

10· ·available to you when you were the Chief

11· ·Administrative Officer, and also in preparation for

12· ·your testimony.

13· · · · · · · · · Bob Gruhl was the Chief Building

14· ·Officer at the time; correct?· Back in the '70s?· Do

15· ·you recall that?

16· · · · · · · · · A.· ·I have never met the individual,

17· ·and --

18· · · · · · · · · Q.· ·Well, you wouldn't have done.

19· · · · · · · · · A.· ·-- and the name doesn't ring a

20· ·bell.· I --

21· · · · · · · · · Q.· ·Well, you wouldn't have done.

22· ·He died in 1980, so you wouldn't have been able to

23· ·meet with him.

24· · · · · · · · · A.· ·Well...

25· · · · · · · · · Q.· ·Then there was a Junior Building

·1· ·Officer who was involved in inspecting the mall.

·2· ·His name was Frank Hollick, a member of a very well

·3· ·known Elliot Lake family.

·4· · · · · · · · · But Frank tragically and somewhat

·5· ·ironically died when he fell off a roof; not this

·6· ·roof but another roof.

·7· · · · · · · · · Did you ever have an opportunity to

·8· ·meet Frank Hollick or discuss the Algo Centre Mall

·9· ·with him?

10· · · · · · · · · A.· ·No.

11· · · · · · · · · Q.· ·All right.· Then there was a man

12· ·named Perkins, who I understand was the City

13· ·Engineer, and --

14· · · · · · · · · A.· ·Michael Perkins?

15· · · · · · · · · Q.· ·Yes.· And I understand

16· ·Mr. Perkins is still alive and well and living in

17· ·Elliot Lake.

18· · · · · · · · · And he was on staff at the City of

19· ·Elliot Lake back when the mall was being built, and

20· ·I believe he was still on staff when you were the

21· ·Chief Administrative Officer; is that right?

22· · · · · · · · · A.· ·He was the Municipal Engineer

23· ·during my tenure, from 1990 to 2000.

24· · · · · · · · · Q.· ·And he would have known a lot

25· ·more about the structure of buildings than you,

·1· ·based on your training; correct?

·2· · · · · · · · · A.· ·Definitely.

·3· · · · · · · · · Q.· ·Did you ever consult Mr. Perkins

·4· ·about the Algo Centre Mall?

·5· · · · · · · · · A.· ·Not to my recollect, no.

·6· · · · · · · · · Q.· ·Why not?

·7· · · · · · · · · A.· ·I felt there was no reason for

·8· ·me to do that at this time.

·9· · · · · · · · · Q.· ·Well, you knew there was leaks

10· ·in the mall that the owners couldn't fix.

11· · · · · · · · · Did it never occur to you to ask the

12· ·engineer that you had on staff to investigate and

13· ·report to you?

14· · · · · · · · · A.· ·No, it did not, to pursue that

15· ·with him.

16· · · · · · · · · Q.· ·All right.· The other person who

17· ·is working at the City at the time was Andre

18· ·Marseille.

19· · · · · · · · · I understand he was a plumbing

20· ·inspector, and the plumbing inspector, he was senior

21· ·to Frank Hollick.

22· · · · · · · · · I understand that he's also still

23· ·alive and well.

24· · · · · · · · · Did you have an opportunity -- and he

25· ·conducted a number of the inspections that were --

·1· · · · · · · · · A.· ·I have never --

·2· · · · · · · · · Q.· ·-- conducted.

·3· · · · · · · · · Did you consult Mr. Marseille at all?

·4· · · · · · · · · A.· ·I have never met Mr. Marseille.

·5· · · · · · · · · Q.· ·And you've never spoken to him

·6· ·about the situation at the mall?

·7· · · · · · · · · A.· ·Obviously not.

·8· · · · · · · · · Q.· ·No, and yet the building

·9· ·inspection reports that were prepared by

10· ·Mr. Marseille would have been available to you as

11· ·the Chief Administrative Officer of the City of

12· ·Elliot Lake, would they not?

13· · · · · · · · · A.· ·Yes, I would presume so.

14· · · · · · · · · Q.· ·But you never requested them?

15· · · · · · · · · A.· ·No, I did not.

16· · · · · · · · · Q.· ·Then there was a Senior Building

17· ·Inspector.· The Senior Building Inspector was hired

18· ·in, I believe, 1977.· He would have been senior to

19· ·Frank Hollick and junior to Mr. Gruhl.

20· · · · · · · · · His name was Grant Ferguson, and I

21· ·can assure you that he is very much alive and well

22· ·and living in the Province of Ontario.

23· · · · · · · · · Did you ever speak to Mr. Ferguson

24· ·about what was being done in the building department

25· ·and what was happening with respect to the -- this

·1· ·building or buildings in general during that period

·2· ·of time?

·3· · · · · · · · · A.· ·No, sir.· I never met the

·4· ·gentleman.

·5· · · · · · · · · Q.· ·All right.· But you could have

·6· ·found out that he was an employee at the building

·7· ·department at the time by reviewing the personnel

·8· ·files that you had on hand; correct?

·9· · · · · · · · · A.· ·And at the time, there was no

10· ·reason for me to do so.

11· · · · · · · · · Q.· ·Well, you weren't concerned

12· ·about the condition of the mall?

13· · · · · · · · · A.· ·Yes, I was, but --

14· · · · · · · · · Q.· ·Well, why wouldn't you ask the

15· ·people who knew?

16· · · · · · · · · A.· ·I would relay on -- rely on the

17· ·Chief Building Official.

18· · · · · · · · · Q.· ·Well, that wasn't getting you

19· ·very good results, was it?

20· · · · · · · · · A.· ·No.

21· · · · · · · · · Q.· ·You weren't getting very good

22· ·results by relying on the Chief Building Official.

23· · · · · · · · · Doesn't the buck stop with you, as

24· ·the Chief Administrative Officer?

25· · · · · · · · · A.· ·Yes, it does, sir.· But I still

·1· ·have to rely on my professional staff.

·2· · · · · · · · · Q.· ·Well, you didn't go to all of

·3· ·your professional staff, did you?· You didn't go to

·4· ·Mr. Perkins?· And you could have hired someone else

·5· ·from outside; correct?

·6· · · · · · · · · A.· ·Yes, I guess I could have.

·7· ·However, that would have been left up to the -- the

·8· ·Chief Building Official, if he deemed it was

·9· ·necessary.

10· · · · · · · · · Q.· ·You couldn't make that decision

11· ·for yourself?· When you had a legal problem, you

12· ·hired a lawyer?

13· · · · · · · · · A.· ·Mm-hmm.

14· · · · · · · · · Q.· ·Didn't you?

15· · · · · · · · · A.· ·Yes, I did.

16· · · · · · · · · Q.· ·Did you need any per -- anyone's

17· ·permission to do that?

18· · · · · · · · · A.· ·No.

19· · · · · · · · · Q.· ·You had the authority to do it,

20· ·didn't you?

21· · · · · · · · · A.· ·Yes, sir.

22· · · · · · · · · Q.· ·You just never bothered?· You

23· ·just dumped it on your Chief Building Official;

24· ·isn't that right?

25· · · · · · · · · A.· ·No, I wouldn't suggest it that

·1· ·way.

·2· · · · · · · · · Q.· ·Well, he wasn't solving the

·3· ·problem for you.· Isn't it normally your

·4· ·responsibility, when you are the boss, if someone

·5· ·who is working for you is not solving the problem,

·6· ·that you take the problem away from them and you

·7· ·give it to somebody else who can fix it?

·8· · · · · · · · · A.· ·Well, I -- I think in this

·9· ·situation that there was continuing activity on the

10· ·part of the property owner to attempt to resolve

11· ·the -- the water problem.

12· · · · · · · · · Q.· ·That's very interesting.· I

13· ·wanted to talk to you about that, and the question

14· ·of discretionary enforcement.

15· · · · · · · · · And let me give you a quote from a

16· ·Ministry of Labour's report, and you tell me whether

17· ·you think you can -- you are in a position to

18· ·disagree with this assertion or not.

19· · · · · · · · · The Ministry of Labour, in looking back

20· ·at the conduct of the City of Elliot Lake, including

21· ·during your regime, Mr. Bauthus --

22· · · · · · · · · THE COMMISSIONER:· Slow down, please.

23· · · · · · · · · MR. ELLIOTT:· I'm very sorry,

24· ·Mr. Commissioner.

25· · · · · · · · · THE COMMISSIONER:· For the

·1· ·interpreters and the stenographer.

·2· · · · · · · · · MR. ELLIOTT:· My apologies to the

·3· ·interpreters.· Always tend to talk a little faster

·4· ·when you are quoting from something.

·5· · · · · · · · · THE COMMISSIONER:· Well...

·6· · · · · · · · · BY MR. ELLIOTT:

·7· · · · · · · · · Q.· ·Here's what they say:

·8· · · · · · · · · · ·"The City of Elliot Lake was

·9· · · · · · · · · ·aware that water had been

10· · · · · · · · · ·leaking into the mall for many

11· · · · · · · · · ·years; the City was involved in

12· · · · · · · · · ·trying to resolve leaks into

13· · · · · · · · · ·the City owned public library

14· · · · · · · · · ·that was housed in the mall.

15· · · · · · · · · ·In spite of this, it appeared

16· · · · · · · · · ·that the Building Department

17· · · · · · · · · ·took no action to compel the

18· · · · · · · · · ·mall owner to rectify the

19· · · · · · · · · ·problem and carry out a

20· · · · · · · · · ·structural assessment until

21· · · · · · · · · ·there was a change in ownership

22· · · · · · · · · ·in 2005."

23· · · · · · · · · Are you in a position to deny that,

24· ·Mr. Bauthus?

25· · · · · · · · · A.· ·No.· That's when the request for

·1· ·the structural review was undertaken, yes.

·2· · · · · · · · · Q.· ·In fact, it was in October 24th

·3· ·2006, I believe, that the City of Elliot Lake

·4· ·building department finally ordered the mall owner

·5· ·to provide a report.

·6· · · · · · · · · You weren't there at the time?

·7· · · · · · · · · A.· ·No, I was not.

·8· · · · · · · · · Q.· ·So during your watch, no such

·9· ·report was ever requested, although it could have

10· ·been; correct?

11· · · · · · · · · A.· ·Yes.

12· · · · · · · · · Q.· ·Mr. Bauthus, you talked about

13· ·discretionary enforcement.

14· · · · · · · · · Can you give me another example of

15· ·someone in the City of Elliot Lake who has been in

16· ·consistent and perpetual violation of the City of

17· ·Elliot Lake's by-laws from 1979 to 2005, without

18· ·getting any kind of prosecution, investigation,

19· ·notice of violation or any kind of action on the

20· ·part of the City of Elliot Lake?

21· · · · · · · · · A.· ·No, I can't.

22· · · · · · · · · Q.· ·I'm going to suggest to you,

23· ·Mr. Bauthus, that if a landlord had an apartment

24· ·building in Elliot Lake and they let the roof leak

25· ·into their tenants' apartments for even five days,

·1· ·that the City of Elliot Lake would have been all

·2· ·over them, and that they would have taken action to

·3· ·see that that roof is fixed; is that not so, sir?

·4· · · · · · · · · A.· ·We would have taken action to

·5· ·see that they would work to remediate the problem,

·6· ·yes.

·7· · · · · · · · · Q.· ·And I'm going to suggest to you

·8· ·that the reason that the City of Elliot Lake did

·9· ·nothing for decades about this leaking roof is

10· ·because the City of Elliot Lake was more concerned

11· ·about keeping the mall open, and they --

12· · · · · · · · · THE CLERK:· You need to step a bit

13· ·away from the mic.

14· · · · · · · · · MR. ELLIOTT:· Okay.· Sorry.

15· · · · · · · · · MR. CASSAN:· I have an objection to

16· ·the question.

17· · · · · · · · · MR. ELLIOTT:· Well, I haven't

18· ·finished asking the question, Mr. Cassan.· Perhaps

19· ·you'd like to wait until I finish asking it before

20· ·you object.

21· · · · · · · · · MR. CASSAN:· Actually, I wouldn't.

22· ·The objection is the --

23· · · · · · · · · THE COMMISSIONER:· Let's hear the

24· ·question.

25· · · · · · · · · Don't answer it.· I'll hear the

·1· ·question.

·2· · · · · · · · · MR. CASSAN:· Thank you.

·3· · · · · · · · · THE COMMISSIONER:· What's the

·4· ·question, sir?

·5· · · · · · · · · BY MR. ELLIOTT:

·6· · · · · · · · · Q.· ·My question is:· Why was the

·7· ·City of Elliot Lake not enforcing this by-law with

·8· ·respect to this particular entity for so many years

·9· ·when they would have enforced the by-law against

10· ·someone else?

11· · · · · · · · · You don't need to look at your

12· ·lawyer.

13· · · · · · · · · THE COMMISSIONER:· What's your --

14· · · · · · · · · MR. CASSAN:· My objection,

15· ·Mr. Commissioner, was to the characterization by my

16· ·friend that the City did nothing.

17· · · · · · · · · We've heard hours of testimony about

18· ·what the City did do.· My friend is characterizing

19· ·that as doing "nothing."

20· · · · · · · · · Although he then rephrased the

21· ·question, and so --

22· · · · · · · · · THE COMMISSIONER:· Right.· So the

23· ·rephrased question is more to your liking?

24· · · · · · · · · MR. CASSAN:· The rephrased question

25· ·is fine.

·1· · · · · · · · · THE COMMISSIONER:· We'll have the

·2· ·answer to that, and then we'll break for lunch.

·3· · · · · · · · · Mr. Bauthus?

·4· · · · · · · · · THE WITNESS:· Now, with regard to the

·5· ·issue that -- of -- because of the economic value of

·6· ·the -- the mall being a consideration for the City

·7· ·not undertaking anything specific was not there, in

·8· ·terms of anything, as I said previously, direction

·9· ·to me from Mayor or Council, or my direction to any

10· ·of the staff, with regard to what may have happened

11· ·or transpired relative to the -- the water and the

12· ·ongoing issues on the water, is a number of actions

13· ·were taken, in talking to the mall owner.

14· · · · · · · · · They had shown a continual work and

15· ·maintenance to attempt to resolve that situation.· And

16· ·even in taking a look at the reports coming back,

17· ·unfortunately they did not do everything, perhaps,

18· ·that might have otherwise been -- been necessary.

19· ·But, however, in the purpose of enforcement, had the

20· ·City undertaken any level of enforcement at the time

21· ·and moved ahead for court action, one would look at --

22· ·at it in a way anything else has happened.

23· · · · · · · · · If the owner has undertaken appropriate

24· ·due diligence to attempt to remediate the problem,

25· ·that would have been shown as evidence that they are

·1· ·trying to work to clear up the problem.

·2· · · · · · · · · MR. ELLIOTT:· Mr. Commissioner, I

·3· ·have only one two-part question left.· I wonder if I

·4· ·could just get that out of the way.

·5· · · · · · · · · THE COMMISSIONER:· If you want to

·6· ·finish, if that's all there is, that's fine.

·7· · · · · · · · · MR. ELLIOTT:· Yes.

·8· · · · · · · · · BY MR. ELLIOTT:

·9· · · · · · · · · Q.· ·Once the mines were closed,

10· ·what -- is it true to say that the mall was the

11· ·first or second largest source of tax revenue for

12· ·the City of Elliot Lake?

13· · · · · · · · · A.· ·At the time the mines were

14· ·closed, they were probably -- except for Retirement

15· ·Living as a single entity at the time it came on

16· ·board, yeah, I would -- my recollection in looking

17· ·at the -- trying to remember the tax rolls and that,

18· ·would have been the largest or one of the largest

19· ·single taxpayers.

20· · · · · · · · · Q.· ·And at the time you left, would

21· ·that be in the order of about half a million dollars

22· ·a year to the coffers of the City of Elliot Lake?

23· · · · · · · · · A.· ·They would be around that

24· ·number, yes, sir.

25· · · · · · · · · MR. ELLIOTT:· Thank you very much,

·1· ·Mr Bauthus.· Those are all my questions.

·2· · · · · · · · · THE COMMISSIONER:· Thank you, Mr.

·3· ·Elliott.

·4· · · · · · · · · We'll break for lunch, and let's start

·5· ·again at 2:05 to give us a bit more time.· Thank you.

·6· · · · · · · · · THE CLERK:· This hearing stands

·7· ·adjourned until 2:05 p.m.

·8· · · · · · · · · --- LUNCH RECESS TAKEN AT 12:49 P.M.

·9· · · · · · · · · --- RESUMED AT 2:05 P.M.

10· · · · · · · · · MR. BERNARD:· This hearing is now

11· ·resumed.· Please be seated.

12· · · · · · · · · MR. KEARNS:· Good afternoon, Mr.

13· ·Commissioner.

14· · · · · · · · · THE COMMISSIONER:· Good afternoon.

15· · · · · · · · · CROSS-EXAMINATION BY MR. KEARNS:

16· · · · · · · · · Q.· ·Mr. Bauthus, I want to go over

17· ·a few of the things that you talked to Mr. Doody

18· ·about this morning.

19· · · · · · · · · I understand your evidence is that

20· ·you came here in 1990 and that you had interviewed

21· ·for the job in 1989.

22· · · · · · · · · So you came at a time when it was

23· ·rather tumultuous for those of us in Elliot Lake.

24· ·Would you agree?

25· · · · · · · · · A.· ·Yes.

·1· · · · · · · · · Q.· ·In terms of you coming here Mr.

·2· ·Bauthus, when did the announcement that the mines

·3· ·were going to close had happened?

·4· · · · · · · · · A.· ·I don't recall the specific

·5· ·date, but I think, as I mentioned, that I had

·6· ·accepted the job and set the starting date, and

·7· ·sometime around the beginning of the year, Mayor

·8· ·Farkouh had called me at my home in Richmond Hill

·9· ·and indicated that he had just received a letter

10· ·from the mines and that -- and at that time, there

11· ·was going to be, of course, a change from the job in

12· ·terms of what I was interviewed for, and if I wanted

13· ·to reconsider my position with the City of

14· ·Elliot Lake, I could do so and there would be no

15· ·issues on their part.

16· · · · · · · · · Q.· ·Okay.

17· · · · · · · · · A.· ·As time has shown, I chose to

18· ·come here.

19· · · · · · · · · Q.· ·You chose to live in interesting

20· ·times?

21· · · · · · · · · A.· ·Yes.

22· · · · · · · · · Q.· ·Now, there was the initial

23· ·announcement in 1990, and they kept one of the mines

24· ·open until 1995, but would you agree with me that by

25· ·'96, '97, the City is facing some pretty serious

·1· ·challenges?

·2· · · · · · · · · A.· ·Yes, in terms of -- well,

·3· ·through the restructuring part, from the City

·4· ·perspective, there were serious challenges.· And as

·5· ·I indicated earlier, in just being able to maintain

·6· ·services, with a significant loss in taxable

·7· ·assessment with the mine sites having gone off the

·8· ·tax rolls; however, the residential component of the

·9· ·community, with its services -- roads, sidewalks,

10· ·parks and all the other components that the City was

11· ·responsible for -- remained virtually the same.

12· · · · · · · · · Q.· ·Now, you're answering my

13· ·question as it relates to the City itself, as in the

14· ·corporation of the City of Elliot Lake.

15· · · · · · · · · A.· ·Yes.

16· · · · · · · · · Q.· ·But my question was more related

17· ·to the community itself and the challenges that the

18· ·community faced with problems with employment, and

19· ·the retail sector, and these kind of things.· It was

20· ·a pretty challenging time for the community, for the

21· ·people of Elliot Lake?

22· · · · · · · · · A.· ·Well, there was a change, yes,

23· ·in terms of the community itself; in terms of the

24· ·economic, high-paying jobs, the miners were

25· ·high-paying jobs and having that level of disposable

·1· ·income and those were no long longer available; and

·2· ·then attempting to grow a retirement community and

·3· ·that was a different economic impact, in that their

·4· ·disposable incomes were not of the magnitude that

·5· ·the miners had.

·6· · · · · · · · · So, of course, that translated into the

·7· ·economics of the community had a very significant

·8· ·effect that affected the retail, and we saw businesses

·9· ·close as a result of that.

10· · · · · · · · · Q.· ·Now, Mr. Doody started you

11· ·looking at a handwritten note that Bob Leistner had

12· ·made of a meeting that you guys had had in December

13· ·of 1997, and the Commissioner will hear evidence

14· ·later on that the possibility of the hotel closing,

15· ·the community was aware of that in advance of this

16· ·meeting in December in Sault Ste. Marie; would you

17· ·agree with me about that?

18· · · · · · · · · A.· ·I would presume there were

19· ·discussions; but, myself, I don't recall anything

20· ·specific at this time.

21· · · · · · · · · Q.· ·The evidence will show, when we

22· ·get to it, the Retirement Living, that there was

23· ·a meeting in October of 1997 at which Deana Pertina

24· ·presented to the Retirement Living Board the

25· ·concerns -- I think she was with the Economic

·1· ·Development Office at the time?

·2· · · · · · · · · A.· ·She was, yes.

·3· · · · · · · · · Q.· ·-- the concerns they had about

·4· ·the hotel closing.

·5· · · · · · · · · So what I'm saying is I'm certain by

·6· ·the time you go to this meeting in December of '97,

·7· ·this isn't the first time that you hear from Mr.

·8· ·Leistner that they're thinking of closing the hotel?

·9· · · · · · · · · A.· ·It may not have been, obviously,

10· ·what you're saying.

11· · · · · · · · · Q.· ·Now, as the CAO for the City,

12· ·what were your thoughts on that?· What effect did

13· ·you see the City could suffer from ACP closing the

14· ·hotel and potentially tearing it down?

15· · · · · · · · · A.· ·It was -- there would have been

16· ·an impact on the ability to provide adequate rooms

17· ·to meet the needs, and that there was a very limited

18· ·number of rooms available with the Algocen having

19· ·some 80-some rooms to address the tourism and

20· ·visitation issue; and going through, like some of

21· ·the things that we were trying to promote in terms

22· ·of the City was visitors coming to the City, either

23· ·to participate in hockey tournaments or something of

24· ·that nature, and that would have been compromised to

25· ·some extent.

·1· · · · · · · · · Q.· ·The hotel was also a big part of

·2· ·the Retirement Living program, wasn't it?

·3· · · · · · · · · A.· ·Yes.

·4· · · · · · · · · Q.· ·That was where they needed to

·5· ·house the people and, in fact, the hotel and the

·6· ·mall itself was a fairly attractive building for

·7· ·people coming to town.· They would have been

·8· ·surprised to have seen a building of that stature in

·9· ·a town with maybe 13-, 14-, 15,000 people; would you

10· ·agree with that?

11· · · · · · · · · A.· ·Yes.

12· · · · · · · · · Q.· ·Would you agree with me that any

13· ·decision to close the hotel in '97 or '98 would have

14· ·posed a threat to the future of Elliot Lake?

15· · · · · · · · · A.· ·The hotel and the mall, that

16· ·would have had a serious negative effect on the

17· ·ability to continue to promote the community as

18· ·a viable retirement opportunity.

19· · · · · · · · · Q.· ·And pretty much as a viable --

20· · · · · · · · · A.· ·Viable community, yes.

21· · · · · · · · · Q.· ·I'd just like to talk to you

22· ·about, then, the main issue that my friend raised

23· ·with you in this area, which was about this

24· ·nondisclosure agreement and the confidentiality and

25· ·what may be perceived by some as some secrecy going

·1· ·on here.

·2· · · · · · · · · Is it fair to say that when you met

·3· ·with Mr. Leistner, in December of '97, it was going

·4· ·to be very clear to you that whatever information

·5· ·that he was prepared to give you was going to be

·6· ·guarded very carefully.

·7· · · · · · · · · A.· ·I can't recall specific

·8· ·discussions on that nature myself.· Not to say that

·9· ·it didn't happen, but I don't specifically recall

10· ·that.

11· · · · · · · · · Q.· ·His notes talk about, from that

12· ·day, talk specifically about the terms of reference

13· ·in the four points that he sets out.· Clearly, the

14· ·terms of reference which is the terms under which

15· ·you are going to get information and Retirement

16· ·Living is going to get information, that needed to

17· ·be clear and solid before anything went forward;

18· ·would you agree with me about that?

19· · · · · · · · · A.· ·Yes.

20· · · · · · · · · Q.· ·And you responded quickly with

21· ·draft terms of reference.· I would like to just look

22· ·at those.

23· · · · · · · · · MR. KEARNS:· Ms. Kuka, that's at --

24· ·I believe it's Exhibit No. 2098.· Can we go three

25· ·pages further with that.· Just maybe one back and

·1· ·closer to the bottom.

·2· · · · · · · · · BY MR. KEARNS

·3· · · · · · · · · Q.· ·The reporting that KPMG is

·4· ·referring to under the "Reporting" phase, that is

·5· ·a reporting that they are going to be making to

·6· ·whoever it is is allowed to look at this

·7· ·information; correct?

·8· · · · · · · · · From whether it's Retirement Living

·9· ·or the City, they're not involved in the

10· ·nondisclosure.· They are just saying there is going

11· ·to be some reporting and it has to go to somebody?

12· · · · · · · · · A.· ·Uh-hmm, yes.

13· · · · · · · · · Q.· ·Now, what I think is important

14· ·to realize is that you need -- in order to go

15· ·forward with this project, you need information from

16· ·Mr. Leistner.· Do you agree with that?

17· · · · · · · · · A.· ·Yes.

18· · · · · · · · · Q.· ·Would you agree with me that

19· ·he's under no obligation to provide that information

20· ·to you; he's under no obligation to tell you about

21· ·his leases; he's under no obligation to tell you

22· ·about his income, his finances, his expenses; he's

23· ·under no obligation to allow anybody on his property

24· ·to do a building search, a building condition

25· ·assessment.

·1· · · · · · · · · Would you agree with me, he can just

·2· ·say "No, I'm not interested" and you guys just pack

·3· ·up and go home?

·4· · · · · · · · · A.· ·No, under the purpose of the

·5· ·report, no, that's right, that would have been my

·6· ·understanding.

·7· · · · · · · · · Q.· ·So really we are going to get

·8· ·whatever Mr. Leistner on behalf of his

·9· ·corporation -- obviously, I don't want to

10· ·personalize it, but whatever ACP is prepared to give

11· ·us and we're going to get that on the terms and

12· ·conditions that they tell us we're going to get it;

13· ·is that right?

14· · · · · · · · · A.· ·Yes.

15· · · · · · · · · Q.· ·Okay.· And if we can go to

16· ·Exhibit No. 3226.· Yes, you will see that he agreed

17· ·with KPMG and I believe that -- were the KPMG people

18· ·being proposed from Sudbury?

19· · · · · · · · · A.· ·Yes.

20· · · · · · · · · Q.· ·Do you remember?

21· · · · · · · · · He agreed to consultants with respect

22· ·to the retail, I think, from Sudbury, didn't agree

23· ·for them from Sault Ste. Marie or Elliot Lake.

24· · · · · · · · · Do you know why he wouldn't agree to

25· ·qualified consultants coming from the Sault or

·1· ·Elliot Lake?

·2· · · · · · · · · A.· ·In terms of the study, I would

·3· ·presume that that would be of concern because ACP

·4· ·does business in Sault Ste. Marie and Elliot Lake.

·5· · · · · · · · · Q.· ·A little too close to home to

·6· ·have consultants know that information if they were

·7· ·practicing in Elliot Lake.

·8· · · · · · · · · And it seems to me, obviously these

·9· ·people are going to be subject to nondisclosure

10· ·agreements themselves.· But even then, clearly, Mr.

11· ·Leistner is making it clear that Sault Ste. Marie

12· ·and Elliot Lake people aren't acceptable as

13· ·consultants; is that correct?

14· · · · · · · · · A.· ·That's the way I read that.

15· · · · · · · · · Q.· ·And then paragraphs 3 and 4 and

16· ·5 and 6 -- I think to the next page, Ms. Kuka -- are

17· ·all about -- and all about the terms, about what

18· ·information -- what information he's going to give.

19· ·It's all about restricting who is going to be able

20· ·to see that information.· We've had Mr. Leistner

21· ·described by Mr. Caughill as a meticulous person.

22· · · · · · · · · Would you agree with me that he is

23· ·very much concerned in this letter that information

24· ·from ACP be protected and released only pursuant to

25· ·agreements from them?

·1· · · · · · · · · A.· ·Yes.

·2· · · · · · · · · Q.· ·And number 7 doesn't even deal

·3· ·with reporting requirements with respect to the

·4· ·physical building inspection because he's going to

·5· ·deal with those later once the engineer has been

·6· ·retained, and that's going to be retained by

·7· ·Retirement Living?

·8· · · · · · · · · A.· ·Uh-hmm.

·9· · · · · · · · · Q.· ·Is that correct?

10· · · · · · · · · A.· ·Yes.

11· · · · · · · · · Q.· ·Okay.· Now the next document to

12· ·look at is -- chronologically -- your report to

13· ·Council.

14· · · · · · · · · MR. KEARNS:· And that is Exhibit No.

15· ·249, Madam Clerk.· Is it just one-page?

16· · · · · · · · · MS. KUKA:· This would be the next

17· ·page of it.

18· · · · · · · · · MR. KEARNS:· Oh, yes.· Thank you.

19· ·That's exactly what I was looking for.

20· · · · · · · · · BY MR. KEARNS:

21· · · · · · · · · Q.· ·And if we could go to the last

22· ·page of that and right at the bottom.· This is

23· ·a report that Council reads in advance of the

24· ·meeting and then there is a general discussion that

25· ·you lead based on the information that you've

·1· ·provided them in the report.

·2· · · · · · · · · A.· ·Yes, this report is included in

·3· ·the agenda for the meeting and the information upon

·4· ·which they deliberate.

·5· · · · · · · · · Q.· ·And I just want to talk about

·6· ·the last line under "Summary":

·7· · · · · · · · · · ·"By entering into a contract

·8· · · · · · · · · ·with Retirement Living, we can

·9· · · · · · · · · ·undertake the project and

10· · · · · · · · · ·ensure that we maintain the

11· · · · · · · · · ·confidentiality of the

12· · · · · · · · · ·information related to the

13· · · · · · · · · ·private sector businesses."

14· · · · · · · · · Was there a discussion that you recall

15· ·at Council that night, in which it was clear to

16· ·councillors that the information that was going to be

17· ·provided by ACP was going to be subject to

18· ·confidentiality restrictions?

19· · · · · · · · · A.· ·I don't know to what extent

20· ·I would have discussed it.· I may have discussed in

21· ·the entirety of the report, that it was necessary to

22· ·maintain the -- maintain confidentiality and using

23· ·Retirement Living would meet those obligations

24· ·because of our dealing with the businesses.

25· · · · · · · · · The scope of breaking out ACP as

·1· ·a specific item, I can't recall whether that was

·2· ·raised by myself or raised by a councillor in the

·3· ·questioning.

·4· · · · · · · · · Q.· ·Okay, but I mean it's right

·5· ·there in the last line of your summary.· So, you

·6· ·know, I'm just interested in your comments earlier

·7· ·to my friend about some councillors or a councillor,

·8· ·more councillors seemed to be concerned about not

·9· ·getting access to some information; do you remember

10· ·saying that to Mr. Doody?

11· · · · · · · · · A.· ·Yes, I did.

12· · · · · · · · · Q.· ·But it seems to me that if

13· ·I looked at what your report to them says, and

14· ·presume that there would have been a discussion that

15· ·evening about the fact that we need to use

16· ·Retirement Living for this, because we need somebody

17· ·independent of the City, how could the councillors

18· ·have left that meeting under the understanding that

19· ·they are going to get access to this information if

20· ·ACP doesn't want them to get that information?

21· · · · · · · · · A.· ·That, I can't say, you know, in

22· ·terms of why they would come to that conclusion.

23· · · · · · · · · Now, I had indicated here, maybe it was

24· ·the fact that after the fact of an NDA being actually

25· ·drawn up and them, as individual councillors, being

·1· ·named in the NDA.

·2· · · · · · · · · Q.· ·Okay, but I mean the councillors

·3· ·are named in an NDA.· They are named in the NDA only

·4· ·for, as kind of an aside, as a way to get money back

·5· ·from ACP if they don't allow you to have the

·6· ·reports.

·7· · · · · · · · · The NDA just says you can't show this

·8· ·stuff to anybody; right?

·9· · · · · · · · · A.· ·Uh-hmm.

10· · · · · · · · · Q.· ·It doesn't mention

11· ·"councillors."· It's just --

12· · · · · · · · · MR. DOODY:· With respect, my friend

13· ·is misstating the evidence.

14· · · · · · · · · The document speaks for itself, but it

15· ·certainly does name councillors specifically by name.

16· · · · · · · · · BY MR. KEARNS:

17· · · · · · · · · Q.· ·Let's go to it.· It's number

18· ·390.

19· · · · · · · · · The document does speak for itself,

20· ·and it specified names in paragraph 3, people that

21· ·can't see the report.

22· · · · · · · · · Wouldn't you agree with me, Mr.

23· ·Bauthus, that in fact paragraph 1 says:· "Nobody can

24· ·see the report without ACP's agreement"?

25· · · · · · · · · A.· ·Uh-hmm.· I'm not going to argue

·1· ·that point.· I guess in terms of the councillors,

·2· ·and I'm just going by my recollection, in terms of

·3· ·some of the discussion that ensued as a result of

·4· ·the report and the NDAs, that I recall that there

·5· ·was some discussion that the magnitude, the gist of

·6· ·it, I don't know, as I indicated earlier, but --

·7· · · · · · · · · Q.· ·Have you had a chance to look --

·8· · · · · · · · · THE COMMISSIONER:· But the report, in

·9· ·fairness, the agreement rather, you're right, it is

10· ·an absolute prohibition on disclosure.· The named

11· ·individuals are there as exceptions, in a way, to

12· ·the nondisclosure in the sense that, if disclosure

13· ·is intended or is requested or is withheld from

14· ·those named individuals, that kicks in a particular

15· ·process, a --

16· · · · · · · · · If I can flip to the second page, Ms.

17· ·Kuka.

18· · · · · · · · · All right.· If it involves those

19· ·individuals, then it gives rise to compensation; do

20· ·you agree with me?

21· · · · · · · · · MR. KEARNS:· Absolutely.

22· · · · · · · · · And seeing my job here is to make sure

23· ·that, Mr. Commissioner, you have the information

24· ·before you that I think clearly you do.

25

·1· · · · · · · · · BY MR. KEARNS

·2· · · · · · · · · Q.· ·Essentially, what the -- I'm

·3· ·looking at specifically a second page, and it's what

·4· ·the Commissioner referred to, Mr. Bauthus.· You've

·5· ·had a chance to read this document, you're familiar

·6· ·with it?

·7· · · · · · · · · A.· ·At this time, yes, I did.

·8· · · · · · · · · Q.· ·And do you understand that what

·9· ·it means is if ACP doesn't agree to give the summary

10· ·of the building condition and the value of the

11· ·facility, they don't agree to allow the councillors

12· ·and you -- and I've forgotten the name of the other

13· ·woman?

14· · · · · · · · · A.· ·Carole Lister.

15· · · · · · · · · Q.· ·-- Ms. Lister to see it, then

16· ·ACP is going to refund to you $20,000 because you

17· ·would say:

18· · · · · · · · · · ·"Why have I wasted $20,000 on

19· · · · · · · · · ·two reports that you won't let

20· · · · · · · · · ·me show to anybody?"

21· · · · · · · · · And ACP says you are right, if you

22· ·spend $20,000 on these reports and we don't let them

23· ·show them to you, we'll give you the money back;

24· ·isn't that what the agreement says?

25· · · · · · · · · A.· ·That's the gist of it.

·1· · · · · · · · · Q.· ·So this is a blanket

·2· ·confidentiality agreement; no-one gets to see it

·3· ·without ACP's agreement.

·4· · · · · · · · · And if I can take you to Exhibit No.

·5· ·2089.· This is a letter from Mr. Leistner to Ms.

·6· ·Guertin dated May 15, 1998.

·7· · · · · · · · · ACP has allowed at Retirement Living

·8· ·only two people to see it, and that is Mr. Kennealy

·9· ·and Ms. Guertin; is that correct?

10· · · · · · · · · A.· ·That's correct, and so I guess

11· ·when you take a look at it and some of the comments,

12· ·all that they would know or take a look at is the

13· ·NDA, is that there are some councillors that were

14· ·mentioned, they hadn't seen that either so as to

15· ·make any comment or an informed response on it, so

16· ·they made comment.

17· · · · · · · · · Q.· ·Okay.· No, I understand that.

18· ·I guess what my friend asked you about was the

19· ·wording in Mr. Kennealy's report about there being

20· ·some kind of a tripartite agreement about

21· ·nondisclosure, you, the City and ACP, and it is

22· ·clearly you are not part of this nondisclosure

23· ·agreement.

24· · · · · · · · · But, at the same time, would you have

25· ·expected to have been consulted on this?· Isn't it

·1· ·true that once the agreement is signed with

·2· ·Retirement Living, it's their job to get this done;

·3· ·is that not true?

·4· · · · · · · · · A.· ·I would view it that way, yes,

·5· ·to continue and deliver the -- on the contract, yes,

·6· ·in terms of the study and so forth.

·7· · · · · · · · · Q.· ·And you knew, and City

·8· ·councillors knew that part of delivering on that

·9· ·contract requirement was going to be a nondisclosure

10· ·agreement with ACP?

11· · · · · · · · · A.· ·Uh-hmm.

12· · · · · · · · · Q.· ·That came as no surprise to

13· ·anyone, did it?

14· · · · · · · · · MR. MacRAE:· With respect, Mr.

15· ·Commissioner, I have an objection to that evidence.

16· · · · · · · · · THE COMMISSIONER:· I'm sorry,

17· ·I didn't hear that beginning, Mr. MacRae.

18· · · · · · · · · MR. MacRAE:· I have an objection to

19· ·that evidence in that it's my submission that it's

20· ·improper for Mr. Kearns to suggest that the

21· ·councillors didn't know.

22· · · · · · · · · That evidence isn't before this

23· ·Commission.

24· · · · · · · · · The evidence is that Mr. -- as Mr.

25· ·Bauthus has indicated -- thank you, has indicated, he

·1· ·didn't tell the Council.

·2· · · · · · · · · That's my recollection of the evidence.

·3· · · · · · · · · THE COMMISSIONER:· Did you say

·4· ·"didn't know"?

·5· · · · · · · · · MR. MacRAE:· Did know.

·6· · · · · · · · · THE COMMISSIONER:· Did know.

·7· · · · · · · · · MR. MacRAE:· Did know that there

·8· ·would be a nondisclosure agreement.· That's not the

·9· ·evidence.

10· · · · · · · · · THE COMMISSIONER:· Mr. Kearns,

11· ·I don't disagree with Mr. MacRae.· That can be put

12· ·as a question rather than as an assertion.· All

13· ·right.

14· · · · · · · · · BY MR. KEARNS:

15· · · · · · · · · Q.· ·Is it not true, Mr. Bauthus, at

16· ·the end of your presentation with respect to the

17· ·$48,000 contract that councillors ought to have been

18· ·aware that there were confidentiality restrictions

19· ·relating to any information that they were going to

20· ·get from ACP?

21· · · · · · · · · A.· ·Yeah, I think it would be

22· ·understood that that was identified in terms of --

23· ·and in the report, that that was why Retirement

24· ·Living was undertaking the work, that there was

25· ·confidentiality of information coming to them in

·1· ·order to exercise the study and complete under that

·2· ·contract.

·3· · · · · · · · · Q.· ·And that was --

·4· · · · · · · · · A.· ·Now, I don't know that

·5· ·I mentioned there was going to be an NDA, but

·6· ·certainly there was the expectation that there would

·7· ·be confidentiality.

·8· · · · · · · · · Q.· ·Right, your expectation was that

·9· ·there were going to be terms and restrictions on

10· ·disclosure of this information; correct?

11· · · · · · · · · A.· ·Yes.

12· · · · · · · · · Q.· ·And most councillors, listening

13· ·carefully, to you and reading your report that

14· ·night, would know there were going to be

15· ·restrictions on the dissemination of that

16· ·information?

17· · · · · · · · · A.· ·Yes, I did not -- you know, in

18· ·terms of the report, I did not identify what those

19· ·terms and restrictions might otherwise be.

20· · · · · · · · · Q.· ·Okay, but in this report, I mean

21· ·we're talking about with vagueness here that I don't

22· ·understand.

23· · · · · · · · · I mean the only reason why Retirement

24· ·Living is involved in this is because information is

25· ·necessary to move forward, that you can't expect the

·1· ·private sector to provide to the City and put into

·2· ·a public forum; right?· That's the idea.· It's in

·3· ·your report?

·4· · · · · · · · · A.· ·Yeah, that's why it was

·5· ·specified in the report and that's why we undertook

·6· ·the study with Retirement Living.

·7· · · · · · · · · Q.· ·Yes, and --

·8· · · · · · · · · A.· ·As the contractor in order to

·9· ·execute the study, complete the study, that was

10· ·understood, going forward.

11· · · · · · · · · Q.· ·Now, when Council agreed to put

12· ·40-odd-thousand dollars towards this project, would

13· ·you agree with me that it was for the purpose of

14· ·trying to find a way to save the hotel and to move

15· ·the mall forward?

16· · · · · · · · · A.· ·Yes, to determine if it was

17· ·a viable enterprise going forward.

18· · · · · · · · · Q.· ·And would you agree with me that

19· ·this $45,000 that they spent was integral in

20· ·convincing Retirement Living to go forward and to

21· ·buy the mall and the hotel?

22· · · · · · · · · A.· ·Yes, I would suggest that --

23· ·I would think that it would be necessary for that

24· ·information, that the economic future of the City

25· ·would support the mall going forward.

·1· · · · · · · · · Q.· ·Would you agree with me, then,

·2· ·that with what came out of this $45,000, which is

·3· ·the purchase of the mall and hotel by Retirement

·4· ·Living, that this was City money well spent?

·5· · · · · · · · · A.· ·In terms of the mall going

·6· ·forward, and yes, that -- the information that we

·7· ·had suggested that we could survive in the community

·8· ·with the mall, as part of the community and for

·9· ·economic stability or continuing to move ahead.

10· · · · · · · · · Q.· ·Okay, but my question was really

11· ·much simpler than that.· Council decides to put

12· ·$45,000 out to see if they can put together

13· ·something that will help save the mall, and the

14· ·hotel.

15· · · · · · · · · A.· ·Right.

16· · · · · · · · · Q.· ·As a result of that, Retirement

17· ·Living buys the hotel and the mall.

18· · · · · · · · · Would you not think as the CAO of the

19· ·corporation that that was money well spent?

20· · · · · · · · · A.· ·Yes.

21· · · · · · · · · MR. KEARNS:· Thank you.· Those are my

22· ·questions.

23· · · · · · · · · THE COMMISSIONER:· Thank you.

24· · · · · · · · · CROSS-EXAMINATION BY MR. MacRAE:

25· · · · · · · · · Q.· ·Good afternoon, Mr. Bauthus.· My

·1· ·name is Bob MacRae and I represent Mr. Bob Wood who

·2· ·has standing at this hearing, at this Commission.

·3· · · · · · · · · And I'd like to take you to the

·4· ·discussion that you were just having with respect to

·5· ·the nondisclosure agreement.

·6· · · · · · · · · If we could deal with that while it's

·7· ·still fresh in your mind, you indicated that you

·8· ·hadn't informed any members of Council about the

·9· ·nondisclosure agreement, the formal nondisclosure

10· ·agreement that we've been having discussions about;

11· ·do you agree that that's your evidence?

12· · · · · · · · · A.· ·I don't recall that I did

13· ·specifically.

14· · · · · · · · · Q.· ·Would you agree with me that as

15· ·the CAO of Elliot Lake, it is your responsibility to

16· ·essentially manage all of the departments within the

17· ·municipality?

18· · · · · · · · · A.· ·Yes.

19· · · · · · · · · Q.· ·Everyone reports to you?

20· · · · · · · · · A.· ·Yes, sir.

21· · · · · · · · · Q.· ·All right.· Would there not be

22· ·a written -- would there not be documentation that

23· ·would confirm that you did, in fact, tell Council

24· ·that there was a nondisclosure agreement and that

25· ·they would not be receiving any information if, in

·1· ·fact, you had formally told them?

·2· · · · · · · · · A.· ·I don't know that I would have

·3· ·gone any more specific than I did in my report in

·4· ·terms of the confidentiality and what was included

·5· ·as the final report.

·6· · · · · · · · · I don't -- again, I don't know that

·7· ·I would have mentioned specifics on an NDA.

·8· · · · · · · · · Q.· ·Well, as I recall your evidence,

·9· ·you had indicated in the report to Council that

10· ·there would be confidentiality requirements; am I

11· ·correct?

12· · · · · · · · · A.· ·Yes.

13· · · · · · · · · Q.· ·And the confidentiality

14· ·requirements, that would be just a commonsense

15· ·situation with respect to Council being required to

16· ·keep information confidential?

17· · · · · · · · · A.· ·That Council would keep --

18· · · · · · · · · Q.· ·Yes.

19· · · · · · · · · A.· ·-- information confidential?

20· ·There -- you know, by virtue of the process, yes,

21· ·I would think that they would do so.· However,

22· ·because of the nature of the municipal organization,

23· ·any information coming into the hands of Council

24· ·becomes part of the public domain within certain

25· ·constraints.

·1· · · · · · · · · Q.· ·And those certain constraints

·2· ·would include in-camera meetings; am I correct?

·3· ·Minutes of in-camera meetings are not public

·4· ·documents; am I correct?

·5· · · · · · · · · A.· ·Yes.

·6· · · · · · · · · Q.· ·So it would have been possible

·7· ·for you to -- to have the clerk arrange an in-camera

·8· ·meeting during a regular session of Council to

·9· ·inform the Council members about the NDA, the formal

10· ·NDA?

11· · · · · · · · · A.· ·I guess it would have been

12· ·possible, however it wasn't specifically done prior,

13· ·prior to the NDA being executed.

14· · · · · · · · · Q.· ·And when were you first told

15· ·that the NDA had been executed?

16· · · · · · · · · A.· ·I can't recall the date.

17· · · · · · · · · Q.· ·Do you recall being told that

18· ·you would not be receiving any information as

19· ·a result of the NDA?

20· · · · · · · · · A.· ·I can't recall any specific

21· ·discussion in that line.

22· · · · · · · · · Q.· ·Would you agree with me that

23· ·this process started almost as a partnership between

24· ·the City of Elliot Lake and Retirement Living?

25· · · · · · · · · A.· ·In moving forward, yes, we

·1· ·looked at it together in ways and means to achieve

·2· ·the objective.· And Retirement Living being the type

·3· ·of vehicle that it is, they were able to undertake

·4· ·the study and maintain confidentiality, unlike the

·5· ·City.

·6· · · · · · · · · Q.· ·I understand that's your

·7· ·evidence with respect to what occurred, but going

·8· ·back to the beginning of this process, would you not

·9· ·agree with me that, in fact, you were driving the

10· ·process; you completed the terms of reference?

11· · · · · · · · · A.· ·Yes, in the partnership with

12· ·Retirement Living.

13· · · · · · · · · Q.· ·When you say "in partnership,"

14· ·did you provide Retirement Living with a draft of

15· ·the terms of reference for approval?

16· · · · · · · · · A.· ·I'm sure that I discussed the

17· ·terms of reference with Mr. Kennealy before we had

18· ·completed them and presented them to Council in

19· ·going forward.

20· · · · · · · · · Q.· ·And when you say "we," are you

21· ·talking about the partnership or are you talking

22· ·about the City of Elliot Lake?

23· · · · · · · · · A.· ·The City of Elliot Lake.

24· · · · · · · · · Q.· ·Would you agree with me that you

25· ·and Mr. Kennealy or you and Retirement Living were

·1· ·working together at the beginning of this project?

·2· · · · · · · · · A.· ·Yes.· We worked together to

·3· ·develop the terms of reference and there was

·4· ·collaboration between the two of us in terms of the

·5· ·terms of reference, and -- until we had the final

·6· ·product.

·7· · · · · · · · · Q.· ·And when you say, again, that

·8· ·"we had a final product," who had the final product,

·9· ·the City of Elliot Lake or the partnership between

10· ·Retirement Living and the City of Elliot Lake?

11· · · · · · · · · A.· ·I would say -- well, that would

12· ·be the terms of reference to undertake the study by

13· ·the City.· This is what we wanted to do.· Here's the

14· ·terms of reference for the study that the City was

15· ·going to be funding and because of the

16· ·confidentiality issues, it was recommended also that

17· ·Retirement Living be the contractor for the purposes

18· ·of the undertaking of the study.

19· · · · · · · · · Q.· ·All right.· When you say "for

20· ·the confidentiality it was recommended that

21· ·Retirement Living," who made that recommendation?

22· · · · · · · · · A.· ·I did.· It was done in the

23· ·report.

24· · · · · · · · · Q.· ·All right.· And your

25· ·recommendation was that Retirement Living conduct

·1· ·the report; am I correct?

·2· · · · · · · · · A.· ·Conduct the -- undertake the

·3· ·study, yes.

·4· · · · · · · · · Q.· ·At that point in time, would you

·5· ·agree with me that it was still a full partnership

·6· ·between the City of Elliot Lake and Retirement

·7· ·Living?

·8· · · · · · · · · A.· ·I'm not sure what your -- you

·9· ·mean in the way of a partnership.· There was no

10· ·formal partnership or terms of partnership or

11· ·anything identified in writing or anything of that

12· ·nature.

13· · · · · · · · · Due to the issues that we were

14· ·attempting to address at that time, this is the way it

15· ·was discussed and decided that we should be

16· ·approaching the issue of the need for the retail

17· ·study, the need to review the mall, and with that,

18· ·that led to the report going to Council suggesting

19· ·that we undertake this and the ensuing activities that

20· ·came out of that.

21· · · · · · · · · Q.· ·And as part of the compilation

22· ·of the report, am I correct that other businesses

23· ·were approached by the consultants, the individuals

24· ·who were preparing the report, not just the Algoma

25· ·Central property?

·1· · · · · · · · · A.· ·Yes, sir.

·2· · · · · · · · · Q.· ·And part -- as I understand it,

·3· ·the reason to use a third party was so that there

·4· ·would be -- the parties being questioned would be

·5· ·forthcoming with respect to the information because,

·6· ·to paraphrase you, they wouldn't be providing the

·7· ·information to the City; they would be providing it

·8· ·to a consultant?

·9· · · · · · · · · A.· ·That is correct, yes.

10· · · · · · · · · Q.· ·Did any other parties require

11· ·confidentiality agreement?

12· · · · · · · · · A.· ·No, sir.

13· · · · · · · · · Q.· ·Sir, getting back to the

14· ·discussion, then, with respect to, was Retirement

15· ·Living a party to the agreement with respect to the

16· ·report or was Retirement Living charged with

17· ·preparing the report?

18· · · · · · · · · A.· ·They were charged with the

19· ·responsibility of undertaking the information,

20· ·pulling the information together and preparing the

21· ·report.

22· · · · · · · · · Q.· ·They prepared the report on

23· ·behalf of the City?

24· · · · · · · · · A.· ·Yes.

25· · · · · · · · · Q.· ·So, then, my question is: If you

·1· ·were -- if the City of Elliot Lake was normally

·2· ·retaining a consulting firm to complete this, it

·3· ·would be, possibly, say KPMG if we use them as

·4· ·an example, they wouldn't be a partner with the

·5· ·City, they would be a paid consultant acting on

·6· ·behalf of the City; am I correct?

·7· · · · · · · · · A.· ·Yes, sir.

·8· · · · · · · · · Q.· ·All right.· But in this

·9· ·particular situation, there was a partnership

10· ·between the City and Retirement Living with respect

11· ·to completing this information; would you agree with

12· ·me?

13· · · · · · · · · THE COMMISSIONER:· Well, you keep on

14· ·using the expression "partnership," sir, which in

15· ·a sense has a very distinct legal meaning.

16· · · · · · · · · I would categorize this, perhaps, as

17· ·a mutually beneficial collaboration, would you not, as

18· ·opposed to a partnership?

19· · · · · · · · · MR. MacRAE:· Yes, I wasn't trying --

20· ·I will certainly use that term.

21· · · · · · · · · I wasn't trying to suggest it was

22· ·a legal partnership, but rather a collaborative

23· ·effort, and I'll use that term in the future, Mr.

24· ·Commissioner.

25· · · · · · · · · BY MR. MacRAE:

·1· · · · · · · · · Q.· ·So with respect to this

·2· ·collaborative effort that was being untaken, would

·3· ·you agree with me that that would be a definition or

·4· ·a term that would describe the relationship between

·5· ·the City and Retirement Living in preparing this

·6· ·report?

·7· · · · · · · · · A.· ·No, in terms of this specific

·8· ·report, no, I wouldn't say it was a collaborative

·9· ·effort because Retirement Living was tasked with

10· ·undertaking the collection of the data and analyzing

11· ·the data and preparing the report, and that was the

12· ·whole purpose of Retirement Living coming on board

13· ·to prepare the report, is that the City would not be

14· ·privy to the background information respecting the

15· ·individual businesses in that regard.

16· · · · · · · · · So, I would look at it -- at, again, as

17· ·I say in my report, that it's to maintain the

18· ·confidentiality.· It was expected that we would

19· ·receive a report on the retail study as outlined.

20· · · · · · · · · THE COMMISSIONER:· How would you

21· ·describe it, then, sir?· You use your own words to

22· ·describe the relationship between the City and

23· ·Retirement Living.· What word would you use to

24· ·describe the relation -- there was obviously

25· ·a relationship of some sort.· They weren't two

·1· ·totally separate entities having no communication,

·2· ·one with the other.

·3· · · · · · · · · How would you describe the arrangement?

·4· ·We've used the expression "partnership."· We've used

·5· ·the expression "collaboration."· You've said that

·6· ·neither applies.

·7· · · · · · · · · How would you describe it?

·8· · · · · · · · · THE WITNESS:· Well, I think in this

·9· ·particular instance, it was a contractor/contractee

10· ·type of arrangement for them to undertake the study

11· ·of the information and prepare the finished

12· ·information coming to the City.

13· · · · · · · · · THE COMMISSIONER:· It was KPMG, they

14· ·would be doing it for the money.· They're in the

15· ·business of doing this kind of investigation.

16· · · · · · · · · KPMG wouldn't be in a partnership with

17· ·the City in that sense or in collaboration with the

18· ·City.· They would be hired contractors, hired to do

19· ·a job.

20· · · · · · · · · Now --

21· · · · · · · · · THE WITNESS:· And I guess if I might,

22· ·Your Honour --

23· · · · · · · · · THE COMMISSIONER:· Yes.

24· · · · · · · · · THE WITNESS:· -- in that situation,

25· ·if the City were to undertake that information,

·1· ·then, I guess, looking at the information that the

·2· ·consultant would have accumulated, would become part

·3· ·of the background of the report that the City would

·4· ·have access --

·5· · · · · · · · · THE COMMISSIONER:· No, I understand

·6· ·that.

·7· · · · · · · · · THE WITNESS:· -- to and that's where

·8· ·we had a third party, a one-off relationship.

·9· · · · · · · · · In this study with Retirement Living,

10· ·there was, in my mind, a sense of comfort to the

11· ·businesses, that they were not providing the

12· ·information in such a form that the staff of the City

13· ·would have access to that.

14· · · · · · · · · THE COMMISSIONER:· I understand that.

15· · · · · · · · · I'm just saying "collaborative" may not

16· ·be the word, but there were certainly congruent

17· ·interests.

18· · · · · · · · · I mean Retirement Living existed for

19· ·a specific purpose, right?· And they had an interest

20· ·and they did eventually purchase this -- the mall, and

21· ·it was to their interest and it was the City's

22· ·interest, you, the City, wanted -- were interested in

23· ·having them acquire because it was beneficial to the

24· ·City.

25· · · · · · · · · I take it collaborative, Retirement

·1· ·Living also saw a benefit from their perspective, and

·2· ·in that sense, were in a collaborative endeavour with

·3· ·you, albeit they were constrained in relation to the

·4· ·provision of information because it was necessary to

·5· ·have a confidentiality agreement, if they were -- if

·6· ·certain information was to be obtained, otherwise you

·7· ·wouldn't -- nobody would have been able to obtain the

·8· ·information.

·9· · · · · · · · · THE WITNESS:· Well, I think in terms

10· ·of looking at this issue, there was a common

11· ·interest on the part of both parties, or both

12· ·parties had a common interest in terms of the

13· ·ongoing success of the community.

14· · · · · · · · · And so with Retirement Living

15· ·undertaking the study, I guess there was a sense there

16· ·that if it went through, and the report was positive

17· ·-- and I'm looking in terms of the retail side of

18· ·it -- and even taking a look at the due diligence side

19· ·on the review of the mall itself, but all of that

20· ·information, I would look at that, that if it was

21· ·positive and they acted on it and moved ahead, as they

22· ·did, and the other side -- if the information coming

23· ·in was negative, in that after the review that it was

24· ·the -- the feeling was that they would not proceed

25· ·given there wasn't the support for them -- the future

·1· ·support for them to make it a viable business.

·2· · · · · · · · · THE COMMISSIONER:· Sure.

·3· · · · · · · · · THE WITNESS:· Because, obviously,

·4· ·they would be spending money that would be lost in

·5· ·the venture, and in that sense, our interests are

·6· ·concurrent.

·7· · · · · · · · · MR. MacRAE:· Thank you, Mr.

·8· ·Commissioner.

·9· · · · · · · · · BY MR. MacRAE:

10· · · · · · · · · Q.· ·With respect to the information,

11· ·is it your understanding when you reviewed the

12· ·nondisclosure agreement that Mr. Kennealy would be

13· ·entitled to receive that information?

14· · · · · · · · · A.· ·Yes.

15· · · · · · · · · Q.· ·And that Mr. Kennealy was freely

16· ·able to receive that information?

17· · · · · · · · · A.· ·Yes.

18· · · · · · · · · Q.· ·And Mr. Kennealy was an

19· ·employee of the corporation, Retirement Living; am I

20· ·correct?

21· · · · · · · · · A.· ·Yes.

22· · · · · · · · · Q.· ·At the time that this was going

23· ·on, as I understand and recall, there would have

24· ·been six members of Council; am I correct?

25· · · · · · · · · A.· ·Six members and the Mayor.

·1· · · · · · · · · Q.· ·Council and the Mayor.· Seven

·2· ·individuals make that up.

·3· · · · · · · · · A.· ·Yes.

·4· · · · · · · · · Q.· ·Would you agree with me that on

·5· ·a regular basis members of Council were expected to

·6· ·deal confidentially with many, many matters that

·7· ·came before Council?

·8· · · · · · · · · A.· ·Yes, I would.

·9· · · · · · · · · Q.· ·I can give you an example.

10· ·Labour discussions, labour negotiations,

11· ·traditionally those are confidential negotiations,

12· ·are they not?

13· · · · · · · · · A.· ·Yes.

14· · · · · · · · · Q.· ·And the members of Council can

15· ·be trusted with that information?

16· · · · · · · · · A.· ·Yes, we discuss, obviously,

17· ·I receive CAO direction as to what Council would

18· ·like to see as the direction of negotiations.

19· · · · · · · · · Q.· ·But my point is that the

20· ·information with respect to the confidential

21· ·negotiations is available to various members of

22· ·Council when negotiations are going on?

23· · · · · · · · · A.· ·Yes.

24· · · · · · · · · Q.· ·And the sale of property, that

25· ·when the municipality of Elliot Lake has determined

·1· ·during your tenure with Elliot Lake to sell

·2· ·property, that's treated very confidentially by

·3· ·members of Council; am I correct?

·4· · · · · · · · · A.· ·Yes, it is.

·5· · · · · · · · · Q.· ·And, in fact, when members --

·6· ·when individuals are elected to Council, they have

·7· ·to swear an oath to treat as confidential items that

·8· ·are confidential and to always act in the best

·9· ·interest of the City of Elliot Lake; is that not

10· ·correct?

11· · · · · · · · · A.· ·That's correct, yes.

12· · · · · · · · · Q.· ·So as CAO, when you became aware

13· ·that the councillors were going to be frozen out of

14· ·this information and not permitted to receive it

15· ·under any circumstances, did you not take issue with

16· ·that on behalf of your Council?

17· · · · · · · · · A.· ·I don't recall that I did.· And

18· ·I guess it's not the question of whether or not the

19· ·councillor as an individual can be trusted to

20· ·maintain that confidence.

21· · · · · · · · · The question is: Is the information, as

22· ·it becomes available and in the custody of the

23· ·municipality, whether or not that at any time in the

24· ·future can be accessed and made available.

25· · · · · · · · · Q.· ·So, are you suggesting that one

·1· ·of the main purposes in proceeding in this way was

·2· ·in order to ensure that this information did not

·3· ·become public?

·4· · · · · · · · · A.· ·No, I -- that was not the intent

·5· ·in terms of the initial -- my point of view, that to

·6· ·ensure that it -- well, I guess, depends on how you

·7· ·want to look at it, that it did or it didn't.

·8· · · · · · · · · The point in question was that the

·9· ·people that were responsible to provide that

10· ·information to the City, that unless they felt

11· ·comfortable that the City was not going to have access

12· ·to it, they probably would not be prepared to be

13· ·forthright in the presentation of that information,

14· ·which was necessary for us to evaluate the status of

15· ·the retail sector in the community.

16· · · · · · · · · Q.· ·But, Mr. Bauthus, you've

17· ·indicated, when you say "valid in order to determine

18· ·the retail sector," no other segment of the retail

19· ·sector, your evidence is, raised an objection to the

20· ·information going to Council; am I correct?

21· · · · · · · · · A.· ·No, not specifically in that

22· ·sense.

23· · · · · · · · · And I think in terms of the report,

24· ·they were satisfied with the fact that Retirement

25· ·Living was undertaking the study.

·1· · · · · · · · · You know, however, I guess if you look

·2· ·at it in terms of the magnitude and the businesses

·3· ·that were run by ACP, they may have had a view that

·4· ·they wanted to ensure that, again, because they were

·5· ·the major business in the community.

·6· · · · · · · · · Q.· ·All right.· You say that there

·7· ·may have been reasons.· My question to you is: Did

·8· ·you not -- did you not think that it would be

·9· ·appropriate to push back, or at least to make

10· ·Council aware, of the requirements that they were

11· ·going to be kept in the dark completely with respect

12· ·to this information, and that it was being done

13· ·specifically to avoid the information becoming

14· ·public?

15· · · · · · · · · A.· ·Well, I guess at the time, in

16· ·looking at the issue of the retail study, I didn't

17· ·take particular note of it, and the point that the

18· ·overall information is -- should be in the public

19· ·domain or should not be available to the

20· ·councillors.· The decision -- the information was

21· ·there to prepare the report, which was used for

22· ·decisions later.

23· · · · · · · · · So, I didn't -- I did not particularly

24· ·twig to the issue of whether or not that -- the

25· ·Council should have access or that it was being held

·1· ·away from them for that purpose.

·2· · · · · · · · · It was not necessary at the end of

·3· ·the -- at the end of the report and the decisions that

·4· ·were made as a result of that report.

·5· · · · · · · · · Q.· ·And what was not necessary, Mr.

·6· ·Bauthus?

·7· · · · · · · · · A.· ·Having all the detail.

·8· · · · · · · · · Q.· ·Who having all the details?

·9· · · · · · · · · A.· ·The City councillors.

10· · · · · · · · · Q.· ·And you made that decision?

11· · · · · · · · · A.· ·I guess I did, yes.· But, again,

12· ·you take the ACP looking at that in their concerns

13· ·and the building evaluation.

14· · · · · · · · · Again, that is part of the due

15· ·diligence in terms of -- that was required, both in

16· ·terms of the viability of the business going forward

17· ·and the due diligence in the subsequent acquisition of

18· ·the mall.

19· · · · · · · · · Q.· ·Wasn't this a bifurcated

20· ·process?

21· · · · · · · · · Wasn't there a report going on with

22· ·respect to -- or a report being developed with

23· ·respect to the commercial viability of the

24· ·commercial sector in Elliot Lake at the same time

25· ·that there was a review going on with respect to the

·1· ·purchasing of the Algoma Central Properties by

·2· ·Retirement Living?

·3· · · · · · · · · A.· ·I think the work was more or

·4· ·less concurrent being one was building in to the

·5· ·other, I would imagine, in that the commercial

·6· ·viability -- commercial viability of the enterprise

·7· ·is part of it, and I guess is part of the due

·8· ·diligence, the physical nature of the assets that

·9· ·may be purchased was also required.

10· · · · · · · · · Q.· ·Well, I'll leave that issue with

11· ·this question then, Mr. Leistner -- or rather, Mr.

12· ·Bauthus: How is it possible for members of Council

13· ·to be aware that they're not going to be given any

14· ·information, when, in fact, they're not even told in

15· ·the first place that they're not going to be told?

16· · · · · · · · · A.· ·Well, I guess the issue is that

17· ·they were told that there was going to be a level of

18· ·confidentiality that was necessary to undertake the

19· ·study, and the background information was not

20· ·necessary for their purposes as a councillor as

21· ·opposed to the outcome of that information as to the

22· ·viability of the retail sector --

23· · · · · · · · · Q.· ·But --

24· · · · · · · · · A.· ·-- which includes the mall.

25· · · · · · · · · Q.· ·But, Mr. Bauthus, how would they

·1· ·ever be able to make that determination if they were

·2· ·never told in the first place?

·3· · · · · · · · · A.· ·They were told, sir.

·4· · · · · · · · · They were told that as part of the

·5· ·arrangement and undertaking this contract with

·6· ·Elliot Lake Retirement Living that this was the way it

·7· ·had to be done in order to ensure that we

·8· ·accumulated -- or "we" -- or the study accumulates as

·9· ·much information as possible.

10· · · · · · · · · So, the whole essence of that report is

11· ·saying that we're moving it off to a third party,

12· ·being a Retirement Living, to undertake the study so

13· ·as the details supporting that study -- because it

14· ·relates to the retail sector, the details of the

15· ·individual businesses was not available to the City --

16· ·the City and so forth because of the perceived and --

17· ·both perceived and real issues of information in the

18· ·public domain.

19· · · · · · · · · So, if it doesn't hit the Council table

20· ·at all or City hall records, it is not available.

21· · · · · · · · · Q.· ·It's secret?

22· · · · · · · · · A.· ·I don't know that I would look

23· ·at it and say it's secret.

24· · · · · · · · · Q.· ·Council's never going to see it

25· ·under that -- under those circumstances; you'd agree

·1· ·with me that Council was never going to see it?

·2· · · · · · · · · A.· ·No, they weren't going to see

·3· ·the details.· They weren't going to see the business

·4· ·decisions that were being considered by the

·5· ·businesses in the community at that time.

·6· · · · · · · · · If the individual businesses wanted to

·7· ·discuss those in a public forum or let the councillor

·8· ·know what he or she is doing in the business, that was

·9· ·up to the individual business to do and discuss that

10· ·with Council.

11· · · · · · · · · Q.· ·But if we take this back to the

12· ·discussion that you had in Sault Ste. Marie with Mr.

13· ·Leistner, it was about there was a possibility of

14· ·a purchase of the Algoma Central property in

15· ·Elliot Lake; is that not correct?

16· · · · · · · · · A.· ·That was part of -- I gather

17· ·from the information and the discussions, that was

18· ·part of the discussion.

19· · · · · · · · · Q.· ·You were at the meeting?

20· · · · · · · · · A.· ·Yes.

21· · · · · · · · · Q.· ·You, you -- and you were the CAO

22· ·of Elliot Lake?

23· · · · · · · · · A.· ·Yes.

24· · · · · · · · · Q.· ·And George Farkouh was the Mayor

25· ·of Elliot Lake?

·1· · · · · · · · · A.· ·Yes.

·2· · · · · · · · · Q.· ·And Mr. Kennealy was the CAO of

·3· ·Retirement Living?

·4· · · · · · · · · A.· ·Yes, sir.

·5· · · · · · · · · Q.· ·And the original discussion was

·6· ·about the purchase of the mall?

·7· · · · · · · · · A.· ·Yeah, the direction of the mall

·8· ·going forward.

·9· · · · · · · · · Q.· ·Okay.· I said I would leave it

10· ·last time and I do intend to do that this time with

11· ·this question: Would you agree with me that what you

12· ·indicated in your memo and in the report to Council,

13· ·is that there would be a requirement for

14· ·confidentiality, but you never said that the

15· ·confidentiality would be so extreme that the members

16· ·of Council would not even find out about it?

17· · · · · · · · · A.· ·I did not discuss in the report

18· ·or otherwise the level of that confidentiality.

19· · · · · · · · · Q.· ·All right.· Thank you.

20· · · · · · · · · MR. MacRAE:· I wonder, then, Ms.

21· ·Kuka, if you could bring up Exhibit No. 3224.

22· · · · · · · · · Thank you.

23· · · · · · · · · BY MR. MacRAE:

24· · · · · · · · · Q.· ·The date on this, I believe, is

25· ·December the 5th, 1997; am I correct?

·1· · · · · · · · · A.· ·Yes.

·2· · · · · · · · · Q.· ·These are the notes that dealt

·3· ·with the meeting that you had with Mr. Leistner.

·4· ·And I have some questions about that meeting.

·5· · · · · · · · · Do you recall if Mr. Leistner

·6· ·provided you with any information about the previous

·7· ·history of the mall from a parking structure

·8· ·perspective?

·9· · · · · · · · · A.· ·I don't recall any information

10· ·on that line.

11· · · · · · · · · Q.· ·When you say you don't recall,

12· ·are you saying -- is your answer that "No, it wasn't

13· ·discussed" or "I don't know whether it was"?

14· · · · · · · · · A.· ·I don't have anything in my

15· ·records that would suggest that it was discussed.

16· · · · · · · · · Q.· ·Do you recall the meeting?

17· · · · · · · · · A.· ·I recall the meeting.

18· · · · · · · · · Unfortunately I don't recall the

19· ·details of the meeting.

20· · · · · · · · · Q.· ·Did anyone -- were there other

21· ·representatives there from the Algoma Central

22· ·Properties or just Mr. Leistner?

23· · · · · · · · · A.· ·I don't know.· I'm looking here

24· ·and it seems that there was another individual, and

25· ·I don't know who that would have been.

·1· · · · · · · · · Q.· ·But you do recall the meeting?

·2· · · · · · · · · A.· ·I do recall the meeting.

·3· · · · · · · · · Q.· ·Did you arrange the meeting or

·4· ·did someone else arrange the meeting?

·5· · · · · · · · · A.· ·I don't -- I don't know that

·6· ·I did.· I think it was arranged.

·7· · · · · · · · · Q.· ·And you don't recall whether

·8· ·Mayor Farkouh --

·9· · · · · · · · · A.· ·No, I don't.

10· · · · · · · · · Q.· ·Do you recall whether any

11· ·representative of the Algoma Central property

12· ·indicated to you that there had previously been

13· ·engineering reports completed on the building that

14· ·may be of interest to the City of Elliot Lake?

15· · · · · · · · · A.· ·I don't remember that we

16· ·discussed anything of that nature.

17· · · · · · · · · MR. MacRAE:· Okay.· I have no further

18· ·questions.· Thank you very much.· Thank you, Mr.

19· ·Commissioner.

20· · · · · · · · · CROSS-EXAMINATION BY MS. SMITH:

21· · · · · · · · · Q.· ·Good afternoon, Mr. Bauthus.· My

22· ·name is Kristin Smith.· I am counsel for the

23· ·Government of Ontario, so that includes the Ministry

24· ·of Labour and other ministries that the government

25· ·is representing in this Inquiry.

·1· · · · · · · · · And I want to take you back on

·2· ·a completely different subject than you were just

·3· ·getting questions on to your testimony this morning,

·4· ·and you were answering some questions that Mr. Doody

·5· ·was asking you about a 1999 report from the Library

·6· ·Board to the Joint Health and Safety Committee; do

·7· ·you recall that?

·8· · · · · · · · · A.· ·Yes.

·9· · · · · · · · · Q.· ·Okay.· And Mr. Doody had asked

10· ·you a question as to whether you thought the leaks

11· ·that were being reported by the Library Board to the

12· ·Joint Health and Safety Committee may have affected

13· ·the structure.· Do you remember the questions that

14· ·he asked you this morning about that?

15· · · · · · · · · A.· ·Yes.

16· · · · · · · · · Q.· ·And part of your answer was that

17· ·you had said that you did not think that -- or you

18· ·did not draw any direct link between the leaks in

19· ·the structure, but you also said in your answer that

20· ·the Ministry of Labour had come into the library and

21· ·reported on two instances with respect to air

22· ·quality and mold; do you remember giving that answer

23· ·this morning?

24· · · · · · · · · A.· ·Yes.

25· · · · · · · · · Q.· ·And you had also said -- you

·1· ·went on to say that when the Ministry of Labour came

·2· ·in, they also did not draw any correlation between

·3· ·water leakage and the in--- structural integrity of

·4· ·the building; do you remember --

·5· · · · · · · · · A.· ·Yes, I indicated that, yes.

·6· · · · · · · · · Q.· ·So were you aware that in 1995 a

·7· ·Ministry of Labour inspector by the name of Ralph

·8· ·Regan came into the library after Ms. Fazekas had

·9· ·asked him to come in?· Were you aware of that in

10· ·1995?

11· · · · · · · · · A.· ·I am not sure of the dates.

12· · · · · · · · · I looked at the report that's -- at the

13· ·time that I was familiar with the times that Mr. Regan

14· ·had attended.

15· · · · · · · · · Q.· ·And the other instance that he

16· ·had come in was in 2005, but you were not CAO at

17· ·that time?

18· · · · · · · · · A.· ·No, those were --

19· · · · · · · · · Q.· ·That's correct?

20· · · · · · · · · A.· ·No, I wasn't CAO at the time,

21· ·but I knew there were two specific times that Mr.

22· ·Regan had come in.

23· · · · · · · · · Q.· ·So he came in one time when you

24· ·were CAO in 1995 and the other instance in 2005 when

25· ·you were not?

·1· · · · · · · · · A.· ·Uh-hmm.

·2· · · · · · · · · Q.· ·Is that correct?

·3· · · · · · · · · A.· ·Yes.

·4· · · · · · · · · Q.· ·And did you receive, personally

·5· ·receive, a copy of the Ministry of Labour's report

·6· ·when they came in 1995 when you were CAO at the

·7· ·time?

·8· · · · · · · · · A.· ·I don't recall that I received

·9· ·it.

10· · · · · · · · · Q.· ·Do you recall the results of

11· ·their inspection or what was indicated in their

12· ·report?

13· · · · · · · · · A.· ·Other than what I have read

14· ·here.· In terms of my memory, I don't recall

15· ·anything else.

16· · · · · · · · · MS. SMITH:· Okay.· I would ask, Ms.

17· ·Kuka, if you could turn up Exhibit No. 1434.· So if

18· ·you could just zoom in on the top half of the page,

19· ·please.

20· · · · · · · · · BY MS. SMITH

21· · · · · · · · · Q.· ·So this is the report -- if you

22· ·look at the top of the page, the first box where

23· ·there's information written in it, it says "December

24· ·19, 1995."

25· · · · · · · · · And if we could scroll down to the

·1· ·bottom, it indicates that, the middle box on the

·2· ·bottom, Ralph Regan's signature.· Do you see that?

·3· · · · · · · · · A.· ·Yes, I do.

·4· · · · · · · · · Q.· ·And if we could just scroll up

·5· ·to the top half of the page, it indicates in the

·6· ·narrative description, he met with "Barbara Fazekas,

·7· ·the Librarian" -- I believe it's "Phil Butler and

·8· ·Debbie Quinn."

·9· · · · · · · · · They would be the Health and Safety

10· ·representatives from the Joint Health and Safety

11· ·Committee; is that correct?

12· · · · · · · · · A.· ·Yes.

13· · · · · · · · · Q.· ·And he "conducted an air quality

14· ·survey with Bob Wright from M.O.L., and no orders

15· ·were issued."

16· · · · · · · · · Do you recall receiving this report

17· ·at the time?

18· · · · · · · · · A.· ·No, I don't recall it coming

19· ·across my desk.

20· · · · · · · · · Q.· ·And you would agree with me,

21· ·then, that the purpose of this inspection in 1995

22· ·was to respond to a complaint by Ms. Fazekas

23· ·regarding air quality and mold?

24· · · · · · · · · A.· ·That's correct, yes.

25· · · · · · · · · Q.· ·And it was not a complaint or

·1· ·did not deal with anything related to structural

·2· ·integrity of the building?

·3· · · · · · · · · A.· ·Yes.

·4· · · · · · · · · Q.· ·So, I'm going to take you to the

·5· ·report that the Library Board gave to the Joint

·6· ·Health and Safety Committee.· You looked at that

·7· ·this morning.

·8· · · · · · · · · MS. SMITH:· And that's Exhibit No.

·9· ·11-3, Ms. Kuka.· If we can just jump to page 7.

10· ·Yeah, that's fine, and just zoom in on the top half

11· ·of the page.

12· · · · · · · · · BY MS. SMITH

13· · · · · · · · · Q.· ·You had looked at this this

14· ·morning in your questions with Mr. Doody.· And Ms.

15· ·Fazekas says in this memo that she had discussions

16· ·with you on October 9th, that you had met with Mr.

17· ·Liautaud, the mall manager, and that -- although the

18· ·issue had not been resolved.

19· · · · · · · · · At this time when you received this

20· ·report from Ms. Fazekas, did you call Ministry of

21· ·Labour or contact Ministry of Labour about the

22· ·concerns she was raising regarding the air quality?

23· · · · · · · · · A.· ·No, I didn't.

24· · · · · · · · · Q.· ·Okay.· Did you call or contact

25· ·Ministry of Labour at any time while you were CAO

·1· ·about any issues with the library and the leaks and

·2· ·the complaints about air quality and mold?

·3· · · · · · · · · A.· ·No, I didn't.

·4· · · · · · · · · MS. SMITH:· Thank you very much.

·5· · · · · · · · · THE COMMISSIONER:· Thank you.

·6· · · · · · · · · CROSS-EXAMINATION BY MR. BISCEGLIA:

·7· · · · · · · · · Q.· ·Help us out a bit.

·8· · · · · · · · · I'm Joe Bisceglia.· My client is Mr.

·9· ·Saunders, who was an engineer with M.R. Wright &

10· ·Associates at the time of -- just shortly before the

11· ·collapse.

12· · · · · · · · · Help us out.· My appreciation of the

13· ·evidence is that times were financially difficult

14· ·for the City and that all kind of efforts were being

15· ·made to save money and so on, but as an observer

16· ·during the course of these hearings, what I don't

17· ·understand is, did anybody ever take the landlord to

18· ·task for the cost of the repairs or allege any kind

19· ·of fundamental breach of the lease agreements?

20· · · · · · · · · A.· ·That was discussed earlier and

21· ·I know in turn talked to Mr. Liautaud that probably

22· ·there was a discussion in terms of what the terms of

23· ·the lease had said.· However, during this period

24· ·there wasn't anything on the financial nature in

25· ·terms of recovery from the mall.· However, later in

·1· ·2007, or 2008, or thereabouts, I had done something

·2· ·in terms of recovering of expenses.

·3· · · · · · · · · Q.· ·But the owner wasn't Algocen

·4· ·Realty at that time?

·5· · · · · · · · · A.· ·Not at that time.

·6· · · · · · · · · Q.· ·Was the owner Retirement Living

·7· ·at that time?

·8· · · · · · · · · A.· ·No.

·9· · · · · · · · · Q.· ·But I'm asking about the

10· ·relevant period historically when Algocen owned it

11· ·or Retirement Living owned it and we see all the

12· ·damage that occurred in the library and you have

13· ·these complaints and the air quality being looked at

14· ·and consultants were hired by the City as well.

15· · · · · · · · · Was there any decision or discussion

16· ·at the Council level as to what action to take, if

17· ·any, in that regard in terms of recovery of any

18· ·money?

19· · · · · · · · · A.· ·None other than what we've seen

20· ·here with the discussion with Mr. Bishop.

21· · · · · · · · · Q.· ·Thank you.

22· · · · · · · · · THE COMMISSIONER:· Mr. Longo.

23· · · · · · · · · CROSS-EXAMINATION BY MR. LONGO:

24· · · · · · · · · Q.· ·Good afternoon, sir.· My name is

25· ·Leo Longo and I represent the Ontario Building

·1· ·Officials Association.

·2· · · · · · · · · There were just a few questions I'd

·3· ·like to ask.· One is more of a factual background

·4· ·question.

·5· · · · · · · · · Prior to your employment with

·6· ·Elliot Lake, am I correct that the municipality had

·7· ·a CAO previous to you?

·8· · · · · · · · · A.· ·Yes.

·9· · · · · · · · · Q.· ·Exhibit No. 3 shows that a Mr.

10· ·J.S. Bloom was CAO from 1979 to December of 1989,

11· ·just prior to your employment?

12· · · · · · · · · A.· ·Uh-hmm, yes, Mr. Bloom preceded

13· ·me.

14· · · · · · · · · Q.· ·In your response to questions my

15· ·friend Mr. Doody asked yesterday afternoon, you

16· ·indicated that your powers came from both the

17· ·municipal act and a municipal by-law; do you recall

18· ·that?

19· · · · · · · · · A.· ·Yes.

20· · · · · · · · · MR. LONGO:· Ms. Kuka, if I could ask

21· ·you to put up on the screen the extracts from the

22· ·1990 Municipal Act.

23· · · · · · · · · MS. KUKA:· This one?

24· · · · · · · · · MR. LONGO:· No, that's the actual

25· ·by-law.· It's the Provincial statute.· That's it.

·1· ·Thank you.

·2· · · · · · · · · BY MR. LONGO:

·3· · · · · · · · · Q.· ·Page 1 is just to give a

·4· ·reference that this is an extract from the Municipal

·5· ·Act Revised Statutes of Ontario, 1990, chapter M, as

·6· ·in "Mary," .45.

·7· · · · · · · · · If we could turn to page 2 which

·8· ·is -- at the bottom, you will see the commencement

·9· ·of section 72:

10· · · · · · · · · · ·"The Council may by by-law

11· · · · · · · · · ·appoint a chief administrative

12· · · · · · · · · ·officer."

13· · · · · · · · · Stopping there.· Sir, you will agree

14· ·with me that unlike a treasurer or a clerk which

15· ·a municipality must hire, it is a decision of choice

16· ·of a municipality whether it wishes to hire a CAO?

17· · · · · · · · · A.· ·Yes, it is a permissive.

18· · · · · · · · · Q.· ·Thank you.· And looking at the

19· ·powers under this act, it says:

20· · · · · · · · · · ·"The by-law may appoint

21· · · · · · · · · ·an officer who" --"(a): shall

22· · · · · · · · · ·have such general control and

23· · · · · · · · · ·management of the

24· · · · · · · · · ·administration of the

25· · · · · · · · · ·government and affairs of the

·1· · · · · · · · · ·municipal corporation and

·2· · · · · · · · · ·perform such duties as the

·3· · · · · · · · · ·Council by by-law prescribes

·4· · · · · · · · · ·and (b) shall be responsible

·5· · · · · · · · · ·for the efficient

·6· · · · · · · · · ·administration of all its

·7· · · · · · · · · ·departments to the extent that

·8· · · · · · · · · ·he or she is given authority

·9· · · · · · · · · ·and control over them by

10· · · · · · · · · ·by-law."

11· · · · · · · · · Sir, would you agree with me in

12· ·reviewing those two sections that the Municipal Act

13· ·really gives no powers to the CAO, but simply says

14· ·"powers can be given by by-law"?

15· · · · · · · · · A.· ·Yes, that's ...

16· · · · · · · · · Q.· ·All right.· And I take it, sir,

17· ·this was your first time as being employed by

18· ·a municipality in the position of a chief

19· ·administrative officer?

20· · · · · · · · · A.· ·Yes, sir.

21· · · · · · · · · Q.· ·And before you accepted your

22· ·employment, did you discuss what powers you wanted

23· ·to have in the CAO by-law, which by-law would assign

24· ·duties and matters to you?

25· · · · · · · · · A.· ·Yes, that would have been ...

·1· · · · · · · · · Q.· ·And did you review the previous

·2· ·by-law and request certain revisions to it?

·3· · · · · · · · · A.· ·Yes, sir, I did.

·4· · · · · · · · · MR. LONGO:· And, Ms. Kuka, if we

·5· ·could now turn to the first document you were

·6· ·putting up, which was by-law 90-5.

·7· · · · · · · · · Mr. Commissioner, I understand this is

·8· ·a by-law of the City of Elliot Lake -- of the town of

·9· ·Elliot Lake as it then was, passed January 2, 1990.

10· · · · · · · · · And it's entitled:

11· · · · · · · · · · ·"Being a by-law to detail the

12· · · · · · · · · ·duties and responsibilities of

13· · · · · · · · · ·the Chief Administrative

14· · · · · · · · · ·Officer, and that by-law number

15· · · · · · · · · ·76-80 be repealed."

16· · · · · · · · · Is this the by-law, sir, that

17· ·reflected the discussions that you had with the

18· ·municipality before you accepted employment?

19· · · · · · · · · A.· ·Yes, sir, that was the by-law.

20· · · · · · · · · BY MR. LONGO:

21· · · · · · · · · Q.· ·All right.· I would just ask if

22· ·we could review certain sections, just so that on

23· ·the record the Commission is aware of certain duties

24· ·and powers.

25· · · · · · · · · Section 2(b) indicated that you:

·1· · · · · · · · · · ·"Shall administer the

·2· · · · · · · · · ·day-to-day business affairs of

·3· · · · · · · · · ·all the departments of the

·4· · · · · · · · · ·corporation in accordance with

·5· · · · · · · · · ·the policies and plans approved

·6· · · · · · · · · ·by Council, except with respect

·7· · · · · · · · · ·to the statutory duties of such

·8· · · · · · · · · ·officials as are appointed

·9· · · · · · · · · ·pursuant to statute."

10· · · · · · · · · Sir, the Chief Building Official, to

11· ·your understanding, is that a person who fell within

12· ·the exception mentioned in subsection B?

13· · · · · · · · · A.· ·Yes, it would be a statutory

14· ·officer.

15· · · · · · · · · Q.· ·Thank you.· If we could look to

16· ·section I.· Oh, sorry, G, excuse me.

17· · · · · · · · · Indicates that:

18· · · · · · · · · · ·"The CAO shall ensure that

19· · · · · · · · · ·information and reports

20· · · · · · · · · ·requested by Council, or which

21· · · · · · · · · ·in the opinion of the CAO could

22· · · · · · · · · ·assist the Council, are

23· · · · · · · · · ·prepared and submitted."

24· · · · · · · · · Would you agree with me, sir, that

25· ·this allowed you the discretion to put before the

·1· ·Council anything that you thought "might be of

·2· ·assistance to them"?

·3· · · · · · · · · A.· ·Yes, and the way we did it is

·4· ·those reports and recommendations formed the

·5· ·directions.

·6· · · · · · · · · Q.· ·So you could be an initiator of

·7· ·reports to Council and not simply bringing back

·8· ·things that they've asked you to bring back?

·9· · · · · · · · · A.· ·Yes.

10· · · · · · · · · Q.· ·Thank you.· If we could turn to

11· ·sub (i) which is on the following page.

12· · · · · · · · · · ·"CAO shall attend all

13· · · · · · · · · ·meetings of Council and make

14· · · · · · · · · ·such observations and

15· · · · · · · · · ·suggestions deemed expedient on

16· · · · · · · · · ·the subjects under discussion."

17· · · · · · · · · Would you agree, sir, that that

18· ·indicates an expectation from Council that you be

19· ·an active participant at Council meetings, and not

20· ·just simply record them or dutifully follow what

21· ·occurs.

22· · · · · · · · · A.· ·Yes, upon leave of the Chair to

23· ·speak, of course.

24· · · · · · · · · Q.· ·M as in "Mary," you have the

25· ·power to recommend the hiring and dismissal or

·1· ·suspension of department heads; is that correct?

·2· · · · · · · · · A.· ·Yeah, if you read the whole --

·3· · · · · · · · · · ·"Subject of the right of

·4· · · · · · · · · ·hearing before Council."· Yes.

·5· · · · · · · · · Q.· ·And, sir, to my knowledge, that

·6· ·may have been one of the added clauses that you had

·7· ·inserted into this by-law that did not exist in the

·8· ·previous by-law?

·9· · · · · · · · · A.· ·Yes, you're right.

10· · · · · · · · · Q.· ·Then if we go to 3(a):

11· · · · · · · · · · ·"The CAO may appoint, employ,

12· · · · · · · · · ·suspend or dismiss employees

13· · · · · · · · · ·below the rank of department

14· · · · · · · · · ·heads and not covered by

15· · · · · · · · · ·collective bargaining

16· · · · · · · · · ·agreements."

17· · · · · · · · · Again, subject to the same right of

18· ·appeal to Council?

19· · · · · · · · · A.· ·Yes.

20· · · · · · · · · Q.· ·So I just want to be clear for

21· ·the record that that by-law then set out for you, as

22· ·you started your job, what your duties and

23· ·responsibilities were?

24· · · · · · · · · A.· ·Yes.

25· · · · · · · · · Q.· ·Correct?

·1· · · · · · · · · And to my knowledge, that by-law was

·2· ·not changed during the term of your employment from

·3· ·1990 to 2000?

·4· · · · · · · · · A.· ·No.

·5· · · · · · · · · Q.· ·It was not changed; correct?

·6· · · · · · · · · A.· ·Not changed.

·7· · · · · · · · · Q.· ·Thank you.· Now, I understand

·8· ·you've indicated that a CAO's job is to implement

·9· ·Council policy and direction.

10· · · · · · · · · Would you agree with me that CAOs can

11· ·also perform a role as being, what I would call,

12· ·a sparkplug, one who presents ideas and potential

13· ·municipal initiatives to Council for its

14· ·consideration?

15· · · · · · · · · A.· ·Yes.

16· · · · · · · · · Q.· ·Thank you.· Now, I'm going to be

17· ·asking you a series of questions about two distinct

18· ·issues at the mall during 1990 and 2000.

19· · · · · · · · · Issue number 1 is the leaking roof.

20· ·And issue number 2 is vehicle parking and traffic on

21· ·the roof.

22· · · · · · · · · Do you understand the two issues I'm

23· ·going to be asking you about?

24· · · · · · · · · A.· ·(Witness nods.)

25· · · · · · · · · Q.· ·My questions are: Did any

·1· ·municipal department head ever raise with you issue

·2· ·1 or issue 2 during the relevant time period of 1990

·3· ·to 2000?

·4· · · · · · · · · A.· ·In terms of issue 1 with regard

·5· ·to --

·6· · · · · · · · · Q.· ·The leaky roof?

·7· · · · · · · · · A.· ·-- the leaky roof.· I don't

·8· ·recall any specific issue that was raised at that

·9· ·point by that department.

10· · · · · · · · · Q.· ·By that department?

11· · · · · · · · · A.· ·And I point out, in terms of

12· ·this, for operational purposes, the library was

13· ·a department, but I'm saying in here, in this -- I'm

14· ·not treating that as a department for the purpose of

15· ·raising that issue.

16· · · · · · · · · Q.· ·Okay, thank you.· And on issue

17· ·number 2, did a municipal department head ever raise

18· ·with you the issue concerning vehicle parking and

19· ·traffic on the roof?

20· · · · · · · · · A.· ·To the best of my recollect, no.

21· · · · · · · · · Q.· ·Did a municipal employee ever

22· ·raise with you issue 1 or issue 2?

23· · · · · · · · · A.· ·The issue of water, again --

24· ·again, a municipal employee being the library, yes.

25· · · · · · · · · Q.· ·Thank you.· But other than that,

·1· ·you can't recall any?

·2· · · · · · · · · A.· ·I don't -- nothing jumps out,

·3· ·no.

·4· · · · · · · · · Q.· ·Did a Council member ever raise

·5· ·with you issue number 1 or 2 during 1990 to 2000?

·6· · · · · · · · · A.· ·No, I don't think so.

·7· · · · · · · · · Q.· ·Did the Mayor ever raise with

·8· ·you issue number 1 or 2 during 1990 to 2000?

·9· · · · · · · · · A.· ·No, sir.

10· · · · · · · · · Q.· ·Did any member of the public

11· ·ever raise with you issue number 1 or number 2?

12· · · · · · · · · A.· ·Not that I would deem in my

13· ·capacity as CAO, no.

14· · · · · · · · · Certainly there had been comment, if

15· ·I was over at the mall, about the water buckets.

16· · · · · · · · · Q.· ·But never anything official in

17· ·wearing your CAO hat?

18· · · · · · · · · A.· ·Not that I ...

19· · · · · · · · · Q.· ·Okay, thank you.· Now, were

20· ·either issue 1 or issue 2 at the mall ever the

21· ·subject of a staff report to Council during 1990 to

22· ·2000?

23· · · · · · · · · A.· ·No, sir.

24· · · · · · · · · Q.· ·Were either issue number 1 or 2

25· ·at the mall ever the subject of a public deputation

·1· ·to Council during 1990 to 2000?

·2· · · · · · · · · A.· ·There was the presentation by

·3· ·the Library Board in 1999 that spoke to the issues

·4· ·and that led to the --

·5· · · · · · · · · Q.· ·Thank you.

·6· · · · · · · · · A.· ·-- the issue of the water and

·7· ·the resolution they presented at that time.

·8· · · · · · · · · Q.· ·Other than that, can you recall

·9· ·any?

10· · · · · · · · · A.· ·I can't recall.

11· · · · · · · · · Q.· ·Thank you.· Were either issue 1

12· ·or 2 at the mall ever the subject of discussion at

13· ·a closed session meeting of Council?

14· · · · · · · · · A.· ·I don't think so.

15· · · · · · · · · Q.· ·Was either issue 1 or 2 at the

16· ·mall ever the subject of a discussion at

17· ·an orientation or educational session conducted for

18· ·Council?· You know, when new Councils get elected,

19· ·there is sometimes orientation sessions with the new

20· ·Council.

21· · · · · · · · · Can you recall -- first of all, were

22· ·those orientations sessions ever held during 1990

23· ·and 2000?

24· · · · · · · · · A.· ·Yes, they were.

25· · · · · · · · · Q.· ·So my question is: Were either

·1· ·issues 1 or 2 ever the subject of discussion at such

·2· ·an orientation session conducted for Council?

·3· · · · · · · · · A.· ·No.· To the best of my

·4· ·knowledge, no.

·5· · · · · · · · · Q.· ·Final question: Did you

·6· ·personally ever raise with Council issues 1 or 2

·7· ·during 1990 to 2000?

·8· · · · · · · · · A.· ·No, not in a formal sense, no,

·9· ·I did not.

10· · · · · · · · · Q.· ·Thank you.· Did you

11· ·personally -- did you personally ever raise with the

12· ·CBO issues 1 or 2 during 1990 and 2000?

13· · · · · · · · · A.· ·With the CBO, with regard to

14· ·issue 2, no, I did not.

15· · · · · · · · · With issue 1, with some of the

16· ·correspondence that had come in, had been passed

17· ·through to Mr. Pigeau, the letter in '91, from Janet

18· ·Taylor, the letter in '94 from Ms. Fazekas.

19· · · · · · · · · Q.· ·Thank you.· I just have a few

20· ·Property Standards questions for you.

21· · · · · · · · · Exhibit No. 6-6 is Property Standard

22· ·by-law 79-15.

23· · · · · · · · · Sir, to my knowledge, this property

24· ·standard regime had been in operation at least

25· ·12 years before you arrived on the scene.

·1· · · · · · · · · My question is: Do you know, were any

·2· ·significant amendments made to that Property

·3· ·Standards by-law between 1990 and 2000?

·4· · · · · · · · · A.· ·I don't recall, other than --

·5· ·well, in terms of the report in 1995, in terms of

·6· ·how we were undertaking enforcement.

·7· · · · · · · · · Q.· ·I was going to get to that next,

·8· ·but my first question was: Were there any changes to

·9· ·the by-law itself in that 10-year period, and

10· ·I think your answer is "No"?

11· · · · · · · · · A.· ·No.

12· · · · · · · · · Q.· ·So, Exhibit No. 6-8 is the

13· ·policy document, which is the staff report CK95-58,

14· ·which was prepared to establish operational levels

15· ·of service.

16· · · · · · · · · Could you please advise the

17· ·Commission what prompted this level of service

18· ·initiative?

19· · · · · · · · · A.· ·At that time, we were going

20· ·through staffing issues as a result of the impact of

21· ·the mine closures, and it was felt that in this area

22· ·that we wanted to reiterate with Council what we

23· ·were able to do with the resources that we had in

24· ·terms of our enforcement policies.

25· · · · · · · · · Q.· ·Would this policy, when it was

·1· ·before Council, would Council have had the benefit

·2· ·of legal advice, as well, respecting the

·3· ·appropriateness of passing such a level of service,

·4· ·operational policy?

·5· · · · · · · · · A.· ·On process, we may have passed

·6· ·it by our solicitor.· I don't know.· I'd have to go

·7· ·back and see specifically, but I do know in terms of

·8· ·the utilization of our solicitor, that she was

·9· ·utilized in a fashion similar to -- if she were

10· ·a staff solicitor and that staff, if they felt it

11· ·was necessary, could contact her to vet issues that

12· ·they were faced with.

13· · · · · · · · · They did not have to come to me and

14· ·specifically ask for approval.· In that, I'd have to

15· ·go back and look and see if ...

16· · · · · · · · · Q.· ·That's fine.· And, sir, I think

17· ·you've indicated in your evidence that between 1990

18· ·and 2000, you were a frequent visitor to the mall?

19· · · · · · · · · A.· ·Yes.

20· · · · · · · · · Q.· ·And can you advise me, from your

21· ·experience during those years, did the mall ever

22· ·experience vacancies of over 50 per cent of its

23· ·tenanted space during those years?

24· · · · · · · · · A.· ·I don't think so, no.

25· · · · · · · · · MR. LONGO:· Those are my questions,

·1· ·Mr. Commissioner, thank you.

·2· · · · · · · · · THE COMMISSIONER:· Thank you.

·3· ·Appropriate time for afternoon break, counsel.

·4· · · · · · · · · Are you going to be next?

·5· · · · · · · · · MS. CARR:· Mr. Elliott.

·6· · · · · · · · · THE COMMISSIONER:· He's coming back

·7· ·in?· I'm sorry?

·8· · · · · · · · · MS. CARR:· Mr. Elliott already asked

·9· ·his questions.

10· · · · · · · · · THE COMMISSIONER:· Oh, he did.· Of

11· ·course.· So who is left?· Just so I know.

12· · · · · · · · · MR. CASSAN:· Just me, Mr.

13· ·Commissioner.

14· · · · · · · · · THE COMMISSIONER:· Just you, Mr.

15· ·Cassan.· All right.

16· · · · · · · · · Well, we won't start you now.

17· · · · · · · · · --- RECESS AT 3:31 P.M.

18· · · · · · · · · --- UPON RESUMING AT 3:51 P.M.

19· · · · · · · · · RE-EXAMINATION BY MR. CASSAN:

20· · · · · · · · · Q.· ·Mr. Bauthus, we've heard you

21· ·talk about Ministry of Labour reports and

22· ·particularly about a gentleman named Ralph Regan.

23· · · · · · · · · Where was Mr. Regan's office?

24· · · · · · · · · A.· ·It was in the hotel section of

25· ·the mall, on the first floor, as I understand.

·1· · · · · · · · · Q.· ·And I understand that the

·2· ·Ministry of Labour provided a few reports to the

·3· ·Library Board.

·4· · · · · · · · · Did those come to your attention?

·5· · · · · · · · · A.· ·No, they did not.

·6· · · · · · · · · Q.· ·Did it provide you any comfort

·7· ·to know that the Ministry of Labour was located in

·8· ·the mall?

·9· · · · · · · · · A.· ·Yeah, as I said earlier today,

10· ·Mr. Regan or the other Ministry of Labour officials

11· ·were aware of the leaks in the mall, not only in the

12· ·library, I would assume, mainly because I look at

13· ·their office being there and even with Mr. Regan,

14· ·his wife had a salon in the mall so he was very

15· ·familiar with the ongoing issues and I would have to

16· ·think that if he had some concerns as a -- with

17· ·regard to safety or structural safety, because of

18· ·the water infiltration, he would have raised those

19· ·issues, either through his own auspices or brought

20· ·them to the attention of the appropriate officials

21· ·at City Hall, either that being myself or the CBO.

22· · · · · · · · · Q.· ·To take you to a question that

23· ·Mr. Bisceglia was asking you about, do you know why

24· ·the Library Board did not sue the mall?

25· · · · · · · · · A.· ·No.· In that period from 1990 to

·1· ·2000 while I was there, no, I can't recall any

·2· ·specific discussions with regard to suing the mall.

·3· · · · · · · · · There was some concern with regard to

·4· ·the cost related to the clean up and so forth as

·5· ·a result of the water leakage, and that discussion led

·6· ·to the question with regard to recovery against rent,

·7· ·and I know in terms of looking at the lease and

·8· ·looking at having, you know, the nature of the

·9· ·discussions in the past with Mr. Liautaud, that it

10· ·would have been pointed out that that was contrary to

11· ·the lease arrangements, and it would not be prudent --

12· ·be proficient for us to go that route because the

13· ·lease was very specific.

14· · · · · · · · · Q.· ·You just mentioned repairing the

15· ·ceiling and I'm wondering if I can take you to

16· ·Exhibit No. 11-3, page 3979.

17· · · · · · · · · Particularly with respect to the

18· ·ceiling tiles, this was the report that was given to

19· ·Council.· Can you just comment on what you took from

20· ·that?

21· · · · · · · · · A.· ·In terms of looking at it,

22· ·I explained the process at the time, and that the

23· ·monies would be considered at the budget -- at the

24· ·budget time and so forth.

25· · · · · · · · · However, I did take a look at it and

·1· ·I made the comment or -- just a mental comment in

·2· ·looking at it, that they've included in there, ceiling

·3· ·tiles at $10 each at approximately 10 per year.

·4· · · · · · · · · If there was, in fact, a chronic water

·5· ·problem, it kind of suggested that they would need

·6· ·much more than 10 tiles per year, in order to

·7· ·address -- address their needs, and I guess, in

·8· ·looking at it, that's not to minimize the fact that

·9· ·there was water coming in and the issues related to

10· ·that, but exactly how chronic was it, when that was

11· ·all that they would require?

12· · · · · · · · · Q.· ·One of the things that Mr. Doody

13· ·asked you was about enforcement by order, and we've

14· ·talked about the order, but if I could take you now

15· ·to Exhibit No. 6-6.

16· · · · · · · · · The last page Ms. Kuka.· The document

17· ·number is 522.

18· · · · · · · · · Paragraph (d), you are familiar with

19· ·this -- this is the Property Standards by-law, Mr.

20· ·Bauthus?

21· · · · · · · · · A.· ·Yes, sir.

22· · · · · · · · · Q.· ·So I just want to bring your

23· ·attention to paragraph (d).

24· · · · · · · · · I guess, just to back up, if you put

25· ·an order on the property, does that fix the roof?

·1· · · · · · · · · A.· ·No, not necessarily; it requires

·2· ·that there be some action taken by the owner to

·3· ·respond to that order, in terms of remediating the

·4· ·problems identified in the order.

·5· · · · · · · · · Q.· ·And so, in paragraph (d) that

·6· ·strikes me as the consequences of what happens if

·7· ·the owner doesn't comply with the order.

·8· · · · · · · · · It looks like there are there two

·9· ·remedies considered and I'm wondering if you could

10· ·just take the Commission through those two remedies

11· ·and what those mean for the municipality.

12· · · · · · · · · A.· ·Well, if the owner chooses not

13· ·to take the appropriate action to remediate the

14· ·issue called for by the order, the municipality may

15· ·engage appropriate resources in order to do so, and

16· ·failing that, if that's not appropriate, they may

17· ·call for the demolition of the property.

18· · · · · · · · · Q.· ·And I understand that you did

19· ·not see the engineering reports and the estimates

20· ·for repair in the Trow Report that we've seen, in

21· ·the Yallowega report, and so on.

22· · · · · · · · · Did you have any idea of how much it

23· ·would cost the municipality in the event the

24· ·municipality had to replace the roof?

25· · · · · · · · · A.· ·No, I had no idea at the time,

·1· ·other than looking at the size of it, it would be

·2· ·fairly significant.

·3· · · · · · · · · Q.· ·And in the event the

·4· ·municipality chose demolition instead of repair, did

·5· ·you have any idea of the cost of that?

·6· · · · · · · · · A.· ·No, but again it would be very

·7· ·significant, given the issues on the demolition of

·8· ·it, and the disposal.

·9· · · · · · · · · Q.· ·Leaving the issue of the order

10· ·aside with respect to the Property Standards by-law,

11· ·what's the goal of the municipality with respect to

12· ·that?

13· · · · · · · · · A.· ·Well, I think that was -- it was

14· ·stated in the report that our initial contact with

15· ·the property owner is to try to achieve compliance,

16· ·and that is and has always been our goal, or our

17· ·immediate goal is to work with the property owner in

18· ·order to achieve compliance --

19· · · · · · · · · THE COMMISSIONER:· We've been through

20· ·that, Mr. Cassan.

21· · · · · · · · · BY MR. CASSAN:

22· · · · · · · · · Q.· ·And did -- what was the

23· ·demonstrated attitude with respect to compliance?

24· · · · · · · · · A.· ·In this case, we saw an ongoing

25· ·effort on the part of the mall to attempt to

·1· ·attenuate the leakage throughout the period to year

·2· ·2000.

·3· · · · · · · · · Q.· ·Moving to something that Mr.

·4· ·MacRae was asking you about with respect to the

·5· ·issue of confidentiality, is there any prohibition

·6· ·in the Municipal Act that would stop councillors

·7· ·from discussing matters brought to them in camera?

·8· · · · · · · · · A.· ·No, there's nothing that has any

·9· ·weight of any note that would prevent the

10· ·councillors from discussing anything that may be of

11· ·a confidential nature.

12· · · · · · · · · Some municipalities have attempted to

13· ·achieve some control on conduct through a code of

14· ·conduct for the councillors.· However, that wouldn't

15· ·even guarantee that absolute confidentiality could be

16· ·adhered to and I guess, in terms of looking at this,

17· ·particularly with Algocen, as well as the other

18· ·businesses, they have seen and have concerns about the

19· ·ability to maintain confidentiality when they have

20· ·seen a number of other instances where information has

21· ·been provided even to councillors in camera, that has

22· ·been subsequently leaked or been provided outside the

23· ·realm of that meeting.

24· · · · · · · · · Q.· ·And so were there any

25· ·ramifications or consequences that a councillor

·1· ·would face if a person did that?

·2· · · · · · · · · A.· ·As it sits right now, there are

·3· ·no consequences for a councillor not to maintain

·4· ·confidentiality.

·5· · · · · · · · · THE COMMISSIONER:· In Elliot Lake or

·6· ·anywhere?

·7· · · · · · · · · THE WITNESS:· Outside of those

·8· ·municipalities that have a code of conduct, there is

·9· ·nothing legally that would -- that could be used as

10· ·a means to achieve --

11· · · · · · · · · THE COMMISSIONER:· As a stick?

12· · · · · · · · · THE WITNESS:· As a stick or a lever

13· ·to achieve confidentiality outside of an NDA or --

14· · · · · · · · · BY MR. CASSAN:

15· · · · · · · · · Q.· ·And just for the assistance of

16· ·the Commissioner, do you know what the remedies

17· ·would have been or are, in the event that

18· ·a councillor breaches a code of conduct?

19· · · · · · · · · I know that we didn't have one here,

20· ·but just the scope of the remedies available?

21· · · · · · · · · A.· ·I can't speak to it specifically

22· ·but I would not imagine that there would be anything

23· ·in the way of any legal implications.

24· · · · · · · · · Q.· ·I wanted no know if you know

25· ·what those are; if you don't, that's fine.

·1· · · · · · · · · A.· ·No.

·2· · · · · · · · · Q.· ·I want you to try to go back in

·3· ·time to the period between 1990 and 2000.· I want

·4· ·you to avoid hindsight, if possible.· I know it's

·5· ·difficult.

·6· · · · · · · · · You did not have the engineer's

·7· ·reports.· What were your thoughts back then, if you

·8· ·put an order on the mall and closed it down, what

·9· ·were your concerns or did you have any thoughts of

10· ·that?

11· · · · · · · · · A.· ·I guess, in terms of undertaking

12· ·an order, in closing down a facility, our immediate

13· ·thought would be ensuring that we had done it

14· ·pursuant to the right reasons and had evidence that

15· ·we were pursuing down that road, and in looking at

16· ·this situation, it would have been that we would

17· ·have had incontrovertible proof that there were some

18· ·-- there were safety issues caused by the water

19· ·infiltration, and a concern would be that if we did

20· ·not have the supporting rationale to support stop up

21· ·and closing, I would feel that the City would be

22· ·subject to considerable liability from the parties

23· ·involved in the site, not only the property owner,

24· ·the business owners, and the employees for loss of

25· ·income.

·1· · · · · · · · · Q.· ·Thank you, Mr. Bauthus.

·2· · · · · · · · · THE COMMISSIONER:· Mr. Doody?

·3· · · · · · · · · MR. DOODY:· A few items, Mr.

·4· ·Commissioner.

·5· · · · · · · · · RE-EXAMINATION BY MR. DOODY:

·6· · · · · · · · · Q.· ·If I could start by housekeeping

·7· ·on behalf of Mr. Longo.· He referred Mr. Bauthus to

·8· ·by-law No. 90-5 and I believe he asked for it to be

·9· ·entered as an exhibit but I'm not sure we got

10· ·a number?

11· · · · · · · · · MS. KUKA:· 3266.

12· · · · · · · · · MR. DOODY:· Exhibit No. 3266.

13· · · · · · · · · Thank you very much.

14· · · · · · · · · BY MR. DOODY:

15· · · · · · · · · Q.· ·Sir, you agreed -- do you recall

16· ·when Mr. Kearns was questioning you, you agreed with

17· ·Mr. Kearns' suggestion that Mr. Leistner at the time

18· ·you were entering into the discussions with him,

19· ·which commenced in a meeting in his office in Sault

20· ·Ste. Marie on December the 5th of 1997, you agreed

21· ·with Mr. Kearns' suggestion that Mr. Leistner had no

22· ·obligation to allow you on his property to inspect

23· ·it; do you recall giving that answer to Mr. Kearns?

24· · · · · · · · · A.· ·Yes, I do, and my taking, at

25· ·that time in terms of -- I answered that in terms of

·1· ·what was transpiring right at that point in time,

·2· ·relative to the due diligence and the study itself.

·3· ·I certainly am aware that -- and maybe I should have

·4· ·said, that I'm aware that a municipality under the

·5· ·Property Standards, has the authority to enter upon,

·6· ·to inspect and so forth.

·7· · · · · · · · · I am aware of that.

·8· · · · · · · · · Q.· ·And you'll agree with me that at

·9· ·that time, there was a basis to commit to conduct

10· ·such an inspection by or on behalf of the Property

11· ·Standards Officer because the City was in receipt of

12· ·complaints about the leaks from the library?

13· · · · · · · · · A.· ·Yes, with the proviso, however,

14· ·that we had observed that the mall was working to

15· ·remedy the leaks at that time.· So --

16· · · · · · · · · Q.· ·Well, let's just take this one

17· ·step at a time, Mr. Bauthus, if we could.

18· · · · · · · · · You told Mr. Kearns that you agreed

19· ·with his suggestion that Mr. Leistner had no

20· ·obligation to allow you on his property.

21· · · · · · · · · So point one, just so we're clear on

22· ·the evidence, you agree with me that you knew at

23· ·that time that the Property Standards by-law in

24· ·article 9.1(c) allowed the Property Standards

25· ·Officer to enter into any property at all reasonable

·1· ·times to inspect it; correct?

·2· · · · · · · · · A.· ·That's correct, yes.

·3· · · · · · · · · Q.· ·And you will agree with me that

·4· ·at that time, the City was in receipt of complaints,

·5· ·correct, that the building leaked?

·6· · · · · · · · · A.· ·Yes, but however, in terms of my

·7· ·response to Mr. Kearns, at the time the response was

·8· ·based on the fact of the study that we were doing

·9· ·and my impression was that, for the purposes of that

10· ·study, in garnering the information needed to do

11· ·that review, we did not have the authority under

12· ·that, to enter on the property.

13· · · · · · · · · Q.· ·You did -- sir, can you explain

14· ·to me, why you say you did not have the authority to

15· ·enter on the property, when you were in

16· ·possession -- the City was in possession of

17· ·complaints that it leaked, and the Property

18· ·Standards by-law allowed the Property Standards

19· ·Officer to conduct an inspection of the property?

20· · · · · · · · · Is that not -- it is not correct that

21· ·you did have the authority to have the Property

22· ·Standards Officer conduct an inspection of the

23· ·property?· You had the authority, did you not?

24· · · · · · · · · A.· ·We had the authority by virtue

25· ·of the Act, but the purposes at that time for that

·1· ·particular time, in the instance, was not taken into

·2· ·consideration, with a view to --

·3· · · · · · · · · Q.· ·You didn't think of it, is that

·4· ·not fair?

·5· · · · · · · · · A.· ·We didn't relate the purchase of

·6· ·the property at that time to the Property Standards

·7· ·issue, and were looking at not only the inspection

·8· ·of the property, but also the financial and other

·9· ·data related to the operations of the mall and the

10· ·hotel.

11· · · · · · · · · Q.· ·I'm not questioning you right

12· ·now about the financial information.

13· · · · · · · · · My questions are directed solely and

14· ·specifically to the physical condition of the mall.

15· · · · · · · · · And you'll agree with me that you did

16· ·have the authority to have the Property Standards

17· ·Officer conduct an inspection for the purpose of

18· ·determining whether or not the mall was in

19· ·compliance with the Property Standards by-law;

20· ·correct?

21· · · · · · · · · A.· ·Yes, there was that

22· ·availability.· However, when I go back and state

23· ·that was not --

24· · · · · · · · · THE COMMISSIONER:· Well, we've been

25· ·through that, sir.· You've given the answer I need

·1· ·to hear.

·2· · · · · · · · · BY MR. DOODY:

·3· · · · · · · · · Q.· ·Sir, moving on to what Mr.

·4· ·Cassan was questioning you about, under the Property

·5· ·Standards by-law, he took you to the remedy section

·6· ·and in particular, article 9.9(d) which gives the

·7· ·City the right to demolish or repair the property.

·8· · · · · · · · · And you will recall Mr. Cassan asked

·9· ·you about the potential cost of demolishing or

10· ·repairing the property, and you recall you told Mr.

11· ·Cassan that you didn't know but you would have

12· ·thought that it would be a lot of money; do you

13· ·recall giving Mr. Cassan those answers?

14· · · · · · · · · A.· ·I said it would be significant,

15· ·yes, I do.

16· · · · · · · · · Q.· ·And you will agree with me that

17· ·the Property Standards by-law provides that if the

18· ·City does go onto the property and repair it, or in

19· ·the worst case demolish it, that the cost of

20· ·repairing or demolishing can be collected in like

21· ·manner as municipal taxes by the City?

22· · · · · · · · · A.· ·Yes.

23· · · · · · · · · Q.· ·And if the City was -- one of

24· ·the remedies that the City has with respect to

25· ·collecting debts owed to it as municipal taxes is

·1· ·the right to seize and sell the property to pay the

·2· ·unpaid taxes; correct?

·3· · · · · · · · · A.· ·There is a subtle difference, in

·4· ·terms of looking at it, and as much as the

·5· ·legislation says it can be collected as a like

·6· ·manner of taxes, there is a difference that comes up

·7· ·in the legislation that creates some barriers in

·8· ·that, in that it doesn't state that any such charges

·9· ·are deemed to be taxes and therefore subject to

10· ·recoveries under the Act.

11· · · · · · · · · Q.· ·Well, sir, the by-law which City

12· ·Council had passed, provided that in the event the

13· ·municipal corporation demolished or repaired, the

14· ·corporation could recover the expenses it incurs in

15· ·so doing by action or in like manner as taxes;

16· ·that's what the by-law provided; correct?

17· · · · · · · · · A.· ·Yeah, and that is pursuant to

18· ·the wording in the legislation and the difficulty we

19· ·have there is the City would have to expend those

20· ·monies in order to achieve the objective, whether

21· ·it's to demolish or to remedy the situation, but

22· ·there is no guarantee that those monies can be

23· ·recovered through property sale in the Property Tax

24· ·Sale Act --

25· · · · · · · · · Q.· ·Well, sir, they could have sued

·1· ·them.· It says "by action".

·2· · · · · · · · · A.· ·Yes.

·3· · · · · · · · · Q.· ·And did you really have any

·4· ·doubt that the Algoma Central Property Corporation

·5· ·did not have the assets to pay what that would cost?

·6· · · · · · · · · A.· ·I can't speak to that, as to

·7· ·whether or not there would be a separate corporate

·8· ·entity set up that would maintain and operate the

·9· ·Elliot Lake operation as opposed to the total

10· ·operation.

11· · · · · · · · · Q.· ·Is it not the case, sir, that

12· ·based on the evidence you've given me so far, the

13· ·City never considered doing any such thing?

14· · · · · · · · · A.· ·No, you're right.· We did not

15· ·consider it.

16· · · · · · · · · As I said, we attempted to work with

17· ·the client, in attempting to attenuate the water

18· ·issue.

19· · · · · · · · · Q.· ·Well, sir, is it not your

20· ·evidence, that at no time during your first ten-year

21· ·tenure at the City, did the City have any

22· ·discussions of any sort whatsoever, with the

23· ·landlord -- sorry, with the property owner, about

24· ·the application of the Property Standards by-law to

25· ·the property?

·1· · · · · · · · · It just didn't happen; isn't that the

·2· ·total of your evidence on that point?

·3· · · · · · · · · A.· ·I did not discuss that

·4· ·specifically with the property owner and the CBO in

·5· ·terms of discussing when he went over the various

·6· ·times, the couple of times that we have

·7· ·identified --

·8· · · · · · · · · Q.· ·To your knowledge, nobody else

·9· ·did either --

10· · · · · · · · · A.· ·No, no.

11· · · · · · · · · Q.· ·-- correct?

12· · · · · · · · · A.· ·No.

13· · · · · · · · · Q.· ·Now, moving on, Mr. Kearns and

14· ·Mr. MacRae asked you questions about the

15· ·confidentiality requirements which you had made --

16· ·to which you had made reference in your report of

17· ·March the 6th, 1998 which is part of Exhibit No. 249

18· ·and that's your report to Council.

19· · · · · · · · · And you will recall the questions and

20· ·answers Mr. Kearns and Mr. MacRae asked you, in that

21· ·regard; correct?

22· · · · · · · · · A.· ·Uh-hmm, yes, sir.

23· · · · · · · · · Q.· ·You recall that evidence?

24· · · · · · · · · Sir, what I'm unclear on is what your

25· ·evidence is, as to what you understood councillors

·1· ·had been told, and understood about confidentiality

·2· ·in respect of the physical asset review.

·3· · · · · · · · · I know you've told us about

·4· ·confidentiality about the financial issues of

·5· ·business owners, but with respect to the physical

·6· ·asset review which was -- which was being financed

·7· ·by the resolution of March the 9th, and the by-law

·8· ·of March the 23rd, were -- did the -- to your

·9· ·knowledge, were the councillors -- did the

10· ·councillors understand that that physical asset

11· ·review was going to be shared with the City or not

12· ·shared with the City?

13· · · · · · · · · What is your evidence on that point,

14· ·sir, because I'm not clear on it?

15· · · · · · · · · A.· ·I'm not sure what their

16· ·understanding was.· I didn't state -- I can't recall

17· ·stating that there would be or would not be

18· ·a sharing of that information.

19· · · · · · · · · Q.· ·Well, sir, with respect to your

20· ·report, we went through this, but we can agree, can

21· ·we not, that in your report of the 6th of March,

22· ·which is part of Exhibit No. 249, there's no mention

23· ·of the physical asset review?

24· · · · · · · · · A.· ·Uh-hmm.

25· · · · · · · · · Q.· ·That that term appears only in

·1· ·the subsequent by-law, as part of the Schedule A to

·2· ·the contract, where the term "building condition

·3· ·evaluation" appears for the first time.

·4· · · · · · · · · So, in your report of March the 6th,

·5· ·which was before Council on March the 9th, is it not

·6· ·so that there is no mention of the Physical

·7· ·Condition Evaluation?

·8· · · · · · · · · A.· ·At that time, in that report,

·9· ·no, it wasn't mentioned in that report.

10· · · · · · · · · Q.· ·So, again I'm not trying to

11· ·suggest anything to you here, sir; I'm just trying

12· ·to understand.

13· · · · · · · · · Did you think that the councillors

14· ·understood and had been told that the Physical

15· ·Condition Evaluation would be shared with them or

16· ·not shared with them at the time they authorized the

17· ·expenditure?

18· · · · · · · · · A.· ·I can't say what the councillors

19· ·thought.

20· · · · · · · · · I did not, obviously, raise that

21· ·specific item.

22· · · · · · · · · Q.· ·What did you think?

23· · · · · · · · · A.· ·In terms of that, I didn't think

24· ·it would be shared, any information from Algocen.

25· · · · · · · · · Q.· ·So it was your understanding at

·1· ·that time that there would be a Physical Condition

·2· ·Evaluation but it would not be shared with the City?

·3· · · · · · · · · A.· ·Uh-hmm.

·4· · · · · · · · · Q.· ·Is that right?

·5· · · · · · · · · A.· ·Yes, sir.

·6· · · · · · · · · Q.· ·Mr. Bauthus, the Commissioner

·7· ·asked you a question about --

·8· · · · · · · · · Sorry, you told the Commissioner, as

·9· ·I recall and as my notes indicate, that you assumed

10· ·that if Retirement Living went ahead with the

11· ·purchase, the Physical Condition Evaluation would

12· ·have been acceptable; do you recall telling him

13· ·that?

14· · · · · · · · · A.· ·Yes, I do.

15· · · · · · · · · Q.· ·And so, is it your evidence then

16· ·that you were leaving up to Retirement Living the

17· ·issue of determining whether the mall was acceptable

18· ·physically?

19· · · · · · · · · A.· ·Yes, as part of the due

20· ·diligence, I would have, as they were making a major

21· ·purchase, and that would be part of the expectation,

22· ·as with any prudent purchaser, that the physical or

23· ·the structural condition of the asset that is being

24· ·acquired would be considered when they're making

25· ·that purchase.

·1· · · · · · · · · Q.· ·And you told my friend Mr.

·2· ·Longo, when he was going through the various

·3· ·questions about whether the issues of -- as he

·4· ·described them, "leaks or parking on the roof" had

·5· ·been raised with certain individuals during your

·6· ·first ten-year tenure, he asked you if that -- if

·7· ·those issues, either the issue, as he put it, No. 1

·8· ·of the leaks or issue No. 2 of parking on the roof,

·9· ·was raised with Council.· And your answer was that

10· ·it was never raised with Council in a formal sense.

11· · · · · · · · · Do you recall either of those issues

12· ·being raised by Council in an informal sense?

13· · · · · · · · · A.· ·Not -- I can't recall any issues

14· ·with regard to the parking -- the park and weight

15· ·issue or the load issue, in any way.

16· · · · · · · · · And you know, with the water, other

17· ·than the times that we had gone through, you know,

18· ·when -- and I go back in terms of the '98, '99 time

19· ·period when they presented to Council, and also on the

20· ·individual basis, I would imagine that those Council

21· ·reps that sit on the Library Board, if it was

22· ·discussed at a board level, that they would be privy

23· ·to those discussions at that time.

24· · · · · · · · · Q.· ·Sir, if I could just -- one last

25· ·point, in questions by Mr. Cassan, he took you to

·1· ·Exhibit No. 11-3 and page -- the page that ends

·2· ·3979, if I could just take you back there.

·3· · · · · · · · · Mr. Cassan asked you about the third

·4· ·line under potential costs here in the Librarian's

·5· ·report which is ceiling tiles at $10 each times

·6· ·approximately 10 per year and asked you what you

·7· ·concluded about that.

·8· · · · · · · · · And you gave -- your answer, as

·9· ·I recall it, was something in the nature of you

10· ·concluded that about 10 a year wasn't that

11· ·significant; do you recall that answer?

12· · · · · · · · · A.· ·I recall saying that, in respect

13· ·of a "chronic situation".

14· · · · · · · · · Q.· ·If you went on to the -- did you

15· ·go on to the next bullet when you were reviewing

16· ·this where it says, under the heading, "Replacement

17· ·Costs for Materials or Equipment Losses":

18· · · · · · · · · · ·"In one shelving unit there

19· · · · · · · · · ·are 188 books.· At

20· · · · · · · · · ·approximately $35 per title,

21· · · · · · · · · ·the replacement costs for books

22· · · · · · · · · ·damaged by water would be

23· · · · · · · · · ·$6,580 minimum, provided all

24· · · · · · · · · ·the titles were in print and

25· · · · · · · · · ·could be re-ordered."

·1· · · · · · · · · Did you draw any conclusion about the

·2· ·seriousness of the leaks from that potential cost

·3· ·recitation in the Librarian's report?

·4· · · · · · · · · A.· ·No, I was looking at it from --

·5· ·not from to minimize the impact of the water but the

·6· ·issue of the chronic nature of it.

·7· · · · · · · · · Q.· ·And you concluded it was

·8· ·chronic; is that fair?· Or not chronic?

·9· · · · · · · · · A.· ·I said in terms of looking at

10· ·that, if that was the number of times, it was not

11· ·significantly chronic but still, you know, even one

12· ·leak could create that damage if it was -- if it

13· ·happened, I recognise.

14· · · · · · · · · Q.· ·So, did you conclude from this

15· ·report that the leaks were serious or not serious?

16· · · · · · · · · A.· ·I don't think I concluded

17· ·anything specifically, other than the leaks in the

18· ·library were an issue that had -- that should have

19· ·been resolved.

20· · · · · · · · · Q.· ·Thank you, sir.· Those are my

21· ·questions.

22· · · · · · · · · THE COMMISSIONER:· Thank you, very

23· ·much, Mr. Bauthus.· That's it.

24· · · · · · · · (The witness withdrew).

25· · · · · · · · · THE COMMISSIONER:· Ms. Effendi, are

·1· ·you ready to go?

·2· · · · · · · · · MS. EFFENDI:· I am, Mr. Commissioner.

·3· · · · · · · · · THE CLERK:· Do you prefer to swear on

·4· ·a religious text or to affirm?

·5· · · · · · · · · THE WITNESS:· The Bible's good.

·6· · · · · · · · · THE CLERK:· All right.

·7· · · · · · · · · If you could please stand up and put

·8· ·your right hand on the Bible.

·9· · · · · · · · · Do you swear that the evidence to be

10· ·given by you to the Commission shall be the truth, the

11· ·whole truth and nothing but the truth, so help you

12· ·God?

13· · · · · · · · · THE WITNESS:· So help me God.· Thank

14· ·you.

15· · · · · · · · · BARBARA CLOUGHLEY: SWORN.

16· · · · · · · · · THE COMMISSIONER:· Good afternoon,

17· ·ma'am.

18· · · · · · · · · THE WITNESS:· Good afternoon.

19· · · · · · · · · THE COMMISSIONER:· Thanks for being

20· ·patient.· I know you've been waiting for a long

21· ·time.

22· · · · · · · · · THE WITNESS:· That's okay.

23· · · · · · · · · EXAMINATION-IN-CHIEF BY MS EFFENDI:

24· · · · · · · · · MS. EFFENDI:· Good afternoon, Ms.

25· ·Cloughley.

·1· · · · · · · · · Before I start, Mr. Commissioner,

·2· ·I just wanted to flag for the record that there will

·3· ·be only one exhibit during my examination of Ms.

·4· ·Cloughley and that will be Exhibit No. 3264.

·5· · · · · · · · · THE COMMISSIONER:· Thank you.

·6· · · · · · · · · BY MS. EFFENDI:

·7· · · · · · · · · Q.· ·Ms. Cloughley, I understand

·8· ·that -- I'm going to go through some background

·9· ·information with you and then we'll get into some of

10· ·the information that you know about the mall.

11· · · · · · · · · I understand that you were born in

12· ·Hamilton?

13· · · · · · · · · A.· ·Uh-hmm.

14· · · · · · · · · Q.· ·And that you -- before coming to

15· ·Elliot Lake in 1978 you actually moved to Grimsby,

16· ·Ontario and then got married?

17· · · · · · · · · A.· ·As a youngster, I moved to

18· ·Grimsby and met my husband there, yes, and married.

19· · · · · · · · · Q.· ·So you came to Elliot Lake in

20· ·1978?

21· · · · · · · · · A.· ·Yes.

22· · · · · · · · · Q.· ·And then you stayed in

23· ·Elliot Lake until 2002 when you left to go to St.

24· ·Catharines for two years?

25· · · · · · · · · A.· ·Correct.

·1· · · · · · · · · Q.· ·And then you came back to

·2· ·Elliot Lake in 2004?

·3· · · · · · · · · A.· ·That's right.

·4· · · · · · · · · Q.· ·So, from -- you were here for

·5· ·over 30 years?

·6· · · · · · · · · A.· ·Uh-hmm.

·7· · · · · · · · · Q.· ·Now, in terms of your employment

·8· ·history, I understand that you were a front desk

·9· ·manager at the Oaks Hotel from 1978 until 1982 in

10· ·Elliot Lake?

11· · · · · · · · · A.· ·That's correct.

12· · · · · · · · · Q.· ·And then can you tell us --

13· ·I also understand that you applied for a position at

14· ·the Algo Inn when it was first being built; can you

15· ·tell us about that?

16· · · · · · · · · A.· ·Yes, I did.· They were building

17· ·the mall and there was a hotel being built and so --

18· ·like others I went for an interview and I happened

19· ·to get the job and I had gone on a tour, as it was

20· ·being built, with Mr. Pappoulas and I had to tell my

21· ·present employer that I had another job offer, and

22· ·they met the wage, plus a little bit more, so

23· ·I declined with the Algo Mall and stayed at The

24· ·Oaks.

25· · · · · · · · · Q.· ·Okay, fantastic.

·1· · · · · · · · · And when you mentioned Mr.

·2· ·Pappoulas --

·3· · · · · · · · · A.· ·Uh-hmm.

·4· · · · · · · · · Q.· ·-- he was an employee of Algocen

·5· ·Realty?

·6· · · · · · · · · A.· ·Yes.· Yes.· I think he was

·7· ·overseeing a lot of the construction there.

·8· · · · · · · · · Q.· ·Okay.

·9· · · · · · · · · I understand then subsequently you

10· ·started employment with Woolco in May 1983.

11· · · · · · · · · A.· ·That's correct.

12· · · · · · · · · Q.· ·And I understand when you first

13· ·started with Woolco, you held the position of

14· ·customer service -- the head of the customer service

15· ·department?

16· · · · · · · · · A.· ·Well, I just worked in customer

17· ·service as a part-time employee.

18· · · · · · · · · Q.· ·Okay.· Can you describe to me,

19· ·just generally what were your responsibilities in

20· ·the customer department?

21· · · · · · · · · A.· ·Well, we took refunds, we worked

22· ·the switchboard for the store, purchases.

23· · · · · · · · · Q.· ·Okay.· And you reported, at that

24· ·time to the general manager; is that correct?

25· · · · · · · · · A.· ·Yes.

·1· · · · · · · · · Q.· ·And that would have been Mr.

·2· ·Winston Savoy; is that correct?

·3· · · · · · · · · A.· ·Right.

·4· · · · · · · · · Q.· ·Yes.· And I understand that six

·5· ·months later you got a promotion?

·6· · · · · · · · · A.· ·Yes.

·7· · · · · · · · · Q.· ·And you then held the position

·8· ·of personnel manager.

·9· · · · · · · · · A.· ·That's correct.

10· · · · · · · · · Q.· ·And what were your

11· ·responsibilities as personnel manager?

12· · · · · · · · · A.· ·Well, staffing the store, the

13· ·store budget, scheduling, payroll, evaluations of

14· ·the employees.

15· · · · · · · · · Q.· ·And how many employees did

16· ·Woolco have during that time period that you worked

17· ·for them?

18· · · · · · · · · A.· ·Well, there would be about 120,

19· ·but some of them were lessees, and there would be 30

20· ·to 35 full-time employees, the rest of them

21· ·part-time.

22· · · · · · · · · Q.· ·Can you -- so you were there at

23· ·Elliot Lake when they were building the mall?

24· · · · · · · · · A.· ·Yes.

25· · · · · · · · · Q.· ·Can you describe to the

·1· ·Commissioner, the reaction of the community when the

·2· ·mall opened?

·3· · · · · · · · · A.· ·Well, we were all excited.· It

·4· ·was something new and we didn't have to go out of

·5· ·town to shop.· A lot of people, you know, we'd go to

·6· ·Espanola every two weeks and get their groceries,

·7· ·even though we had shopping here, I mean, it was

·8· ·just exciting, there was a big brand new store,

·9· ·Dominion and Woolco, and Reitmans, so there was

10· ·a lot of excitement.

11· · · · · · · · · Q.· ·So you, I assume, visited the

12· ·mall prior to starting to work at Woolco?

13· · · · · · · · · A.· ·Yes, yes.

14· · · · · · · · · Q.· ·And did you -- when you visited

15· ·the mall, prior to starting to work there, did you

16· ·notice any leaks at that time?

17· · · · · · · · · A.· ·No, not really.

18· · · · · · · · · Q.· ·Okay.

19· · · · · · · · · A.· ·No.

20· · · · · · · · · Q.· ·Did you notice any buckets in

21· ·the mall?

22· · · · · · · · · A.· ·No buckets.

23· · · · · · · · · Q.· ·Any tarps?

24· · · · · · · · · A.· ·Nothing like that, no.

25· · · · · · · · · Q.· ·Okay.· Did you park on the roof

·1· ·when you went to shop at the mall, prior to working

·2· ·there?

·3· · · · · · · · · A.· ·I parked everywhere really.

·4· ·I parked on the roof, parked down below.

·5· · · · · · · · · Q.· ·And --

·6· · · · · · · · · A.· ·Wherever there was parking.

·7· · · · · · · · · Q.· ·Okay.· Did you see at any point

·8· ·in time, when you parked on the roof, any trucks?

·9· · · · · · · · · A.· ·In what way, capacity?· You mean

10· ·shoppers or?

11· · · · · · · · · Q.· ·Pick-up trucks.· Let's start

12· ·with that.· I'll go step-by-step.

13· · · · · · · · · Did you see any pick-up trucks on the

14· ·roof when you parked there?

15· · · · · · · · · A.· ·I'm sure there was.· If people

16· ·drove in them and they parked there, there'd be --

17· ·yes.

18· · · · · · · · · Q.· ·Did you see any snowplow on the

19· ·roof when you parked there?

20· · · · · · · · · A.· ·No, no.· I'd be at work, I'd be

21· ·somewhere else during the day, depending on when it

22· ·snowed.

23· · · · · · · · · Q.· ·Okay, fair enough.

24· · · · · · · · · When you started working at Woolco,

25· ·in May of 1983 --

·1· · · · · · · · · A.· ·Uh-hmm.

·2· · · · · · · · · Q.· ·-- did you notice any leaks

·3· ·then?

·4· · · · · · · · · A.· ·Yes, because I was there more

·5· ·often and the mall had been opened for almost three

·6· ·years.

·7· · · · · · · · · Q.· ·And when -- do you recall when

·8· ·you started to notice these leaks?

·9· · · · · · · · · A.· ·Oh, almost instantly.

10· · · · · · · · · Q.· ·Okay.· And when would the leaks

11· ·actually appear in the store?

12· · · · · · · · · A.· ·Well, when it rained.

13· · · · · · · · · Q.· ·So every time it rained there

14· ·would be leaks in the store?

15· · · · · · · · · A.· ·Depending on how hard it rained.

16· · · · · · · · · Q.· ·Okay.

17· · · · · · · · · A.· ·Or how long it had rained.

18· · · · · · · · · It could be a slow leak but if it was

19· ·hard rain, it could come through quite quickly.

20· · · · · · · · · Q.· ·So how fast would the dripping

21· ·start to, you know, begin in the store once the rain

22· ·had started?

23· · · · · · · · · A.· ·Well, it just depended on when

24· ·if rained.· Like, if it rained overnight it was the

25· ·maintenance crew in the morning that came into that,

·1· ·and the cleaning crew and had to look after it.

·2· · · · · · · · · Q.· ·And I'll get to that in

·3· ·a second, but when you referenced the cleaning crew,

·4· ·are you referencing the cleaning crew of Woolco?

·5· · · · · · · · · A.· ·Well, we hired a cleaning

·6· ·company to come in for the main floor, but for the

·7· ·downstairs, the washrooms, the locker room, my

·8· ·office, anything that wasn't the main floor, I hired

·9· ·a cleaning lady.

10· · · · · · · · · Q.· ·Okay.· So it was someone that

11· ·Woolco had hired to clean, it wasn't the mall

12· ·maintenance people?

13· · · · · · · · · A.· ·Either way, no, not the mall

14· ·maintenance, no.

15· · · · · · · · · THE COMMISSIONER:· Did you occupy

16· ·more than one level, ma'am?

17· · · · · · · · · THE WITNESS:· No, it was just one.

18· · · · · · · · · THE COMMISSIONER:· I thought you said

19· ·when they went downstairs?

20· · · · · · · · · THE WITNESS:· Well, our locker room

21· ·and some of our offices were downstairs.

22· · · · · · · · · THE COMMISSIONER:· On the second --

23· ·on a lower level?

24· · · · · · · · · THE WITNESS:· Just a small section.

25· · · · · · · · · THE COMMISSIONER:· So you did occupy

·1· ·a lower level?

·2· · · · · · · · · THE WITNESS:· Yes, yes.

·3· · · · · · · · · THE COMMISSIONER:· But not for

·4· ·shopping?

·5· · · · · · · · · THE WITNESS:· No, no, no, no.

·6· · · · · · · · · THE COMMISSIONER:· That's fine.

·7· · · · · · · · · BY MS. EFFENDI:

·8· · · · · · · · · Q.· ·Would it ever leak in the

·9· ·winter, Ms. Cloughley?

10· · · · · · · · · A.· ·No, not really, no.

11· · · · · · · · · Q.· ·Okay.· I think it would be

12· ·helpful at this time maybe to show the Commissioner

13· ·where the leaks occurred at Woolco.

14· · · · · · · · · So we will pull up Ms. Kuka, Exhibit

15· ·No. 3264.

16· · · · · · · · · So you have that in front of you, as

17· ·well, Ms. Cloughley and you will see that this is

18· ·a drawing that we prepared with your assistance.

19· · · · · · · · · So can you describe to the

20· ·Commissioner what we're looking at and where the

21· ·leaks actually occurred in the store?

22· · · · · · · · · A.· ·Okay.· The two dotted lines are

23· ·centre aisle of the store where you would come in

24· ·from the mall and walk straight through.

25· · · · · · · · · We didn't do a lot on this.· There was

·1· ·an entrance --I can't show you, but right here was the

·2· ·front entrance.

·3· · · · · · · · · MS. EFFENDI:· Ms. Kuka, does Ms.

·4· ·Cloughley have a mouse?

·5· · · · · · · · · BY MS. EFFENDI:

·6· · · · · · · · · Q.· ·Do you have a mouse there?

·7· · · · · · · · · A.· ·Oh, yes, I can see a mouse.

·8· · · · · · · · · Q.· ·So you can point with that

·9· ·mouse, if you like.

10· · · · · · · · · A.· ·So this right here was the front

11· ·doors of the store.

12· · · · · · · · · Q.· ·Near the --

13· · · · · · · · · A.· ·And then you had that walkway

14· ·along there.· And then it would go right -- it went

15· ·right here, and joined with this, and kept going and

16· ·then there was another aisle here.· In this corner

17· ·here was the Red Grill and customer service was

18· ·right here.

19· · · · · · · · · So this was a centre aisle, coming in

20· ·from the mall entrance.

21· · · · · · · · · This "A" would be around the shoe

22· ·department, one of our lessees.

23· · · · · · · · · This "B" is up closer to the customer

24· ·service area and furniture.

25· · · · · · · · · And my office was actually back right

·1· ·here.

·2· · · · · · · · · THE COMMISSIONER:· When you talk

·3· ·about lessees, ma'am, I take it these are

·4· ·independent people that Woolco --

·5· · · · · · · · · THE WITNESS:· Woolco rented space to.

·6· · · · · · · · · THE COMMISSIONER:· -- rented to and

·7· ·they occupied a certain space within --

·8· · · · · · · · · THE WITNESS:· That's correct.

·9· · · · · · · · · THE COMMISSIONER:· And so their

10· ·inventory didn't belong to Woolco, it belonged to

11· ·them; is that right?

12· · · · · · · · · THE WITNESS:· No.· That's correct.

13· ·And then eventually Woolco just took over everything

14· ·and ran it themselves.

15· · · · · · · · · THE COMMISSIONER:· All right.

16· · · · · · · · · BY MS. EFFENDI:

17· · · · · · · · · Q.· ·So, Ms. Cloughley, is it fair to

18· ·say then where it says "A" on the right there was

19· ·an entrance there?

20· · · · · · · · · A.· ·Uh-hmm.

21· · · · · · · · · Q.· ·And then below, where it says

22· ·"B Cloughley's office" there was another entrance

23· ·there as well?

24· · · · · · · · · A.· ·Right where the hand is, was the

25· ·front door entrance.

·1· · · · · · · · · Q.· ·And where were the leaks?· Where

·2· ·would the leaks occur in the store?

·3· · · · · · · · · A.· ·This "C" is ladies' wear and the

·4· ·"D" is houseware.

·5· · · · · · · · · Q.· ·And would there be any leaks in

·6· ·the centre aisle because --

·7· · · · · · · · · A.· ·Yes.

·8· · · · · · · · · Q.· ·-- I see you have --

·9· · · · · · · · · A.· ·Yes, "A" and "B" --

10· · · · · · · · · COURT REPORTER:· I'm sorry, one at a

11· ·time please, you are over-speaking one another.

12· · · · · · · · · THE COMMISSIONER:· You're both

13· ·talking over each other.

14· · · · · · · · · MS. EFFENDI:· We are too eager here,

15· ·Ms. Cloughley so we are going to have to wait for

16· ·the other to be finished, so I'll let you go now.

17· · · · · · · · · THE WITNESS:· Well, "A" is in centre

18· ·aisle and then "B".· This whole thing here is centre

19· ·aisle, and there were two major leaks there.

20· · · · · · · · · There were -- "A" and "B" were major

21· ·leaks.· "D" -- "C" and "D" were occasional.

22· · · · · · · · · BY MS. EFFENDI:

23· · · · · · · · · Q.· ·Okay.· So, just to summarize

24· ·then, your evidence where we have "A", "B", "C" and

25· ·"D", there were leaks, and then the major one was

·1· ·the centre aisle --

·2· · · · · · · · · A.· ·Yes.

·3· · · · · · · · · Q.· ·-- where leaks would occur more

·4· ·frequently?

·5· · · · · · · · · A.· ·Yes.

·6· · · · · · · · · Q.· ·And would there be -- were there

·7· ·ever leaks in your office?

·8· · · · · · · · · A.· ·Yes.

·9· · · · · · · · · Q.· ·Can you tell us about that?

10· · · · · · · · · A.· ·I had one that -- I'd noticed

11· ·the ceiling tile had become stained so I called our

12· ·manager and they called the mall to come up and have

13· ·a look at it and they took the ceiling tile away

14· ·and -- they just wanted to observe it for a week or

15· ·two, and during that period of time, it had leaked

16· ·again and I had some employee files on top of the

17· ·file, and it had -- whatever dripped, had eaten

18· ·right through the files and the paper was all

19· ·shredded and -- in a hole, and then the paint on top

20· ·of the filing cabinet was starting to eat away.

21· · · · · · · · · Q.· ·And did you show that to the

22· ·mall manager?

23· · · · · · · · · A.· ·Yes.

24· · · · · · · · · Q.· ·And what did he tell you --

25· · · · · · · · · A.· ·He was called to come back up

·1· ·and he just dismissed it.· It wasn't an issue, not

·2· ·to worry about it.

·3· · · · · · · · · Q.· ·Okay.· Let's now deal with the

·4· ·issue of how the store dealt with those leaks.

·5· · · · · · · · · What was done at the store when

·6· ·a leak would occur?

·7· · · · · · · · · A.· ·We'd go to housewares and take

·8· ·out buckets and put them underneath the leaks and

·9· ·sometimes -- depending on how heavy it was raining,

10· ·sometimes it would spray.

11· · · · · · · · · It would almost, like, for instance,

12· ·there were three drips and because we would have --

13· ·because we didn't have a bucket big enough, we would

14· ·have to take three buckets and then just place them

15· ·under each drip to catch the water.

16· · · · · · · · · Q.· ·And did you, at any point in

17· ·time, use tarps to cover the merchandise?

18· · · · · · · · · A.· ·In ladies' wear and, I believe

19· ·in the shoe department they had covered with plastic

20· ·because it was dripping down.

21· · · · · · · · · Q.· ·And did you also use hoses?

22· · · · · · · · · A.· ·We didn't use anything.

23· · · · · · · · · I do remember seeing hoses in the mall,

24· ·but not while I was working there.

25· · · · · · · · · I think that was a later brainstorm.

·1· · · · · · · · · Q.· ·Okay.· As far as you know, were

·2· ·there any drip pans at Woolco?· You know those metal

·3· ·kind of pans?

·4· · · · · · · · · A.· ·No, we had nothing like that.

·5· ·We just took the ceiling tile back and ...

·6· · · · · · · · · Q.· ·And who dealt with the leaks, so

·7· ·I just wanted to confirm --

·8· · · · · · · · · A.· ·Uh-hmm.

·9· · · · · · · · · Q.· ·-- it was always the staff that

10· ·Woolco had hired; is that correct?

11· · · · · · · · · A.· ·Our employees, yes.

12· · · · · · · · · Q.· ·Your employees?

13· · · · · · · · · A.· ·Well, you had to, you had to do

14· ·something right away or there would be water

15· ·everywhere.

16· · · · · · · · · Q.· ·Did you ever contact the mall

17· ·maintenance to come and deal with those leaks?

18· · · · · · · · · A.· ·That wasn't my responsibility.

19· · · · · · · · · Q.· ·Okay.

20· · · · · · · · · A.· ·I was just for the employees,

21· ·that would have been the manager or general manager

22· ·of the store.

23· · · · · · · · · Q.· ·Fair enough.· As far as you

24· ·know, was there any damage caused to the merchandise

25· ·because of the leaks?

·1· · · · · · · · · A.· ·Yes, there was some markdown on

·2· ·some garments over in ladies' wear and some were

·3· ·just -- they did what you call a -- I have to

·4· ·remember -- it's like a credit.

·5· · · · · · · · · Q.· ·Discount?

·6· · · · · · · · · A.· ·Well, yeah, but it's -- it's not

·7· ·coming to me, the term that they use, but they write

·8· ·it off, more or less.

·9· · · · · · · · · Q.· ·Okay.· And was there any damage

10· ·to ceiling tiles because of the leaks?

11· · · · · · · · · A.· ·Oh, there -- of course.

12· · · · · · · · · Q.· ·And who replaced those tiles?

13· ·Was it Woolco?

14· · · · · · · · · A.· ·No, not to my knowledge.· Again,

15· ·it was not in my area of responsibility.

16· · · · · · · · · Q.· ·Okay.· As far as you know in

17· ·your responsibility as personnel manager did the

18· ·employees complain to you about the leaks?

19· · · · · · · · · A.· ·No, not really.· It would

20· ·just -- it was commonplace, it was "It's leaking

21· ·again."

22· · · · · · · · · Q.· ·You just lived with it?

23· · · · · · · · · A.· ·Yeah, yeah.

24· · · · · · · · · Q.· ·It was part of --

25· · · · · · · · · A.· ·We just did what we had to do to

·1· ·keep the floor dry so that we didn't have any

·2· ·customers slipping and falling, and it was just

·3· ·commonplace.· I mean, it leaked, when it rained, you

·4· ·expected it to leak.

·5· · · · · · · · · Q.· ·It was part of daily life at the

·6· ·Woolco?

·7· · · · · · · · · A.· ·Exactly.· Uh-hmm.

·8· · · · · · · · · Q.· ·As far as you're aware, did any

·9· ·customers complain about the leaks?

10· · · · · · · · · A.· ·Not really.· Not to me anyway.

11· ·It doesn't mean it didn't happen, but not to me.

12· · · · · · · · · Q.· ·Did you ever complain to -- you

13· ·indicated to us -- let me backtrack.

14· · · · · · · · · A.· ·Uh-hmm.

15· · · · · · · · · Q.· ·You indicated to us that you

16· ·personally didn't complain to the mall manager.

17· · · · · · · · · Are you aware as to whether or not

18· ·Woolco, your manager, would have complained to the

19· ·mall manager or the mall owners?

20· · · · · · · · · A.· ·Again, out of my area of

21· ·responsibility.

22· · · · · · · · · Q.· ·Were you ever told, when you

23· ·were working at Woolco, what caused the leaks in the

24· ·store?

25· · · · · · · · · A.· ·Never.

·1· · · · · · · · · Q.· ·Did the mall maintenance ever

·2· ·tell you when they would come into the store, why it

·3· ·leaked or what they were doing?

·4· · · · · · · · · A.· ·(Shakes head.)

·5· · · · · · · · · Q.· ·No?

·6· · · · · · · · · A.· ·No.

·7· · · · · · · · · Q.· ·Did they ever tell you that they

·8· ·were trying to fix the leaks?

·9· · · · · · · · · As far as you know, did the leaks --

10· · · · · · · · · THE COMMISSIONER:· What was the last

11· ·answer?

12· · · · · · · · · THE WITNESS:· No, no.

13· · · · · · · · · THE COMMISSIONER:· Thank you.

14· · · · · · · · · BY MS. EFFENDI:

15· · · · · · · · · Q.· ·Did the leaks ever improve, Ms.

16· ·Cloughley, during your time at Woolco?

17· · · · · · · · · A.· ·Not that I remember, no.

18· · · · · · · · · Q.· ·And I understand that you worked

19· ·there until 1992; is that correct?

20· · · · · · · · · A.· ·Correct, yes.

21· · · · · · · · · Q.· ·Did you ever see, during your

22· ·time at Woolco, mall maintenance repairing, doing

23· ·repairs on the roof?

24· · · · · · · · · A.· ·You would see -- yes, it would

25· ·be the mall employees.

·1· · · · · · · · · Q.· ·The mall employees themselves?

·2· · · · · · · · · A.· ·Themselves, their maintenance

·3· ·crew, yes.

·4· · · · · · · · · Q.· ·Did you ever see any consultants

·5· ·or external people or were they all familiar faces

·6· ·up there?

·7· · · · · · · · · A.· ·Always familiar faces.

·8· · · · · · · · · Q.· ·Okay.· Did the leaks ever get

·9· ·worse.· You told us they never got better but did

10· ·they ever get worse?

11· · · · · · · · · A.· ·Do you mean while I was there?

12· · · · · · · · · Q.· ·While you were at Woolco, yep?

13· · · · · · · · · A.· ·Not that I remember, no.

14· · · · · · · · · Q.· ·I understand that Woolco had

15· ·a Health and Safety Committee at one point when you

16· ·were working there; is that correct?

17· · · · · · · · · A.· ·Well, Workman's Compensation

18· ·came out with a WMIS program so our head office

19· ·wanted us to establish a Health and Safety Committee

20· ·in the store.

21· · · · · · · · · Q.· ·Okay.

22· · · · · · · · · A.· ·And they made me head of it.

23· · · · · · · · · Q.· ·Okay.· So -- and I understand as

24· ·part of your role on that committee, you had raised

25· ·an issue about air quality; do you recall that?

·1· · · · · · · · · A.· ·Yes.

·2· · · · · · · · · Q.· ·Can you tell us how that --

·3· ·based -- what triggered your complaint about air

·4· ·quality?

·5· · · · · · · · · A.· ·Well, when I'd be scheduling or

·6· ·trying to do budget, sometimes I'd have to close my

·7· ·door because it was a busy area and I would be

·8· ·bothered a lot by customers, and after doing that,

·9· ·within any -- say, 15 to 30 minutes I'd want to have

10· ·a nap.

11· · · · · · · · · And then I thought about the girls

12· ·downstairs in the cash office, because they were

13· ·depending on outside air for ventilation, and

14· ·I thought it might be a good idea as a first step to

15· ·call in the Ministry and have the air tested, the

16· ·quality of air in the store.

17· · · · · · · · · Q.· ·And when you say the "Ministry",

18· ·are you referring to the Ministry of Labour?

19· · · · · · · · · A.· ·Yes, yes.

20· · · · · · · · · Q.· ·Do you recall who you called at

21· ·the Ministry of Labour?

22· · · · · · · · · A.· ·No, just --

23· · · · · · · · · Q.· ·The office?

24· · · · · · · · · A.· ·Yes, yes.

25· · · · · · · · · Q.· ·Okay.· And they sent someone

·1· ·over to do some testing?

·2· · · · · · · · · A.· ·That's correct.

·3· · · · · · · · · Q.· ·Okay.· And do you recall what

·4· ·the result of those testings were?

·5· · · · · · · · · A.· ·Well, the air wasn't the best

·6· ·but the recommendation for my office was to leave

·7· ·the door open all the time because it would be

·8· ·continually happening.

·9· · · · · · · · · Q.· ·Okay.· And do you recall -- just

10· ·backtracking for a second, when you made the

11· ·complaint, was it a representative of the Ministry

12· ·that came over and inspected the location?

13· · · · · · · · · A.· ·Yes.

14· · · · · · · · · Q.· ·So they came to your office and

15· ·they went downstairs, as well to the other

16· ·employees' --

17· · · · · · · · · A.· ·That's correct.

18· · · · · · · · · Q.· ·-- offices?

19· · · · · · · · · A.· ·Yes.

20· · · · · · · · · Q.· ·And do you recall how long that

21· ·inspection would have lasted?

22· · · · · · · · · A.· ·No, no.· It was the same day,

23· ·I can say that.· But it didn't go into anything more

24· ·than one day.

25· · · · · · · · · Q.· ·Okay.· Did the Health and Safety

·1· ·Committee ever deal with the issue of leaks?

·2· · · · · · · · · A.· ·No, no.

·3· · · · · · · · · Q.· ·Why not?

·4· · · · · · · · · A.· ·Never crossed our minds.

·5· · · · · · · · · Q.· ·Why not?· Part of life at

·6· ·Woolco, having leaks?

·7· · · · · · · · · A.· ·Probably.· Just commonplace.

·8· · · · · · · · · Q.· ·Leaving Woolco now aside for

·9· ·a second and just taking a look at the other

10· ·locations in the mall, I assume that you would walk

11· ·in the mall in order to get to the store?

12· · · · · · · · · A.· ·Correct -- oh, no, I'd come in

13· ·the front door.

14· · · · · · · · · Q.· ·You came in the front door?

15· · · · · · · · · A.· ·And you were not allowed out --

16· · · · · · · · · Q.· ·Okay.

17· · · · · · · · · A.· ·-- for breaks.

18· · · · · · · · · Q.· ·Did you ever go and do some

19· ·shopping after hours in the mail, when you weren't

20· ·working at Woolco and you weren't allowed to leave?

21· · · · · · · · · A.· ·Occasionally.

22· · · · · · · · · Q.· ·Do you recall seeing any leaks

23· ·in the mall, other than Woolco?

24· · · · · · · · · A.· ·Well, the kiosk area but

25· ·I believe that was later on.

·1· · · · · · · · · Q.· ·So the kiosk -- so the lottery

·2· ·kiosk?

·3· · · · · · · · · A.· ·Yes, yes.

·4· · · · · · · · · Q.· ·And do you recall seeing any

·5· ·other places with leaks?

·6· · · · · · · · · A.· ·Not until later on, much later

·7· ·on, after I'd left there.

·8· · · · · · · · · Q.· ·What about the library?

·9· · · · · · · · · A.· ·The library, yeah.

10· · · · · · · · · Q.· ·So you remember the library?

11· · · · · · · · · A.· ·Yes, I do.

12· · · · · · · · · Q.· ·So the lottery kiosk, the

13· ·library and then of course Woolco where you worked?

14· · · · · · · · · A.· ·Yes.· And even with Zeller's,

15· ·you'd still see the same thing going on.

16· · · · · · · · · Q.· ·Well, I will get to that in a

17· ·second.

18· · · · · · · · · I understand that you left Woolco in

19· ·1992?

20· · · · · · · · · A.· ·Correct.

21· · · · · · · · · Q.· ·Okay.· I understand also that

22· ·you were an avid golfer?

23· · · · · · · · · A.· ·Yes.

24· · · · · · · · · Q.· ·And that during one golf

25· ·tournament you had an encounter with someone from

·1· ·Algoma Central properties?

·2· · · · · · · · · A.· ·Yes.

·3· · · · · · · · · Q.· ·Do you remember that?

·4· · · · · · · · · A.· ·He said Algocen Realty.

·5· · · · · · · · · Q.· ·Okay, Algocen Realty.

·6· · · · · · · · · A.· ·Yes.

·7· · · · · · · · · Q.· ·Can you tell us about that

·8· ·encounter you had on the golf course?

·9· · · · · · · · · A.· ·Well, it was a mixed tournament

10· ·and my husband and I were golfing.· And you never

11· ·know who you're golfing with, and we were paired up

12· ·with this couple and just in general conversation,

13· ·I mentioned that I worked for Woolco at the mall,

14· ·and he said, "Oh, I sit on the Board of Directors at

15· ·Algocen Realty."

16· · · · · · · · · And I said, "Oh, really."

17· · · · · · · · · And he said "Yes."

18· · · · · · · · · And this stuck in my mind all these

19· ·years because I've never heard this expression before,

20· ·and my husband and father-in-law have been in

21· ·business.

22· · · · · · · · · He said, "That's our dog."

23· · · · · · · · · And I said, "Oh, what do you mean

24· ·'that's your dog'"?

25· · · · · · · · · And he said, "Well, we just write

·1· ·everything off through there."

·2· · · · · · · · · So that's always stuck in my mind.

·3· · · · · · · · · Q.· ·Do you recall the name of the

·4· ·gentleman?

·5· · · · · · · · · A.· ·No, no, it was so long ago.

·6· · · · · · · · · Q.· ·It would have been during your

·7· ·time at Woolco?

·8· · · · · · · · · A.· ·Yeah, mid to late '80s.

·9· · · · · · · · · Q.· ·Fair enough.· I understand that

10· ·in 1999 you were then hired by NorDev; is that

11· ·correct?

12· · · · · · · · · A.· ·Yes.

13· · · · · · · · · Q.· ·And you were hired to work at

14· ·the front desk at their location in the mall?

15· · · · · · · · · A.· ·That's correct, yes.

16· · · · · · · · · Q.· ·And you worked there until 2002?

17· · · · · · · · · A.· ·Yes.

18· · · · · · · · · Q.· ·Can you describe, just

19· ·generally, what were your responsibilities when you

20· ·worked at NorDev?

21· · · · · · · · · A.· ·Well, taking reservations and

22· ·checking guests in and out.· A lot of the mall

23· ·business, it was the hub at the mall, if there was

24· ·any complaints or anything like that, you know,

25· ·someone's made a big spill or whatever, it always

·1· ·came to the front desk.

·2· · · · · · · · · Q.· ·Because by then, NorDev owned

·3· ·the mall?

·4· · · · · · · · · A.· ·Yes.

·5· · · · · · · · · Q.· ·Okay.· Do you recall seeing any

·6· ·difference in the mall during the ownership of the

·7· ·mall by NorDev?

·8· · · · · · · · · A.· ·Absolutely.· They cleaned it up.

·9· ·The floors were wonderful.· They replaced the

10· ·furniture in the mall itself, the seats, and put

11· ·plants and things.· It was very appealing, actually,

12· ·to what it was.

13· · · · · · · · · Q.· ·Did the leaks continue, Ms.

14· ·Cloughley?

15· · · · · · · · · A.· ·Yes, yes.

16· · · · · · · · · Q.· ·And where did the leaks continue

17· ·to be seen when you were working for NorDev?

18· · · · · · · · · A.· ·Well, again, they seemed to be

19· ·worse around that kiosk area there.

20· · · · · · · · · There would be buckets if it was

21· ·raining.

22· · · · · · · · · I mean, it didn't mean it rained every

23· ·time I was working, you know, but I do remember it

24· ·being there, even going in as a customer.

25· · · · · · · · · Q.· ·And was there leaks in the

·1· ·library still?

·2· · · · · · · · · A.· ·Yes, on the children's side.

·3· · · · · · · · · Q.· ·Okay.· During the time you

·4· ·worked for NorDev, do you recall the mall

·5· ·maintenance crew still doing repairs on the roof?

·6· · · · · · · · · A.· ·Yes.· On at least one occasion

·7· ·I can remember I had to get ahold of them and call

·8· ·them, and that's exactly where they were, because

·9· ·I couldn't get ahold of them right away.

10· · · · · · · · · Q.· ·Did you recall ever seeing any

11· ·other contractor, engineer, other from the mall

12· ·maintenance crew up there on the roof doing repairs?

13· · · · · · · · · A.· ·No, but that doesn't mean that

14· ·there wasn't, because I'm not there all the time.

15· · · · · · · · · Q.· ·Fair enough.· I understand,

16· ·then, you left in 2002?

17· · · · · · · · · A.· ·Yes.

18· · · · · · · · · Q.· ·But you decided Elliot Lake was

19· ·for you and you came back two years later?

20· · · · · · · · · A.· ·That's correct.

21· · · · · · · · · Q.· ·When you returned in 2004, did

22· ·you visit the mall then?

23· · · · · · · · · A.· ·Well, just -- it wasn't a place

24· ·that I liked to go.

25· · · · · · · · · Q.· ·Why not?

·1· · · · · · · · · A.· ·Well, I just did a lot of

·2· ·shopping out of town.

·3· · · · · · · · · Q.· ·Okay.· During those times that

·4· ·you did go to the mall --

·5· · · · · · · · · A.· ·Yes.

·6· · · · · · · · · Q.· ·-- did you continue to see leaks

·7· ·in the mall?

·8· · · · · · · · · A.· ·That one area, again, the kiosk

·9· ·because you couldn't help but see it when you come

10· ·up the escalator and you are walking towards it,

11· ·it's right there.

12· · · · · · · · · Q.· ·And what is it that you would

13· ·see?

14· · · · · · · · · A.· ·There was buckets and there was

15· ·a tarp on top.

16· · · · · · · · · Q.· ·Was there a hose going from the

17· ·tarp to the bucket?

18· · · · · · · · · A.· ·I believe at that point is when

19· ·I think I started seeing hoses, yes.

20· · · · · · · · · Q.· ·Okay.· Do you recall seeing

21· ·leaks in the library at that time?

22· · · · · · · · · A.· ·Yes.

23· · · · · · · · · Q.· ·And what about Zeller's which

24· ·I now, I think, understood occupied the Woolco?

25· · · · · · · · · A.· ·That's correct, yeah.

·1· · · · · · · · · Q.· ·And there were leaks there?

·2· · · · · · · · · A.· ·Yeah, and it was actually the

·3· ·ceiling was worse at that point than what it was

·4· ·when Woolco was there.· More ceiling tiles missing.

·5· · · · · · · · · Q.· ·From the Zeller's area?

·6· · · · · · · · · A.· ·Yes.

·7· · · · · · · · · Q.· ·Do you recall any other areas in

·8· ·the mall that struck you as places where there were

·9· ·leaks?

10· · · · · · · · · A.· ·No, not really, not at this

11· ·time.· It is hard to remember all of it.

12· · · · · · · · · Q.· ·A new owner came around in 2005

13· ·to the mall.· From your visits to the mall, did you

14· ·notice that the leaks got any better?

15· · · · · · · · · A.· ·No, I can honestly say no.

16· ·I never thought that it was ever any better.

17· · · · · · · · · It might not have gotten worse at that

18· ·point, but it wasn't better.

19· · · · · · · · · Q.· ·Okay.· Did it ever occur to you,

20· ·Ms. Cloughley, when you would go and see, you know,

21· ·the leaks at Zeller's or the library or the kiosk

22· ·area, did it ever occur to you to complain to a City

23· ·official?

24· · · · · · · · · A.· ·No.· In hindsight I wish maybe

25· ·I had.

·1· · · · · · · · · Q.· ·Why do you say that?

·2· · · · · · · · · A.· ·Well, we wouldn't be here today.

·3· · · · · · · · · Q.· ·Fair enough.· Ms. Cloughley,

·4· ·these are all my questions.

·5· · · · · · · · · Is there anything you would like to

·6· ·tell the Commissioner that I haven't addressed with

·7· ·you?

·8· · · · · · · · · A.· ·No, I think that basically

·9· ·covers it all.

10· · · · · · · · · MS. EFFENDI:· Thank you.

11· · · · · · · · · CROSS-EXAMINATION BY MR. BISCEGLIA:

12· · · · · · · · · Q.· ·Just a few questions, Ms.

13· ·Cloughley.

14· · · · · · · · · A.· ·Uh-hmm.

15· · · · · · · · · Q.· ·My name is Joe Bisceglia.· I am

16· ·a lawyer for Greg Saunders.

17· · · · · · · · · I gather your typical working day was

18· ·9:00 to 5:00 or eight hours a day on average?

19· · · · · · · · · A.· ·Eight to 5:00, yes.

20· · · · · · · · · Q.· ·And with respect to the first

21· ·time you were working there, Mr. Pappoulas was the

22· ·manager of the mall; is that correct?

23· · · · · · · · · A.· ·I don't know what his position

24· ·was.· I just know that he's the one that took me on

25· ·a tour of the hotel.· It wasn't completed.· I had to

·1· ·wear a hardhat, but it was just to give me an idea

·2· ·of what it was going to be like.

·3· · · · · · · · · Q.· ·But once you began working at

·4· ·the mall, do you recall who the mall manager was or

·5· ·appeared to be in charge?

·6· · · · · · · · · A.· ·No, I don't.· That was many

·7· ·years ago.

·8· · · · · · · · · Q.· ·Did you know any of the

·9· ·maintenance people that worked at the mall?· Like

10· ·the floor cleaning and so forth, did you ever see

11· ·them?

12· · · · · · · · · A.· ·No, no, but I do remember that

13· ·a Mr. Willey, who was head of maintenance at the

14· ·time, he became mall manager.

15· · · · · · · · · Q.· ·When Mr. Willey was there, he

16· ·had, I guess, some helpers that helped him clean the

17· ·mall?

18· · · · · · · · · A.· ·Yes.

19· · · · · · · · · Q.· ·And pick up the garbage, mop the

20· ·hallways --

21· · · · · · · · · A.· ·I would assume so, yeah.

22· · · · · · · · · Q.· ·Clean the hallways, so to speak,

23· ·polish the floors, do the general maintenance?

24· · · · · · · · · A.· ·I would assume so, yes.

25· · · · · · · · · Q.· ·Did you see any of that, ma'am?

·1· · · · · · · · · A.· ·No.· No.

·2· · · · · · · · · Q.· ·The people that you saw working

·3· ·on the roof, did you ever see them working on the

·4· ·roof of the parking lot?

·5· · · · · · · · · A.· ·Yes.

·6· · · · · · · · · Q.· ·Were they the same people who

·7· ·did the general cleaning or maintenance during the

·8· ·daytime, when they weren't working on the roof

·9· ·working inside the mall itself?

10· · · · · · · · · A.· ·Yes.

11· · · · · · · · · Q.· ·So, the maintenance crew would

12· ·be used from time to time to do the roof work; is

13· ·that correct?

14· · · · · · · · · A.· ·That's correct.

15· · · · · · · · · Q.· ·And was that basically the case

16· ·while you were at the mall or working at the mall,

17· ·that the general maintenance people were used for

18· ·the purposes of doing the roof repairs regardless of

19· ·who the owner was?

20· · · · · · · · · A.· ·That's correct.

21· · · · · · · · · MR. BISCEGLIA:· Thank you very much,

22· ·ma'am.

23· · · · · · · · · THE COMMISSIONER:· Mr. MacRae.

24· · · · · · · · · MR. MacRAE:· I have no questions.

25· · · · · · · · · THE COMMISSIONER:· Ms. Smith.

·1· · · · · · · · · CROSS-EXAMINATION BY MS. SMITH:

·2· · · · · · · · · Q.· ·Good afternoon, Ms. Cloughley.

·3· · · · · · · · · A.· ·Good afternoon.

·4· · · · · · · · · Q.· ·My name is Kristin Smith and I'm

·5· ·counsel for the Government of Ontario.

·6· · · · · · · · · A· · Yes.

·7· · · · · · · · · Q· · And here we obviously represent

·8· ·the Ministry of Labour.

·9· · · · · · · · · So I just have some questions for you

10· ·specifically about the inspection that was done by

11· ·the representative of the Ministry of Labour who you

12· ·called.

13· · · · · · · · · First off, you told my friend, Ms.

14· ·Effendi, that you were a member of the Health and

15· ·Safety Committee?

16· · · · · · · · · A.· ·Yes.

17· · · · · · · · · Q.· ·And you indicated that was

18· ·a committee that was created as a result of WMIS

19· ·that came in?

20· · · · · · · · · A.· ·Yes, that's what I was told by

21· ·my general manager.

22· · · · · · · · · Q.· ·And who else was on the

23· ·committee; do you recall?

24· · · · · · · · · A.· ·No, no, it's way too long.

25· · · · · · · · · Q.· ·And can you describe what your

·1· ·role was on the committee?

·2· · · · · · · · · A.· ·I just over -- I oversaw it.

·3· ·I just made that -- I was told to make it effective

·4· ·in the store.· And to make sure that the WMIS was

·5· ·being followed.

·6· · · · · · · · · Q.· ·Okay.

·7· · · · · · · · · A.· ·Which was a chemical.

·8· ·It's chemicals and things that you use in the store

·9· ·and that -- that -- at least that's my understanding

10· ·of it.

11· · · · · · · · · Q.· ·And to ensure that they're being

12· ·used safely?

13· · · · · · · · · A.· ·Yes, correct.

14· · · · · · · · · Q.· ·And you indicated that you

15· ·called Ministry of Labour about air quality;

16· ·correct?

17· · · · · · · · · A.· ·Yes.

18· · · · · · · · · Q.· ·And you called them because of

19· ·your role in the Health and Safety Committee or

20· ·because you had your own concerns?

21· · · · · · · · · A.· ·Both.

22· · · · · · · · · Q.· ·Okay, so I want to show you

23· ·a document --

24· · · · · · · · · MS. SMITH:· I'll just give you the

25· ·number, Ms. Kuka.· It's MOL_P000001081.

·1· · · · · · · · · If we can just zoom in on the front.

·2· · · · · · · · · BY MS. SMITH

·3· · · · · · · · · Q.· ·And this should be right in

·4· ·front of you there, Ms. Cloughley.

·5· · · · · · · · · A.· ·I see it.

·6· · · · · · · · · Q.· ·And you will see at the top of

·7· ·the page, it says "Request for visit."· This is

·8· ·a Ministry of Labour form.

·9· · · · · · · · · A.· ·Right.

10· · · · · · · · · Q.· ·And the date on the form -- if

11· ·we can just -- halfway down the page, it indicates

12· ·"Requested by J.G. Collinson, 89/08/25," August the

13· ·25th of 1989.

14· · · · · · · · · Do you know who J.G. Collinson is?

15· · · · · · · · · A.· ·No, I have no idea.

16· · · · · · · · · Q.· ·And just to confirm, you were

17· ·working at the Woolco at this time?

18· · · · · · · · · A.· ·Yes.

19· · · · · · · · · MS. SMITH:· So if you could go up,

20· ·Ms. Kuka.

21· · · · · · · · · BY MS. SMITH

22· · · · · · · · · Q.· ·It indicates the lawyer

23· ·representative is Lorne ...

24· · · · · · · · · A.· ·Lorne Derkachenko.

25· · · · · · · · · Q.· ·And who was that?

·1· · · · · · · · · A.· ·He was one of the -- he's got

·2· ·assistant manager there, which he wasn't.· He was

·3· ·a division manager.

·4· · · · · · · · · Q.· ·And it indicates in the details

·5· ·that Mr. Derkachenko telephoned to request an IAQ,

·6· ·which I take it to mean indoor air quality

·7· ·assessment:

·8· · · · · · · · · · ·"Workers are complaining

·9· · · · · · · · · ·about stale, stuffy air.

10· · · · · · · · · ·Woolco is located in the Algo

11· · · · · · · · · ·Mall, has 60 full-time and 30

12· · · · · · · · · ·part-time employees."

13· · · · · · · · · Is this about the same time that you

14· ·recall the air quality assessment was done, in 1989?

15· · · · · · · · · A· · It could be.· I'm totally

16· ·dismayed about Lorne Derkachenko as assistant

17· ·manager.· He was never assistant manager.

18· · · · · · · · · Q.· ·Besides what his title is --

19· · · · · · · · · A.· ·Uh-hmm.

20· · · · · · · · · Q.· ·-- do you recall this would have

21· ·been about two to three years before you stopped

22· ·working at Woolco; so does that sound about right in

23· ·terms of the time when the air quality assessment

24· ·was done?

25· · · · · · · · · A.· ·Yes.

·1· · · · · · · · · Q.· ·And it indicates here at the

·2· ·bottom that it was assigned to Bénard, who is an air

·3· ·quality assessor with the Ministry of Labour.

·4· · · · · · · · · So I'm going to take you to the

·5· ·report that the Ministry of Labour published on

·6· ·that.

·7· · · · · · · · · MS. SMITH:· And it's at document ID,

·8· ·Ms. Kuka, is OPP-E000056275.· And it starts at

·9· ·page 5 of this document.· So if we could just zoom

10· ·in on the top half.

11· · · · · · · · · BY MS. SMITH

12· · · · · · · · · Q.· ·So this is the consultant report

13· ·that was done by -- you can see at the top, the

14· ·report date is February the 12th, 1990, from J.M.

15· ·Bénard?

16· · · · · · · · · A.· ·Yes.

17· · · · · · · · · Q.· ·And you will see that halfway

18· ·down there that your name is actually on there as

19· ·a contact.· First it says "G. Mathieson, manager,"

20· ·and "B. Cloughley, personnel manager."· I take that

21· ·to be you?

22· · · · · · · · · A.· ·Correct.

23· · · · · · · · · Q.· ·And who is G. Mathieson?

24· · · · · · · · · A.· ·He is the store manager at that

25· ·time.

·1· · · · · · · · · Q.· ·And it says L. Liautaud.· He is

·2· ·the mall manager at that time?

·3· · · · · · · · · A.· ·Yes.

·4· · · · · · · · · Q.· ·And D. Blanchette, a supervisor

·5· ·of Beaver Engineering.· Do you know who that is?

·6· · · · · · · · · A.· ·I have no idea who that is.

·7· · · · · · · · · Q.· ·Okay.· Have you seen this report

·8· ·before?

·9· · · · · · · · · A.· ·No.

10· · · · · · · · · Q.· ·So I'm just going to take you

11· ·through some of the report.

12· · · · · · · · · This is the actual report that was

13· ·submitted by Mr. Bénard after he did the air quality

14· ·inspection that you spoke about in your testimony?

15· · · · · · · · · A.· ·The first time I saw this report

16· ·was just when I was interviewed by the lawyers when

17· ·I come in.

18· · · · · · · · · Q.· ·So you have seen this before

19· ·today?

20· · · · · · · · · A.· ·Just once, but I didn't see it

21· ·in the --

22· · · · · · · · · Q.· ·At the time of the inspection?

23· · · · · · · · · A.· ·Yes, and while I was working

24· ·there.· The first time I saw this was just three

25· ·weeks ago.

·1· · · · · · · · · MS. SMITH:· Okay.· So if we could

·2· ·just go down to -- just down the page there, Ms.

·3· ·Kuka.· You can see there is a chart at the centre of

·4· ·the page.

·5· · · · · · · · · And if we can just go up the other way

·6· ·a little bit.· Thank you.

·7· · · · · · · · · And it indicates, if you look to the

·8· ·far right, it says "Advice to" and then there is

·9· ·a "Y/N."· Do you see that?

10· · · · · · · · · A.· ·Yes.

11· · · · · · · · · Q.· ·And then there the two columns

12· ·there are "Advice to" the "Management & Health &

13· ·Safety Committee."

14· · · · · · · · · I take that to be the Health and

15· ·Safety Committee that you were the head of?

16· · · · · · · · · A.· ·Yes.

17· · · · · · · · · Q.· ·And also the second one is

18· ·"Inspectorate for Orders," and that would be to the

19· ·Ministry of Labour, to possibly make orders.

20· · · · · · · · · And do you see there that it

21· ·indicates advice was given to the "Management &

22· ·Health & Safety Committee"? There's a yes, a "Y"

23· ·there?

24· · · · · · · · · A.· ·A "Y," yes.

25· · · · · · · · · Q.· ·And do you recall receiving

·1· ·specific advice as a member --

·2· · · · · · · · · A.· ·Yes.

·3· · · · · · · · · Q.· ·-- on the Health & Safety

·4· ·Committee?

·5· · · · · · · · · A.· ·Yes.

·6· · · · · · · · · Q.· ·And I'm just going to take you

·7· ·through the report, as it detailed some of the

·8· ·advice, but I take it that your recollection, you

·9· ·said earlier that the only advice you got was to

10· ·leave your door open to your office.

11· · · · · · · · · A.· ·Correct.

12· · · · · · · · · Q.· ·Okay.· So if we could just go

13· ·down to the bottom of the page there.

14· · · · · · · · · Actually, I'm going to take you to

15· ·the next page.· The report is about -- what you've

16· ·seen before -- is about six pages long, so I just

17· ·want to take you through exactly what was done on

18· ·the assessment.

19· · · · · · · · · THE COMMISSIONER:· If you could just

20· ·read it, Ms. Smith.

21· · · · · · · · · MS. SMITH:· Sorry?

22· · · · · · · · · THE COMMISSIONER:· Just read it.

23· · · · · · · · · MS. SMITH:· Sure, not a problem.· I

24· ·was just actually going --

25· · · · · · · · · THE COMMISSIONER:· I take it we're

·1· ·not -- (Simultaneous speakers - unclear)

·2· · · · · · · · · MS. SMITH:· I'm not going to take her

·3· ·through the entire thing, the document is --

·4· · · · · · · · · THE COMMISSIONER:· The author is not

·5· ·going to be called.

·6· · · · · · · · · MS. SMITH:· No.

·7· · · · · · · · · BY MS. SMITH:

·8· · · · · · · · · Q.· ·If we could go to the next page,

·9· ·page 3.· He indicates on different points the

10· ·different parts of his inspection.

11· · · · · · · · · The first one, point 1 there, being

12· ·the outdoor air that he tested.

13· · · · · · · · · And the last sentence of that first

14· ·paragraph says:

15· · · · · · · · · · ·"Air containing 600 ppm or

16· · · · · · · · · ·less C0² usually indicates

17· · · · · · · · · ·adequate fresh make-up air is

18· · · · · · · · · ·is being introduced and that

19· · · · · · · · · ·the environment is

20· · · · · · · · · ·satisfactory, barring the

21· · · · · · · · · ·presence of other specific

22· · · · · · · · · ·toxic substances."

23· · · · · · · · · And then he goes down, and indicates

24· ·what the results were, whether they met that.

25· · · · · · · · · At the bottom of the page he says there

·1· ·is a table that presents the results of the CO²

·2· ·measurements.

·3· · · · · · · · · Second last paragraph:

·4· · · · · · · · · · ·"In the basement, CO² levels

·5· · · · · · · · · ·ranged from 450 to 600 ppm in

·6· · · · · · · · · ·the different areas."

·7· · · · · · · · · And in the last paragraph:

·8· · · · · · · · · · ·"On the main floor, in the

·9· · · · · · · · · ·department store as well as the

10· · · · · · · · · ·cafeteria CO² concentrations

11· · · · · · · · · ·ranged from 475 to 600 ppm.

12· · · · · · · · · ·A reading of 650 ppm was

13· · · · · · · · · ·obtained in the personnel

14· · · · · · · · · ·office also located on the main

15· · · · · · · · · ·floor."

16· · · · · · · · · Now, I take it that's your office, the

17· ·personnel office?

18· · · · · · · · · A.· ·Yes.

19· · · · · · · · · Q.· ·And you'd indicated earlier that

20· ·yours office was in the basement?

21· · · · · · · · · A.· ·No, not mine.· I indicated it

22· ·was behind customer service.

23· · · · · · · · · Q.· ·On the main floor?

24· · · · · · · · · A.· ·Yes.

25· · · · · · · · · Q.· ·Okay.· I just wanted to make

·1· ·sure that's correct?

·2· · · · · · · · · THE COMMISSIONER:· Were you a smoker,

·3· ·at that time?· Were you a smoker?

·4· · · · · · · · · THE WITNESS:· Yes.

·5· · · · · · · · · THE COMMISSIONER:· And did you

·6· ·smoke -- could you smoke in that office?

·7· · · · · · · · · THE WITNESS:· Yes.

·8· · · · · · · · · THE COMMISSIONER:· Okay.· I'm not

·9· ·being critical.· I'm just --

10· · · · · · · · · THE WITNESS:· But I'm not now.

11· · · · · · · · · THE COMMISSIONER:· I was at that time

12· ·as well, so don't read anything into my question,

13· ·but that obviously has something to do with air

14· ·quality.

15· · · · · · · · · MS. SMITH:· I think in this report,

16· ·at some point, it does actually indicate that there

17· ·was smoking.

18· · · · · · · · · THE COMMISSIONER:· It does.

19· · · · · · · · · BY MS. SMITH:

20· · · · · · · · · Q.· ·And it goes on to say at the

21· ·bottom of the page:

22· · · · · · · · · · ·"In all but one case CO²

23· · · · · · · · · ·levels were at or below

24· · · · · · · · · ·600 ppm, indicating adequate

25· · · · · · · · · ·fresh air supply to these

·1· · · · · · · · · ·areas."

·2· · · · · · · · · So, were you aware that the results

·3· ·of this air quality assessment, was that all of the

·4· ·areas in the mall came within acceptable levels?

·5· · · · · · · · · A.· ·The mall?

·6· · · · · · · · · Q.· ·Sorry -- of the store, of the

·7· ·department store.

·8· · · · · · · · · A.· ·Not really.

·9· · · · · · · · · Q.· ·What was your -- what was your

10· ·understanding of the results then of the study?

11· · · · · · · · · A.· ·I never saw any of this.· I only

12· ·went on what the girl said to me, "You need to leave

13· ·your office door open."

14· · · · · · · · · Q.· ·Okay.· I'm just going to -- if

15· ·we could go to over to page 4.· At the top of the

16· ·page, you can see there, she speaks -- it speaks

17· ·specifically, about your office.

18· · · · · · · · · A.· ·Uh-hmm.

19· · · · · · · · · Q.· ·It says the personnel office is

20· ·a confined area.

21· · · · · · · · · A.· ·Uh-hmm.

22· · · · · · · · · Q.· ·Would you agree with that

23· ·assessment?

24· · · · · · · · · A.· ·Yes, correct.

25· · · · · · · · · Q.· ·(Reading)

·1· · · · · · · · · · ·"And with the door closed, it

·2· · · · · · · · · ·does not benefit from the

·3· · · · · · · · · ·natural ventilation that would

·4· · · · · · · · · ·be provided to the rest of the

·5· · · · · · · · · ·store area through doors used

·6· · · · · · · · · ·by patrons to enter and exit

·7· · · · · · · · · ·the premises."

·8· · · · · · · · · You will agree with me it doesn't

·9· ·indicate anything here in the report that you were

10· ·to keep your door open, to the office?

11· · · · · · · · · A.· ·Well, I would take it from that

12· ·paragraph there, yes, I should.

13· · · · · · · · · Q.· ·And you'll agree --

14· · · · · · · · · A.· ·I don't benefit from the natural

15· ·ventilation, so I need to leave my door open, is the

16· ·way I see it.

17· · · · · · · · · Q.· ·And you will agree with me

18· ·though, that despite that you should leave your door

19· ·open, it was still found to be within the acceptable

20· ·levels under 600 ppm of CO²?

21· · · · · · · · · A.· ·I guess, 30 years later, it

22· ·really ...

23· · · · · · · · · Q.· ·Okay.· So I'm just going to take

24· ·you through some of the other findings, if we can

25· ·just go down the page.· Under number 2, this was the

·1· ·testing of the temperature in the mall.

·2· · · · · · · · · Did you ever have any concerns about

·3· ·the temperature of the mall?· Was it too hot or too

·4· ·cold?

·5· · · · · · · · · A.· ·You mean the store?

·6· · · · · · · · · Q.· ·The store, yes.· Sorry.

·7· · · · · · · · · A.· ·No, not really.

·8· · · · · · · · · Q.· ·Okay, so it appears here that

·9· ·there was testing done of the temperature using the

10· ·American Society of Heating, Refrigerating and Air

11· ·Conditioning Engineers, testing.· The recommended

12· ·temperature range is 24 plus or minus 3 degrees

13· ·Celsius with relative humidity ranging from 30 to

14· ·60 per cent.

15· · · · · · · · · And if we could just go down the

16· ·page, the last sentence there indicates:

17· · · · · · · · · · ·"The temperature measurements

18· · · · · · · · · ·within the store as well as in

19· · · · · · · · · ·the personnel office, were

20· · · · · · · · · ·within the ASHRAE recommended

21· · · · · · · · · ·ranges."

22· · · · · · · · · And the only other part I wanted to

23· ·take you to is number 5 on the next page.

24· · · · · · · · · It speaks here about a Bionaire air

25· ·purifier.

·1· · · · · · · · · Do you ever remember seeing any air

·2· ·purifiers in the store?

·3· · · · · · · · · A.· ·No, not that I can remember.

·4· · · · · · · · · Q.· ·It indicates here that there

·5· ·were one -- one was in the general office and one

·6· ·was in the lounge.

·7· · · · · · · · · I take that be to a staff lounge.

·8· · · · · · · · · A.· ·Yes.

·9· · · · · · · · · Q.· ·Was there a staff lounge?

10· · · · · · · · · A.· ·Yes.

11· · · · · · · · · Q.· ·So you never -- you don't recall

12· ·seeing an air purifier in either of those places?

13· · · · · · · · · It indicates here that the inspection

14· ·identified that the units needed new (clean) filters

15· ·and they are to be ensured that they're properly

16· ·maintained.

17· · · · · · · · · THE COMMISSIONER:· She never saw

18· ·them.

19· · · · · · · · · BY MS. SMITH:

20· · · · · · · · · Q.· ·I'm just going to take you,

21· ·finally, to the last page, next page, page 6.

22· · · · · · · · · You will see at the top it says:

23· · · · · · · · · · ·"Advice to the Management and

24· · · · · · · · · ·the Joint Health and Safety

25· · · · · · · · · ·Committee."

·1· · · · · · · · · And it indicates four points.

·2· · · · · · · · · So, I take it, from your testimony that

·3· ·you never received these specific four points, as

·4· ·a member of the Health and Safety Committee?

·5· · · · · · · · · A.· ·No, and I've never seen these

·6· ·before.· I never got this report when I was working

·7· ·there.

·8· · · · · · · · · It was never given to me.· It must have

·9· ·been given to the general manager.

10· · · · · · · · · Q.· ·And the only other question

11· ·I have is, besides keeping your door open, did you

12· ·do anything else to follow up on the advice that

13· ·came out of the inspection?

14· · · · · · · · · A.· ·I never saw this, so I couldn't

15· ·have.

16· · · · · · · · · Q.· ·And did you call the Ministry of

17· ·Labour at any other times, while you worked at

18· ·Woolco?

19· · · · · · · · · A.· ·That was the only time.

20· · · · · · · · · Q.· ·Thank you very much.

21· · · · · · · · · A.· ·You're welcome.

22· · · · · · · · · CROSS-EXAMINATION BY MS. CARR:

23· · · · · · · · · MS. CARR:· Mr. Commissioner, I note

24· ·that it is 5 o'clock.· Are you happy --

25· · · · · · · · · THE COMMISSIONER:· Motor on.· Make it

·1· ·short.

·2· · · · · · · · · MS. CARR:· Okay, I will.

·3· · · · · · · · · BY MS. CARR:

·4· · · · · · · · · Q.· ·Good morning, Ms. Cloughley.· My

·5· ·name is Alex Carr, and I am one of the lawyers that

·6· ·is representing two of the community groups that are

·7· ·participating in this Inquiry.

·8· · · · · · · · · A.· ·Okay.

·9· · · · · · · · · Q.· ·I only have a few questions for

10· ·you.· You said earlier when you were talking with

11· ·Ms. Effendi that, at times, there were stains on the

12· ·ceiling tiles, as a resulting of the leaks, and that

13· ·Woolco didn't replace the ceiling tiles.

14· · · · · · · · · Would they be replaced, at all?

15· · · · · · · · · A.· ·I have no idea.· It was not my

16· ·responsibility.· The general manager would look

17· ·after that type of thing.

18· · · · · · · · · I was strictly staffing and employee

19· ·relations.

20· · · · · · · · · Q.· ·I understand that, but you would

21· ·have been in the Woolco store and so you may or may

22· ·not have noticed whether or not the ceiling tiles

23· ·were replaced.

24· · · · · · · · · Did you notice whether they were ever

25· ·replaced, or whether there were just holes left in

·1· ·the ceiling?

·2· · · · · · · · · A.· ·Well, there were -- again,

·3· ·things became commonplace.

·4· · · · · · · · · If there was one or two missing, they

·5· ·might have been replaced.· They might not have or two

·6· ·more might have been moved.· It was just never

·7· ·anything that we concentrated on.

·8· · · · · · · · · Q.· ·So -- but I think what you are

·9· ·telling me is there was never an effort to ensure

10· ·that as soon as there was a stain on the ceiling it

11· ·was replaced immediately, with a clean ceiling tile?

12· · · · · · · · · A.· ·Oh, absolutely, that would be

13· ·correct, yes.

14· · · · · · · · · Q.· ·Okay.· And can you tell me --

15· ·and you may not remember this -- but can you tell

16· ·me, would there ever have been instances where there

17· ·would have been tile stains left for a number of

18· ·years, or for a year, without being replaced?

19· · · · · · · · · A.· ·Well, that very well could have

20· ·happened, yes.

21· · · · · · · · · Q.· ·That could have happened.

22· · · · · · · · · And I wonder if we could pull up the

23· ·last exhibit we were looking at.

24· · · · · · · · · I think it's OPP-E 56275.

25· · · · · · · · · I'm not sure if it's made an exhibit.

·1· · · · · · · · · MS. KUKA:· It will be Exhibit No.

·2· ·3268.

·3· · · · · · · · · · ·EXHIBIT NO.· 3268:· Ontario

·4· · · · · · · · · Ministry of Labour· Gas Sampling

·5· · · · · · · · · Report, OPP_E0000056275

·6· · · · · · · · · MS. CARR:· Thank you.· And if we

·7· ·could go to page 5.· Sorry, yes.

·8· · · · · · · · · BY MS. CARR:

·9· · · · · · · · · Q.· ·And I notice there are four

10· ·people listed and you've been through the people who

11· ·were on this --

12· · · · · · · · · A.· ·Yes.

13· · · · · · · · · Q.· ·-- that list of contacts, and

14· ·the last one is listed by phone and I presume that

15· ·that means that -- it says -- it gives her -- it

16· ·says "By phone" under her name and it indicates,

17· ·I think, a date where perhaps she was contacted by

18· ·phone.

19· · · · · · · · · I'm not sure, but I'm wondering if

20· ·you were there, in person on the day that this

21· ·inspection was done.

22· · · · · · · · · A.· ·When the Ministry came in --

23· · · · · · · · · Q.· ·Yeah --

24· · · · · · · · · A.· ·-- yes, I was there that day,

25· ·yes.

·1· · · · · · · · · Q.· ·And did you walk around with the

·2· ·inspector?

·3· · · · · · · · · A.· ·No, they did that all on their

·4· ·own.

·5· · · · · · · · · Q.· ·Could we turn to pages 7 and 8

·6· ·of this report.

·7· · · · · · · · · I don't think it's pages 7 and 8 of

·8· ·the exhibit itself but --

·9· · · · · · · · · Okay.· And I know you've not seen

10· ·this report, but this -- I just wanted to point out

11· ·to the Commissioner, that these are all the areas

12· ·that the inspector would have gone in the store so

13· ·they would have gone to the general office, the cash

14· ·office, the -- they would have seen the main floor,

15· ·the ladies' wear, they would have been all through

16· ·this store.

17· · · · · · · · · And we have talked about how there

18· ·could have been ceiling tiles evident.

19· · · · · · · · · Did the inspector ever ask you

20· ·whether or not -- did the inspector ever ask you

21· ·about any evidence of leaks or disrepair in the

22· ·Woolco store when they were there?

23· · · · · · · · · A.· ·No.

24· · · · · · · · · Q.· ·To your knowledge, did anyone at

25· ·Woolco ever mention anything to the inspector about

·1· ·the fact that there were leaks in the store?

·2· · · · · · · · · A.· ·I would not know that.

·3· · · · · · · · · Q.· ·You would not know that.

·4· · · · · · · · · A.· ·No.

·5· · · · · · · · · Q.· ·Okay.· Those are all my

·6· ·questions.· Thank you very much.

·7· · · · · · · · · MR. SHOEMAKER:· Good afternoon, Mr.

·8· ·Commissioner.· I've only got a few questions.

·9· · · · · · · · · CROSS-EXAMINATION BY MR. SHOEMAKER:

10· · · · · · · · · Q.· ·Good morning, Ms. Cloughley.

11· ·I'm Matthew Shoemaker, one of the representatives

12· ·for the City of Elliot Lake.

13· · · · · · · · · A.· ·Okay.

14· · · · · · · · · Q.· ·When the MOL attended the store,

15· ·the Ministry of Labour that is, did you recognize

16· ·the Ministry of Labour employee?

17· · · · · · · · · A.· ·No.

18· · · · · · · · · Q.· ·So, you wouldn't know if he was

19· ·someone from the mall office location?

20· · · · · · · · · A.· ·I believe they come in from

21· ·somewhere out of town.

22· · · · · · · · · Q.· ·Okay.· And you mentioned to

23· ·Ms. Effendi that you had never contacted City Hall

24· ·about the leaks at the --

25· · · · · · · · · A.· ·That would not be my

·1· ·responsibility.· I was the personnel manager, not

·2· ·the general manager.

·3· · · · · · · · · Q.· ·But as chair of the Joint Health

·4· ·and Safety Commission (sic).

·5· · · · · · · · · A.· ·Well, it was kind of

·6· ·an appointment thing, and it wasn't something that

·7· ·was very long before I left the store so ...

·8· · · · · · · · · Q.· ·Right.· But there were never

·9· ·discussions at these meetings?

10· · · · · · · · · A.· ·Never, no.

11· · · · · · · · · Q.· ·Okay, well, those are all my

12· ·questions.

13· · · · · · · · · A.· ·Okay.

14· · · · · · · · · Q.· ·Thank you.

15· · · · · · · · · THE COMMISSIONER:· Anybody else?

16· ·Have I missed anybody?· No re-examination, Ms.

17· ·Effendi?

18· · · · · · · · · MS. EFFENDI:· No, Mr. Commissioner.

19· · · · · · · · · THE COMMISSIONER:· Thank you very

20· ·much, ma'am.· You've been very patient.· You've been

21· ·waiting for a while, and you've been on stand-by.

22· ·I thank you.· It's much appreciated.· Thank you.

23· ·Nine o'clock tomorrow everybody.

24· · · · · · · · · THE CLERK:· Order, all rise.

25· · · · · · · · · This Inquiry is now adjourned until

·1· ·9 o'clock on March 27th.

·2· ·--- Whereupon at 5:12 p.m. the Inquiry proceedings

·3· · · ·adjourned to 9:00 a.m. on Wednesday, March 27, 2013

·4

·5

·6

·7

·8

·9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

·1

·2· · · · · · · · ·REPORTER'S CERTIFICATE

·3

·4· · · · · · · · · I, LISA M. BARRETT, RPR, CRR, CSR,

·5· ·Certified Shorthand Reporter certify;

·6· · · · · · · · · That the foregoing proceedings were

·7· ·taken before me at the time and place therein set

·8· ·forth;

·9· · · · · · · · · That the testimony of the witness

10· ·and all objections made at the time of the

11· ·examination were recorded stenographically by me

12· ·and were therefter transcribed;

13· · · · · · · · · That the foregoing is a true and

14· ·correct transcript of my shorthand notes so taken.

15

16

17· · · · · · · · · Dated this 26th day of March, 2013.

18· · · · · · · · · ____________________________________

19· · · · · · · · · NEESON & ASSOCIATES

20· · · · · · · · · COURT REPORTING AND CAPTIONING INC.

21· · · · · · · · · PER: LISA BARRETT, RPR, CRR, CSR

22

23

24

25

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com

http://www.neesoncourtreporting.com