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November 8, 2013 VIA EMAIL Mr. Loran V. Halyn Sugimoto & Company Barristers & Solicitors 204, 2635 - 37th Ave NE Calgary AB T1Y 5Z6 Dear Mr. Halyn: Re: Demand from Cal Wenzel and Shane Homes Limited PRIVATE & CONFIDENTIAL
We are counsel for his Worship, Mayor Naheed K. Nenshi and have been provided with your correspondence dated October 31, 2013. The Mayor is disappointed with the inflammatory language and hyperbole contained in your letter. Set out below is the Mayor's response to the accusations made by your clients. Distilling the rhetoric in your letter, it appears that Mr. Wenzel and Shane Homes Limited claim that they have been slandered in three ways: 1. Mr. Wenzel is said to have broken the law; 2. Mr. Wenzel told others during his secret meeting how to break the law; and 3. Mr. Wenzel's secret meeting was referred to as a scene out of the movie "The Godfather" and Mr. Wenzel considers that he was referred to as the Godfather. In respect of the first two matters, I would strongly suggest that your clients review the Local Authorities Election Act, RSA 2000, c.L-21 ("LAEA"). The LAEA now sets out (as of February 3, 2010) specific rules for municipal election finance and contribution disclosure. It sets out maximum contribution amounts in Section 147.2(1). For ease of reference that provision provides: Limitations on Contributions 147.2(1) Campaign contributions by any person, corporation, trade union or employee organization to a candidate shall not exceed $5,000.00 in any year.
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In addition, the LAEA also defines the scope of "Campaign contribution" for the purposes of the Act. Again,for ease of reference I set out that provision below: Definitions 147.1(1) In this Part,
(A)"Campaign Contribution" means any money, personal property, real property or service that is provided to or for the benefit of a candidate or the candidate's election campaign without fair market value compensation from that candidate but does not include services provided by a volunteer who voluntarily performs the services and receives no compensation, directly or indirectly, in relation to the services or time spent providing the services. On a plain reading of the LAEA, "Campaign Contribution" would include any goods and services that are provided to the candidate at less than fair market value compensation from the candidate, including things "donated" to be used during the campaign by the candidate. By contrast, the exception for "services provided by a volunteer" appears to contemplate services (and not goods) that are "performed" personally by a volunteer and may not have separate fair market value. Indeed, a review of Hansard Debates at the reading of Bill 203, which amended the LAEA to include the maximum limits on campaign contributions in Alberta municipal elections, the Honourable Mr. Lukaszuk of Edmonton — Castle Downs made the following comment on the definition of contributions for the purposes of campaign expenses: So if somebody gives you an office to use for the duration of the campaign, that actually has a market value. You should declare it as a donation. That's what we do in provincial elections. Returning to the secret meeting convened by Mr. Wenzel of his colleagues and supporters, I quote below verbatim the statements made by Mr. Wenzel: Cal Wenzel: "Druh Farrell — In case anyone doesn't know — she doesn't like me and I don't particularly like her. I had 13 trucks out last election delivering signs and assembling them and I got called by Druh in the elections because they said I'd given $5,000 in cash so therefore my trucks that were out delivering put me over the $5,000 limit so they were going to take us to court. So Druh and I don't see eye to eye obviously." "Now, one of the things you know, when you're looking at getting rid of an incumbent you know, such as Druh Farrell or Pincott, the candidates that you know, Kevin Taylor and James Maxim, are suggesting that they need somewhere in the area of $150,000 to $250,000 in their campaign funds. Now that could be maybe a little bit less, because Chris has promised every United truck to be made available and he's going to print the signs on their computers, and so you know, maybe he can get by
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with $125,000. That's how much money these guys think they need. Now the other thing is, keep in mind you can only send them $5,000 per year, and that means you've 35 days to send in this year's tranche and then next year you can send in an additional. So it's really quite important that you know,that you get on that." "So how much does it really cost you? So if we have to sit here and say, you know, we have to fund maybe ten candidates here for $5,000 — that's $50,000 this year and $50,000 next year. Keeping in mind, in order to bring Preston on board, eleven of us put up $100,000 — so a million one. So its not like we haven't put up our money, you know, and we're going to be there to put it up again and yet we're also supporting the candidates. So I'll leave you with that." As your clients are probably aware, justification is a complete defence to any claim of alleged defamation. That is, truth is a complete answer. The law provides that it is sufficient if the substance of the allegation is justified. Based upon the definition of "Campaign Contribution" it is difficult to understand how Mr. Wenzel's confession to a group secretly called to a meeting that he had donated $5,000 and then in addition had thirteen trucks out delivering signs and assembling them would not be a clear violation of the law. Indeed, it would appear that Mr. Wenzel is fortunate that he was not pursued or prosecuted under Section 147.2(5) for contravening the LAEA. In addition, during the course of his statements to his various friends during that meeting, he was clearly explaining to them how they could provide services such as "every United truck" or printing signs for the candidates as a way to obviate the $5,000 limit. That, reasonably construed, again would be a violation of the LAEA. Therefore, your letter is accurate that Mr. Wenzel did not admit to breaking the law. However, based on his confessions in the meeting, it is difficult to understand how he did not break the law. In addition to the defence of justification, all three allegations (i.e. the accusation of breaking the law, telling others how to, and the reference to the Godfather) attract the protection of qualified privilege. This defence protects statements made in the protection of the public interest and in furtherance of a duty to the public. In this context, the importance of the communication outweighs any potential harm to a Plaintiff. The interview given by Mayor Nenshi to the CBC was done in the course of a public debate during an election campaign. It is without doubt in the public interest for there to be a full airing and debate about policy issues from a mayoral candidate. As such, a qualified privilege attaches to all of the statements made by the Mayor during his interview. Thirdly, aside from justification and qualified privilege, the statements made by the Mayor of which Mr. Wenzel now complains are fair comment. The comments made by the Mayor regarding Mr. Wenzel's secret meeting were based upon fact as recorded and published by an attendee at that meeting. The matter at issue, an attempt by Mr. Wenzel and his friends to drum up electoral support (financial and otherwise) for like-minded candidates is also a matter of important public interest. The question is thus whether any person could honestly express those opinions on the proved facts? Speaking frankly, it is difficult to understand how any reasonable person would not.
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As part of his comment, Mayor Nenshi noted that the secret meeting called by Mr. Wenzel was like a scene out of the movie "The Godfather". This reference is without question an expression of subjective opinion and hyperbole which constitutes "fair comment" under Canadian law. In the context of the proven facts, no reasonable thinking person would conclude, based on this comment, that Mr. Wenzel must be involved in a "mafia-like" organization, as you referred to in your letter, or that he was committing heinous crimes. Rather, the reasonable person would consider this statement as a fair comment about Mr. Wenzel's approach to politics: an individual who has gathered 150 friends to raise money, who is kind and benevolent to those who give respect and agree with his views, but, perhaps, ruthless when something stands in his way. Finally, I do note, in relation to that "Godfather comment" that Mr. Wenzel, in an interview given to the Calgary Sun published on April 23, 2013, was quoted as follows: "Then when I think about it, I built this company as a family business. My son now runs this thing day to day. I hope one day my grandson runs it. So we will stay and fight and we won't run away. If Nenshi wants to fight then he's going to get it." "Our family is more resolved than ever to go after him." It is unclear what "family" Mr. Wenzel was referring to or how he would "go after him," but I would draw your attention to the further qualified privilege that allows an individual to respond to direct criticism or personal attacks. The statement by Mr. Wenzel to the Calgary Sun certainly appears to engage that definition in respect of Mayor Nenshi. I trust the above fully answers any concerns that Mr. Wenzel or Shane Homes have in this matter. The Mayor respectfully declines your offer to provide an apology "to Mr. Wenzel's satisfaction" as demanded in your letter. To be clear, should your clients decide to pursue a claim, the Mayor will be seeking full reimbursement for any costs incurred in defending such a claim. Yours truly, BENN NES LLP
MM/kl cc: His Worship Naheed K. Nenshi Mayor, City of Calgary