by Zoe Blunt and Mark Worthing – Focus Magazine
When a 2009 rezoning application by Peninsula Co-op to convert several acres of farmland into a supermarket was opposed by candidates seeking election to the Co-op’s board, the Co-op acted in a way that an arbitrator later found was “unlawful.” Now, on the eve of a new election for a board of directors, Peninsula Co-op has filed a legal suit against seven people, including one of the candidates.
It’s a stormy spring for Peninsula Co-op, and two pivotal events this May will shape the future of the influential 56,000-member gas and grocery chain. On May 4, the Co-op’s rezoning application for a larger food store in Central Saanich goes to public hearing. And on May 25 comes a court-ordered board election that could turf out the pro-development majority.
In the past two years, the Co-op has spent tens of thousands of members’ dollars trying to convince them to support rezoning. The Co-op has also stated that it will pull up stakes (and jobs) in Central Saanich if its zoning application is denied. And, in a surprise move, the Co-op has filed suit against some of its own members, while the incumbent board and staff risk potential contempt of court charges and another invalid election.
The latest brouhaha began back in 2009, when Peninsula Co-op introduced a rezoning proposal to allow a new 40,000-square-foot grocery store and Co-op office near the intersection of Keating X Road and West Saanich Road. Some members, neighbours, and farm advocates took exception to a plan to pave farmland and overturn the Regional Growth Strategy. Rezoning the Co-op property also could unlock future development on a stretch of rural land strategically located between the urban boundaries of Brentwood Bay and Keating.
Concern over the zoning application brought member Randy Pearson out to the Co-op’s fateful 2009 annual meeting. “I was pretty upset about the farmland—putting up a food store and blacktopping eight acres of farmland instead of looking at food security is what upset me in the beginning,” he told Monday Magazine.
At the meeting, Pearson witnessed procedural abuses that drove him to file a complaint under the Co-operative Association Act. Last year, arbitrator Jakob De Villiers threw out the results of that 2009 election. De Villiers concluded the manager and directors engaged in “unlawful,” “illegal,” and “undemocratic” behaviour. He concluded they acted in “bad faith,” in a way that was “oppressive” to members—interfering in election campaigns, refusing access to membership lists, setting up a bogus “nominating committee” to screen candidates, and more.
But the Co-op directors didn’t hang their heads before this blast of condemnation. Rather, they negotiated for a modified Consent Order to let the disallowed board members serve out their terms. The revised judgement orders the Co-op to put up six board positions for election this May, instead of the usual three. Furthermore, even though arbitrator Jakob De Villiers ruled that manager Pat Fafard “unlawfully” interfered with the 2009 election, the Co-op board later promoted Fafard to chief executive officer.
Also in 2009, it became clear that Peninsula Co-op’s political ambitions were not limited to its own members and property. Its involvement in the 2008 municipal election in Central Saanich came to light after the RCMP investigated a complaint about improper campaign contributions. The Mounties recommended 19 charges for campaign finance violations. That’s when members learned the Co-op spent $16,488 supporting pro-development candidates—without consulting the membership. (The Crown declined to lay charges, stating the prosecution was “not in the public interest.”)
How much support does $16,488 buy? The rezoning proposal recently took a great leap forward with a recommendation for approval from Central Saanich’s Committee of the Whole. Perhaps that’s just coincidence, but Co-op member and former board candidate David Lawson doesn’t think so. “It was apparent to me that the Co-op’s motivation for having these developers elected was to get farmland, agricultural land, converted to a big box store,” he said.
Sue Stroud, another Co-op member, said, “There’s all these shenanigans going on over municipal elections, backing the developers and getting their crews on the council to get their stuff done…It’s not what’s best for the community.”
“Those [councillors] who are voting in favour of the Co-op development are the people who were supported by Co-op during the last election,” says David Wilson, a two-time Co-op board candidate. “Essentially, it appears the Co-op put people into council that are going to owe them favours.”
MORE “SHENANIGANS” STARTED in late November 2010, when an unknown prankster tacked up a “For Sale” sign on Peninsula Co-op’s zoning application notice and followed up with a fake press release, using a phoney email address, phone number, and voicemail recording of manager Fafard. Besides announcing the decision to sell the disputed property and find a more suitable location for the larger store, the release committed the Co-op to develop only within the CRD’s Urban Containment Boundaries, and apologized for past behaviour and election irregularities.
A few media outlets picked up the fake November 29 press release, and the Friends of Peninsula Co-op, a group opposed to the development, celebrated the good news, but only briefly. By the next day, the release had been exposed as a hoax. But the Co-op board, which included two police chiefs and a former deputy chief, reacted to the April Fools-style joke as if it were a siege.
Along with pasting an unauthorized Crimestoppers logo into ads to catch the pranksters, Co-op president Ron Gaudet, then the Oak Bay chief of police, confused matters by altering the fake press release so that it appeared as if it was sent by Friends of Peninsula Co-op. Whether it was accidental or intentional, the alteration was quickly exposed.
Days later, Gaudet retired from the Oak Bay Police Department, but still reigns as president of the Co-op, the seat he occupied when the board decided the prank warranted calling in the Central Saanich police (led by Central Saanich police chief and fellow Co-op director Paul Hames). The local police, perhaps mindful of the optics, bounced the investigation over to the RCMP. In February, an officer turned up at Sue Stroud’s provincial government workplace wanting to talk.
The interrogation was surreal, said Stroud, who denies any involvement in the hoax. “He said things like, ‘Do you people realize this [prank] puts the profitability of the Co-op in jeopardy?’”
Stroud told Focus she is filing a police complaint, because the board’s behaviour goes beyond Co-op politics. “It’s dangerous because it’s messing with the community, it goes to misuse of farmland, and it puts the community, our ability to feed ourselves, at risk.”
IN FEBRUARY 2011, TENSIONS ROSE FURTHER with the arrival of defamation notices addressed to individuals who publicly criticized the Co-op. People felt intimidated, said Lawson. “I can tell you that the [legal threats] have been pervasive. There are a number of groups and individuals in this area that are trying to protect and preserve what we have. It’s anybody trying to protect property, and land, and farms…who are getting those letters.” Lawson declined to name names, saying he feared he would be next.
As it turned out, he wasn’t. But on April 8, Peninsula Co-op served a notice of motion for a civil action against the Residents and Ratepayers of Central Saanich Society (RRoCSS), three Co-op members, and others not yet named. The complaint alleges Chris Paynter, Sue Stroud, Alicia Cormier and others engaged in an elaborate conspiracy to engineer the November hoax. It cites no proof and no criminal charges have been laid. The Co-op demands “damages and injunctive relief for defamation, injurious falsehood, trespass to real property, trespass to chattels and civil conspiracy.” The defendants had 21 days to respond to the claim.
Stroud and Cormier strongly deny any involvement in the hoax, and Paynter, a director of RRoCSS, would not comment, citing advice from his lawyer.
Ian Cameron, president of RRoCSS, vigorously rejected the Co-op claim: “There is no truth whatsoever in the allegations made in the lawsuit that RRoCSS was involved or had knowledge of the hoax,” he said in a statement.
Cameron labels the court action a “SLAPP” (Strategic Litigation Against Public Participation) and “an attempt to silence reasonable debate about the Co-op plan to use perfectly good farmland for an unnecessary supermarket. It’s contrary to the Central Saanich Community Plan, and RRoCSS has been fighting it, and will continue to do so, in spite of this attempt to muzzle our voice,” the statement said.
According to the Society of Professional Journalists, “a SLAPP suit is filed in retaliation for public participation in a political dispute. The plaintiff is attempting to intimidate a political opponent and, if possible, prevent further public participation on the issue by the person or organization.” In a Toronto Star editorial on SLAPP suits, Devon Page and Rick Smith state: “What is at stake is nothing less than the democratic process itself. And whether ordinary citizens can continue to defend their communities and their environment without fear of devastating financial liability.” While the legal complaint itself may be baseless and may never see a day in court, it still has the effect of chilling debate and smearing the reputations of those named.
Jeanette Sheehy, a pro-farmland candidate for the Co-op board, notes the Co-op civil suit may end up sidelining potential pro-farming candidates. “They tried to disqualify two of our candidates because of the special resolution that says if you’re involved in a lawsuit with the Co-op, you can’t run for the board of directors,” she explained. The special resolution, adopted in 2010, states that anyone involved in a “legal dispute” with the Co-op may not stand for election. Cormier has filed to run for the board, but by naming her in the civil action, the Co-op may succeed in knocking her off the ballot. (In all, the Co-op Action Network has endorsed six candidates.)
Pearson said he considered standing for election to the board, but in the event of ongoing complaints about the election rules, the Co-op would have banned him under the new rule as well.
The new, improved election that’s supposed to fix the old, discredited one is set to begin May 25, but it’s already falling off the rails. Sheehy reports the directors are defying the court order by refusing to hand over the membership list to candidates. In answer to Sheehy’s requests for the membership list, director and chair of the current nominations committee Gord Griffiths wrote: “as a director I do not have access to a membership list to provide to you…It’s also my understanding that as an organization, we (say management/operations) cannot share it with you either. On a legal basis, the Privacy Act (provincial one, not federal) precludes this from happening.”
Griffiths appears to flatly contradict arbitrator De Villiers ruling in 2010: “The Manager’s refusal to provide the candidate access to the list of members on the spurious ground that he was concerned about members’ privacy was plainly unlawful, and by itself constituted a serious irregularity, handicapping Mr Lawson’s election campaign. Sections 128 to 133 of the Act gave Mr Lawson the right, not only to inspect the membership list, but also to be provided by the Association with a copy of that list on payment of a reasonable charge.”
Randy Pearson said he’s watching the election closely. “If they violate the consent order, I would have to go to court to contest it,” he said. “That would be contempt of court. They have to be very, very careful, and follow the election procedures and all the rules.” He added, “This is serious. Contempt of court is a criminal charge.”
Attempts to reach CEO Fafard were not successful, and general manager Ron Heal was “too busy” to discuss the upcoming elections. When asked for the list of candidates, he said it would be available from the nominating committee at some future date.
Cormier said the conflicts at Co-op made running for the board the most challenging event of her life. Given recent events, she thinks “the 2011 election will be equally difficult.” But she said she remains committed to her campaign for regional food security and economic sustainability.
Pearson says he’s not about to let the board off the hook. “[The Co-op board has] never taken responsibility for their failings in the 2009 elections,” he said. “They shouldn’t be blaming others for their own bad behaviour. They’ve put themselves in a bad light.”
The legal threats haven’t changed Pearson’s mind. “They want development on farmland—we intend to go after them,” he said. “We are going after them.”