OTTAWA—Ray Novak, the current chief of staff to Conservative Leader Stephen Harper, was in the room when Nigel Wright said, twice, he would personally provide Sen. Mike Duffy with the money to repay inappropriate housing expenses, court heard Thursday.

Benjamin Perrin, a former lawyer in the Prime Minister’s Office, shared this detail during his first day of testimony as a Crown witness in the ongoing criminal trial of Duffy, the senator for Prince Edward Island who told Canadians he would reimburse disputed living expenses and then did so after securing a bank draft for $90,172 — the full amount owed — from Wright.

On March 22, 2013, Perrin told the court, he was preparing Wright, who was then chief of staff to the prime minister, for what he expected to be a tense conference call with Janice Payne, the lawyer representing Duffy in his dealings with the PMO, the Senate and forensic accounting firm Deloitte over questionable living expenses claimed for his suburban Ottawa home.

The latest development in the ongoing saga was that Duffy, the former broadcaster turned high-profile Conservative, was thinking about going back on his public commitment to reimburse the expenses, because he still believed the rules were ambiguous and that he was seriously considering taking his chances with Deloitte.

At some point during his summary, Perrin testified, Novak, who was then principal secretary to Harper, entered the room and sat at the head of the table.

Then, Wright cut in and said: “Mr. Duffy will be going ahead with repaying his expenses, because I will be paying for them,” Perrin recalled on the stand, which, he said, was the first time he had ever heard that from Wright.

“I was quite surprised by that statement from him. He had never discussed it with me or consulted with me in any way. It had never been in any contemplation that I ever heard of or speculated on. So, because it was so surprising to me, I immediately looked to my right to see Mr. Novak’s reaction and he didn’t have any reaction to that information,” Perrin told the court.

Perrin said Wright repeated that information on the conference call.

“Sen. Duffy is going to go ahead and repay that money because it’s coming out of my pocket,” Perrin said of what Wright told Payne, after having said Duffy’s chances of Deloitte delivering a favourable finding were “nil.”

Perrin said Novak remained in the room throughout the telephone conversation between Wright and Payne, though he did not participate in it.

On Tuesday, under cross-examination from defence lawyer Donald Bayne, Wright did not implicate Novak, telling the court the long-time aide to Harper did not participate in the call, although Wright said Novak “popped in and out” of his office while it was taking place.

And on Aug. 13, after the court released an email Wright had sent to both Perrin and Novak that mentioned his cheque, Conservative campaign spokesman Kory Teneycke told reporters Novak had not seen it and had learned about the payment when the prime minister did.

“It’s unfathomable that Ray would be aware of a payment from Nigel to Mr. Duffy and not tell the prime minister. That’s just unfathomable. It’s not the case,” said Teneycke.

Duffy has pleaded not guilty to 31 charges, including bribery, fraud and breach of trust.

Throughout his testimony Thursday, Perrin, an associate professor of law at the University of British Columbia — from which he had taken a one-year leave of absence to work as in-house counsel and special adviser on legal affairs and policy at the PMO — often portrayed himself as bewildered, at some points even concerned, by some of its politics.

That bafflement at one point extended to Harper himself, after the prime minister decided a senator only needed to own $4,000 worth of property in a province to be constitutionally qualified for one of its seats.

That position was in response to an early attempt by the PMO to protect Conservative senators, including Duffy, Sen. Pamela Wallin and Sen. Dennis Patterson, by more clearly defining residency in a way that would put to rest any doubts about their eligibility to sit in the Senate.

The Constitution Act of 1867, Perrin pointed out to the court, mentions property and residency as two separate criteria: a senator must own $4,000 of real property, but also “shall be resident in the Province for which he is appointed.”

“I was immediately taken aback by the prime minister’s decision that if you simply owned $4,000 in real property, that made you a resident. To me, both legally and practically, it seemed untenable,” Perrin said Thursday. “I stated, as diplomatically as I could ... the view taken by the prime minister was not consistent with basic legal interpretation principles and that I didn’t agree with it.”

Perrin also told the court he was troubled when he learned Conservative Sen. Irving Gerstein was working his contacts at Deloitte to figure out whether Duffy repaying his disputed expenses would render its report moot.

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Perrin said he went so far as to bring it up with Wright sometime in mid-March 2013, following an unrelated meeting.

“I stated that when an audit firm has a mandate, they are going to follow through with it and they are not going to stop. . . . They’re not going to just call it off or declare it moot or achieve some other outcome than what they independently would arrive at,” Perrin said he told Wright, saying he “felt awkward” making such a basic point to someone with an extensive background in corporate law.

Perrin said Wright did not disagree.

Perrin’s testimony continues Friday.

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