An Ontario Superior Court judge has reinstated Jim Karygiannis as councillor for Scarborough-Agincourt.

In a ruling released on Monday, Justice William Chalmers said he has granted Karygiannis "relief from the forfeiture of the office" but the order does not stop the city's compliance audit committee from continuing with an audit of his election expenses or prevent it from proceeding with legal action.

"I find that Mr. Karygiannis acted in good faith with respect to the filing of the financial statements," Chalmers said in the ruling.

Chalmers said there was "no attempt" by Karygiannis to hide a big dinner expense that sparked the controversy surrounding his election expenses.

The judge noted that the "relief" is granted only while an audit proceeds, and given that a decision still needs to be made following that audit, it would be "unfair" for Karygiannis to be subjected to "extreme punishment" of leaving office.

Karygiannis, for his part, said he is "ecstatic" to return to council. He repeated his position that there was an "error in filing."

"I'm happy to be returning to work to look after my constituents, respond to their needs and continue the work that we've been doing so far in Scarborough-Agincourt," Karygiannis said.

"I want to thank the people that reached out to me during this time and especially the strength of my family. Tomorrow is another day and tomorrow we start back at work."

Brad Ross, spokesperson for the city, said arrangements are being made to allow Karygiannis to attend council's regularly scheduled meeting on Tuesday as councillor for Ward 22.

Councillor removed from office in early November

City Clerk Ulli Watkiss served noticed to Karygiannis in early November that he was no longer the councillor for Ward 22 over an alleged expense violation, specifically a supplementary financial statement he filed for the municipal election last year.

Karygiannis was told he was in default of the Municipal Elections Act, which requires every candidate to file a financial statement for the election, and disqualified from being elected or appointed to any office until after the 2022 municipal election.

Under the provincial act, there is a limit on the amount of money candidates can spend in an election. For Ward 22 last year, that total was $61,207.95, with a maximum of 10 per cent — or $6,120.80 — to be spent for "parties and other expressions of appreciation" after voting day.

Watkiss had said Karygiannis filed expenses under "parties and other expressions of appreciation" showing that he spent $32,083.50, which exceeds the expense limit by $25,962.70.

She had said she had no "latitude or discretion" on the matter, and "forfeiture of the office" was automatic if a financial statement showed expenses for "parties and other expressions of appreciation" after voting day exceed the amount permitted.

Karygiannis could still face punishment, judge notes

In the ruling, Chalmers notes that penalties contained in the Municipal Elections Act don't apply if a judge were to find that a candidate committed an offence inadvertently, or because of an error in judgment, while "acting in good faith."

Chalmers added that following the audit, there are several different possible outcomes. Karygiannis might not be charged under the Municipal Elections Act; he could be charged but not convicted, or charged and convicted. If convicted, he could still face punishment, which includes being kicked out of office.

Adam Challef filed the application for a compliance audit of Karygiannis's expenses that led to his removal, pointing out Karygiannis raised over $217,000 during the election.

Challef, the City of Toronto and Watkiss are listed as respondents in the case.

"I'm disappointed with this decision and will be reviewing it and my legal options before determining next steps," Challef said on Monday.