 
DEFENDING
ELECTED OFFICIALS AND MUNICIPAL EMPLOYEES
By
Charles M. K. Loopstra, Q.C.
The existence of a duty of care must be considered in light of all
relevant circumstances, including any applicable statutes or regulations.
Thus, a legislative exemption from liability can negate a duty of
care in circumstances where that duty would otherwise arise.
Statutory
provisions can manipulate municipal liability in a variety of ways, including
the importing of statutory duties upon municipalities to act, through
the granting of statutory causes of action against municipalities, by
eviscerating and/or restricting common law rights, or by codifying common
law principles.
Statutory
Duties
Historically,
the courts have been reluctant to impose civil liability upon a municipality
for the breach of a statutory duty. In R. v. Saskatchewan Wheat
Pool, the Supreme Court of Canada held
that the breach of a statutory duty or standard ought to be considered
in the context of the law of negligence when determining both the duty
and the standard of care owed. On pages 225-226 of the judgment, Dickson
C.J.C. outlined the governing principles in this areas:
1. Civil consequences
of breach of statute should be subsumed in the law of negligence;
2. The notion
of a nominate tort of statutory breach giving a right to recovery merely
on proof of breach and damages should be rejected, as should
the view that an unexcused breach constitutes negligence per
se giving rise to absolute liability;
3. Proof of statutory
breach, causative of damages, may be evidence of negligence;
4. The statutory
formulation of the duty may afford a specific, and useful, standard
of reasonable conduct.
The
Supreme Court in Wheat Pool has demonstrated that in the absence
of a statutory cause of action, there will be a reluctance to grant a
common law duty of care for a breach of a statutory duty. However, that
does not mean that the breach of a statute cannot give rise to liability
if the constituent elements of tortious responsibility have been satisfied.
Statutory
Immunity
The
Province of Ontario has recently expanded the scope of statutory immunity
for municipalities and their servants. Unfortunately, the provisions for
statutory immunity vary from province to province. In some cases, the
statutory provisions simply codify the common law. In other cases there
is a substantial variation from the common law. Notwithstanding the protection
intended to be offered by statute, the courts will strictly construe these
provisions and a careful reading is necessary to determine the degree
of protection offered and under what circumstances liability is restricted.
Negligence
The
ingredients of a negligence claim against a municipality are typically
the same as those comprising a private law negligence claim, but with
a few important differences. In assessing the duty of care in a municipal
negligence claim, the aforementioned principle enshrined in Kamloops
v. Nielson becomes paramount: if the
decision complained of is purely policy-based, the private law duty of
care will be thwarted. In addition, attention will be given to whether
the municipality’s decision falls under the auspices of a legislative,
judicial or quasi-judicial function. If so, the municipality can again
claim immunity from the private law duty of care. It should be noted that
there is no debate over a municipality’s liability for intentional torts
and abuse of power which epitomize two examples of ‘big wrongs’ that will
not garner immunity for municipalities.
In
assessing the standard of care owed by a municipality, the courts must
specifically consider the respective social, economic and political climate.
Towards this end, internal guidelines and the common practice of other
municipalities may become relevant factors. With respect to causation,
foreseeability of damages, and assessment of damages, there are no rules
unique to municipalities. However, it should be noted that when apportioning
negligence amongst multiple tortfeasors, municipalities often bear the
brunt of a disproportionate degree of financial responsibility, otherwise
known as the ‘deep pockets’ approach.
Immunity
for Personal Liability
In
Ontario, statutory immunity for individual tortious acts has been given
to members of council, officers, employees, agents of a municipality or
persons acting under instructions of the officer, employee or agent on
the following conditions:
1. the act must
have been performed in good faith; and
2.
it must be done in the performance or intended performance of a duty
or authority under the Municipal Act or by-law passed under it, or
any neglect or default in the performance of such duty or authority.
This
section is new to the Municipal Act, 2001, although similar
provisions have existed for some time in the Fire Protection and Prevention
Act, the Health Promotion and Protection
Act, and the Building Code Act.
This
statutory immunity does not relieve the municipality of its vicarious
liability, but only protects the individual from suit.
Often suits against a municipality also name the individual who is alleged
to have committed the tort. This section provides a statutory bar to such
a suit for damages, and should result in a successful motion for judgment
to have the action dismissed against the individual if the pleading discloses
no allegations of bad faith or acting outside the scope of the employee’s
duties. The immunity also extends beyond employees to an "agent of
a municipality or a person acting under the instructions of the officer,
employee or agent".
Although
the section was intended to protect individuals from personal liability,
without absolving the municipality from its corporate vicarious liability,
the section may actually extend some protection to corporate agents as
well.
One
of the important benefits of being granted immunity from personal liability
is the fact that it avoids the seldom used common law principle of indemnification.
At common law, a municipality which is vicariously liable for the negligence
or other tortious conduct of an employeee, has a right of indemnity from
the employee by operation of law. Unless the employment contract states
otherwise, the municipality had a right to recover from the negligent
employee. That right has now been extinguished, provided the employee
has acted within the scope of his employment and in good faith.
The "Good Faith" Defence
Acting
in good faith presumes exercising a judgment which is either made in good
faith or in bad faith. If it is made in good faith, the statutory immunity
applies. If it is made in bad faith, the statutory immunity does not apply.
The
question arises whether or not the statutory immunity afforded by Section
448 of the new Ontario Municipal Act, 2001 applies to any and all
acts, in the absence of bad faith, or whether they only apply to acts
to which the principal of "good faith" can apply. In C.H.
v. British Columbia the Court considered
the good faith defence in the context of statutory immunity provided by
Section 101 of the Child, Family and Community Service Act, R.S.B.C.
1996, C 46("CFCSA").
Section
101 of the CFCSA provides as follows:
No
person is personally liable for anything done or omitted in good faith
in the exercise or performance or intended exercise or performance
of:
- A power, duty
or function conferred by or under this Act, or
- A power, duty
or function on behalf of or under the direction of a person on whom
the power, duty or function conferred by or under this Act.
The
Court held that where there is no exercise of discretion in the performance
of a statutory duty, the defence of good faith does not apply. If it is
purely an operational decision, in the furtherance of a statutory duty,
the Court held that the issue of good faith does not arise.
I
am not aware of any similar restrictive interpretation placed on the "good
faith" defence in Ontario.
New
Liability Issues
The
new Ontario Municipal Act, 2001 for the first time enumerates
the duties and responsibilities of its officers and employees. Of particular
note are the following subsections:
227 Municipal
administration. - It is the role of the officers and employees of
the municipality.
(a) to implement
council’s decisions and establish administrative practices and procedures
to carry out council’s decisions;
...
(c) carry out
other duties required under this or any Act and other duties assigned
by the municipality.
228.(1)
Clerk. - A municipality shall appoint a clerk whose duty it is,
(d) to perform
the other duties required under this Act or under any other Act; and
(2) Deputy clerks.
- A municipality may appoint deputy clerks who have all the powers and
duties of the clerk under this and any other Act.
229. Chief administrative
officer. - A municipality may appoint a chief administrative officer
who shall be responsible for,
(a) exercising
general control and management of the affairs of the municipality
for the purpose of ensuring the efficient and effective operation
of the municipality; and
(b) performing
such other duties as are assigned by the municipality
286. (1) Treasurer.
- A municipality shall appoint a treasurer who is responsible for handling
all of the financial affairs of the municipality on behalf of and in the
manner directed by the council of the municipality, including,
(f) ensuring investments
of the municipality are made in compliance with the regulations made
under section 418.
Although the breach
of these specified duties do not by themselves give rise to a cause
of action, they may be relied upon as a formulation of the standard
of the private law duty owed to others. In the appropriate circumstances
this may give rise to an action against the municipality, even if
the officer or employee has statutory immunity under section 448,
or against both the officer or employee and the municipality if there
is a finding that the officer or employee failed to act in good faith.
In Remmers v. Lipinski, the
C.A.O. of an Alberta municipality was found personally liable in excess
of $3,000,000 for being willfully blind to the dishonesty of his Treasurer,
even though there was no finding of dishonesty on the part of the
C.A.O. In this case there was a finding of gross negligence
on the part of the C.A.O. which may very well equate to failure to
act in good faith, thereby negating the statutory immunity which would
otherwise be available to a C.A.O. in Ontario. The tort of
misfeasance in public office would clearly fall into this category.
A
recent decision of the Ontario Court of Appeal upheld a decision by
a trial judge to award substantial damages against a municipality
for acts of "bad faith" on the part of its officers.
Neither the trial judge or the appeal decision made any reference
to the cause of action on which the award of damages was based, other
than making reference to findings of "bad faith" and "unlawful
interference" by Town officials. Ordinarily, bad faith was pleaded
as a ground to declare a municipal action or by-law invalid. Unless
there was a basis for an independent tort based on negligence, abuse
of public authority or interference with economic interests, a finding
of bad faith would not lead to an award of damages. Clearly this decision
could open up the flood gates for damages against municipalities on
the grounds of "bad faith" in the absence of such an independent
tort.
Another
area of interest is the impact of the English House of Lords decision
in Spring v. Guardian Assurance
which was considered by the Ontario Court of Appeal in Haskett
v. Equifax Canada Inc. Unlike
the tort of negligent misrepresentation, where the inaccurate information
must be given to the plaintiff and relied upon by the plaintiff, these
cases consider whether providing harmful information (even if true)
to a third party gives rise to a cause of action for negligence. The
Ontario Court of Appeal in Haskett was only dealing with a
motion for judgment, and the decision only stands for the proposition
that on the basis of the principles adopted in Kamloops v. Nielson,
there is a triable issue. What this case decided is that the relevant
statute informs the common law duty of care, which may give rise to
reporting of information, even if such information is true. This presents
a new approach to tort liability which previously was not available
if the action was brought for defamation. If the information was false,
the defendant may be able to rely on the defence of absolute or qualified
privilege. If the information was true, the defendant is able to rely
on the defence of justification.
The
Haskett case was considered in Dical Investments Ltd. v.
Aurora (Town). In this case the
plaintiff was negotiating offers on two lots to two separate purchasers.
The plaintiff alleged that the purchasers were provided with erroneous
information by the Town with respect to the amount of the applicable
development charges, which resulted in the purchasers not executing
the final offers. The plaintiff subsequently sold the lots at a substantially
reduced price. The trial judge concluded that using the two stage
test from Kamloops v. Nielson there was no proximity between
the plaintiff and the defendant such as to create a duty of care.
Moreover, there could be no claim for negligent misstatement, since
it was not the plaintiff that had allegedly relied on the inaccurate
information, but rather the potential purchasers.
Recent
Developments in the Law of Negligent Misstatement
In
Avco Financial Services Realty Ltd. v. Norman
the Ontario Court of Appeal clarifies the relationship between negligent
misrepresentation and contributory negligence. One of the 5 tests
the plaintiff must meet in order for a negligent misrepresentation
tort claim to be successful is that the plaintiff must have relied,
in a reasonable manner, on the negligent misrepresentation.
If the reliance on the statement was, in the circumstances of the
case, not reasonable, a key element of negligent misrepresentation
has not been proved. Consequently, contributory negligence does not
constitute a defence to negligent misrepresentation, but would normally
be used to reduce the damages payable, after liability had been determined.
However, the Ontario Court of Appeal in Perry v. Clintar
held that once the plaintiff had reasonably relied upon the plaintiff’s
representation to his detriment, it is inappropriate for the Court
to make a finding of contributory negligence on the part of the plaintiff.
In Avco, the Ontario Court of Appeal rejected its own finding
in Perry and held that findings of negligent misrepresentation
and contributory negligence can logically co-exist. The same facts
may be examined to determine whether the reliance is reasonable, but
once the determination is made that it was reasonable, then those
facts may operate to reduce the damages on the basis of contributory
negligence. However, if the allegation of contributory negligence
is based on facts that result in a finding that the reliance was not
reasonable, the question will already have been determined, since
the plaintiff has failed to meet one of the 5 tests set out in Cognos.
5. Employee
Acting Outside Scope of Employment
When
a claim for negligent misrepresentation by a municipality is received,
the first question that should be asked is whether the representor
was acting within the scope of his authority. Where a fire official
led a caller to believe that a fire truck was on its way but did not
dispatch a fire truck, the Court held that because the fire official
was acting within the scope of his employment, the municipality was
liable for his negligent misrepresentation.
Since
it is necessary for the plaintiff to establish reasonable reliance
on the misstatement, it is difficult to foresee a court holding that
reliance on a statement made by an employee to the plaintiff is reasonable,
but the municipality is not liable because the employee was acting
outside of the scope of his employment. As a result, it is unclear
whether a municipality will be able to successfully argue that it
is not vicariously liable where a court has already held that reliance
by plaintiff on the statement was reasonable. As a result, in an action
for negligent misstatement, where the employee was clearly acting
outside the scope of his municipal duties, the municipality should
plead that it was not reasonable for the plaintiff to have relied
on the statement, thereby failing to meet one of the 5 threshold tests
set out in Cognos.
This
issue was also considered in Moin v. Blue Mountain (Town)
where the Reeve ‘s promise to construct a road at a council meeting
was held to be a negligent misstatement, and the municipality was
held liable in damages. Clearly the Reeve, speaking on his own, cannot
bind council in the absence of a by-law or resolution. Ordinarily,
a citizen who attends at a council meeting will presume that statements
made by councillors are made in their political capacity while exercising
their legislative or quasi-judicial functions. Accordingly, the test
for reasonable reliance on such statements would fail. However, in
Moin the rest of the members of council sat silent. As a result,
the court held:
There was
nothing in the circumstance to alert the plaintiff or any other
citizen that the Reeve was speaking only for himself or that he
was anything other than the spokesperson for the municipality...No
matter how uncomfortable it might have been for the other members
of council, it was surely incumbent upon them to speak up if, as
it turned out to be the case, the Reeve did not represent their
views. They must have known that the respondent was relying upon
these statements and they could not simply leave the respondent
with the impression that council had improved the median improvement
of the [road]. The fact that there was no such commitment was highly
pertinent information.
Thus,
in cases where the municipality fails to speak up and correct the
record, vicarious liability may be imposed against the municipality
even when the municipal councillor or employee is acting outside the
scope of this duties. The "duty to speak up" imposed by
Moin would not extend to a positive duty to advise someone
that the municipality is intending to do that which it has the statutory
power to do, even if silence may lead to a detrimental conclusion.
It
is important to note however that in British Columbia Ferry
Corp. v. Invicta Security Service Corp.,
the employer was held vicariously liable for the deliberate wrongful
acts of the employee on the basis that:
. . . where
an employee is given authority which amounts to 'total intervention'
or control which is then misused through the perpetration of a deliberate
wrongful act, the employer will be vicariously liable.
Thus,
if a municipality chooses to give an incompetent employee complete
discretion to give advice at the counter, or write letters on the
municipality's letterhead, without proper supervision, the municipality
would be hard-pressed to argue that the employee was acting outside
the scope of his authority. On the other hand, if that employee was
given strict instructions not to give certain advice, but nevertheless
gave such advice without the knowledge of the employer, the employer
could argue that the employee was acting outside the scope of his
authority, making the employee liable for the negligent misrepresentation
but not the employer.
The
Supreme Court of Canada, in two recent decisions involving vicarious
liability, has somewhat expanded the scope of liability which requires
some reassessment of the traditional principles in determining vicarious
liability. In Bazley v. Curry, the court was dealing with the
vicarious liability of a non-profit employer as a result of the employee’s
sexual abuse. The court’s pronouncements on vicarious liability with
respect to intentional wrongs may lead to some new developments in
assessing vicarious liability on the part of municipalities in defamation
and misfeansance in public office cases. In Bazley v. Curry,
Madam Justice McLachlin applied a two-part test to determine vicarious
liability in the case of intentional torts:
- are there
precedents which unambiguously determine whether vicarious liability
should be imposed on the employer? and
- if precedent
is inconclusive, courts should turn to policy for guidance.
Madam
Justice McLachlin suggested that courts should be guided by the following
principles:
- They should
openly confront the question of whether liability should lie against
the employer, rather than obscuring the decision beneath semantic
discussions of "scope of employment" and "mode
of conduct".
- The fundamental
question is whether the wrongful act is sufficiently related
to conduct authorized by the employer to justify the imposition
of vicarious liability. Vicarious liability is generally appropriate
where there is a significant connection between the creation
or enhancement of a risk and the wrong that accrues therefrom,
even if unrelated to the employer’s desires. Where this is so,
vicarious liability will serve the policy considerations of provision
of an adequate and just remedy and deterrence. Incidental connections
to the employment enterprise, like time and place (without more),
will not suffice. Once engaged in a particular business, it is
fair that an employer be made to pay the generally foreseeable
costs of that business. In contrast, to impose liability for costs
unrelated to the risk would effectively make the employer an involuntary
insurer.
- In determining
the sufficiency of the connection between the employer’s creation
or enhancement of the risk and the wrong complained of, subsidiary
factors may be considered. These may vary with the nature of the
case. When related to intentional torts, the relevant factors
may include, but are not limited to, the following:
- the opportunity
that the enterprise afforded the employee to abuse his or
her power;
- the extent
to which the wrongful act may have furthered the employer’s
aims (and hence be more likely to have been committed by the
employee);
- the extent
to which the wrongful act was related to friction, confrontation
or intimacy inherent in the employer’s enterprise;
- the extent
of power conferred on the employee in relation to the victim;
- the vulnerability
of potential victims to wrongful exercise of the employee’s
power.
Fraud
and Misfeasance in Public Office
Fraud
(including fraudulent misrepresentation or the tort of deceit) and misfeasance
in public office (also referred to as abuse of public authority) are actionable
intentional torts. They contemplate wrongful conduct by individuals acting
outside of the scope of their duties in a deliberate and intentional manner.
In Odhavji Estate v. Woodhouse
the Supreme Court of Canada held that the failure of a public officer
to perform a statutory duty can constitute misfeasance in public office.
However, it is an intentional tort distinguished by (1) deliberate, unlawful
conduct in the exercise of public functions; and (2) awareness that the
conduct is unlawful and likely to injure the plaintiff. A mere failure
to discharge obligations of an office cannot constitute misfeasance in
a public office and the plaintiff must prove the failures were deliberate.
Mr.
Justice Iacobucci defined the tort as follows:
22. What
then are the essential ingredients of the tort, at least insofar as
it is necessary to determine the issues that arise on the pleadings
in this case? In Three Rivers, the House of Lords held that the tort
of misfeasance in a public office can arise in one of two ways, what
I shall call Category A and Category B. Category A involves conduct
that is specifically intended to injure a person or class or persons.
Category B involves a public officer who acts with knowledge both
that she or he has no power to do the act complained of and that the
act is likely to injure the plaintiff. This understanding of the tort
has been endorsed by a number of Canadian courts: see for example
Powder Mountain Resorts, supra; Alberta (Minister of Public Works,
Supply and Services) (C.A.), supra; and Granite Power Corp. v. Ontario,
[2002] O.J. No. 2188 (QL) (S.C.J.). It is important, however, to recall
that the two categories merely represent two different ways in which
a public officer can commit the tort; in each instance, the plaintiff
must prove each of the tort’s constituent elements. It is thus necessary
to consider the elements that are common to each form of the tort.
23. In
my view, there are two such elements. First, the public officer must
have engaged in deliberate and unlawful conduct in his or her capacity
as a public officer. Second, the public officer must have been aware
both that his or her conduct was unlawful and that is was likely to
harm the plaintiff. What distinguishes one form of misfeasance in
a public office from the other is the manner in which the plaintiff
proves each ingredient of the tort. In Category B, the plaintiff must
prove the two ingredients of the tort independently of one another.
In Category A, the fact that the public officer has acted for the
express purpose of harming the plaintiff is sufficient to satisfy
each ingredient of the tort, owing to the fact that a public officer
does not have the authority to exercise his or her powers for an improper
purpose, such as deliberately harming a member of the public. In each
instance, the tort involves deliberate disregard of official duty
coupled with knowledge that the misconduct is likely to injure the
plaintiff.
.
.
Mr.
Justice Iacobucci also gives examples of when the tort of misfeasance
in public office is not established:
27.
Another factor that may remove an official’s conduct from the scope
of the tort of misfeasance in a public office is a conflict with the
officer’s statutory obligations and his or her constitutionally protected
rights, such as the right against self-incrimination. Should such
circumstances arise, a public officer’s decision not to comply with
his or her statutory obligation may not amount to misfeasance in a
public office. I need not decide that question here except that it
could be argued. A public officer who properly insists on asserting
his or her constitutional rights cannot accurately be said to have
deliberately disregarded the legal obligations of his or her office.
Under this argument, an obligation inconsistent with the officer’s
constitutional rights is not itself lawful.
28. As a matter of policy, I do not believe
that it is necessary to place any further restrictions on the ambit
of the tort. The requirement that the defendant must have been aware
that his or her conduct was unlawful reflects the well-established
principle that misfeasance in a public office requires an element
of "bad faith"
29. or "dishonesty". In a democracy,
public officers must retain the authority to make decisions that,
where appropriate, are adverse to the interests of certain citizens.
Knowledge of harm is thus an insufficient basis on which to conclude
that the defendant has acted in bad faith or dishonestly. A public
officer may in good faith make a decision that she or he knows to
be adverse to interests of certain members of the public. In order
for the conduct to fall within the scope of the tort, the officer
must deliberately engage in conduct that he or she knows to be inconsistent
with the obligations of the office.
30. The
requirement that the defendant must have been aware that his or her
unlawful conduct would harm the plaintiff further restricts the ambit
of the tort. Liability does not attach to each officer who blatantly
disregards his or her official duty, but only to a public officer
who, in addition, demonstrates a conscious disregard for the interests
of those who will be affected by the misconduct in question. This
requirement establishes the required nexus between the parties. Unlawful
conduct in the exercise of public functions is a public wrong, but
absent some awareness of harm there is no basis on which to conclude
that the defendant has breached an obligation that she or he owes
to the plaintiff, as an individual. And absent the breach of an obligation
that the defendant owes to the plaintiff, there can be no liability
in tort.
(The
Odhavji Estate decision also provides a useful analysis of what
private law duties are owed by various parties in a negligence action.
The court utilizes the two part Anns test adopted in Kamloops
and Nielson to conclude that the police chief had a duty to the plaintiffs,
but the Metropolitan Toronto Police Services Board and the Province of
Ontario did not.)
In
Sherway v. Kingsville (Town) the
C.A.O. of the municipality acted fraudulently in executing a contract
for a water main project when council approval had not been obtained.
The plaintiff was successful in its action for fraud against the C.A.O.,
but did not succeed in an action for negligent misrepresentation against
him and the municipality. The court distinguished the case from Moin
and found that the plaintiff was not entitled to rely on the signatures
on the contract when it knew council approval was required. As a result
there was no finding of vicarious liability on the part of the municipality.
Indemnification
Many
municipalities have enacted Indemnification by-laws to indemnify members
of council and employees against legal costs, damages and fines incurred
as a result of legal proceedings brought against them as a result of their
capacity as a councillor or employee of the municipality. In Ontario,
these by-laws are enacted under the authority of the Municipal Act.
In effect the municipality is authorized to act as insurer and indemnifier
to councillors and employees for all kinds of proceedings. Before personal
immunity was introduced to the new Municipal Act, 2001,
in the absence of an indemnity by-law or employment contract that barred
recovery, the municipality was entitled to recover against the employee
for damages awarded against it as result of being held vicariously liable
for the tortious conduct of the employee. Although most employees were
insured under the same policy as the municipality, where there was no
such indemnification provided, there would still be an issue where the
employee (as a result of a conflict) required separate representation
and with respect to the deductible amount under the policy.
Several
issues have arisen since the new indemnity provisions have been enacted.
Should the municipality enact a new by-law under the new Municipal
Act, and if so, to what extent can it provide indemnification? This
issue arose in Santa v. Thunder Bay (City)
in which councillor Santa was attempting to recover substantial legal
fees incurred by him which had been authorized by resolution of council.
Councillor Santa had incurred $201,000 in legal costs in defending challenges
under the Municipal Elections Act, 1996, S.O. 1996, c.32.
Santa brought a motion for judgment for the payment of the legal fees,
whereas the City brought a motion to have the reimbursement resolutions
declared invalid. The court held that a municipality has only such powers
as are expressly conferred on it by statute. The provisions of the old
and new Ontario Municipal Act only provide for reimbursement where
a member was performing the duties of his office. The action involving
councillor Santa was with respect to his status as a candidate, not a
councillor. As a result the reimbursement was illegal and the resolutions
were declared invalid. The court stated:
The
plain wording of the statutes requires that reimbursement can only
be made where a member of council was performing the duties of his
or her office. Thus, reimbursement for activity that predates a term
of office, or is outside the ambit of the office is not permitted.
There
will undoubtedly be more litigation involving this issue. In Leger
v. Edmonton (City) it was held that
there was no jurisdiction to reimburse a member of council for legal costs
attributable to his defamatory remarks made to the media, as they did
not arise from the performance of his office.
In
Rawana v. Sarnia (City) councillor
Rawana demanded payment on a debt owed to him by a contractor tendering
on a large contract to be awarded by city council. Councillor Rawana successfully
defended a prosecution for accepting a bribe. In an action for recovery
of his legal costs, the court held:
In
my view, the Act contemplates by-laws to reimburse members of council
for expenses they may incur while acting "in their capacity as
members of council". It does not contemplate the reimbursement
for members of council while acting in their personal or any other
capacity.
The
current Ontario statutory provision which (subject to an exception pursuant
to section 14 of the Municipal Conflict of Interest Act) provides
for recovery of expenses incurred with respect to the following:
1.
Risks that may involve pecuniary loss or liability on the part of
employees and members of council or a local board.
2.
The payment of damages or costs awarded against any employees or members
of council or expenses incurred by them as a result of any action
or other proceeding arising out of acts or omissions done or made
by them in their capacity as employees or members of council, including
while acting in the performance of any statutory duty.
3.
The payment of any sum required in connection with the settlement
of any action or other proceeding referred to in number 2 above, and
for the cost of defending the employees or members of council in the
action or proceeding
What
remains to be seen is whether the courts will apply a restrictive meaning
to this section should the person seeking reimbursement have acted ostensibly
within the scope of his duties, but clearly found to have abused his public
office or terms of his employment. It is my opinion that the Indemnification
by-laws enacted by municipalities should exempt certain conduct from the
application of the by-law, especially in view of the fact that more than
likely the underlying insurance coverage would not extend to such conduct.
- Ryan v. Victoria
[1999] 1 S.C.R. 201.
- R. v. Saskatchewan
Wheat Pool, [1983] 1 S.C.R. 205.
- See Brewer
Bros. v. Canada, [1991] 80 D.L.R. (4th) 321; Odhavji Estate v.
Woodhouse [2003] S.C.J. 74.
- Swinamer v.
Nova Scotia, [1994] 1 S.C.R. 445 at 456.
- [1984] 2 S.C.R.
2.
- Municipal Act,
2001, S.O. 2001, s. 448 (1).
- Fire Protection
and Prevention Act, 1997, S.O. 1997, c. 4., s. 74.
- Health Protection
and Promotion Act,
R.S.O, 1990, c. H.7, s. 95.
- Building Code
Act, 1992, S.O. 1992, c. 23, s. 31.
- Supra,
ss. 448 (2).
- [2003] B.C.J.
No. 1706; see also MacAlpine v. H. (T.), (1991), 57 B.C.L.R.
(2d) 1 (C.A.).
- [2000] A.J. No.
362 (Q.B.); affd, [2001] A.J. No. 904 (C.A.); leave to appeal refused,
[2001] S.C.C.A. No. 502.
- White Hatter
Limousine Service Ltd. v. Calgary (City), (1993), 18 M.P.L.R. (2d)
117 (Alta. Q.B.); Odhavji Estate, supra.
- Pedwell v.
Pelham (Town)
[1998] O.J. 3461 (Ont. C.J.); appeal allowed in part [2003] O.J. 1774
(Ont. C.A.).
- [1994] H.L.J.
No. 31.
- [2003] 63 O.R.
(3rd) 577.
- [2003] O.J. No.
3439.
- (2003) 64 O.R.
(3rd) 239 (C.A.).
- Queen v. Cognos
Inc. [1993] 1 S.C.R. 87.
- Grand Restaurants
of Canada Ltd. v. Toronto
(1981) 32 O.R. (2d) 757 (H.C.J.); aff'd (1982) 39 O.R. (2d) 752 (C.A.).
- (1996) 41 C.B.R.
(3d) 90.
- Densmore
v. Whitehorse (City), [1986] 5 W.W.R. 708.
- (2000) 13 M.P.L.R.
(3rd) 1 (Ont. C.A.).
- Omers Realty
Management Corp. v Peel (Regional Municipality), [2000] O.J. No.
3256 (Ont. S.C.J.).
- (1997), 35 C.C.L.T.
(2d) 182.
- (1999)174 D.L.R.
(4th) 45.
Jacobi v. Griffiths (1999) 174 D.L.R. (4th) 71.
- [2003] S.C.J.
No. 74.
- [2002] O.J. No.
4938 (Ont. S.C.J.).
- S. 207 para. 50,
s. 243 and s. 252 of the Municipal Act, R.S.O 1990, c.45 and
s. 279 and 283 of the Municipal Act, 2001, S.O. 2001, c.25.
- Supra,
s. 448.
- (2003) 66 O.R.
(3d) 434 (S.C.J..).
- See Audziss
v. Santa (2003) 66 O.R. (3d) 444.
- (1989) 100 A.R.
196 (Q.B.).
- (1996) 30 O.R.
(3d) 85 (Gen.Div.).

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