Defending Elected Officials and Municipal Employees

10th Annual Provincial/Municipal Liability Conference by The Canadian Institute, Toronto

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.1

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,2 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.3

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.4

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. Nielson5 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.6

This section is new to the Municipal Act, 2001, although similar provisions have existed for some time in the Fire Protection and Prevention Act,7 the Health Promotion and Protection Act,8 and the Building Code Act.9

This statutory immunity does not relieve the municipality of its vicarious liability, but only protects the individual from suit.10 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 Columbia11 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:

  1. A power, duty or function conferred by or under this Act, or
  2. 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 newOntario 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,12 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.13

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.14 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 Assurance15 which was considered by the Ontario Court of Appeal in Haskett v. Equifax Canada Inc.16 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).17 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. Norman18 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.19 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.20 However, the Ontario Court of Appeal in Perry v. Clintar21 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.

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.22

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)23 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.

  • 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.

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.24

  1. It is important to note however that in British Columbia Ferry Corp. v. Invicta Security Service Corp.,25 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.

 

  1. 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.
  2. 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. InBazley v. Curry,26 Madam Justice McLachlin applied a two-part test to determine vicarious liability in the case of intentional torts:

 

Madam Justice McLachlin suggested that courts should be guided by the following principles:

  1. 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".
  2. 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:

  1. the opportunity that the enterprise afforded the employee to abuse his or her power;
  2. 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);
  3. the extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer’s enterprise;
  4. the extent of power conferred on the employee in relation to the victim;
  5. 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. Woodhouse27 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)28 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.29 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, 2001,30 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)31 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 theMunicipal Elections Act, 1996, S.O. 1996, c.32.32 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)33 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)34 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.

  1. Ryan v. Victoria [1999] 1 S.C.R. 201. 
  2. R. v. Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205.
  3. See Brewer Bros. v. Canada, [1991] 80 D.L.R. (4th) 321; Odhavji Estate v. Woodhouse [2003] S.C.J. 74.
  4. Swinamer v. Nova Scotia, [1994] 1 S.C.R. 445 at 456.
  5. [1984] 2 S.C.R. 2.
  6. Municipal Act, 2001, S.O. 2001, s. 448 (1).
  7. Fire Protection and Prevention Act, 1997, S.O. 1997, c. 4., s. 74.
  8. Health Protection and Promotion Act, R.S.O, 1990, c. H.7, s. 95.
  9. Building Code Act, 1992, S.O. 1992, c. 23, s. 31.
  10. Supra, ss. 448 (2).
  11. [2003] B.C.J. No. 1706; see also MacAlpine v. H. (T.), (1991), 57 B.C.L.R. (2d) 1 (C.A.).
  12. [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.
  13. White Hatter Limousine Service Ltd. v. Calgary (City), (1993), 18 M.P.L.R. (2d) 117 (Alta. Q.B.); Odhavji Estate, supra.
  14. Pedwell v. Pelham (Town) [1998] O.J. 3461 (Ont. C.J.); appeal allowed in part [2003] O.J. 1774 (Ont. C.A.).
  15. [1994] H.L.J. No. 31. 
  16. [2003] 63 O.R. (3rd) 577. 
  17. [2003] O.J. No. 3439.
  18. (2003) 64 O.R. (3rd) 239 (C.A.).
  19. Queen v. Cognos Inc. [1993] 1 S.C.R. 87.
  20. 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.).
  21. (1996) 41 C.B.R. (3d) 90.
  22. Densmore v. Whitehorse (City), [1986] 5 W.W.R. 708.
  23. (2000) 13 M.P.L.R. (3rd) 1 (Ont. C.A.).
  24. Omers Realty Management Corp. v Peel (Regional Municipality), [2000] O.J. No. 3256 (Ont. S.C.J.).
  25. (1997), 35 C.C.L.T. (2d) 182.
  26. (1999)174 D.L.R. (4th) 45.
    Jacobi v. Griffiths (1999) 174 D.L.R. (4th) 71.
  27. [2003] S.C.J. No. 74.
  28. [2002] O.J. No. 4938 (Ont. S.C.J.).
  29. 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.
  30. Supra, s. 448.
  31. (2003) 66 O.R. (3d) 434 (S.C.J..).
  32. See Audziss v. Santa (2003) 66 O.R. (3d) 444.
  33. (1989) 100 A.R. 196 (Q.B.). 
  34. (1996) 30 O.R. (3d) 85 (Gen.Div.).

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