Suing a City: Abuse of Power Lawsuits

Denis Grigoras

Denis is a lawyer who draws on his background in complex legal disputes and transactions to problem-solve for his clients.

Yes, believe it or not, you can sue a city. Municipal corporations, which include cities, are no longer immune to liability as they were in the past. They can be held accountable for various wrongdoings, such as tortious acts, breaches of contract, and neglecting statutory duties.

Abuse of Power

Introduction

Yes, believe it or not, you can sue a city. Municipal corporations, which include cities, are no longer immune to liability as they were in the past. They can be held accountable for various wrongdoings, such as tortious acts, breaches of contract, and neglecting statutory duties. Furthermore, cities must comply with the Canadian Charter of Rights and Freedoms, and can be held liable for damages if they violate Charter rights.

However, it’s essential to note that municipalities possess certain unique protections from tort liability in specific situations. These protections include immunity from liability for policy decisions in negligence cases and harm that is an “unavoidable result” of exercising statutory authority in nuisance cases and under the rule in Rylands v. Fletcher (which we covered in a separate blog post). These protections are in place to grant municipalities some flexibility in making difficult choices concerning resource allocation and service provision.

Overall, while you can sue a city, be aware of the unique protections they have, which may impact the success of your lawsuit.

This blog post will deal with the specific tort of abuse of power (also called abuse of public office), including how these lawsuits against a city must be framed.

Roncarelli v. Duplessis: Establishing the Tort

The landmark case Roncarelli v. Duplessis laid the groundwork for the tort of abuse of power in Canada. A Jehovah’s Witness restaurant owner had his liquor license revoked by the Quebec Liquor Commission at the request of the Quebec Premier, who sought to suppress Jehovah’s Witnesses. The Supreme Court of Canada found the Premier liable for damages and established the principle that public officials must act in good faith and in accordance with a statute’s intent and purpose. Subsequent cases, such as Miguna v. Toronto (City) Police Services Board and L. (A.) v. Ontario (Minister of Community and Social Services), helped clarify the need for proof of malice and directed malice. The tort later evolved in England to eliminate the requirement for malice.

Impact of English Law: Broadening Tort Parameters

The Bourgoin SA v. Ministry of Agriculture, Fisheries and Food case from the English Court of Appeal influenced Canada to adopt a broader definition of abuse of power. In this case, a Ministerial license change prevented French turkey producers from exporting to the UK. The court ruled that the Minister’s motive, whether dominant or subsidiary, was to protect domestic producers by excluding French competitors. Malice or intent to harm was no longer necessary to establish abuse of power. Instead, officials must know or reasonably anticipate that their actions will cause harm to the plaintiff.

In the 2000 House of Lords decision, Three Rivers District Council v. Bank of England, the court upheld the expanded tort and applied it to cases where public officials exercised power for an improper purpose or acted knowingly without authority, causing probable injury to the claimant. Reckless indifference satisfied the “probability of injury” requirement.

Present-day Canadian Approach: Odhavji Estate v. Woodhouse

The Supreme Court of Canada adopted England’s broader misfeasance tort in Odhavji Estate v. Woodhouse. In this case, the court followed the tort elements established in Three Rivers District Council v. Bank of England. The case involved a fatal shooting by two Metropolitan Toronto Police officers and the plaintiff’s claims of negligence, excessive force, and misfeasance in public office.

The Supreme Court clarified two categories of public misfeasance (A and B) and established two common elements: 1) the public officer’s deliberate and unlawful actions, and 2) the officer’s awareness that their actions were unlawful and likely to cause harm. The court defined public misfeasance as deliberate unlawful conduct in public functions with the knowledge that it is likely to cause harm. The plaintiff must also prove legal causation and tort law damages.

Implementing Odhavji Guidelines

  • Identifying a “Public Officer”

Case law has yet to provide a clear definition of “public officer,” but mayors, municipal officers, premiers, RCMP, police, attorney generals, and cabinet ministers typically fall under this classification. Individuals acting under statutory authority or assisting public officers may also be considered public officers.

  • The Defendant’s Status / Exercising a “Public Function”

In order to be considered a case of misfeasance in public office, the defendant must not only be a “public officer” but also be acting in their capacity as such when the misfeasance took place. Courts have examined whether individuals were exercising private law rights or public functions during the alleged abuse of power. Cases such as Keene v. British Columbia have clarified this requirement. In this instance, the court found that the Director of the Ministry of Children and Family Development was exercising private law rights arising from their custody and guardianship rights when placing a child with a caregiver, and therefore was not considered a public officer.

  • Considering Discretionary Decisions in Abuse of Power

Courts are often hesitant to apply the tort of abuse of power in cases involving discretionary decisions. In L. (A.) v. Ontario (Minister of Community and Social Services), the Ontario Court of Appeal ruled that a broad budgetary decision that harmed the plaintiff but did not target them specifically was not an abuse of public office.

Similarly, the abuse of public office claim failed in Vernon (City) v. Sengotta because the city council’s order to remove a fire-damaged building was motivated by community goals, not to injure the plaintiff. The court emphasized the council’s expertise in assessing community needs and requirements.

The risk of applying the tort of abuse of power too broadly is that it could potentially encroach upon political decision-making and involve judging public officials’ personal thoughts, as noted in the B.C. case of Powder Mountain Resorts Ltd. v. British Columbia.

In Meekis v. Ontario, the Ontario Court of Appeal ruled that discretion could not be discriminatory. The court acknowledged that while the plaintiffs’ claims were novel and might be difficult to prove at trial, they were given a narrow window of opportunity to demonstrate that the respondent coroners acted or failed to act with the improper purpose of discriminating against them when providing coronial services. Misfeasance in public office requires an unlawful act.

  • Comparing Actual Knowledge and Reckless Indifference to Lawfulness

Canadian courts have inconsistently applied the test for actual knowledge or reckless indifference to lawfulness in the tort of abuse of public office. Some cases, such as McNutt v. Canada (Attorney General), Rowe v. De Salaberry (Rural Municipality), and Volpe v. Wong-Tam, support the need for actual knowledge. These courts found that reckless indifference or inattention to the plaintiff’s interests did not constitute awareness of the act’s unlawfulness.

On the other hand, cases like O’Dwyer v. Ontario (Racing Commission) and Canada v. Apotex Inc. used the “reckless indifference” standard to determine liability for abuse of public office. These cases established misfeasance in public office through reckless indifference.

In conclusion, there is no clear consensus among Canadian courts on whether actual knowledge or reckless indifference to lawfulness should be the standard for determining liability in abuse of public office cases.

  • Utilizing Honest Mistake as a Defence

A public actor’s “honest but mistaken belief” can exonerate them from liability in abuse of public office cases. However, the interpretations of “honest mistake” and “reckless indifference” among courts remain unclear.

In CADNET Productions Inc. v. Canada, the Federal Court of Appeal dismissed the plaintiff’s appeal, ruling that HRDC’s third-party demands were a one-time training issue and an honest but mistaken belief. In Canus Fisheries Ltd. v. Canada, the court found that the defendant’s employee’s incorrect methodology did not constitute misfeasance in public office.

Differentiating “Honest Mistake” from “Reckless Indifference”

Until the Supreme Court of Canada provides further guidance, the distinction between “honest mistake” and “reckless indifference” will remain subject to differing interpretations by lower courts. This inconsistency in application can lead to uncertainty for public officers and claimants alike.

Malice and Intent Components

A crucial component of the tort of abuse of power is the element of malice or improper purpose. The plaintiff must demonstrate that the public officer intentionally committed an unlawful act, knowing that it would likely harm the plaintiff or being recklessly indifferent to that potential harm.

In Roncarelli v. Duplessis, the court found that the cancellation of the plaintiff’s liquor license was a vindictive act by the Premier, and the intention to harm was evident. Conversely, in Odhavji Estate v. Woodhouse, the court dismissed the claim, stating that although the police officers’ conduct was negligent, there was no evidence of malice or intention to harm the plaintiffs.

Restitution for Abuse of Power

When a claimant successfully proves the tort of abuse of public office, they may be awarded compensation for the harm suffered. Damages may include:

  1. Compensatory damages: These damages compensate the plaintiff for the actual loss or harm suffered as a result of the defendant’s actions.
  2. Punitive damages: These damages are awarded to punish the defendant for their wrongful conduct and to deter similar behaviour in the future.
  3. Aggravated damages: These damages may be awarded when the defendant’s actions were particularly offensive or humiliating to the plaintiff.

However, it is essential to note that damages in abuse of public office cases are not meant to be a windfall for the plaintiff. Instead, they aim to provide a fair and reasonable compensation for the harm suffered.

Conclusion

The tort of abuse of power (abuse of public office) is a complex area of Canadian law that deals with the misconduct of public officers. While the elements of the tort have been established, the application and interpretation of these elements continue to evolve through case law. The distinctions between “honest mistake” and “reckless indifference” and the standards of actual knowledge and recklessness remain ambiguous, awaiting further guidance from the Supreme Court of Canada.

As it stands, public officers must be cautious in exercising their discretionary powers, ensuring that their actions are lawful and do not intentionally or recklessly harm others. Claimants pursuing an abuse of power claim must be prepared to navigate the nuances of this tort and demonstrate the necessary elements to succeed.

Example: Granite Power Corp. v. Ontario

In this legal case involving Granite Power Corporation (“Granite”) and the government of Ontario, the Supreme Court of Canada dismissed Granite’s application for leave to appeal with costs on March 3, 2005. The case centred around Granite, a small private utility and the exclusive supplier of electricity to the Town of Gananoque since 1885. Granite had an agreement with the town guaranteeing its exclusivity until 2014. However, the government’s policy shift in 1997 to open the electricity market to competition threatened Granite’s monopoly. Despite several communications with government officials between 1997 and 2002, Granite received unclear responses. Finally, in 2002, the government granted Granite an exemption from the new policy, but Granite claimed it was insufficient and too late, alleging the government’s actions had already undermined its business and agreement with the town.

Granite sued the government, claiming negligence, wrongful expropriation, and misfeasance in public office. The government moved to strike out the claim, arguing it didn’t disclose a reasonable cause of action. Chadwick J. found that Granite’s pleading disclosed three reasonable causes of action, which the Divisional Court later affirmed. However, upon further appeal, it was decided that the claim of negligence should not proceed, as the Minister did not owe a duty of care specifically to Granite, but to the public as a whole. The claim for wrongful expropriation was also dismissed, as the government had neither deprived Granite of doing business nor appropriated its business for its own or public use. Nonetheless, the claim for misfeasance in a public office was allowed to continue as it was adequately pleaded, with allegations that the Minister and his staff pursued a course of conduct actuated by malice, duplicity, and bad faith, potentially designed to put Granite out of business before the expiry of its agreement. Consequently, the appeal was partially allowed, permitting the misfeasance claim to proceed while dismissing the negligence and wrongful expropriation claims.

Have you or your organization been affected by a decision or action of a public official? Do you believe there may have been an abuse of power or are you facing allegations of such conduct? Seek clarity and protect your rights.

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