A QUESTION OF BALANCE: LEGISLATIVE RESPONSES TO JUDICIAL EXPANSION OF MUNICIPAL LIABILITY THE SASKATCHEWAN EXPERIENCE

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1 SEPTEMBER 10, 2013 Page 1 of C.17 - CW INFO A QUESTION OF BALANCE: LEGISLATIVE RESPONSES TO JUDICIAL EXPANSION OF MUNICIPAL LIABILITY THE SASKATCHEWAN EXPERIENCE Neil Robertson, Q.C., Legal Counsel, Regina Police Service Regina, Saskatchewan Association of Ontario Municipalities Annual Conference Ottawa, Ontario 20 August 2013

2 SEPTEMBER 10, 2013 Page 2 of C.17 - CW INFO TABLE OF CONTENTS INTRODUCTION... 1 GOVERNMENT UNDER THE RULE OF LAW... 2 THE COURTS... 4 The Supreme Court s expansion of municipal liability... 4 Anns v. London Borough of Merton... 4 Barratt v. Corporation of the District of North Vancouver... 5 Kamloops v. Nielsen... 6 Laurentide Motels Ltd. v. Beauport (Ville)... 8 Rothfield v. Manolakos... 8 Just v. British Columbia (Minister of Highways)... 9 Tock v. St. John s Metropolitan Area Board... 9 The Supreme Court s expansion of police liability Odhavji Estate v. Wodehouse Hill v. Hamilton-Wentworth Regional Police Services Board Ward v. City of Vancouver Tort of Malicious Prosecution Nelles v. Ontario Miazga v. Kvello Estate Police Liability to Victims of Crime The post-millennium Climate for Municipal Liability Claims against Municipalities The trickle down effect of leaky condos Housen v. R.M of Shellbrook New v. City of Moose Jaw Municipal Insurance THE LEGISLATIVE RESPONSE IN SASKATCHEWAN Influences on the legislative process Saskatchewan legislative reforms affecting municipal liability The Class Actions Act The Contributory Negligence Act The Limitations Act Saskatchewan s Review of Municipal Liability Exposure Statutory protections in Saskatchewan s municipal statutes Building Inspection and Permit Approval Good Faith Immunity Duty of Repair Nuisance Road Access CONCLUSION... 51

3 SEPTEMBER 10, 2013 Page 3 of C.17 - CW INFO 1 INTRODUCTION The purpose of this paper is to review past changes in the legal landscape affecting municipal liability to provide a context for a discussion of legislative reforms to limit municipal liability. The Saskatchewan experience, in particular the Saskatchewan Legislature s enactment of certain protections for municipalities, is discussed in this context. Canadian municipalities have sought and, in some cases, received legislative protections to restore a balance that tipped in favour of claimants, largely as the result of judge-made law. Those court cases follow a North American trend described in the United States as the litigation explosion. Municipalities, as deep pockets defendants, are especially vulnerable to this increased liability exposure. One response in the USA was a tort reform movement, which has echoed in Canada. As in any response, there is a danger in going too far, as the pendulum swings back. In deciding where to go, it is always good to understand from where we have come. The paper begins with a brief discussion of the relationship between the three branches of government and the different influences on legislative versus judicial decision-making. The paper then reviews and describes in some detail the major decisions of the Supreme Court of Canada that expanded municipal liability in the 1980s and police liability in the 2000s. The resulting changed climate for municipal liability is illustrated with three cases that helped make the case for legislative reform to re-balance the scales of justice. Those Saskatchewan legislative reforms relevant to municipal and police liability which were enacted over the past decade are then described.

4 SEPTEMBER 10, 2013 Page 4 of C.17 - CW INFO 2 GOVERNMENT UNDER THE RULE OF LAW The Constitution Act, 1982 provides in the opening words of Part I, the Canadian Charter of Rights and Freedoms, that Canada is founded upon principles that recognize the supremacy of God and the rule of law. As Canadians, we are blessed to enjoy these foundational principles as more than just words. Our system of government establishes branches of government Executive, Legislative and Judicial, to provide effective governance and to ensure that the interests of all citizens are served and protected. This system is replicated on a national, provincial and municipal level. Essentially, Parliament, the Legislatures and municipal Councils make the laws. The Executive administers government under the laws as made by the Legislature and applied by the Courts. The Courts interpret and apply the law to resolve disputes, adjudicate claims, and sanction offenders, while ensuring that the rights of the individual are protected. There is, of necessity, a tension between these branches of government, since, while each has a separate and distinct role to play, they also provide a check on the other. Certainly, this tension can be evident in claims by citizens against their governments. Historically, the maxim that The King can do no wrong (Rex non potest peccare) meant that the Crown was above the law and had sovereign immunity from lawsuit. But as absolute monarchies gave way to more democratic times, Parliament passed laws to govern the Executive s exercise of power and the Courts assumed jurisdiction over claims against the Executive. While the Sovereign remains personally immune, those in the Executive branch of government who act on her behalf may be held liable, since it is presumed that the Sovereign would never countenance unlawful or improper exercise of her powers to the detriment of her people. 1 Just as persons appointed to many public offices swear an oath to faithfully serve our Queen, Queen Elizabeth II, in her Coronation Oath on 2 June 1953, swore to govern the Peoples according to their respective laws and customs and to cause Law and Justice, in Mercy, to be executed in all your judgements. These reciprocal duties between Sovereign and subject provide a constitutional foundation for our individual rights and a safeguard against abuse of public power. 1 CBC et al. v. R, 1980 CanLII 68 (ON CA), at paragraph 2

5 SEPTEMBER 10, 2013 Page 5 of C.17 - CW INFO 3 Legislatures make laws, but do not apply them. Judges do not make laws, but they do interpret and apply them. The line between the making and application of law is not always distinct, since in recognizing common law and interpreting statute law, the courts may be seen to be making new law. In performing these roles, both legislators and judges inevitably respond to prevailing public sentiments and evolving social values. In doing so, they ensure that the law continues to command public support, on which it depends. Laws therefore change with the times. The judicial process of decision-making has been likened to taking a still photograph, providing a focused and framed, but restricted, view, while the legislative process is more like a motion picture, taking in a broader view, but less capable of careful examination. The judicial process is bound by strict adherence to the principle of judicial independence and rules of evidence that ensure only reliable and relevant evidence introduced by the parties is considered by the judge who determines the facts and applies the law to reach a decision, for which reasons are given. The legislature process is much more open, in which anyone may try to influence the many legislators who collectively determine whether to create a law. While Ministers provide reasons in their second reading speech to Parliament or the Legislature, much may be left unsaid. At times, the Legislatures and the Judiciary may seem to reflect different views and values. This may reflect the institutional orientation of the two bodies and their members. Legislators should seek to promote the public interest by making laws which serve the collective good of the community. While not indifferent to private interests, the public interest should be the paramount consideration. Judges, on the other hand, are usually concerned with individuals involved in legal actions, whether as plaintiff and defendants in civil proceedings or as accused in prosecutions brought by public authorities. In either case, the judges seek to do justice by protecting the rights of the parties and providing procedural justice to ensure a fair trial. Further, most judges are appointed from private practice, where they have spent years representing individual clients, sometimes in disputes with the government. There may, in consequences, be both an institutional and personal disposition towards the individual, rather than the collective.

6 SEPTEMBER 10, 2013 Page 6 of C.17 - CW INFO 4 THE COURTS The Supreme Court s expansion of municipal liability The Supreme Court of Canada was entering an activist phase in the 1980s, coinciding with the advent of the Canadian Charter of Rights of Freedoms, as part of the Constitution Act, This activism was evident in many areas of law, including a significant expansion of municipal liability on a number of fronts over that decade. While one cannot put a precise date to the changing and increasingly adverse liability climate for municipalities, the 1977 decision of the House of Lords in Anns v. London Borough of Merton 2 may be seen as the genesis. The analysis from that judgment was adopted by the Supreme Court of Canada in its 1980 judgment in Barratt v. Corporation of the District of North Vancouver 3 and then given full expression in its 1984 judgment in Kamloops v. Nielsen. 4 The decade ended on a bad note for municipalities with four more Supreme Court judgments in 1989 expanding liability in the areas of building regulation, highway maintenance, sewer utilities and fire services. These judgments, in the space of five years, transformed the legal landscape for municipalities as defendants. All of these judgments are described below. Anns v. London Borough of Merton In Anns v. London Borough of Merton, the House of Lords ruled on a preliminary question of law as to whether the municipality, as a building authority, could be liable to compensate owners of buildings with defective construction on the basis of a failure to properly inspect during construction. The House of Lords answered in the affirmative, stating a two part test to determine liability: first, whether between the alleged wrongdoer and person who suffered damage there was a sufficient relationship of proximity or neighbourhood, such that, in the contemplation of the former, carelessness on his part may Anns v. London Borough of Merton, [1977] 2 All E.R. 492, [1977] 2 W.L.R. 1024, [1978] A.C. 728 Barratt v. Corporation of the District of North Vancouver, [1980] 2 S.C.R. 418, 114 D.L.R. (3 d) 577, 13 M.P.L.R. 116 Kamloops v. Nielsen, [1984] 2 S.C.R. 2, (1984) 10 D.L.R. (4 th ) 641, 26 M.P.L.R. 81

7 SEPTEMBER 10, 2013 Page 7 of C.17 - CW INFO 5 be likely to cause damage to the latter ; and second, whether there are any policy considerations which ought to negative, or to reduce or limit the scope of the class of persons to whom it is owed or the damages to which a breach of it may give rise. 5 This decision was initially followed by courts in other common law jurisdictions, including Canada, but interestingly enough was reversed in 1991 by the House of Lords in Murphy v. Brentwood District Council, which held its earlier decision to be wrongly decided. 6 In pulling back, that Court recognized that one main result of its imposition of greater legal duties on municipalities was to shift the burden of compensating those injured in accidents from insurers to public authorities. Most of the ensuing lawsuits were actually brought by insurers seeking to recover monies paid by the insurer to its insured clients. Courts in other common law jurisdictions have also drawn back from the Anns decision, but not Canada. Barratt v. Corporation of the District of North Vancouver The Supreme Court of Canada, in its 1980 judgment in Barratt v. Corporation of the District of North Vancouver, 7 applied the Anns analysis in finding a municipality not liable to a bicyclist who was injured when potholes caused the bicycle to crash. The Court found the municipality was granted the power to maintain the roads, but was under no duty to do so. The Court also found that the municipality had acted within the bounds of its discretion in determining a system and policy of inspection. While the municipality prevailed in this case, it signalled the highest court s approval of the Anns analysis to determine liability for public authorities Anns v. London, supra at [1978] A.C and at 754 Murphy v. Brentwood District Council, [1990] 2 All E.R. 908, [1991] 1 A.C. 398 see also: Department of the Environment v. Thomas Bates & Sons Ltd. [1990] 3 W.L.R. 457, [1990] 2 All E.R. 943 (H.L) and: Governors of the Peabody Donation Fund v. Sir Lindsay Parkinson & Co. [1984] 3 All E.R. 529 (H.L.) Barratt v. Corporation of the District of North Vancouver, [1980] 2 S.C.R. 418, 114 D.L.R. (3 d) 577, 13 M.P.L.R. 116

8 SEPTEMBER 10, 2013 Page 8 of C.17 - CW INFO 6 Kamloops v. Nielsen The Supreme Court s 1984 judgment in Kamloops v. Nielsen 8 is the landmark case for judicial expansion of municipal liability in Canada. The facts of the case may be proof of the adage that hard cases make bad law. The son of a Kamloop s City councillor built a house on a hill for his parents. The building plans approved by the city required that the footings be taken down to bedrock to ensure its structural stability. The builder placed the footings without notice to the city building inspector. Since the inspector could not determine if the footings were properly laid, he issued a stop work order. That order was lifted when the builder submitted a new set of plans prepared by professional engineers. When the builder later failed to cooperate with those engineers, they disclaimed responsibility and notified the city, which issued another stop work order. The builder went ahead and completed the home, which he then sold to his parents. When the issue came up at City Council, the builder s father and now owner told his Council colleagues that this was to be his retirement home, he would deal with any problems which arose, and he should not continue to be subjected to such harassment from city building officials. Around the same time, a municipal strike ensued and there was no further enforcement of the stop work order. The house was sold to a new owner within two years of its initial occupancy. Within a year of the sale, the new owner discovered foundation problems. The new owner sued both the former owner/councillor, who had sold the property, and the city, for its failure to enforce the stop work order. The trial court found both the former owner and the city liable, apportioning liability 75% to the former owner and 25% to the city. The case was appealed to the Supreme Court of Canada, which upheld both the finding of liability and apportionment. The Court expressly applied Anns, holding that, although the city had no duty to enforce building standards, it made a policy decision to exercise its discretionary statutory power to do so and thereby created a duty of care to those affected by its exercise of that duty. While bylaw enforcement occurred at an operational level, the Court said the city could have escaped liability by making a bona fide policy decision not to enforce. In the circumstances of this case, however, the Court drew an inference that the city dropped the matter because one of its councillors was involved. 8 Kamloops v. Nielsen, [1984] 2 S.C.R. 2, (1984) 10 D.L.R. (4 th ) 641, 26 M.P.L.R. 81

9 SEPTEMBER 10, 2013 Page 9 of C.17 - CW INFO 7 The Supreme Court in its Kamloops judgment, also dealt with the limitations argument put forward by the municipality. The City maintained the claim was out of time, since the legal action was not commenced within the municipal limitation period, which, the City argued, began to run from when the damage occurred under the original ownership by the City Councillor. The Supreme Court again broke new ground, this time declining to follow the House of Lords, and instead created a discoverability requirement before the limitation period could commence. Speaking for the majority, Madam Justice Wilson stated that: This Court is in the happy position of being free to adopt or reject Pirelli. I would reject it. This is not to say that Sparham-Souter presents no problem. As Lord Fraser pointed out in Pirelli the postponement of the accrual of the cause of action until the date of discoverability may involve the courts in the investigation of facts many years after their occurrence. Dennis v. Charnwood Borough Council, [1982] 3 All E.R. 486, is a classic illustration of this. It seems to me, however, to be much the lesser of two evils. Applying Sparham-Souter then to s. 738(2) of the Municipal Act which bars an action on the expiration of one year from the date on which the cause of action arose, the plaintiff's cause of action would not have arisen until November 1978 when his plumber, called to fix a burst pipe, drew the damage to his attention. 9 This discoverability principle was a radical change in law which has created exposure to so-called legacy claims. This has especially affected public bodies, since most have a continuous existence, unlike individuals, who age and die, or private corporations, which are a legal construct intended to insulate the owners from personal liability. Some private businesses routinely re-incorporate or transfer assets outside the corporation to further limit their exposure to lawsuits for old claims. Although the Supreme Court suggested in its Kamloops judgment that the decision in Anns contains its own built-in barriers against the flood of litigation, municipalities were alarmed by this judgment. 10 The British Columbia Legislature enacted legislation to protect municipalities against liability arising from the regulation and enforcement of building standards. 11 As later cases revealed, however, this protection was not sufficient and the floodgates really did open Kamloops v. Nielsen, [1984] 2 S.C.R. 2, at 40 Ibid, at 25 The Municipal Act of British Columbia R.S.B.C. 1979, c. 290; S.B.C. 1987, c. 52, s. 7 (adding s )

10 SEPTEMBER 10, 2013 Page 10 of C.17 - CW INFO Laurentide Motels Ltd. v. Beauport (Ville) 8 The Supreme Court of Canada, in its 1989 judgment in Laurentide Motels Ltd. v. Beauport (Ville), upheld a finding of liability against the municipality for property damage in failing to put out a fire started by a careless hotel guest which destroyed the hotel. 12 The damage award was rather unevenly apportioned between the hotel guest ($54,123.48) and the municipality ($2,542,732.83). The fire brigade had responded promptly to the alarm, but the nearest hydrants were not functioning properly and others were too far away to be of assistance before the fire spread. Although the Supreme Court accepted that municipality was under no duty to provide fire protection services, having done so, the municipality then owed a duty of care to those to whom it extended service and was liable in negligence for not inspecting and maintaining its fire hydrants. Rothfield v. Manolakos The Supreme Court of Canada, in its 1989 judgment in Rothfield v. Manolakos, extended the duty of care arising from building permit approval and inspection to owner-builders themselves, in a case where a retaining wall constructed on a hillside collapsed onto neighbouring property. 13 When the neighbour sued the owner of the wall, that owner sued and added as third parties both its building contractor and the city. The courts found the building contractor and the city liable to both the neighbouring property owner and the owner of the retaining wall. Liability to the neighbours was apportioned 70% to the city and 30% to the owner. The Supreme Court reduced the apportionment of liability to the owner of the wall, which had been set at 60% to the city and 40% to the contractor, by finding the owner to be contributorily negligent to the extent of 30%. The significant development here was the court s finding that the city, as a building authority, had a duty of care to protect people who happen to contract with poor builders. A whole series of cases has followed where municipalities take on a duty to protect people from themselves and become the effective insurer of building developments Laurentide Motels Ltd. v. Beauport (Ville), [1989] 1 S.C. R. 705, 45 M.P.L.R. 1 Rothfield v. Manolakos, [1989] 2 S.C.R. 1259, 63 D.L.R. (4 th ) 449, 46 M.P.L.R. 217

11 SEPTEMBER 10, 2013 Page 11 of C.17 - CW INFO 9 Just v. British Columbia (Minister of Highways) The Supreme Court of Canada, in its 1989 judgment in Just v. British Columbia (Minister of Highways), further expanded the scope of municipal decisions subject to liability for damages in negligence. 14 In this case, a rock fell from the slope above a major highway, seriously injuring a passing motorist and killing his daughter. The Crown Proceedings Act provided that the Crown, in its capacity as a highway authority, was not subject to any greater liability than that imposed on a municipal corporation acting in that capacity. The majority of the Court did not follow its earlier decision in Barratt, discussed above, but instead found the Province liable on the basis of a private duty of care owed to users of its highways, even though the statute only imposed a power, and not a duty, to maintain these highways. Justice Sopinka, in dissent, was sharply critical of this extension of the duty of care on the part of the majority and its distinction between policy and operational decisions, with immunity only applying to pure policy decisions. Tock v. St. John s Metropolitan Area Board The Supreme Court of Canada, in its 1989 judgment in Tock v. St. John s Metropolitan Area Board, changed the law of nuisance in finding the municipal utility liable in nuisance for flooding of the plaintiff s basement as a result of a blocked storm sewer. 15 What the decision stood for was difficult to determine, however, since the six judges who decided the appeal split in three separate judgments with no clear majority. But all agreed that the public utility was liable in nuisance. Two of the judgments, representing five of the six judges, appeared to reject the traditional common law defence of statutory authority, which barred claims in nuisance for works which were authorized by statute. This defence originated in the Industrial Revolution with a judicial recognition that members of the community, who all benefit from these publicly sanctioned developments, such as the construction and operation of railroads, must also accept some of the burdens that accompany their construction and operation. The rationale was that Parliament intended that all members of the community should share in both the gain and the pain from these statutorily authorized undertakings. If everyone adversely Just v. British Columbia (Minister of Highways), [1989] 2 S.C.R. 1288, 64 D.L.R. (4 th ) 689 Tock v. St. John s Metropolitan Area Board, [1989] 2 S.C.R. 1181, 64 D.L.R. (4 th ) 620, 47 M.P.L.R. 113

12 SEPTEMBER 10, 2013 Page 12 of C.17 - CW INFO 10 affected could claim compensation from the noise and smoke of passing trains, the railway would not be financially viable and the economic progress of the nation would be stymied. The three judgments are interesting in their different rationales for finding the municipality liable for this common occurrence. Practically, whichever view prevailed, the traditional defence of statutory authority was gone. Justice La Forest, speaking for himself and Chief Justice Dickson, found that the traditional rationale was outdated and unreasonable and proposed that the law of nuisance be restated in functional terms. While accepting that the Legislatures could insulate public utilities from claims in nuisance, the courts would require express language to do so. In the absence of such clear legislated protection, persons who suffered injury at the hands of a statutory authority should have their claims dealt with in the same manner as claims in nuisance between private individuals. Justice La Forest went on to suggest that the costs of compensation could be factored into the cost of operation of the public utility and fairly spread amongst the consumers who all benefited from the public utility. Justice Wilson, speaking for herself and two other judges, stated at the outset of her judgment their reservations about the approach taken by Justice La Forest, in particular disagreeing with any move to abolish the defence of statutory authority for policy reasons and treat municipalities exercising statutory authority in the same way as private individuals. Such a major departure from the current state of the law would, it seems to me, require the intervention of the legislature. Justice Wilson went on to caution against replacing the existing law in this area with a general test of whether it was reasonable or unreasonable in the circumstances of the case to award compensation. This test may, because of the high degree of judicial subjectivity involved in its application, make life easier for judges but, in my respectful view, it will do nothing to assist public bodies to make a realistic assessment of their exposure in carrying out their statutory mandate. It is altogether too uncertain Justice Wilson preferred to find liability in a restricted application of the inevitable consequences doctrine which would only provide protection where the statute ordered the thing to be done or authorized it to be done in a particular manner or location. Since, in this case, the municipality was not compelled by statute to construct a sewer system nor authorized to do so in a particular manner and place, it could not claim the protection of the doctrine.

13 SEPTEMBER 10, 2013 Page 13 of C.17 - CW INFO 11 Finally, Justice Sopinka, writing for himself alone, agreed with Justice Wilson in rejecting Justice La Forest s approach, but also rejected her approach as flawed, observing that her approach would have the same consequences for the defence of statutory authority. [since] Modern legislation authorizing the provision of the type of works which frequently give rise to nuisances is almost invariably permissive. This would expose public authorities to the same liability for nuisance as private enterprise. While this might assist them in estimating their exposure, that exposure would open the floodgates to the same effect as the approach proposed by La Forest, J. 16 Justice Sopinka went on to reaffirm the law as stated in 1930 by Viscount Dunedin of the English Court of Appeal, 17 rejecting any distinction between mandatory and permissive legislation authorizing public works. If the Legislature authorized the public work or utility, then it must be taken to have authorized interference with private rights. If no compensation provision is included with the statute, all redress is barred. 18 But Justice Sopinka went on to state that The Courts strain against a conclusion that private rights are intended to be sacrificed for the common good. Justice Sopinka then stated the defence of statutory authority as requiring proof by the statutory authority that it was practically impossibile to avoid the nuisance. The defendant must negative that there are alternative methods of carrying out the work. The mere fact that one is considerably less expensive will not avail. If only one method is practically feasible, it must be established that it was practically impossible to avoid the nuisance. It is insufficient for the defendant to negative negligence. The standard is a higher one. While the defence gives rise to some factual difficulties, in which of the allocation of the burden of proof they will be resolved against the defendant. 19 While it was unclear what the Tock decision actually stood for, it did open the floodgates to claims in nuisance as the lower courts grappled with its meaning. Some provinces responded by amending legislation to restore the bar to such nuisance claims. Ten years later, the Supreme Court reconsidered Tock in Ryan v. Victoria (City). 20 Mr. Ryan was injured when he was thrown from his motorcycle after the front tire became stuck in the flangeway Tock v. St. John s Metropolitan Area Board, [1989] 2 S.C.R. 1181, at 1224 City of Manchester v. Farnworth, [1930] A.C. 171, at 183 Tock v. St. John s, supra, at 1225 Ibid, at 1226 Ryan v. Victoria (City), [1999] 1 S.C. R. 201

14 SEPTEMBER 10, 2013 Page 14 of C.17 - CW INFO 12 gap of a rail track which ran down the centre of a street in Victoria, British Columbia. The trial judge found both the railway and the city jointly and severally liable in negligence, for failure to warn of the hazard, and the railway also liable in nuisance. The British Columbia Court of Appeal allowed the appeal of the railway against liability in nuisance, finding that the defence of statutory authority applied, since the width of the flangeway was within the range allowed by federal regulations under the Railways Safety Act. Mr. Ryan appealed to the Supreme Court of Canada, which, in an unanimous judgment, restored the decision of the trial judge. In doing so, the Supreme Court reconsidered and rejected two of the three Tock judgments. The Supreme Court endorsed the judgment of Justice Sopinka, who had spoken for himself alone in Tock in affirming the continued existence of a defence of statutory authority, but requiring proof of practical impossibility to negate a finding of nuisance. 21 As the Supreme Court accurately observed in Ryan, Statutory authority provides, at best, a narrow defence to nuisance. 22 The Supreme Court held that the defence of statutory authority was not available in this case because those standards left the railway with some discretion over the width of the flangeway. 59 The Store Street tracks created an unreasonable interference with the public s use and enjoyment of Store Street and therefore constituted a public nuisance. The Court of Appeal erred in finding that the Railways were entitled to the defence of statutory authority. The appropriate test is the traditional rule restated by Sopinka J. in Tock, supra. It was not practically impossible for the Railways to avoid the nuisance which arose from the flangeways on Store Street. Because the Railways had discretion with regard to the width of the flangeways, their failure to minimize the hazard was not an inevitable consequence of exercising regulatory authority. (per: Major, J. for the Court) 23 The Supreme Court in Ryan also expressly affirmed the two-step process for determining liability in negligence under the Anns/Kamloops analysis. While the law of nuisance was clarified, by this time the pattern seemed well established whereby courts were disposed to finding liability based on nuisance in similar cases. Some municipalities simply paid the inevitable claims, passing on these costs of operation, as Justice La Forest had suggested, through higher taxes and utility rates Ibid., supra, at 238 (paragraph 55) Ibid. at 237 (paragraph 53) Ibid, at 240 (paragraph 59)

15 SEPTEMBER 10, 2013 Page 15 of C.17 - CW INFO 13 The Supreme Court s expansion of police liability Most municipalities are responsible for the provision of policing services. Although established as separate entities, municipalities are usually responsible for funding policing, so ultimately are affected by increased costs of defending lawsuits and paying settlements and court awards of damages. As will be described below, Canada s police have not been immune from the trend of expanded liability. But that expansion came later, in the 2000s. Historically, police were liable to civil claims for assault, false arrest, and false imprisonment. Highprofile cases of reversed convictions and public concerns over abuse of police powers likely increased judicial sympathy for claims against police. The Supreme Court of Canada concluded that the traditional civil remedies were insufficient Hill v. Hamilton-Wentworth Police Services Board, [2007] 3 S.C.R. 129, 2007 SCC 41, at paragraph 35 [35] On this point, I note that the existing remedies for wrongful prosecution and conviction are incomplete and may leave a victim of negligent police investigation without legal recourse. The torts of false arrest, false imprisonment and malicious prosecution do not provide an adequate remedy for negligent acts. Government compensation schemes possess their own limits, both in terms of eligibility and amount of compensation. As the Court of Appeal pointed out, an important category of police conduct with the potential to seriously affect the lives of suspects will go unremedied if a duty of care is not recognized. This category includes very poor performance of important police duties and other non-malicious category of police misconduct (paras ). To deny a remedy in tort is, quite literally, to deny justice. This supports recognition of the tort of negligent police investigation, in order to complete the arsenal of already existing common law and statutory remedies. [36] The personal interest of the suspect in the conduct of the investigation is enhanced by a public interest. Recognizing an action for negligent police investigation may assist in responding to failures of the justice system, such as wrongful convictions or institutional racism. The unfortunate reality is that negligent policing has now been recognized as a significant contributing factor to wrongful convictions in Canada. While the vast majority of police officers perform their duties carefully and reasonably, the record shows that wrongful convictions traceable to faulty police investigations occur. Even one wrongful conviction is too many, and Canada has had more than one. (per: McLachlin, C. J., for the majority) For examples of Canadian public inquiries into the murder convictions of innocent men, see: MacCallum, Justice Edward P. Report of the Commission of Inquiry into the Wrongful Conviction of David Milgaard (Saskatchewan, 2008) Cory, Hon. Peter Report of The Inquiry Regarding Thomas Sophonow (Manitoba, 2001) Kaufmann, Hon. Fred Report of The Commission on Proceedings involving Guy Paul Morin (Ontario, 1997) Report of the Royal Commission on the Donald Marshall Jr. Prosecution (Nova Scotia, December, 1989)

16 SEPTEMBER 10, 2013 Page 16 of C.17 - CW INFO 14 Although police duties are originally and primarily public in nature, a private duty of care can arise, based on the Cooper-Anns test. The Cooper-Anns test is derived from the House of Lords decision in Anns v. Merton London Borough Council, [1978] AC 728, as refined by the Supreme Court of Canada in Cooper v. Hobart, 2001 SCC 79 (CanLII), [2001] 3 S.C.R Where a plaintiff can show a sufficiently close causal connection between the police performance of the duty and the resulting harm, a private duty of care may be found. Over the past decade, the Supreme Court of Canada expanded the scope of the private duty owed by police to certain classes of persons through the torts, or civil wrongs, of misfeasance in public office, negligent investigation and negligent supervision, and Charter breach. 25 If police officers breach the standard of care, liability may follow for resulting injury. At the same time, the Supreme Court also drew back from invitations to expand police liability in other areas, in particular the tort of malicious prosecution and in extending the duty of care to victims. These cases are discussed below. Odhavji Estate v. Wodehouse In its 2003 judgment in Odhavji Estate v. Wodehouse, the Supreme Court considered the torts of misfeasance in public office and negligent supervision, in the context of a claim from the family of a criminal shot dead while fleeing from police. Members of the Metropolitan Toronto Police Service responded to a bank robbery on 26 September As the suspected bank robbers fled from their vehicle, one of them Manish Odhavji was shot dead by police. As required by Ontario law, the Ontario Special Investigations Unit (SIU) was called in to investigate of the fatal shooting. Although police officers are required by s. 113(9) of the Ontario Police Services Act to co-operate fully with the members of the unit in the conduct of investigations, the police officers involved failed to do so. The SIU cleared the officers of any wrongdoing in the shooting, but commented that the investigation had 25 Odhavji Estate v. Woodhouse 2003 SCC 69 ; [2003] 3 S.C.R recognizing tort of misfeasance in public office, where police officers involved in fatal shooting by police failed to cooperate with statutorily mandated investigation of that death, and allowing claim of negligent supervision to proceed against chief of police on alleged failure to compel his subordinates to cooperate. Hill v. Hamilton Wentworth [2007] 3 S.C.R. 129, 2007 SCC 41 - recognizing tort of negligent investigation, where police officers arrested an innocent man who was misidentified by witnesses and subsequently convicted and jailed for bank robberies. Vancouver (City) v. Ward, 2010 SCC 27, [2010] 2 S.C.R upheld award of damages as of s. 24(1) Charter remedy for s. 7 Charter breaches by police, in case of mistaken arrest of lawyer suspected of intent to throw pie at visiting Prime Minister

17 SEPTEMBER 10, 2013 Page 17 of C.17 - CW INFO 15 been hampered by the failure of members to provide specific details of the events leading to the shooting. The actions of the police officers in this case can likely only be understood with knowledge of the fractious relationship which developed over the past two decades between elements within the Toronto Police and its Police Chiefs, Police Board and the public. Reacting to public criticism, some of which will inevitably be unfair, some police officers reacted in classic defensive-aggressive mode. The Special Investigation Unit, established to counter public distrust over police investigating police, became a particular target of opposition from the Toronto police union. Following a trend which began in Los Angeles, spread across the U.S.A., and crossed into Canada, police unions increasingly used their power not just to obtain favourable working conditions through collective bargaining, but also to exert political influence in elections and lobbying of those entrusted to ensure civilian accountability over police. Such conflicts undermine public respect for police and endanger the trust in police as members of the public whose full-time duty is the protection of the public. These events were the subject of media attention and editorial comment in the years immediately preceding this judgment. 26 The estate and bereaved family sued not only the police officers involved in the shooting, but also the Chief of Police, the Metropolitan Toronto Police Services Board, and the Province through its Solicitor- General, alleging misfeasance in public office against the police officers and the Chief and negligence, in failing to properly supervise the officers, against the Chief, Board and the Province. The lawsuit alleged a lack of thorough investigation into the shooting incident had caused the family of the deceased to suffer mental distress, anger, depression and anxiety. Applications to strike the claim were made by defendants on various grounds, including that the Chief, Board and Solicitor-General of Ontario could not be liable for the actions of individual police officers. Justice Day of the Ontario Supreme Court held that the action for misfeasance in public office should be struck as against the Chief of Police and that the action in negligence should be struck as against the Board, leaving the other actions to continue. 26 Whatever happened to serve and protect Globe and Mail editorial, 30 October 2000, at A16 Can Canada trust its cops? by James Harding, Globe and Mail, 18 January 2000, at A15 Toronto Police oppose watchdog The Leader-Post, Regina, 13 August 1998, at A6 Toronto police take on their chief The Globe and Mail, 9 May 1998, front page article and A6 A law unto themselves Globe and Mail editorial, 31 January 1995

18 SEPTEMBER 10, 2013 Page 18 of C.17 - CW INFO 16 The Ontario Court of Appeal split. Justice Borins, for the majority, held that the action in misfeasance should be struck altogether and that the action in negligence should be struck against the Board and Province, leaving only the action in negligence to continue as against the Chief. Justice Feldman, in dissent, would have allowed all of the actions to continue to trial. The Supreme Court, in a unanimous judgment written by Justice Iacobucci, held that the actions against the police officers and the Chief of Police could continue under both misfeasance in public office and negligence, while the actions against the Board and Province should be struck entirely. In doing so, the Supreme Court examined in detail what constitutes the tort of misfeasance in public office. Referring to case law from Canada and common law jurisdictions, the Supreme Court noted the widespread consensus in other common law jurisdictions that there is a broad range of misconduct that can found an action for misfeasance in a public office. The Court went on to cite leading decisions from New Zealand, Australia and Britain in support of the proposition that the tort of misfeasance is not limited to the unlawful exercise of a statutory or prerogative power actually held. 27 The Supreme Court explained the purpose of the tort as ensuring that public officers act in the public interest: the underlying purpose of the tort is to protect each citizen s reasonable expectation that a public officer will not intentionally injure a member of the public through deliberate and unlawful conduct in the exercise of public functions. 28 The Supreme Court adopted the traditional two-category approach to the tort: Category A involves conduct that is specifically intended to injure a person or class of 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. 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 Ibid. at 280 (paragraph 21) Northern Territory of Australia v. Mengel (1995) 129 A.L.R. 1 (H.C.) Garrett v. Attorney-General [1997] 2 N.Z.L.R. 332 Three Rivers District Council v. Bank of England (No. 3) [2000] 2 W.L.R (H.L.) Ibid. at 285 (paragraph 30)

19 SEPTEMBER 10, 2013 Page 19 of C.17 - CW INFO 17 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 it 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 elements 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 a deliberate disregard of official duty coupled with knowledge that the misconduct is likely to injure the plaintiff. Insofar as the nature of the misconduct is concerned, the essential question to be determined is not whether the officer has unlawfully exercised a power actually possessed, but whether the alleged misconduct is deliberate and unlawful. 29 The Court went on to emphasize actions that will not engage the tort, including where a public officer inadvertently or negligently fails adequately to discharge the obligations of his or her office, where budgetary constraints prevent the discharge of such obligations, or where the officer s statutory obligations conflict with a constitutional right, such as the right against self-incrimination. Finally, the Court recognized that public officers must necessarily make decisions which will favour some people over others and the mere fact of harm cannot engage the tort. 30 The requirement that the defendant must have been aware that his or her conduct was unlawful reflects the well-established principle that misfeasance in public office requires an element of bad faith 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. 31 The Supreme Court concluded that the tort of misfeasance in public office is not limited to unlawful exercise of statutory or prerogative powers. It is an intentional tort distinguished by: Ibid, at (paragraphs 22 24) Ibid, at (paragraphs 26 28) Ibid, at (paragraph 28)

20 SEPTEMBER 10, 2013 Page 20 of C.17 - CW INFO 18 [1] deliberate, unlawful conduct in the exercise of public functions; [2] awareness that the conduct is unlawful and likely to injure the plaintiff. 32 Applying this analysis to the case before it, the Court held that failure of a police officer to perform a statutory duty can constitute misfeasance in a public office. The police officers were under a statutory duty to cooperate with the SIU investigation. The Chief of Police was under a statutory duty to ensure members under his command carried out their duties and to maintain discipline in the police service. On the facts pled, if accepted, there was therefore a basis for the tort. Noting that the plaintiff must also prove that the tortious conduct was the legal cause of his or her injuries, and that the injuries suffered are compensable in tort law, 33 the Court pointed out significant hurdles that these plaintiffs would have to overcome for their action to succeed at trial. The Court accepted that no individual has a right to a thorough, competent and credible criminal investigation, but observed that that this was not the basis for the plaintiff s claim. While the Court also accepted that grief and emotional distress are not compensable damages, compensation for psychiatric damages is available where the plaintiff suffers from a visible and provable illness or recognizable physical or psychopathological harm. The Court noted that while the courts have been cautious in protecting an individual s right to psychiatric well-being, compensation for damages of this kind is not foreign to tort law. Consequently, even if the plaintiffs could prove that they had suffered psychiatric damage, in the form of anxiety or depression, they would still have to prove both that it was caused by the alleged misconduct and that it was of sufficient magnitude to warrant compensation. 34 The Court also referred to those provisions of the Ontario Police Services Act noted above in support of its ruling that the action based on negligence could also continue: It would be inappropriate to strike the action for negligent supervision against the Chief on the basis that he did not owe the plaintiffs a duty of care. If the plaintiffs can establish that the complaint of harm is a reasonably foreseeable consequence of the Chief s failure to ensure that the defendant officers cooperated with the SIU, the Chief was under a private law duty of care to take reasonable care to prevent such misconduct Ibid, at 286 (paragraph 32) Ibid, at (paragraph 32) Ibid, at (paragraph 41) Ibid, at 299 (paragraph 61)

21 SEPTEMBER 10, 2013 Page 21 of C.17 - CW INFO 19 This decision is important in that it distinguished between the Chief, the Board and the Province, finding that the Chief of Police was directly responsible for the police officers and, in allegedly failing to ensure their cooperation, may be liable both for misfeasance in public office and negligent supervision. The Board and the Province, on the other hand, have an oversight role such that no duty of care can arise because of a lack of a direct relationship between the individual police officers and the Board or the Province. The Court accepted the tort of negligent supervision, which has been applied with vigour in the United States against police officials. It is a short step to the tort of negligent retention, where a chief of police will be held liable for failing to take action to get rid of officers who do harm if they had previously shown propensity for misconduct. This judgment seemed to indicate concern in the judiciary that police in Canada, once considered incorruptible, are susceptible to the same problems experienced in the United States. Courts appear increasingly prepared to hold not only individual police officers responsible for their misconduct, but also hold the chief of police legally responsible for the actions of subordinate officers, if the chief fails to take reasonable steps to maintain discipline within the police service. The Supreme Court explained the rationale for doing so as follows: Members of the public reasonably expect a Chief of Police to be mindful of the injuries that might arise as a consequence of police misconduct. Although the vast majority of police officers in our country exercise their powers responsibly, members of the force have a significant capacity to affect members of the public adversely through improper conduct in the exercise of police functions. It is only reasonable that members of the public vulnerable to the consequences of police misconduct would expect that a chief of police would take reasonable care to prevent, or at least to discourage, members of the force from injuring members of the public through improper conduct in the exercise of police functions. 36 Hill v. Hamilton-Wentworth Regional Police Services Board The Supreme Court of Canada issued its judgment on 4 October 2007 in Hill v. Hamilton-Wentworth Regional Police Services Board. 37 This was an appeal from the Ontario Court of Appeal which had Ibid, at 297 (at paragraph 57) Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41