July 11, 2024
Dolden Municipal Law Newsletter – July 2024
“Municipal Law Special”
This special edition of our newsletter focusses on municipal
practice, including case briefs and articles which will be of interest
for adjusters and insurers working in this area.
Running Out of Land to Build? Don’t Use Your Neighbours Backyard!
By Jordan Cutler, Dolden Toronto, and Emma Proulx Aggett, Dolden Toronto
The Ontario Superior Court recently delivered a lengthy decision,
Armstrong, et al. v Penny, et al, addressing the implications of a home which was built, in part, on neighboring land.
The decision stresses the importance of exercising due diligence in confirming unclear boundary lines and clarifies that municipalities may be found liable for certain basic errors such as failing to ensure that a house is built on the correct property.
Background
In 1998, Janet Penny and George Penny (the “Defendants”) hired Coachlamp Homes (“Coachlamp”) to custom build them a 3,045 square foot home and 1,216 square foot garage on their property in Cameron, Ontario.
On September 10, 1998, Coachlamp submitted an application for a building permit with the Township of Fenelon (the “Municipality,” now known as the City of Kawartha Lakes). The Municipality issued the building permit on September 14, 1998.
Owner and operator of Coachlamp at the time, Paul Pankurst, retained an Ontario land surveying company under the name of Coe, Fisher, Cameron (“CFC”) to determine a boundary line for construction. CFC visited the property on September 14, 1998, where they determined part of the South boundary. Mr. Pankurst attended the property later that day or the following day and found ribbons which he believed to indicate the North boundary. There is much dispute over what instructions were ultimately given to CFC.
Construction of the home was substantially completed in December, 1998. Unbeknownst to all parties at the time of construction, the Defendants home extended 10.74 m (35.263 ft) beyond the Northern boundary and onto the neighboring property (the “Plaintiffs’ Property”).
In 2002, Peter Armstrong and Shelley Martin (the “Plaintiffs”) purchased the Plaintiffs’ Property. The Plaintiffs did not obtain a building location survey prior to purchasing and did not know the exact boundaries of the lot. In 2003, the Plaintiffs acquired a smaller second parcel of land, which merged with the first parcel they had purchased in 2002.
Around the time of acquiring the second parcel, the Plaintiffs arranged for a survey of the southern line of their property, which revealed that part of the Defendants’ main home, and most of the Defendants’ garage, extended onto their property. The Defendants were informed of the encroachment around that same time.
The Defendants and Plaintiffs attempted negotiations for 5 years following the discovery of encroachment, ultimately with no success. On July 30, 2008, the Plaintiffs issued a Statement of Claim for $2 million in damages for trespass, nuisance and negligence, and an injunction for the Defendants to remove the encroaching part of their house and garage. The Defendants subsequently commenced a Third Party Claim against Coachlamp, CFC, the Municipality, and Jackett Construction (a company hired for excavation and septic system installation).
The Decision
The Court ordered that the Defendants’ home and garage may remain where they are. All rights, title, and interest to the encroached land would be transferred to the Defendants, following the completion of a survey for severance.
The Defendants were to compensate the Plaintiffs for the land retained in the amount of $9.10 per square foot, as well as to pay $1000 for general damages related to trespass, and all other associated costs related to the land transfer.
The Defendants were to be fully indemnified by the Third Parties as follows:
i. Coachlamp – 70%
ii. CFC – 15%
iii. Municipality – 15%
The Municipality was found liable for:
- negligently approving the relevant building permit application notwithstanding that it included inconsistencies was missing documents; and
- negligently performing building permit inspections (since it failed to identify that the structure was not being constructed with the appropriate setbacks).
Takeaway
This case underscores the importance for municipalities to ensure that:
- building permit applications are properly reviewed for accuracy and completeness; and
- buildings are constructed with appropriate setbacks and are validated by a qualified and competent professional to avoid potential liability.
While Justice Christie agreed that “municipalities are not insurers against all possible risks that may occur when a building permit is issued”, she explained that “ensuring that a structure is built on the correct property is one of the most basic required functions of the municipality.”
For further information or if you have any questions about the above article, please contact the authors: Jordan Cutler, Dolden Toronto, Email: jcutler@dolden.com, and Emma Proulx Aggett, Dolden Toronto, Email: eaggett@dolden.com.
Occupational Health and Insanity?
By Charles Painter, Dolden Toronto
While much has been written recently about the Supreme Court of Canada’s decision last year in R. v. Greater Sudbury (City), there does not appear to have been as many articles about how municipalities should respond to the effect which this decision has upon them.
To Recap: The Supreme Court of Canada has held that for the purposes of a prosecution under s.25(1)(c) for an alleged breach of the Occupational Health and Safety Act, R.S.O. 1990, c.O.1, as amended, (“the Act’) municipalities that have hired an independent contractor to perform work upon their premises are both an owner and an employer of the employees of the independent contractor/constructor. A lack of control over the independent contractor/constructor’s employees does not matter:
“The Ministry is not required to prove that the owner had control over the workplace or the workers there. It is clear from the text of the definition of employer that control is not an element that the Ministry must prove to establish that an accused is subject to the duties of an employer…”
So, apart from suddenly having to send trained Heath and Safety staff familiar with the Act’s requirements for employers to each and every independent contractor’s job site within the municipality to inspect and try to avoid prosecutions, what more can/should be done?
The following is a suggested list of actions. (Note: It is strongly recommended to seek qualified legal advice prior to any such actions being taken):
1) Municipalities should consider either directly or indirectly via an organization such as AMO (Association of Municipalities of Ontario), send letters to their MPP requesting the immediate amendment of the Act, to expressly include the “control” element which the Supreme Court of Canada found lacking/deliberately omitted. The only way to completely remove the problems created by the Supreme Court of Canada decision is for the Province of Ontario to take action and amend the Act in a way that restores the former understanding of the legislation. They must make control the key aspect/trigger for responsibility and any liability as an “employer”. Such an amendment is easy to do and only will require a few important words added to the definitions section of the Act.
2) Municipalities should consider including provisions in any new contracts being signed with independent contractors/constructors, that the independent contractor/constructor acknowledges and accepts sole responsibility within the spatial limits of the job-site (which also needs clear definition) and elsewhere for compliance with all aspects of the Act by its employees, servants or agents.
Municipalities should include indemnity provisions in the contract whereby the independent contractor/constructor agrees to defend and fully indemnify the Municipality from and against any and all complaints, charges, prosecutions or other proceedings against it under the Act arising from or related to the work being performed at the job-site. The municipality should, as part of this, consider reserving the right to select what lawyers will defend it from any charges under the Act, direct/instruct such legal counsel, and address and direct/have sole authority to decide upon any resolution of same. In addition, the indemnity should include a clause that requires any and all fines, including surcharges and fees, under the Act against the Municipality relating to the work performed at the job-site to be paid in full by the independent contractor/constructor.
3) Consideration should be given to whether any additional security or bond posted by the independent contractor/constructor is needed to cover the potential for any prosecution and/or fines under the Act relating to the work at the job site.
Takeaway
While there are some actions a municipality can take to mitigate the effects of the recent Supreme Court of Canada decision, none of the foregoing suggestions will (until the Act is amended) prevent a prosecution against a municipality for a violation of the Act relating to the employees of an
independent contractor/constructor. Nor will they prevent the reputational harm that would flow from any convictions. However, the foregoing may help mitigate the financial risks and burdens that have been foisted upon municipalities by the Supreme Court’s decision.
For further information or if you have any questions about the above article, please contact the author: Charles Painter, Dolden Toronto, Email: cpainter@dolden.com.
When Individual Rights Clash with Public Duties: Anderson v. Strathcona (Regional District)
By Jonathan Weisman, Dolden Vancouver
Municipal officials owe a raft of duties to the public bodies which they serve. Among the most important, from a governance perspective, is the confidence in which they are expected to keep information received in the course of their duties. Councilors and others are privy to personal information and details of local operations whose improper disclosure could embarrass the city and cause losses for which it may be liable.
But what happens when these officials’ individual actions are questioned? If the impugned acts relate to confidential information, the official’s right to defend themselves may well trump duties of confidence. And Courts will not defer to municipalities’ decisions in these cases. The B.C. Court of Appeal recently addressed this issue in Anderson v. Strathcona (Regional District).
Noba Anderson was a Director of the Strathcona Regional District. Friends of hers coordinated a Go Fund Me campaign to rebuild a house belonging to her father. The District received complaints that Ms. Anderson had received gifts in her capacity as a Director and alleging that she had acted in conflicts of interest connected with the Go Fund Me campaign. Shortly afterward, a group of District residents brought a petition seeking to disqualify Ms. Anderson from continuing as a Director because of such conflicts.
In a closed meeting, the District Board received a report concerning the allegations against Ms. Anderson. Under the District’s bylaw, reports received in such meetings were required to be kept confidential unless the Board decided to disclose them or was legally required to do so.
Ms. Anderson sought representation in the petition and legal advice about the allegations. She provided her counsel with a copy of the confidential report. Neither she nor her lawyer disclosed the report to any third party.
But her lawyer wrote to the District regarding the report and the investigation which it had prompted.
The District Board passed a resolution censuring Ms. Anderson for disclosing the confidential report, providing for sanctions and future measures against her. Ms. Anderson petitioned the BC Supreme Court to quash this resolution. The Court concluded that the Board’s process and decision were within the range of reasonable choices open to the Board and dismissed Ms. Anderson’s petition, leaving the sanctions in full force.
But the Court of Appeal disagreed. Personal legal advice is a matter of central importance to the legal system. Without it, no official could adequately assess their legal position when conflicts arise between themselves and a public body. For that reason, no deference was due to the Board’s decision – it had to be correct, not merely reasonable.
And given the nature of Ms. Anderson’s disclosure, the Board’s censure was unjustifiable. Advice from her lawyer was sought in confidence, and such consultations could not impair either Ms. Anderson’s or the Board’s ability to function. On the contrary, preventing officials from seeking such advice would have a chilling effect on the performance of their duties. The censure resolution was quashed.
Takeaway
Officials’ duties to public bodies do not deprive them of their individual rights. And where the two conflict, municipalities will bear a heavy burden in seeking to limit rights, particularly where those rights contribute to effective leadership. Decisions made by municipalities in this regard should tread lightly, knowing that they will receive little deference from the Courts.
For further information or if you have any questions about the above article, please contact the author: Jonathan Weisman, Dolden Vancouver, Email: jweisman@dolden.com.
Keeping Kids Safe – A Risk Management Guide for Childcare Centres
By Lindsay Nilsson, Dolden Kelowna
As summer approaches, local governments should be mindful of the risks associated with the operation of children’s day camps and childcare centres. This article sets out the process for identifying, assessing, controlling and treating potential risks that may arise in the context of childcare, which by its very nature, can be an unpredictable industry.
Perhaps the most obvious are health and safety risks which can cause a person to suffer harm, either physical, mental or social. Other risks include operational and financial risks which can impact a local government’s ability to provide childcare services in the first instance. Once operational, a childcare facility will also have to deal with compliance risks which means abiding by the relevant local, provincial and federal laws in order to maintain proper licensing. Finally, there are strategic risks which stem from the organization’s decision making as well as reputational risks which can influence the opinion of the organization’s stakeholders (children, families and employees) which can impact an organization’s viability.
The first step in any such analysis is to identify the specific risks to the childcare organization. Once these have been identified, they must be assessed for the probability of occurring and their likely impact on those affected. Some risks may be remote but are quite hazardous. Others may be more likely to occur but are not as serious. Assessing the likelihood of something happening in connection with the impact of that event will allow childcare organizations to decide what they should do about those risks.
Developing an appropriate response to identifiable risks is the next stage in the risk management process. Childcare organizations will likely choose from four common responses to a risk: avoidance, reduction, transfer or acceptance. Risk avoidance will usually be employed where the risk is too high and the costs are too great. A good example is the restriction of peanuts in childcare facilities to avoid severe allergic reactions. Reducing risk is where a childcare centre takes steps to minimise the harms associated with their operations. Requiring all attendees and staff to have up to date vaccinations is a good example of this risk management strategy.
Risk transfer is where a childcare organization contractually shifts the risk to a third party. For example, having comprehensive liability and property insurance for the childcare centre shifts the risk of claims from the local government to the insurer. Finally, where risks are considered low impact, it may be that a childcare centre decides to simply accept the risk and devise a contingency plan for dealing with the consequences when they arise.
In addition to taking these risk management steps, it is of critical importance to communicate the plan to the appropriate parties and document the steps that are being taken. That way, when a claim arises, the local government is able to demonstrate the steps it has taken to prevent a bad event from happening and also what was done in response to it. It is also important to review the plans and steps taken when something bad has occurred so that the organization can take action to prevent or reduce the likelihood of it happening again.
Takeaway
Set out above, are steps that an organization can take to identify, assess, control and treat potential risks that may arise in the context of childcare. These important steps, taken together, will ensure that kids have fun and remain safe while doing so. This, in turn, will lead to a reduction of claims experienced by local governments that provide these types of services to their communities.
For further information or if you have any questions about the above article, please contact the author: Lindsay Nilsson, Dolden Kelowna, Email: lnilsson@dolden.com.
A Municipality’s Guide to Privacy Impact Programs
By Mercy Iannicello, Dolden Vancouver, and Thomas Boyd, Dolden Vancouver
Municipalities across Canada are increasingly being targeted by cybercriminals for nefarious gains. The reason is straightforward: municipalities often run on outdated technology and lack the training and resources needed to properly defend themselves against cyber-attacks. As such, it is crucial for municipalities to properly prepare themselves for the possibility of a cyber breach in order to mitigate their risk.
In Canada, each province has public sector privacy laws in place that regulate a municipality’s use, collection, retention, and disposal of individuals’ personal information. For instance, in British Columbia, the provincial government enacted section 36.2 of B.C.’s Freedom of Information and Protection of Privacy Act, RSBC 1996, c 165 (“FIPPA”). This requires all public bodies to report data breaches and implement Privacy Management Programs (“PMP”) to further mitigate risk. Pursuant to this section, the head of every public body in British Columbia must develop and implement a PMP. The primary responsibility of a PMP is to ensure that privacy, that is, the responsible management of personal information, is built into all public initiatives, programs, or services by design. A PMP safeguards individual’s personal information by implementing various practices and procedures to protect personal information. The key features of a PMP include the following: risk assessment and mitigation; data minimization; security safeguards; and data breach notification and reporting.
a. Risk Assessment and Mitigation
Municipalities can assess their privacy risk by applying Privacy Impact Assessments (“PIA”). PIAs are an invaluable risk management tool used to identify the effect that new or current programs may have on an individual’s privacy. PIAs are not “one-size fits all”. They must be tailored based on the program and the nature of the information being collected. Where highly sensitive personal information is being collected, a more rigorous PIA is required.
b. Data Minimization
Data Minimization is the practice of collecting information that is directly relevant and necessary to accomplish a specified purpose. The benefit of this practice is that it helps to reduce the amount of sensitive information controlled by the municipality at any one time, which limits the potential exposure of personal information in the event of a privacy breach.
c. Security Safeguards
Implementing security safeguards is necessary to protect individual’s personal information. Security safeguards include managing access controls, encryption, network security, data backups as well as preparing an incident response plan. Unlike the other security safeguards, an incident response plan outlines and defines the roles and responsibilities of each privacy team member. Preparing an incident response plan begins with training and educating your employees on how to recognize the signs of a cyberattack and how to respond.
d. Data Breach Notification and Reporting
In the event of a privacy breach, municipalities should immediately alert the appropriate parties such as breach counsel, law enforcement, and your province’s designated reporting body. Breach counsel specialize in handling privacy breaches and assist with identifying the scope and nature of a privacy breach; liaising with law enforcement and regulatory bodies; investigating the breach to determine its cause; and advising on legal obligations.
Takeaway
It is important for Canadian municipalities to adopt Privacy Impact Assessments in order to safeguard personal information, ensure compliance with provincial privacy laws, and prepare themselves for a potential data or privacy breach. Implementing a PMP or, at a minimum, practicing some form of data minimization, is also recommended as it will invariably narrow the scope of the breach and minimize exposure of personal information. Adopting PIAs and developing a robust PMP demonstrates a commitment to responsible data practices, which fosters public trust.
For further information or if you have any questions about the above article, please contact the authors: Mercy Iannicello, Dolden Vancouver, Email: miannicello@dolden.com, and Thomas Boyd, Dolden Vancouver, Email: tboyd@dolden.com.
| Editor |
| Cody Mann |
| Tel: 604 891 0366 |
| Email: cmann@dolden.com |
Please contact the editor if you would like others in your organization to receive this publication.
