Municipalities v Oil Companies: How far can a municipality go?

Imperial Oil Limited v. McAfee, 2005 BCCA 402

It is not an infrequent event when hydrocarbons from a local gas station leak into the ground and then migrate off-site to contaminate surrounding properties.  In numerous instances, those surrounding properties can include municipal streets.

In Imperial Oil Limited v. McAfee, Imperial operated a gas station on a street corner in the City of Vancouver between 1981 and 2000 when the station was decommissioned and the pumps and underground storage tanks were removed.  A major hydrocarbon spill had taken place at the station in 1986.  Attempts by Imperial to remediate the contamination failed and the contamination migrated to surrounding city property including streets.

When Imperial applied to the City of Vancouver for a permit to construct a new gas station at the site, the City made the approval subject to a number of conditions, one of which required Imperial to remediate all off-site contamination on City property before approval to build the new gas station would be given.

Imperial submitted and sought approval of its remediation action plan (the “Plan”) under the British Columbia Environmental Management Act (the “Act”).  Pursuant to the Plan, Imperial removed a substantial amount of contaminated soil from the site and from the streets affected.  The provincial ministry in charge of the administration of the Act, thereafter issued an approval of the Plan (the “Approval”).  As a result of the Plan and the Approval, Imperial was positioned to apply for a development permit to redevelop the site as a new gas station and it did so. It was common ground amongst all concerned that redevelopment of the site would not affect remaining remediation efforts and no remaining off site contamination was believed to be a threat to the redevelopment.  The City of Vancouver, nonetheless, refused to approve Imperial’s application for a development permit until such time as Imperial agreed to clean up the off site contamination to the City’s standard, which standard was higher than that of the Province’s.  Vancouver cited the Vancouver Charter as authority for its position.  The Charter states, in part:

“Council may make by-laws…

 (b) providing that a development permit may be limited in time and subject to conditions….

“The Council may provide for the good rule and government of the city”

It is well established law that when reviewing a municipalities actions and decisions, the courts must construe or interpret municipal legislation using a broad and purposive approach.  In some case the courts talk of a “benevolent” approach to interpreting municipal statutes.  All of which to say is that the courts must respect the municipal level of government and, except where municipal government has acted outside or in excess of its statutory authority, the courts should defer to the municipal government and not substitute the courts view of good government for that of the municipal government in question.

The trial judge determined that the Vancouver Charter did not provide authority to the City to impose conditions on a developer that are not related to the development proposed.  In other words, clean up of off-site contamination was not related in any way to the proposed development so the City did not have the authority to require it as a condition of issuing the development permit.  The City acted outside its authority.  The trial judge also determined that the specific purposes relied upon by the City to impose the clean up condition, could not be brought within the general authority to provide good rule and government.  The Court of Appeal upheld the trial decision.

The key principles to be taken away from this case are:

  1. A municipality in British  Columbia does not have the jurisdiction or authority to impose conditions on the issuance of a development permit that are not related to the development in question.
  2. A municipality in British Columbia cannot use a general “good government” rule as authority for imposing conditions on the issuance of a development permit that are  unrelated to the development in question.

While this is a decision of the British  Columbia Supreme Court and Court of Appeal, it likely would be similarly held by courts in most if not all other provinces and territories throughout Canada.

Municipal Liability in Vehicle Collision

Gardiner v. MacDonald, 2016 ONSC 602andrew-montgomery-lg

Gardiner v. MacDonald, 2016 ONSC 602 (“Gardiner”) is a recent decision of the Ontario Supreme Court dealing with the apportionment of liability in a tragic vehicle collision involving four individuals occupying an SUV and an Ottawa City public transit bus.  The sole survivor from the SUV, Ben Gardiner (“Gardiner”), one of four individuals in the SUV, suffered what the court characterized as “catastrophic injuries”.  Gardiner and his family commenced a court action against the estate of the driver of the SUV, Mark MacDonald (“MacDonald”), the City of Ottawa, the driver of the Ottawa City bus, Raymond Richer (“Richer”) and those who had supplied alcohol to MacDonald prior to the accident.

Early in the morning of January 23, 2008, Richer was driving his Ottawa City bus north on Riverside Drive.  Richer drove into the intersection at Heron Rd. on a green light.  MacDonald was driving west on Heron Rd. at the same time.  He continued into the intersection with Riverside Drive on a red light.  The bus driven by Richer t-boned MacDonald’s SUV. The occupants of the SUV suffered the most damage with three dead and the fourth very seriously injured.

At the time of the accident it was dark, the roads were covered by slush from melting snow, but the intersection was well lit.  No charges were laid against Richer and alcohol consumed by MacDonald earlier in the evening was determined to be a causal factor in the accident.

By the time of trial, the only issue remaining between the parties was the degree of liability or fault for the accident, if any, on the part of the City of Ottawa and Richer.  The court identified three matters it had to consider in resolving this final issue:

  1. The duty of care owed by Richer, a professional driver for the City of Ottawa who was driving a public transit bus at the time of the accident;
  2. The standard of care Richer, a professional driver, owed to MacDonald and MacDonald’s passengers;
  3. Whether a causal link existed between Richer’s breach, if any, of the standard of care Richer owed and the injuries sustained by Gardiner.

Duty of Care Owed by Richer

The court observed, as a long standing legal principle, that “a driver entering an intersection has a duty to act so as to avoid a collision, if reasonable care will prevent it.”  Other cases relied on by the court expand on this principle and establish that a driver approaching an intersection with a green light does not have the right to proceed into the intersection without exercising proper care to observe what all other users of the road are doing.  Put another way, a driver having the statutory right of way at an intersection will not be relieved of some degree of responsibility for an accident if the driver enters the intersection with  disregard as to what other drivers approaching the same intersection may or may not do.

The court concluded that on any analysis of the facts, Richer was bound by a duty of care to exercise proper caution upon approaching the intersection and to surrender his statutory right of way to MacDonald if by such action the accident might reasonably have been avoided.

Standard of Care Owed by Richer

The court held that the driver who has the statutory right of way at an intersection (e.g., Richer who in this case proceeded into the intersection on a green light) is required in the exercise of this right, to do so as a reasonable and skillful driver would do under similar or like circumstances.  The court stated that the driver with the right of way “will be fixed with some responsibility if he or she had a reasonable opportunity to avoid the collision but failed to do so.”  The court went on to add, however, that a professional driver such as Richer could be held to a higher standard of care than the general driving public if at the particular time in question he was discharging his professional driving duties.  Finally, the court observed that, although the standard of care required of a professional driver might be somewhat higher than that of the general driving public, it is still not a standard of perfection.

On the evidence, the court, while acknowledging that a higher standard of care may be required of a professional driver, concluded it was not necessary in this specific case to determine and apply a higher standard.  Richer’s evidence seriously undermined his credibility by the inconsistencies amongst and between his statements made to police, his discovery evidence and his cross examination at trial. Richer also repeatedly attempted to deny or discredit clear evidence of negligence on his part on the night of the accident.  Richer objected to and sought to discredit GPS records which clearly indicated he was significantly exceeding the speed limit that morning and that he did so under inclement road and driving conditions.  The court found on all of the evidence that Richer did breach the standard of care of the reasonable driver under similar or like circumstances.  There was no need to inquire or determine whether he breached some higher standard of care.

Did Richer’s Breach, if any, Cause Plaintiff’s Injury

The court stated the test for causation as follows: “In order to establish causation….a plaintiff must show that the defendant’ negligence was necessary to bring about the injury – in other words that the injury would not have occurred without the defendant’s negligence.”

The court found that Richer had not only been exceeding the speed limit in his approach to the intersection of the accident, but that he had failed to take into consideration sloppy road conditions that should have led him to drive even more cautiously.  Further, the court found that Richer was not paying proper attention to what the MacDonald vehicle was doing when Richer entered the intersection.  He consequently compromised his opportunity to respond defensively and to possibly avoid the accident.

It was the court’s finding that had Richer been driving prudently and with the care of a reasonable driver under like circumstances, it is unlikely he would have arrived at the intersection where the accident occurred at the same time as MacDonald ran the red light.  The court further found that Richer failed to exercise proper care upon entering the intersection where the accident took place.  The failure to exercise proper care effectively foreclosed on Richer’s ability to  react appropriately and defensively to the uncertainty that existed as to MacDonald’s ability or intention to stop.  In essence the court found that, but for Richer’s negligence, the accident might well have been avoided.  While all parties acknowledged that MacDonald was primarily responsible for the accident, Richer still had an opportunity to avoid the accident if he had been exercising proper care in his own driving.  The court apportioned liability for the damages the plaintiffs suffered 80% to MacDonald and 20% to the City of Ottawa on the basis it was vicariously liable for the negligence of its employee.

The tragic circumstances of this case provide clear lessons for all municipal governments. On the most basic level, and at first blush, the facts of this case might be thought to point the finger of responsibility squarely, fully and exclusively at MacDonald.  He had consumed enough alcohol to impair his judgment and he ran a red light at the intersection of Herod and Riverside the night of the accident. Richer had the statutory right of way at the intersection. These facts, in and of themselves, might seem sufficient on a cursory analysis, to settle any and all questions of responsibility once and for all.  At law, however, the court had to address the question of whether or not Richer, an Ottawa City employee, had any opportunity to avoid the accident.

After reviewing all of the evidence, the court determined Richer did have the opportunity to avoid the accident, but that he squandered it as a result of his own negligence.  He had the statutory right of way at the intersection, but he was driving at an excessive speed and he did not exhibit the standard of care of a reasonable driver in approaching the intersection, to observe and respond to what the MacDonald vehicle was doing.  In the result the court found that, but for Richer’s negligence, the accident, even though primarily put in motion by the actions of MacDonald, might still have been avoided.  It is on this basis that the court apportioned 20% of the liability for the accident to Richer and the City of Ottawa.

On another level, this case squarely focuses the attention of all municipal governments on the need to ensure proper policies, manuals and training programs are in place to inform and educate employees about the duty of care that rests on them to discharge their duties professionally in order to avoid negligence claims.  Equally importantly, the policies, manuals and training programs need to be routinely monitored, evaluated, amended where prudent, and consistently enforced by the municipality. A solicitor knowledgeable and experienced in municipal law can be of great assistance in dealing with these matters.

Dangerous and Unsightly Properties

andrew-montgomery-lgDoucette v. Halifax (Regional Municipality), 2015 NSSC 151 (CanLII)

In Doucette, the Applicant had been issued a valid building permit by the Halifax Regional Municipality (“HRM” or “Municipality”) in September of 2013.  The permit was set to expire in September of 2015.  While the building permit remained in force and effect, the Municipality made an unsightly premises order against the Applicant requiring him to repair the exterior of the building.  The Applicant’s appeal of the unsightly order was denied by the Municipality and he subsequently sought judicial review.

The judicial review application raised three questions; first, did the HRM have the jurisdiction to issue the unsightly premises order? Secondly, if it did have the requisite jurisdiction, was the property unsightly? Thirdly, was there procedural unfairness during the appeal?

In summary, Moir, J., found that the HRM had the requisite jurisdiction to issue the unsightly order, but that it misinterpreted the unsightly premises provisions of the Municipal Government Act and it failed to provide the Applicant with procedural fairness during the course of the appeal.

One of the key findings of the court was that no paramountcy exists as between the legislative provisions for building permits and the legislative provisions for unsightly premises.  Put simply, it is an obligation of the property owner to maintain sightly and safe premises during the course of a new build or renovation.  As we shall see below, however, there are also corresponding limitations on a municipality in making the determination that a property is unsightly. What might be sufficient to establish unsightliness in the ordinary course, may not be sufficient in the context of a property under renovation.

Whether a property is unsightly or not requires an objective analysis as opposed to a subjective analysis.  In addition, the question of whether a property is unsightly must be resolved in the context of the lawful uses of the property.  In other words, unsightly, in the context of a property under major renovation, cannot be determined by reference to surrounding houses not under renovation.  The appeal committee was wrong to make a finding of unsightly premise in the context of a valid building permit by comparing a property under renovation to surrounding properties not under renovation.

Finally, the court determined that had it not found the municipality to have improperly interpreted the unsightly provisions of the Municipal Government Act, it would have set aside the Municipality’s decision on the basis of procedural unfairness.  The same Councillor who had brought forward the initial complaint against the property owner sat to hear the Applicant’s appeal.  When the Applicant sought to make submissions on possible bias, he was denied the opportunity.

A municipality, in interpreting its own authorizing legislation, must be correct in its interpretation.  In this case, finding a property to be unsightly could not be made without consideration of the interplay of the legislative provisions for unsightly properties with the provisions for building permits.  Determining a property to be unsightly must also consider the contextual background of the property, i.e., a property under renovation cannot be compared to surrounding properties that are not under renovation in order to determine the question of unsightliness.