A recent court decision confirms that the interest or bias that is required to prove an elected official has a conflict of interest is one that relates to the distinct interest of the elected official in the particular case and is not merely some financial interest possessed by that elected official that she or he shares with other fellow electors.
Mr. Justice Steeves of the Supreme Court of British Columbia delivered the decision in Redmond v Wiebe, 2021 BCSC 1405 (“Wiebe”), whereby an elected councillor of the City of Vancouver was found to have a financial interest in a Vancouver restaurant which created a potential conflict of interest in his voting on COVID-19-related measures related to expanding the use of outdoor patio seating at local restaurants. However, Mr. Justice Steeves found that the councillor’s interest was in common with the interests of other electors that own the over 3,000 bars and restaurants in Vancouver, which meant that the councillor was entitled to avail himself of a statutory exemption to the general rules relating to conflicts of interest of elected officials.
Importantly, the decision also clarifies several issues relating to how B.C. courts will assess claims of conflicts of interest against elected officials of local governments. Although the decision was made under the Vancouver Charter, which the judge held was a complete code for determining conflicts of interest related to elected officials of Vancouver, Mr. Justice Steves noted that the provisions were largely similar to those in the Community Charter. Therefore, there was no reason the Court could not consider cases which had been decided under the Community Charter to inform analysis of the Vancouver Charter (and, presumably, vice versa).
The Judicial Test for Conflicts of Interest and the Shifting Onus of Proof
Mr. Justice Steeves noted that the judicial test for assessing conflicts of interest of elected officials had recently been addressed by the Court in its decision in Allan v. Froese, 2021 BCSC 28 (“Allan”), which was decided under the Community Charter. The Allan decision set out the test, as follows:
- The petitioners must prove, on a balance of probabilities, that the elected official had a “direct or indirect pecuniary interest in the matter under consideration” by council;
- If step one is proven, the petitioners must then show that the statutory exceptions do not apply, these include showing that:
- the pecuniary interest is not an interest held in common with electors of the municipality generally,
- the pecuniary interest does not relate to remuneration, expenses or benefits payable to the council member in relation to their duties as a council member; and
- a reasonably well-informed person would conclude that the pecuniary interest can reasonably be regarded as likely to influence the member in relation to the matter.
- If the exceptions in step two are shown not to apply, the onus then shifts to the respondents to demonstrate that the official should, nonetheless, not be disqualified because their contravention was inadvertent or due to a good faith error in judgement.
The petitioners in Wiebe argued that the Allan decision contained an error in that it placed the onus of proof at both stage one and two of the test on the petitioners challenging the elected official. The petitioners in Wiebe argued the onus should be with the petitioners only at the first stage and then shift to the elected official at the subsequent stages.
Mr. Justice Steeves agreed, noting that the Court had, many years before Allan, determined that there should be a shifting onus of proof in its decision in Fairbrass v. Hansma, 2009 BCSC 878 (“Fairbrass SC”), which had been affirmed by the Court of Appeal in Fairbrass v. Hansma, 2010 BCCA 319. Mr. Justice Steeves stated that “I conclude that the decision in Allan provides a useful two-stage approach regarding the application of the relevant provisions of the Community Charter. In my view, this applies equally to the Vancouver Charter. Having said that, I prefer the approach in Fairbrass SC with respect to the onus of proof”.
The approach adopted by Mr. Justice Steeves does not address the fact that Superior Courts in several other provinces with similar conflict of interest provisions have maintained the onus on the petitioner at the first two stages: see, Calkin v Dauphinee, 2014 NSSC 452 at para 97; Kruse v Santer, 2015 SKQB 376 at para 39; and, Rocky View (County) v Wright, 2021 ABQB 422 at para 53
Nonetheless, based upon the analysis in Wiebe, which is the most recent judicial commentary on this issue in the province, if the first stage of the test is met by the petitioners, the respondent must then carry the burden to establish one of the statutory exemptions applies. If the official is not able to establish an exception then the court must disqualify the elected official from office for the specified period of time provided under the Vancouver Charter or the Community Charter, as applicable.
Whether the Councillor’s Financial Interest was in Common with Electors of the City Generally
On the facts in Wiebe, Mr. Justice Steeves easily concluded that the elected councillor had a financial interest in a Vancouver pub which would be squarely affected by the outcome of the City’s vote on temporary expansion of patio seating at bars and restaurants across Vancouver. His Lordship also found that the councillor had not disclosed this financial interest at the relevant meetings of the committee discussing and voting on the potential expansion of patio seating, but that such interest was otherwise a matter of public record in other financial disclosures.
The councillor raised as a defence the exception at s. 145.6(1)(a) of the Vancouver Charter by arguing that his direct or indirect pecuniary interest was one that was “in common with electors of the city generally”. He argued that restaurant and bar owners are among the electors, and his financial interest in a particular pub was in common with this group of electors.
Mr. Justice Steeves was faced with a question of whether the legislative phrase “in common with electors of the city generally” meant all electors in Vancouver or a smaller group such as the holders of restaurant and bar licences.
His Lordship answered that question by stating that “the interest or bias that disqualifies a councillor is one that relates to the distinct interest of the councillor in the particular case. It is not merely some interest possessed in common with his fellows or the public generally or, in this case, all electors in the City of Vancouver” (Emphasis added).
His Lordship also noted that there was no evidence of the Vancouver councillor asserting his distinct business or personal interests during the deliberations over the expansion of patio seating and no evidence of any concerns from other Council members.
Accordingly, Mr. Justice Steeves concluded that the councillor’s pecuniary interest was in common with the owners of restaurants and bars in Vancouver, and that all members of this group benefitted from the decision of Council to expand patio seating. The councillor had thus satisfied the burden of proving his pecuniary interest fit the exception to conflict restrictions relating to having a pecuniary interest in common with the electors of Vancouver generally.