By its January 21, 2019 decision in Wu. V. Vancouver (City), 2019 BCCA 23, the BC Court of Appeal has overturned the 2017 decision of the BC Supreme Court in the case of Wu v. Vancouver (City), 2017 BCSC 2072 and has made important findings as it relates to the limits of legal duties owed by public bodies such as local governments, and the liability to which they may be exposed.
The Court of Appeal has identified that public officials are under a statutory duty to act in accordance with their statutory obligations. Where a public official fails to act in accordance with his or her statutory obligations, including a duty to make a decision in a timely fashion, remedies exist in administrative law, for example, through legal proceedings intended to compel a decision to be made by the public official. Having identified this duty, however, the Court of Appeal has confirmed that liability on the part of a public authority does not flow as a consequence of a breach of a statutory duty, and has further identified that, with some exceptions, private law concepts such as the tort of negligence do not generally apply to the types of interactions with the public which are inherent as part of the regular business of a local government.
Background and BC Supreme Court Decision
In Wu v. Vancouver (City), 2017 BCSC 2072, the BC Supreme Court found that the City of Vancouver (the “City”) failed to process an application for a development permit within a “reasonable time”. The plaintiff homeowner wished to demolish a pre-1940 heritage home that the City considered it may wish to protect. Under the existing legislative scheme, if the parties could not agree on terms of retention for the home, and if the City designate the home as protected heritage property by bylaw, the City was obliged to compensate the plaintiff for the loss of property value. During a period of delay in its decision-making, the City subsequently enacted a bylaw that prevented demolition of homes in the area unless they were deemed to no longer have sufficient heritage value. This bylaw, which was adopted under provisions of the Vancouver Charter under which the City was not required to pay compensation, frustrated the homeowners’ development plans.
The homeowners sought an order at the BC Supreme Court compelling the issuance of the development permit and claiming damages. In its determination of the case, the Court articulated a novel private duty of care, founded in negligence, obliging the City to make a decision within a reasonable time, and found that the City had breached that duty in bad faith, requiring the City to compensate the plaintiffs in damages.
As a result of this decision, local governments were left to wonder whether the timelines according to which they processed applications and other requests would be judged pursuant to the standards set out in Wu v. Vancouver (City), and whether this new means of ascribing negligence to local government officials would become the standard going forward.
Court of Appeal Decision
As noted above , the Court of Appeal has overturned the decision of the BC Supreme Court and has determined that the private law duty of care identified by the BC Supreme Court to avoid foreseeable losses to individuals in consequence of its decision-making processes is not a duty of care which is generally owed by local governments to private individuals. In the absence of a timely decision being made by a public authority, the appropriate legal course of action is to bring an application to the Court to compel a decision to be made. In arriving at this conclusion, the Court identified that while private individuals may be owed a “decision” by a local government (e.g. whether or not a Development Permit will be issued), they are not owed a particular outcome of such a decision.
Within its decision, the Court of Appeal assessed whether a novel private law duty of care existed between the City and the plaintiff homeowner, applying what is known as the Anns/Cooper analysis. This legal framework requires courts to assess whether harm was reasonably foreseeable, and whether there is sufficient “proximity” between the parties to establish a duty of care – and with the emphasis of a finding of sufficient “proximity” being the key factor. In other words, if a relationship exists where it is reasonably foreseeable to a public official that harm will occur to a potential claimant as a result of the public official’s action or inaction, and if that relationship is one where the public official has an obligation to protect the private interests of the claimant, then the public official owes the claimant a private law duty of care. The question here was whether there existed a relationship identified in law which would oblige the City to look out for the interests of the property owner in the manner in which the City made its decision concerning development of the subject property.
Importantly, the Court of Appeal concluded that, with some exceptions, a public official carrying out a public law duty does not owe a private law duty of care. In stating this conclusion the Court of Appeal did acknowledge, however, that a private law duty of care might arise where a public official has assumed responsibility to take care of private interests. An example of this is the well-recognized duty owed by public officials to avoid making a negligent misrepresentation.
Based on the Anns/Cooper analysis, the Court of Appeal concluded that the City did not owe a private law duty of care to the respondents. Ultimately, the order the property owner sought, compelling the City to issue the development permit, could not be granted as while the property owner may have been owed a duty to have a decision made, it was not owed a duty to have a development permit issued.
The Wu v. Vancouver (City) appeal decision confirms that in the exercise of their statutory authority, the scope of duty owed by public authorities does not generally extend to a private law duty to look after the economic interests of a party. Instead, administrative law remedies exist to address any alleged failure on the part of a public official to perform his or her public obligations. It is only when a public official assumes responsibility for private rights that he or she could be found to be liable according to the principles of private law.
Conclusion and Take-Aways
The decision of the Court of Appeal in Wu represents an important development in the law pertaining to local governments and public authorities in general, and provides significant clarity to the question of the consequences of a public law duty not being followed.
There are a number of important conclusions which can be identified from this case, including the following:
- Liability will not flow as an automatic consequence of a breach of a public law duty, even where it is foreseeable that such a breach may result in a loss to a claimant.
- Where there has been a delay in the making of a statutory decision, the appropriate remedy for an aggrieved party is to bring a legal proceeding to compel a decision to be made (and not an application for a particular outcome of such a decision).
- Previously identified private-law duties of care owed by public officials still remain – for example: duties to avoid negligent misrepresentation, duties arising from the exercise of the building inspection function of a local government, and duties to avoid a risk of physical harm or property damage, for example, in the context of municipal infrastructure including parks, sidewalks and etc.
Notwithstanding the decision of the Court of Appeal, we recommend the following be considered by local governments – so as not only to avoid the potential for liability, but also the risk of litigation being initiated (even if that litigation may not prove to be successful):
- Review internal procedures for processing applications – ensure that any stated or estimated processing times are practically achievable.
- Review how application procedures and timelines are communicated to the public, and ensure that the possibility of delays in the processing of an application is clearly communicated.
- Consider the inclusion of disclaimer language on application forms so that the applicant understands the local government does not guarantee a final decision will be made within any specific time period.
- If changes to bylaws are being considered which may affect an in-stream application, seek legal advice.