Reasonableness Review: A Case Study of Anderson v Strathcona Regional District

The BC Supreme Court has released reasons in Anderson v Strathcona Regional District, 2021 BCSC 1800 [Anderson] which provides an excellent example of the Court applying the reasonableness standard of review, as recently re-articulated by the Supreme Court of Canada in Vavilov, to decisions of a local government.

In most circumstances, the judicial review of local government decisions post-Vavilov are now conducted pursuant to the standard of reasonableness. This means the Court will assess a decision of the local government to determine whether it generally fell within the range of reasonable outcomes, as opposed to determining whether it was purely “correct”. Reasonableness is a more deferential standard that affords a decision maker with greater leeway in interpreting its authority.

In the Anderson case, one of the members of the Regional District’s Board (the “Director”) brought a judicial review challenging several decisions of the Board, including:

  1. The Board’s decisions to refuse to indemnify the Director for her legal fees arising from a BC Supreme Court petition which sought to have the Director disqualified from holding office (the “Indemnification Decisions”);
  2. The passing of a motion to censure the Director for unauthorized use and disclosure of confidential and privileged Board information (the “Censure Decision”); and
  3. The Board’s decision to withhold certain reports and materials from the Director in the absence of the Director declaring a conflict of interest (the “Record Withholding Decision”).

In all three circumstances, despite arguments by the Director’s lawyer, the Court held the decisions were to be reviewed on the reasonableness standard.

The Indemnification Decisions

The Board had adopted a Bylaw which required the Regional District to indemnify an official against a “claim, action or prosecution” brought against the official.

The Director requested that, pursuant to the indemnification bylaw, the Regional District indemnify her legal expenses incurred in defending a BC Supreme Court petition which sought to have the Director disqualified.

The Board determined that the disqualification petition did not fall within the definition of a claim, action or prosecution. Accordingly, the Board refused the Director’s request for indemnification.

After reviewing the background and the decision, the Court held the Board was reasonable in interpreting and applying its indemnification bylaw and the Local Government Act to deny the Director’s request for indemnification. The judge stated, “In my view, the Board’s interpretation of the Indemnification Bylaw and its application of that bylaw to Ms. Anderson’s circumstances cannot be said to be unreasonable, unfair or beyond the range of acceptable outcomes”.

As with many decisions that are reached by the board or council of a local government, there were no written reasons for the Indemnification Decisions. Nonetheless, following the process outlined in Vavilov, the judge in Anderson concluded that a review of the materials that were before the Board when it considered whether to accept the Director’s request for indemnification provided a “reasonable and satisfactory pathway” to understanding the Board’s rationale for the indemnification Decisions.

The Censure Decision 

Section 117 of the Community Charter requires that municipal council members maintain confidentiality over confidential records and matters discussed in closed meetings. Section 205 of the Local Government Act deems this provision to apply equally to members of regional district boards.

Additionally, the Regional District, in this case, had passed a bylaw establishing a code of conduct for its directors, emphasizing the requirement that confidential information not be disclosed.

Contrary to the duty of confidentiality in s. 117 of the Community Charter, and the Regional District’s code of conduct, the Director shared the Regional District’s legal opinions and a consultant’s report with her own legal counsel; these were records that were considered in closed meetings. The Director argued that as she had a confidential solicitor-client relationship with her own lawyer, she did not breach any duty of confidentiality.

However, the Court held that the duty of confidentiality owed by local government officials to their board or council requires that the information not be shared with anyone, even the official’s own lawyer, without prior approval of the board or council.

As the Director took the confidential information over which the Regional District alone held privilege, and which it had not waived, and shared it with a third party – her lawyer – the Court found that the Censure Decision was reasonable.

The Record Withholding Decision

As a result of the Director’s prior unauthorized disclosure of confidential information, the Regional District Board began the practice of limiting the Director’s access to certain confidential records.

Specifically, the Regional District began withholding reports on the closed meeting agendas which related to matters in which the Director may be in a conflict of interest with the Regional District. The Director was still provided with copies of all other closed reports and an agenda outline that included the title of all closed reports.

As a result of the Director’s prior unauthorized disclosure of confidential information, the potential harm caused by her actions, and the lack of any assurance by the Director that she would change her approach to dealing with confidential information, the Court held that the Record Withholding Decision was fair, reasonable, and did not impede the Director’s ability to perform her functions as an elected member of the Board. In reaching this conclusion, the Court followed the recent decision of Dupont v. Port Coquitlam (City)2021 BCSC 728, in which the Court held that a city council has authority to govern its own internal procedures, including the power to set in place guidelines for restricting a councillor’s access to information.

Key Takeaways for Local Governments

Every day local government officials and employees are faced with making difficult decisions. While the courts have been directed to show deference to the decisions of local governments, the decision still must fall within the realm of reasonableness. Accordingly, the greater the decision impacts on an individual or group of individuals, the more the decision-maker should stop and ensure that they consider the bylaw or legislative authority for making that decision and whether the outcome they are inclined to make is a reasonable application of that authority.