Reasons for Reconsideration Refusals: BC Supreme Court Reviews the Sufficiency of Reasons in the Context of a Reconsideration of a Business Licence Refusal

The BC Supreme Court recently added to the volume of caselaw regarding the procedural fairness requirements that are applied in reviewing decisions of municipal governments.

In BC/Yukon Association of Drug War Survivors v. Surrey (City) 2022 BCSC 855, Justice Skolrood reinforced the common law understanding that decisions of municipal councils are not subject to the same requirement to provide reasons as many other decision-making bodies.  The Court also confirmed that the quality of the materials (including staff reports) which a municipal council considers in coming to their decision, as well as careful recording of minutes, can serve to protect decisions of council from judicial review.  Public policy arguments remain of little value in the context of reviews of procedural fairness.

In August of 2020, a non-profit society called the BC/Yukon Association of Drug War Survivors (the “ADWS”) leased a premises on behalf of one of its member organizations, the Surrey-Newton Union of Drug Users (“SNUDU”).  The premises was located in a multi-tenant commercial building in Surrey, which was zoned IL-Light Impact Industrial Zone.

Shortly after signing the lease, ADWS applied for a business license on behalf of SNUDU, indicating that the premises would be used for administration and meetings with members approximately once per week.  The City issued a business licence number and granted SNUDU provisional permission to operate, pending several inspections (the city had suspended the interior inspections normally required, due to Covid-19).

Some months later, SNUDU was maintaining office hours between 9:00 AM and 8:00 PM, seven days a week.  Bylaw services received a complaint that the premises was being used as a “safe injection” site.  Bylaw officers who attended the premises reported signs of on-site drug use and other safety issues.  Shortly thereafter, the city informed ADWS that it would not issue a business licence because the business operation included “facilitating the consumption of illicit drugs”, and that the city was not in “a position to grant a business licence for this use without you first obtaining approval from the appropriate Provincial health authorities, including the Fraser Health Authority”.  The business licence application fee was refunded.

ADWS applied to Council to reconsider the refusal to issue a business licence.  In the meantime, the medical health officer for the Fraser Health Authority wrote to the city to express support for the SNUDU operation.  The city received more complaints, and bylaw officers observed more indications of drug use at the premises.

Surrey Council held a reconsideration hearing and ultimately passed a resolution upholding the decision to refuse to issue a business licence.  The resolution included a brief summary of the information Council had considered in coming to their decision, including evidence and submissions from counsel for the manager of bylaw enforcement and licensing, and counsel for the ADWS; the suitability of the premises for its intended use by ADWS; and ”the public interest in having safely operated sites situated at suitable locations having regard to the interests of both drug users and other members of the public”.  Shortly following this decision, the ADWS’ lease on the premises was terminated.

ADWS brought a petition alleging that Council had failed to provide clear reasons for the denial of the business licence, especially in light of the public health crisis centered around tainted drugs, and that this failure resulted in a breach of procedural fairness.

In deciding the issue, the Court was sympathetic to the plight of the drug-using community, but did not find that the public policy arguments advanced by the ADWS were applicable to the narrow question of whether Council had provided adequate reasons for their decision.

In rendering his decision, Justice Skolrood referenced the Vavilov decision of the Supreme Court of Canada in noting that “’Reasons’ in the context of municipal council decision-making has been interpreted to mean something different from reasons provided in support of the decisions of other types of administrative tribunals.  The difference reflects the nature of the decision-making process whereby decisions are generally the result of a voting process amongst councillors that does not lend itself to producing a single set of reasons”.

After reviewing several recent BC decisions, the Court noted that “the [decision of Council] here can be assessed against the detailed evidence and submissions presented to Council which resulted in the Decision.  Viewed in their entirety, those materials, when read together with the minutes of the reconsideration hearing as a whole…provide a transparent and intelligible justification for the Decision.”

The case highlights the importance of a well-crafted staff report in helping to protect a Council reconsideration decision against allegations of a lack of procedural fairness.