Local governments, like other public bodies and officials, are required by legislation to perform specific public duties and responsibilities. If these “public law duties” are not conducted correctly, this may be grounds for finding that the decision or action was improper, and a court may send the matter back for reconsideration. However, it does not necessarily give rise to a claim in negligence. To successfully bring a lawsuit for negligence, the plaintiff must show that the public body or official owed the plaintiff a “private law duty of care”.
In Kamoto Holdings Ltd v. Central Kootenay (Regional District), 2022 BCCA 282 (“Kamoto”), the British Columbia Court of Appeal reaffirmed the principle that the existence of a public law duty does not, in and of itself, create sufficient proximity between the plaintiff and the official to establish a private law duty of care.
Facts
In Kamoto, landowners had applied to the Village of Nakusp to subdivide a parcel of land within the Village. The approving officer for the Village sought comments on the application from a building inspector with the Central Kootenay Regional District. The building inspector relied on general information regarding the response time of volunteer fire departments when the building inspector recommended conditions to meet the Building Code. The approving officer adopted the recommended conditions in her preliminary approval letter to the landowners.
After providing the recommended conditions, the approving officer made inquiries to the local volunteer fire department and learned that the response times were faster than the building inspector had expected. As a result, the approving officer removed the conditions on the subdivision application. However, the landowners had already arranged to purchase other property and no longer wished to proceed with the subdivision.
The landowners sued the approving officer and the Regional District in negligence, alleging that the misstatements concerning the requirements of the Building Code were made negligently and caused the landowner economic harm. The approving officer and the Regional District successfully applied to strike the notice of civil claim and to have the action dismissed. The landowners appealed only as against the Regional District.
Analysis
The question before the Court of Appeal was whether the Regional District owed the landowners a private law duty of care when providing advice and recommendations to the Village’s approving officer. If it did, the Court could order the revival of the landowners’ claim that the Regional District made negligent misrepresentations resulting in economic damage to the landowner.
To establish a claim in negligent misrepresentation, a plaintiff must show that the person who made the representation owed the plaintiff a private law duty of care based on a special relationship between the parties. Generally, unless specifically built into the legislation, the existence of a statutory duty owed by a public authority is not sufficient by itself to establish a private law duty of care. Rather, in determining whether the relationship between the plaintiff and the public body gives rise to a private law duty of care, the Courts will first assess whether the relationship is analogous to circumstances previously recognized by the Courts as owing a duty of care. If not, the Courts will analyze whether the relationship demonstrates the factors giving rise to a new duty of care category.
In Kamoto, the relationship between the landowners and the Regional District was not analogous to an established category. Therefore, the Court of Appeal had to determine whether the relationship gave rise to a novel duty of care based on the two-stage test set out in Cooper v. Hobart, 2001 SCC 79, which asks:
- was the harm that occurred the reasonably foreseeable consequence of the defendant’s act; and
- are there reasons, notwithstanding the proximity between the parties established in the first part of this test, that tort liability should not be recognized here?
The first stage requires sufficient proximity between the parties to support the reasonable foreseeability of harm. The Court held there was insufficient proximity to establish a duty of care because the Regional District’s representations were made to the approving officer rather than the landowners. As the landowners’ claim failed at the first stage, it was unnecessary to proceed to the second stage of the test.
Additionally, the Court held that a duty of care in negligent misrepresentation requires that the defendant had undertaken a responsibility to the plaintiff, and that the plaintiff relied on the defendant’s statements to their detriment. The Court followed the decision in Wu v. Vancouver (City), 2019 BCCA 23, for the principle that, subject to rare exceptions, statutory duties owed by public authorities are insufficient to ground private law duties arising out of interactions that are inherent in the exercise of the public law duty.
The Village’s approving officer made a statutory decision which included multiple considerations regarding how to act in the public interest. The Regional District provided information to the approving officer to assist in this decision. Although the landowner may have suffered economic harm because of the statutory decision, the decision was made in the interest of the public and without sufficient proximity to entitle the landowner to rely on the decision as advice.
Decision
Based on its conclusion that the Regional District did not owe a private law duty of care, the Court of Appeal dismissed the appeal and upheld the BC Supreme Court’s decision that the claim raised no reasonable cause of action and could not be saved through an amendment. The Regional District was acting in a well-established role as a referral agency within the subdivision approval process. The Regional District did not undertake a responsibility to the landowners or induce the landowners to act in a particular way. Its duties were of a public law nature, and the appellants were not in a relationship of proximity with the Regional District to establish a private claim. As the Court held, “public officials are expected to perform their public duties efficiently and well. That does not mean, however, that a private law duty of care arises”.
Takeaways for Local Government
The decision in Kamoto confirms that statutory duties owed by public authorities, and interactions inherent to the exercise of those duties, are generally insufficient to ground a private law duty of care. This is an important principle that prevents the chilling effect that would occur if every decision made or action taken by public officials was susceptible to a claim in negligence. For the proper and efficient operation of government, public bodies and officials must be free to exercise their statutory duties without the constant fear of being sued. There is a separate process, known as judicial review, which gives the Courts oversight authority to ensure public officials act fairly and within the confines of their statutory authority. However, Kamoto confirms that actions and decisions of local governments made pursuant to a statutory duty will not generally, in and of themselves, give rise to private liability in a civil lawsuit.
This article was co-authored by our articled student, Thomas Haughian.
