Pecuniary Interest and Patios

October 19, 2022

By Mark Mikulasik

What community of interest allows a municipal councillor to participate in debate and voting on an issue in which they have interest?

THE ISSUE

We all expect councillors or members of local boards to act in good faith for the benefit of the community, not their own interests. Most of us have a good sense of what this should mean. Reducing it to technical language in a statute has proved trickier.

Municipal conflict of interest legislation, including in Ontario, provides an exception which allows council members to take advantage of a community of interest in common with other members of the community. The difficult question is to identify the boundaries of the community of interest. This confuses both councillors and courts. The wording of the legislation does not give much help. Common sense must be applied but from the frequency of violations of conflict of interest guidelines, perhaps common sense is not all that common.

We start with the proposition that the “community of interest” does not have to be shared by all taxpayers. There will seldom be a situation where all taxpayers in a municipality have exactly the same interests.

THE CASE

The British Columbia Court of Appeal decision in Redmond v. Wiebe is instructive. The legislation in British Columbia is very similar to that in Ontario and the Redmond decision relies greatly on Ontario law because the British Columbia Court of Appeal had never examined their own statute prior to this case. So a similar result would be likely in Ontario. The facts are also the kind of situation that could occur frequently.

Wiebe was both a city Councillor in Vancouver and a restaurant owner. Along comes COVID, and council considers passing a patio by-law to assist restaurants through difficult times. Wiebe both participated in the debates on the by-law, and voted on it. His businesses then took advantage by obtaining patio licenses. Common sense tells us that there was a conflict of interest – Wiebe used his position to gain a personal advantage.

But Wiebe claimed that he had a community interest with other restaurant owners in the city which should create an exception and allow him to retain his seat on council. The British Columbia Superior Court judge who heard the first application agreed. Wiebe’s opponents appealed.

Situations where the interest in common exception have has worked in favor of a councillor include:

  • a vote to construct a sewer on the street upon which the councillor lived;
  • a by-law affecting all store owners in the city;
  • where the councillor was one of many property owners affected by a land use planning decision;
  • where a by-law affected all properties with similar zoning, or all properties within a five mile radius.

The exception, however, does not benefit councillors who vote on a law that directly benefits their employer or where the councillor was actively subdividing and selling properties affected by the by-law.

The common interest must be similarity of kind, not of degree. That is, the benefits must be the same sort, but may differ in amount.

But not all bars and restaurants were in a position to benefit from the provisions of the patio by-law. Only establishments that were ready to comply with the application requirements would benefit – that was about one in 10 bars and restaurants in Vancouver. In other words, Wiebe’s business obtained a benefit that was not available to 9 out of 10 of his competitors. He very actively pursued this benefit. He actively influenced what the requirements would be, and in the result, his two properties just happened to comply. This was like the earlier case where a conflict was found to exist. Wiebe was among the first fourteen businesses awarded a patio license, within days after the program began. Clearly, he was actively pursuing his private interests while exercising his public duties. This violates the intention of the statute.

TAKEAWAYS

Municipal conflict of interest rules are intricate and can be confusing. Ontario has modified the law to be more flexible and forgiving.

HOW WEILERS LAW CAN HELP

Whether you are a councillor, board member, or a taxpayer concerned about a councillor’s actions, it is necessary to appreciate the rules by which courts translate common sense and the “smell test” into results. You might be gifted with a fine nose for bad faith, but not many people are that lucky, and most of them are busy tasting fine wines. At Weilers Law, we make it our practice to study how judges really think and have the experience and track record to match.

If you have a question or an issue about municipal conflict of interest regarding a council or a local board, why not give us a call and see if Weilers Law are the right lawyers for you?