TIMOTHY PROBE PLAINTIFF - v. –, 2023 SKKB 7

KING’S BENCH FOR SASKATCHEWAN Citation: 2023 SKKB 7 Date: 2023 01 09 Docket: QBG-RG-00865-2019 Judicial Centre: Regina BETWEEN: TIMOTHY PROBE PLAINTIFF - and – THE RURAL MUNICIPALITY OF SHERWOOD NO. 159 DEFENDANT Counsel: Kevin C. Mellor for the plaintiff, Timothy Probe M. Kim Anderson, K.C. for the defendant, The Rural Municipality of Sherwood No. 159 ___________________________________________________________________________ JUDGMENT MORRALL J. January 9, 2023 ___________________________________________________________________________ Introduction [ 1 ] Mr.

Timothy Probe, the plaintiff and applicant in this action, noted in his memorandum of fact and law that “Along his travelled path… (he) had to defend multiple actions that cost him a great deal of money.” I agree. One simply needs to examine the decisions of: • Sherwood (Rural Municipality No. 159) v Probe , 2018 SKQB 24 , 70 MPLR (5th) 204 [ Sherwood ]; • R v Probe 2018 SKQB 176 , 76 MPLR (5th) 214 [ Probe 2018 ]; • R v Probe , 2020 SKCA 5 , 96 MPLR (5th) 209 [ Probe 2020 ]; and • R v Probe , 2021 SKQB 15 , 402 CCC (3d) 387 [ Probe 2021 ], along with his involvement in the inquiry by the Honorable R.L.

Barclay Q.C. into the R.M. of Sherwood No. 159 and the legal costs arising therefrom to know that is true. (The Honourable R.L. Barclay Q.C., Inspector/Inquiry Officer, Final Report of the Inspection and Inquiry into the R.M. of Sherwood No. 159, (Saskatchewan, 30 December 2014) [Barclay Inquiry]. In the hopes of being relieved of the financial responsibility for these costs, the applicant is seeking

summary judgment from the R.M. of Sherwood No. 159 pursuant to Rules 7-2 and 7-5 of The Queen’s Bench Rules . Facts

[ 2 ] Despite the contentious nature of the various proceedings, the parties in this matter were able to put forward a statement of agreed facts, along with some addendums. This is in the spirit of “putting your best foot forward’ as contemplated by Magna Electric Corporation v Tesco Electric Ltd. , 2015 SKQB 35 , 469 Sask R 15, and both parties are to be commended for proceeding in this manner. [ 3 ] I do not intend to reproduce all 45 paragraphs of the agreement but will simply reiterate the salient facts for the purpose of these proceedings.

I have reviewed each paragraph, decision, bill, and inquiry report contained in the statement of agreed facts. [ 4 ] The plaintiff, Timothy Probe [Mr. Probe] was elected as a councillor for The Rural Municipality of Sherwood No. 159 [ RM] in 2007 and was appointed Deputy Reeve. In 2012, council for the RM [Council] received a plan for a proposed development called Wascana Village. In February 2014, Council approved an amendment to its official community plan and submitted the amendment to the Government of Saskatchewan [Government] for approval. [ 5 ] The amendment was denied and eventually the Honourable R.L.

Barclay Q.C. was appointed as an inspector pursuant to ss. 396 and 397 of The Municipalities Act , SS 2005, c M-36.1 , to review matters connected to the management, operation and administration of the RM, including whether the mechanisms in place in the municipality for the identification, disclosure and addressing of pecuniary interests in matters brought before Council were appropriate and effective. [ 6 ] An interim report was issued in July 2014 and recommended an inquiry, which recommendation was accepted by the Government who appointed the inspector as the inquiry officer. [ 7 ] The inquiry addressed whether members of Council had pecuniary interests in Wascana Village and attempted to advance the project to benefit these pecuniary interests, among other matters. [ 8 ] Mr.

Probe testified at the inquiry and, as counsel for the RM advised that it would be inappropriate for RM counsel to represent him, he retained his own counsel. [ 9 ] During the inquiry, Rodger Linka, counsel for the Reeve of the RM, Kevin Eberle, did not have the time to cross-examine certain witnesses. Mr. Kevin Mellor, counsel for Mr. Probe, then met with Ron McCullough, the Chief Administrative officer of the RM, along with Rodger Linka, and Mr. Mellor indicated he would assist Mr. Linka with cross-examination provided he was guaranteed payment by the RM. Mr. McCullough stated he would find a way to ensure Mr.

Mellor was paid for his legal services and based on that assertion, Mr. Mellor assisted with the cross-examination of several witnesses. [ 10 ] On October 18, 2014, before a report was rendered at the inquiry and based on legal advice from the RM’s legal counsel, the RM passed the Municipal Officials Indemnity Bylaw , Bylaw 17/14 [ Bylaw ], which provided for reimbursement of the legal expenses for certain municipal officials, including Mr. Probe. Mr.

Probe received complete reimbursement of his legal expenses, which had amounted to $49,998.98. [ 11 ] In December 2014, the inquiry report was submitted to the Government, which resulted in the removal of the Reeve of the RM, but no action was taken against Mr. Probe. [ 12 ] Thereafter, 13 ratepayers of the RM brought proceedings to quash the Bylaw and a judgment was issued September 23, 2015 in Baker v Sherwood No. 159 (Rural Municipality) , 2015 SKQB 301 , 483 Sask R 48 [ Baker ], quashing the Bylaw . [ 13 ] At a meeting held on October 14, 2015, while Mr.

Probe had recused himself, a motion was placed before Council to instruct legal counsel to write the recipients of the payments under the Bylaw requesting repayment. The matter was tabled and eventually defeated on October 21, 2015. [ 14 ] The matter returned again on January 13, 2016, at which time a new council had been sworn in, including a new reeve, Mr. Jeffrey Poissant [Mr. Poissant]. A delegation of individuals requesting reimbursement of the payments made under the quashed Bylaw attended this meeting and Mr. Probe voted in favor of the agenda, which included hearing this delegation. Mr.

Probe remained in the room during their presentation. Later, a motion was placed before Council that the RM instruct its legal counsel to pursue repayment of the amounts paid pursuant to the Bylaw . Mr. Probe moved that the motion be tabled pending legal advice and the motion passed with Mr. Probe voting in favor of the motion. [ 15 ] Following this meeting, the Provincial Ombudsman received a complaint that Mr.

Probe did not comply with the conflict of interest provisions of The Municipalities Act . [ 16 ] A meeting of Council for the RM was held on October 28, 2016, at which time Council decided to pursue reimbursement for the payments made to Mr. Probe under the quashed Bylaw . [ 17 ] A statement of claim was issued by the RM on December 30, 2016 against Mr. Probe and others for the reimbursement of the payments made pursuant to the quashed Bylaw . The matter was settled in 2020 without admission of liability, with Mr. Probe contributing $30,195.00 to the settlement amount.

His legal costs for representation in relation to these proceedings was $52,724.64. [ 18 ] On January 27, 2017, the Ombudsman rendered a report which concluded that Mr. Probe breached the conflict of interest provisions of The Municipalities Act and that the RM should bring an application disqualifying Mr. Probe from Council. Following that report, Mr. Probe did not attend any further meetings of Council but did not vacate his seat on Council. [ 19 ] On January 18, 2018, this Court in Sherwood ruled that Mr. Probe had contravened the conflict of interest provisions of The Municipalities Act and ordered that Mr.

Probe be disqualified from Council and that his seat was vacant. Mr. Probe appealed but ultimately abandoned his appeal on September 3, 2018. Mr. Probe’s legal costs from this matter were $26,076.93.

[ 20 ] Mr. Probe was not paid his honorarium as councillor for the RM from October 2016 to January 2018. While he did not attend meetings, he continued to communicate with ratepayers of the RM and referred their issues to other councillors for assistance. Counsel have agreed the total amount that could be claimed from the RM with respect to this issue is $27,150.00. [ 21 ] In relation to the criminal matters, on February 1, 2016, Mr. Probe attended a meeting with Mr.

Poissant, during which they spoke about the matter of the tabling of resolutions respecting legal fees, and the matter of a controversial proposed development within the RM was discussed. Mr. Poissant recorded this meeting without the knowledge of Mr. Probe and turned the recording over to the police. In October 2016, Mr. Probe was charged under ss. 122 and 123 of the Criminal Code , RSC 1985, c C-46 . [ 22 ] On June 7, 2018, Mr. Probe was acquitted of both criminal charges (see Probe 2018) . The Crown appealed and the Court of Appeal remitted the first count back for trial (see Probe 2020 ).

On January 18, 2021, at the re-trial for the first count, Mr. Probe was acquitted again (see Probe 2021 ). No appeal of that acquittal was sought by the Crown. [ 23 ] The total amount for legal fees paid by Mr. Probe related to the criminal charges was $197,145.57. [ 24 ] The two last paragraphs in the agreed statement of facts will be reproduced in their entirety as follows: 44. Mr. Probe asserts that he has acted throughout in good faith. Except to the extent that the facts agreed to in this statement may lead the court to conclude otherwise, the RM does not dispute this assertion. 45.

Except to the extent they may be inconsistent with facts expressly set out herein, any finding of fact made in any of the judgments referenced in this statement is incorporated into this statement. Position of the Parties [ 25 ] Both parties in this matter filed comprehensive briefs of law which were of great assistance to the Court in understanding their respective positions. While this

summary judgment application was commenced by the plaintiff, both parties agreed in oral argument that, given the nature of the statutory

interpretation arguments, a final determination applicable to both parties could be made pursuant to Rule 7-5 of The Queen’s Bench Rules . [ 26 ] As well, Mr. Probe’s counsel abandoned his claim for his legal fees related to these proceedings during argument and agreed that any cost award made by the Court would address that specific matter. The Plaintiff (Applicant) [ 27 ] From a review of the oral and written argument and the written documents on the court file, Mr. Probe asks the Court to grant

summary judgment against the RM and order the RM to pay the following amounts: 1) $49,998.98 for the legal fees he paid to counsel to represent him during the Barclay Inquiry; 2) $52,724.64 for the legal fees he paid to counsel to represent him during the proceedings related to the statement of claim issued by the RM on December 30, 2016; 3) $26,076.93 for the legal fees he paid to counsel to represent him during the proceedings to disqualify him from Council; 4) $197,145.57 for the legal fees he paid to counsel to defend him during all the various criminal proceedings; 5) $27,150.00 for the honorariums owed to him by the RM given his status as a councillor of the RM before he was disqualified; and 6) costs. [ 28 ] In summarizing the plaintiff’s arguments, there are two separate claims which involve interrelated issues.

Firstly, he argues that he was a councillor until January 2018 and was, therefore, entitled to his honorariums up until the date he was disqualified. Secondly, he argues that he was entitled to all the legal fees incurred above because of his good faith activities while he was a councillor for the RM. [ 29 ] With respect to the first claim, the plaintiff argues that he never rescinded his seat on Council for the RM until he was disqualified from Council pursuant to the judgment of this Court on January 18, 2018.

He notes that his absence from Council during the course of the criminal charges was authorized by Council and that he continued to perform certain councillor duties in the interim. [ 30 ] With respect to the second claim, there are four components to the plaintiff’s arguments as follows: 1) statutory

interpretation of The Municipalities Act provisions; 2) contractual agreement with Ron McCullough; 3) negligence on behalf of the RM; and 4) breach of fiduciary duty by the RM. [ 31 ] With respect to the issue of statutory

interpretation, Mr. Probe argues that a contextual and purposive

interpretation of s. 355(3) of The Municipalities Act based on case law and The

Interpretation Act, 1995 , SS 1995, c I-11.2 (since rep), along with public policy arguments and his good faith, supports his contention that the RM should be directed to pay his legal fees. Further, if s. 355(3) does not apply, then s. 356 would operate to require the RM to pay his legal fees as Mr. Probe fits within the

definition as an “agent of the municipality” given the case law cited. [ 32 ] With respect to the issue of contractual agreement, the plaintiff argues that, solely in relation to the $49,998.98 paid with respect to the Barclay Inquiry, he had a contractual agreement with Ron McCullough, the Chief Administrative Officer of the RM, to pay Mr. Mellor’s legal fees.

He argues that the subsequent quashing of the Bylaw did not invalidate the contractual obligation and that it would be equitable to honour the agreement. [ 33 ] With respect to the issue of negligence on behalf of the RM, he argues that the RM breached their duty of care towards him as they knew or ought to have known that if they did not pay Mr. Probe’s substantial legal fees, harm would occur to the plaintiff.

He further states that the RM breached their duty by not properly interpreting their statute, and the request for payment of legal fees and the honorariums was reasonably foreseeable. [ 34 ] With respect to the issue of fiduciary duty, the plaintiff argues that the RM is in a fiduciary relationship with Mr. Probe and the RM breached their duty by unreasonably interpreting The Municipalities Act by refusing to pay the legal fees and honorariums. The Respondent [ 35 ] The respondent RM submits that they have no obligation to pay Mr. Probe with respect to any of his claims. They do not believe that Mr.

Probe’s good faith plays any role in advancing any of his claims. [ 36 ] With respect to the claim for the honorariums, they argue that the effect of the Court’s disqualification order was to disqualify him from being a councillor as of January 13, 2016 so that the RM would not be liable for any of the honorariums after that date. [ 37 ] With respect to the issue of the statutory

interpretation of s. 355(3) of The Municipalities Act , they argue that a clear reading of the statute, especially in relation to s. 356 , along with public policy considerations, would lead to the conclusion that the RM had the discretion to pay Mr. Probe and they validly chose not to do so. They also state that Mr.

Probe clearly does not fit within the definition of an “agent of the municipality” that would require the RM to pay his legal fees pursuant to s. 356. [ 38 ] With respect to the issue relating to the contractual obligation, the RM argues that the statements made by Ron McCullough are unable to bind the RM as only the Council of the RM could make any agreement. While the RM does not deny that an “agreement” was made, they state that Mr.

Probe cannot rely on a purported agreement with an unelected official. [ 39 ] With respect to the issues of negligence and fiduciary duty, the RM states that there is no authority for the proposition that the RM has a duty to act reasonably or for the benefit of Mr. Probe in exercising any discretion it possessed under The Municipalities Act . [ 40 ] The RM also made the following arguments in relation to the certain specific claims raised the plaintiff. [ 41 ] The RM argues that the RM has already paid the $49,998.98 to Mr.

Probe in relation to the Barclay Inquiry and that, along with the argument related to statutory

interpretation, no legal proceeding for the payment of sums already paid may succeed. [ 42 ] In relation to the disqualification proceedings, the respondent argues that s. 151(1) (

a) of The Municipalities Act specifically addresses the situation when a council member can claim costs in a disqualification proceeding from a municipality and Mr. Probe does not meet the specific requirements. [ 43 ] On the issue of Mr. Probe’s criminal proceedings and legal costs, the RM argues that based on the arguments used on the honorarium issue relating to the backdating of the disqualification order, that Mr. Probe was not a municipal officer at the time of the alleged criminal offence. Therefore, he had no entitlement to legal costs based on either the plaintiff’s or respondent’s

interpretation of the statutes. [ 44 ] The respondent finally argues that it should be entitled to costs of $2,000.00, although, during oral argument, they did note the cooperation of the plaintiff in relation to the agreement as to facts. Issues [ 45 ] The issues raised by the parties lead to the following questions that need to be determined: 1) Is it appropriate to grant

summary judgment pursuant to Rule 7-5(1)(

b) of The Queen’s Bench Rules ? 2) If

summary judgment is appropriate, how should the Court approach the statutory

interpretation of the various pieces of legislation in this matter? 3) Does the RM owe the applicant a duty of care in these circumstances? 4) Is the RM in a fiduciary relationship with the applicant and liable on that basis? 5) Is the RM required to pay the applicant his honorarium as a councillor up until January 18, 2018? 6) Is the RM required to pay the applicant his legal fees for his representation at the Barclay Inquiry? 7) Is the RM required to pay the applicant his legal fees related to the statement of claim issued against him and others by the RM on

December 30, 2016? 8) Is the RM required to pay the applicant his legal fees as a result of the Court case disqualifying him from Council (Sherwood)? 9) Is the RM required to pay the applicant his legal fees as a result of his various criminal proceedings? 10) What quantum of costs should be awarded in these proceedings?

Summary Judgment [46] The question of whether it is appropriate to grant

summary judgment under Rule 7-5(1)(

b) was recentlyconsidered by the Saskatchewan Court of Appeal in Michel v Saskatchewan, 2021 SKCA 126 as follows: [108] The agreement by the parties to use the

summary judgment procedure therefore required the Chambers judge to be mindful ofRule 7-5(1)(b). As I have noted, when that rule applies, before judgment can be granted using this process, the court must be “satisfiedthat it is appropriate to grant

summary judgment” (emphasis added). [109] In Casbohm v Winacott Spring Western Star Trucks, 2019 SKQB 44, [2019] 9 WWR 714 [Casbohm], affirmed 2021 SKCA 21,Kalmakoff J. (as he then was) explained that Rule 7-5(1)(b) “may properly be interpreted as all parties agreeing that there is no genuineissue requiring a trial with respect to the issues upon which they seek

summary judgment” (at para 9). Still, in that situation, the use ofthe

summary judgment process is not automatic. Justice Kalmakoff explained the reasons for this as follows: [10] That said,

summary judgment is not automatic just because all parties agree that a matter should be determined that way. A courtshould grant

summary judgment under Rule 7-5(1)(

b) only if doing so results in a fair process that allows for just adjudication of theissues between the parties: Magna Electric Corp. v Tesco Electric Ltd., 2015 SKQB 35, 469 Sask R 15. The purpose of the rules relatingto

summary judgment is to eliminate unnecessary trials, not to eliminate all trials. While the

summary judgment rules must be interpretedbroadly, in a way that favours proportionality and fair access to affordable, timely and just adjudication of claims (see Hryniak vMauldin, 2014 SCC 7, [2014] 1 SCR 87 [Hryniak] and Pervez v Caskey, 2013 SKQB 377, [2013] 12 WWR 794), they must not beapplied in a fashion which compromises the fairness of the procedure or the justness of the outcome. (Emphasis added) The Ontario Court of Appeal came to the same conclusion in Royal Bank of Canada v 1643937 Ontario Inc., 2021 ONCA 98 at para 26,145 OR (3d) 561. [110] Rules 7-5(1)(

a) and 7-5(1)(

b) therefore reach the same end point. Under both rules, the court should only grant

summaryjudgment if it is satisfied that it is able to reach a fair and just determination on the merits. However, in the context of this case, the factthat the parties agreed on the use of the

summary judgment procedure meant that neither party bore an onus, initial or otherwise, ofsatisfying the court that the use of the procedure was justified. The resolution of that question was left to the Chambers judge, in keepingwith Rule 7-5(1)(

b) and the direction given in Casbohm. [47] Given the parties agreed that the

summary judgment process should be used to resolve all the issues before theCourt, I must examine whether I am able to make a fair and just determination of the issues based on the agreement as to facts (includingaddendums) filed by the parties. [48] From a review of the facts and law, I have no hesitation in concluding the

summary judgment process is theappropriate forum for resolving the issues between the parties. While there exists some vagueness and uncertainty as a result of theapplication of paragraphs 44 and 45 to the factual component of this matter, I find that nothing substantive turns on resolving whether theapplicant acted in good faith having regard to the legal analysis that must be performed. [49] Therefore, I will now turn to adjudicating the merits of the issues between the parties. Statutory

Interpretation [50] This matter requires the Court to interpret numerous sections of The Municipalities Act. The SaskatchewanCourt of Appeal recently provided guidance on the issue of statutory

interpretation in Regina Bypass Design Builders v Supreme SteelLP, 2021 SKCA 82 as follows: [23] The proper approach to any issue of statutory

interpretation is the so-called modern principle articulated in Rizzo & Rizzo ShoesLtd., (Re), (SCC), [1998] 1 SCR 27 [Rizzo Shoes], which “recognizes that statutory

interpretation cannot be founded onthe wording of the legislation alone” (at para 21). The modern principle has been codified in s. 2-10(1) of The Legislation Act [SS 2019,c L-10.2], which reads as follows: 2-10(1) The words of

an Act and regulations authorized pursuant to

an Act are to be read in their entire context, and in theirgrammatical and ordinary sense, harmoniously with the scheme of the Act, the object of the Act and the intention of the Legislature. [24] In s. 2-10(2), The Legislation Act also requires every enactment to be interpreted in a remedial fashion and to be given a “fair,large and liberal

interpretation” that best attains the objects of the statute. [25] The language of the statutory provision in question is always the starting point, but not the end point, of an exercise ininterpretation. As noted in Hess v Thomas Estate, 2019 SKCA 26, 433 DLR (4th) 60 [Hess]: [50] The modern principle and s. 10 demand a contextual and purposive approach. However, that does not mean the court can ignorethe ordinary meaning of the words chosen by the legislature. As noted in Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed,(Markham, Ont: LexisNexis, 2014) at 29 [Sullivan]:

…

interpretation properly begins with the ordinary meaning — with reading words in their grammatical and ordinary sense — but doesnot stop there. Interpreters are obliged to consider the total context of the words to be interpreted in every case, no matter how plainthose words may seem upon initial reading. [51] The ordinary meaning prevails unless there is a reason to reject it based on contextual considerations. Such considerations – oneof which is the avoidance of absurdities – may result in the adoption of an

interpretation that differs from the ordinary meaning, but onlyif that

interpretation is plausible (Sullivan at 28–29). The plausible meaning rule requires that the

interpretation is one that the words ofthe text can reasonably bear (Sullivan at 191). As LeBel J. said in Re: Sound v Motion Picture Theatre Associations of Canada, 2012SCC 38, [2012] 2 SCR 376: “Although statutes may be interpreted purposively, the

interpretation must nevertheless be consistent withthe words chosen by Parliament” (at para 33). [26] In Ballantyne [2015 SKCA 38, 457 Sask R 254], Ryan-Froslie J.A., also citing Ruth Sullivan in Sullivan on the Construction ofStatutes, 6th ed, (Markham, Ont: LexisNexis, 2014) [Sullivan], wrote: [20] … 2. Even if the ordinary meaning is plain, courts must take into account the full range of relevant contextual considerations includingpurpose, related provisions in the same and other Acts, legislative drafting conventions, presumptions of legislative intent, absurdities tobe avoided and the like. 3. …the court may adopt an

interpretation that modifies or departs from the ordinary meaning, provided the

interpretation adopted isplausible and the reasons for adopting it are sufficient to justify the departure from ordinary meaning. [27] The modern principle emphasizes the importance of purposive analysis in statutory

interpretation. All legislation is presumed tohave a purpose which courts should strive to discover and give effect to through the interpretive process. Legislative purpose must betaken into account at every stage of the

interpretation exercise and, so far as the language of the text permits,

interpretations that areconsistent with or promote legislative purpose should be adopted, while those that defeat or undermine legislative purpose should beavoided (Sullivan at §9.3; Farm Credit Canada v Gustafson, 2021 SKCA 38 at para 58). [28] Context must also be taken into account. As Sullivan observes, at §2.19, “in hard cases the contextual factors point in differentdirections” and “[i]n such cases, reading the text harmoniously with the scheme and object of the Act and the intention of the legislaturerequires a balancing act”.

All of this means that in some instances, the plain meaning of the words used will receive greater weight in theanalysis and, in other cases, less. As Sullivan describes, at §2.37: The factors that justify outcomes in statutory

interpretation are multiple, involving inferences about meaning and intention derived fromthe text, non-textual evidence of legislative intent, specialized knowledge, “common sense” and legal norms. These factors interact incomplex ways. It is never enough to say the words made me do it. [51] From this analysis, it is clear that a number of variables have to be taken into consideration in relation tostatutory

interpretation although context would seem to be one of the most important factors to keep in mind. Duty of Care [52] The applicant argues that the RM had a duty to reasonably interpret The Municipalities Act so as to pay his legalfees and honorariums. Mr. Probe says that the RM breached that duty by improperly interpreting their statute by declining to pay hislegal fees and honorariums.

Further, they submit that the request for payment was reasonably foreseeable as the applicant would sufferharm if they did not act positively to provide him with these various funds. [53] There is no authority cited for this proposition. [54] Essentially, this is akin to asking the Court to create the tort of negligent

interpretation. In my view, a finding ofduty of care in these circumstances would undermine the legislative intent of any

section in any Act that provides a legislative body withdiscretion to do or not do something. A court, if such a duty existed, would be required to review every decision where discretion wasgiven to ensure an equitable response. Rather than a court examining the contextual meaning of the statute, it would be assessingfairness and subjective expectations in each and every case. As stated by the respondent, the issue is whether the RM has the legislativecompetence to pay the amounts sought by the applicant.

That determination is a matter of statutory competence, not moral obligation. [55] However, even if this matter was framed or argued simply in terms of negligence, the decision of Little v Ottawa(City) (2004), 49 MPLR (3d) 115 (Ont Sup Ct) [Ottawa City], describes the legal considerations for such a request: 30 The Supreme Court of Canada considered the liability of government agencies in tort actions in Just v. British Columbia (1989), (SCC), 64 D.L.R. (4th) 689 (QL). Speaking for the majority, Justice Cory stated at pp. 12, 13, 14, 15: Page 12 . . .

Over the passage of time the increased government activities gave rise to incidents that would have led to tortious liability ifthey had occurred between private citizens. The early governmental immunity from tortious liability became intolerable. This led to theenactment of legislation which in general imposed liability on the Crown for its acts as though it were a person. However, the Crown isnot a person and must be free to govern and make true policy decisions without becoming subject to tort liability as a result of thosedecisions.

On the other hand, complete Crown immunity should not be restored by having every government decision designated as oneof policy. Thus, the dilemma giving rise to the continuing judicial struggle to differentiate between policy and operation. Particularlydifficult decisions will arise in situations where governmental inspections may be expected. The dividing line between “policy” and “operation” is difficult to fix, yet it is essential that it be done . . . .

. . . True policy decisions should be exempt from tortious claims so that governments are not restricted in making decisions basedupon social, political or economic factors. However, the implementation of those decisions may well be subject to claims in tort. Whatguidelines are there to assist courts in differentiating between policy and operation? Page 13 Mason J., speaking for himself and one other member of the Australian High Court in Sutherland Shire Council v. Heyman (1985),1988 ABCA 234 , 60 A.L.R. 1, set out what I find to be most helpful guidelines.

He wrote: Anns [[1977] 2 All E.R. 492] decided that a duty of care cannot arise in relation to acts and omissions which reflect the policy-making and discretionary elements involved in the exercise of statutory discretions. It has been said that it is for the authority to strikethat balance between the claims of efficiency and thrift to which du Parcq LJ referred in Kent v.

East Suffolk Rivers Catchment Board[1940] 1 KP 319 at 338 and that it is not for the court to substitute its decision for the authority's decision on those matters when theywere committed by the legislature to the authority for decision (Dorset Yacht Co. v. Home Office, [1970] AC 1004 at 1031, 1067-8;Anns, at p. 754; Barratt v. District of North Vancouver (1980) (1980), (SCC), 114 D.L.R. (3d) 577 (S.C.C.)). Althoughthese injunctions have compelling force in their application to policy-making decisions, their cogency is less obvious when applied toother discretionary matters.

The standard of negligence applied by the courts in determining whether a duty of care has been breachedcannot be applied to a policy decision, but it can be applied to operational decisions. Accordingly, it is possible that a duty of care mayexist in relation to discretionary considerations which stand outside the policy category in the division between policy factors on the onehand and operational factors on the other. . . .

The distinction between policy and operational factors is not easy to formulate, but the dividing line between them will beobserved if we recognize that a public authority is under no duty of care in relation to decisions which involve or are dictated byfinancial, economic, social or political factors or constraints. Thus budgetary allocations and the constraints which they entail in terms ofallocation of resources cannot be made the subject of a duty of care.

But it may be otherwise when the courts are called upon to apply astandard of care to action or inaction that is merely the product of administrative direction, expert or professional opinion, technicalstandards or general standards of reasonableness. (Emphasis added.) The duty of care should apply to a public authority unless there is a valid basis for its exclusion. A true policy decision undertakenby a government agency constitutes such a valid basis for exclusion. What constitutes a policy decision may vary infinitely and may bemade at different levels although usually at a high level.

The decisions in Anns v. Merton London Borough Council and Kamloops v. Nielsen [ (SCC), [1984] 2 SCR 2]indicate that a government agency in reaching a decision pertaining to inspection must act in a reasonable manner which constitutes abona fide exercise of discretion. To do so they must specifically consider whether to inspect and if so, the system of inspection must be areasonable one in all the circumstances. Page 14 . . .

Thus, once the policy decision to inspect has been made, the court may review the scheme of inspection to ensure it isreasonable and has been reasonably carried out in light of all the circumstances, including the availability of funds, to determine whetherthe government agency has met the requisite standard of care. . . . It may be convenient at this stage to summarize what I consider to be the principles applicable and the manner of proceeding incases of this kind. As a general rule, the traditional tort law duty of care will apply to a government agency in the same way that it willapply to an individual.

In determining whether a duty of care exists, the first question to be resolved is whether the parties are in arelationship of sufficient proximity to warrant the imposition of such a duty. In the case of a government agency, exemption from thisimposition of duty may occur as a result of an explicit statutory exemption. Alternatively, the exemption may arise as a result of thenature of the decision made by the government agency. That is, a government agency will be exempt from the imposition of a duty ofcare in situations which arise from its pure policy decisions. Page 15 . . .

Further, it must be recalled that a policy decision is open to challenge on the basis that it is not made in the bona fide exercise ofdiscretion.

If after due consideration it is found that a duty of care is owed by the government agency and no exemption by way of statuteor policy decision-making is found to exist, a traditional torts analysis ensues and the issue of standard of care required of thegovernment agency must next be considered. 31 Accordingly, the claims made against the City that sound in negligence must be considered as to whether policy oroperational factors are at play, and, as well, as to whether the facts complained of arise out of the city's performance of its investigativeor prosecutorial function.

The City is not liable in negligence respecting the good faith investigation and prosecution of offences withinits authority. See Toronto (City) v. Polai, [ (ON CA), [1970] 1 OR 483, 8 DLR (3d) 689] and Al's Steak House &Tavern Inc. v. Deloitte & Touche, (ON SC), [1994] O.J. No. 2340 (Ont. Gen. Div.). [56] Given that the determination to not cover the plaintiff’s legal costs in these circumstances fits squarely as apolicy decision by Council as it relates to economic, social and political factors (as stated in Ottawa City), I find that no duty of careexists here.

There are no allegations of bad faith on behalf of the RM, nor is there any allegation of negligent misrepresentation on behalfof the RM’s employees. I do not see any facts from which to draw any negative inference against the decision not to pay the plaintiff inall matters. The fact that this decision by the RM negatively impacted the plaintiff financially does not change the discretionary aspect ofthe RM’s decision.

[57] This decision was not administrative or operational in nature. There was not a clear set of factors to look at it inmaking an operational decision. The RM had to make a political decision based on the likely views of their ratepayers and social policyconsiderations having regard for the trouble related to the conflict of interest issues that the plaintiff found himself in. [58] I find no duty of care exists here.

Fiduciary Duty [59] The plaintiff then argues that the RM owed the plaintiff a fiduciary duty given the power they exercise todetermine whether the legal fees and honorariums under The Municipalities Act are paid to him thereby affecting his legal and practicalinterests.

Further, the plaintiff submits he is peculiarly vulnerable to the respondent given the respondent has the sole discretion to paythese monetary amounts. [60] There is also no authority for this specific proposition. [61] The Ottawa (City) decision also has some instructive comments with respect to this argument as well: 25 The Plaintiff says that the fiduciary relationship arises in this case because the City had a discretion under this statutory provision, itcould exercise that discretion unilaterally in a way that could affect the Plaintiff's legal interests, and the Plaintiff was vulnerable,especially since by virtue of the Municipal Conflict of Interest Act [RSO 1990, c M.50] he could not make representations on his ownbehalf to council. 26 Although the categories of fiduciary relationships are not closed, in my view, this claim has no chance of success.

It does notdisclose a reasonable cause of action against the City. Although the Plaintiff has correctly identified the three common featuresdiscernable in relationships in which fiduciary duties have been found to exist, what is missing are the indicia of trust, confidence andreliance. In Hodgkinson v.

Simms (1994), (SCC), 117 D.L.R. (4th) 161 (S.C.C.), Laforest J. stated at pages 7, 10, 11 and12: Page 7 . . . a fiduciary relationship exists where one party agrees to act on behalf of, or in the best interests of another person and, as such, isin a position to affect the interests of that other person in a legal or practical sense. As such, fiduciary relationships are marked byvulnerability in that the fiduciary can abuse the power or discretion given him or her to the detriment of the beneficiary. Page 10 . . . For instance, the fiduciary duty is different in important respects from the ordinary duty of care.

In Canson Enterprises Ltd. v.Boughton & Co. (1991), (SCC), 85 D.L.R. (4th) 129 at pp. 141-2, 39 C.P.R. (3d) 449 at pp. 461-3, [1991] 3 S.C.R. 534,I traced the history of the common law claim of negligent misrepresentation from its origin in the equitable doctrine of fiduciaryresponsibility: see also Nocton v. Lord Ashburton, [1914] A.C. 932, at pp. 968-71, per Lord Shaw of Dunfermline.

However, while bothnegligent misrepresentation and breach of fiduciary duty arise in reliance-based relationships, the presence of loyalty, trust, andconfidence distinguishes the fiduciary relationship from a relationship that simply gives rise to tortious liability. Thus, while a fiduciaryobligation carries with it a duty of skill and competence, the special elements of trust, loyalty, and confidentiality that obtain in afiduciary relationship give rise to a corresponding duty of loyalty. Page 11 . . . . One may begin with the following words of Dickson J. (as he then was) in Guerin v.

The Queen (1984), (SCC), 13 D.L.R. (4th) 321 at p. 341, [1984] 2 S.C.R. 335, 20 E.T.R. 6: . . . where by statute, agreement, or perhaps by unilateral undertaking, one party has an obligation to act for the benefit of another,and that obligation carries with it a discretionary power, the party thus empowered becomes a fiduciary. It is sometimes said that the nature of the fiduciary relationships is both established and exhausted by the standard categories ofagent, trustee, partner, director and the like. I do not agree.

It is the nature of the relationship, not the specific category of actor involvedthat gives rise to the fiduciary duty. The categories of fiduciary, like those of negligence, should not be considered closed.

Page 12 As I noted in LAC Minerals, however, the three-step analysis proposed by Wilson J. encounters difficulties in identifyingrelationships described by a slightly different use of the term “fiduciary”, viz., situations in which fiduciary obligations, though not innateto a given relationship, arise as a matter of fact out of the specific circumstances of that particular relationship: see supra, at p. 29 D.L.R.,p. 112 C.P.R.

In these cases, the question to ask is whether, given all the surrounding circumstances, one party could reasonably haveexpected that the other party would act in the former's best interests with respect to the subject-matter at issue. Discretion, influence,vulnerability and trust were mentioned as non-exhaustive examples of evidential factors to be considered in making this determination.

Thus, outside the established categories, what is required is evidence of a mutual understanding that one party has relinquished itsown self-interest and agreed to act solely on behalf of the other party. . . . 27 On the facts as pleaded, the City could not be found to be under a duty nor to have agreed to act only on behalf of the Plaintiff.Section 81 of the Municipal Elections Act [1996, SO 1996, c 32] establishes the procedure for the City to follow in order to respond to acomplaint from an elector, which may disclose contraventions by a candidate relating to election campaign finances and if so, to decidewhether the candidate should be prosecuted.

In fulfilling these responsibilities, the City cannot undertake to act in the exclusive interestof the candidate. A similar conclusion was reached in Romagnuolo v. Hoskin, [2001] O.J. No. 3537 (Ont. S.C.J.) with respect to a police

officer: ¶ 38 Henry J.'s recognition that the duties of police officers are owed to the public at large cuts to the very heart of the issue before this Court. The nature of a fiduciary relationship requires that one party act selflessly in the exclusive interests of another. In performing his or her duties, a police officer does not, either personally or statutorily, undertake to act in the exclusive interest of each individual member of the public. Instead, the officer's duties are owed to society as a whole.

In the context of law enforcement, society's best interests are often served at the expense of an individual's liberty and freedom. A police officer cannot always be expected to act in each individual's best interests in fulfilling his or her duties to the public at large. 28 For these reasons, the claims based on alleged breach of fiduciary duty by the City are also struck. [ 62 ] If anything, given Mr.

Probe was the elected representative for the RM, it would seem that he was the one with a fiduciary duty towards the RM, given the ability he had as an elected representative to make decisions that could markedly affect the RM’s legal and practical interests in terms of passing bylaws and the control he would have had, with others, to make budget decisions and bind the RM to a specific course of action. In fact, the RM had to bring legal action against the plaintiff to disqualify him due to the fact he was acting in a conflict of interest.

The necessity of legal action illustrates the RM’s vulnerability to the plaintiff’s conduct rather than the other way around. [ 63 ] I find that the RM does not have a fiduciary duty towards the plaintiff. The Honorarium [ 64 ] The plaintiff claims that he should be paid his honoraria from October 2016 to January 18, 2018.

He relies on s. 82(1) of The Municipalities Act which states as follows: Remuneration, etc., of members of council 82(1) Each member of council is to be paid any remuneration and benefits and any reimbursement or allowances for expenses that may be fixed by the council. [ 65 ] The respondent states that the moment he was disqualified occurred on January 13, 2016 as a result of the decision in Sherwood . That decision considered the effects of the following sections of The Municipalities Act : Reasons for disqualification 147

(1) A member of council is disqualified from council if the member: (

a) when nominated, was not eligible for nomination or election as a candidate pursuant to The Local Government Election Act, 2015 ; (

b) ceases to be eligible for nomination or election or to hold office pursuant to The Local Government Election Act, 2015 or any other Act; (

c) is absent from all regular council meetings held during any period of 3 consecutive months during which at least 2 meetings of the council have been held, starting with the date that the first meeting is missed, unless the absence is authorized by: (

i) a resolution of council; or (ii) a leave of absence policy adopted by council; (

d) is convicted while in office: (

i) of an offence punishable by imprisonment for five years or more; or (ii) of an offence pursuant to

section 123 , 124 or 125 of the Criminal Code ; (iii) subsection 114.1(2) of this Act; or (iv) subsection 192(5) of this Act; (

e) contravenes: (

i) a bylaw passed pursuant to

section 34 of The Local Government Election Act, 2015; (ii)

section 142 or 144 of this Act; (iii) subsection 114.1(2) of this Act; or (iv) subsection 192(5) of this Act; (

f) other than a member of the council of a rural municipality, resort village or municipality that has adopted a bylaw pursuant to clause 89(2)(

a) or (b), ceases to reside in the municipality; (

g) in the case of a rural municipality or a municipality other than a rural municipality that has adopted a bylaw pursuant to clause 89(2) (b), ceases to reside in Saskatchewan and for three consecutive months does not reside in Saskatchewan;

(

h) in the case of a rural municipality or a municipality other than a rural municipality that has adopted a bylaw pursuant to clause 89(2) (b), is convicted of making a false statement in the acceptance of his or her nomination as a candidate; (

i) is determined to have made a false statement or declaration in the nomination paper filed in accordance with The Local Government Election Act, 2015 ; or (

j) is removed from office by the Lieutenant Governor in Council or by the minister pursuant to

section 399 or 402, as the case may be, unless the order directs that the person is not disqualified.

(2) A member of council who is disqualified pursuant to this

section is not eligible to be nominated or elected in an election in any municipality until the earlier of: (a) 12 years following the date of the disqualification; and (

b) the date of any pardon obtained with respect to a disqualification pursuant to a conviction pursuant to clause (1)(d). Enforcement of disqualification 148

(1) A member of council who is disqualified must resign immediately.

(2) If a member of council who is disqualified does not resign as required by subsection (1): (

a) the council may, by resolution, declare the person’s office vacant; or (

b) the council or a voter may apply to a judge of the court in the prescribed manner for: (

i) an order determining whether the person was never qualified to be or has ceased to be qualified to remain a member of council; or (ii) an order declaring the person to be disqualified from council.

(2.1) The person whose office has been declared vacant pursuant to clause (2)(

a) may, within 10 business days after the passing of the resolution by council, appeal the resolution to a judge of the court in the prescribed manner.

(2.2) After hearing an application pursuant to subsection (2.1) and any evidence, either oral or by affidavit, that is required, the judge of the court may: (

a) confirm the disqualification resolution; or (

b) set aside the disqualification resolution.

(3) A voter who applies to the court shall: (

a) file an affidavit showing reasonable grounds for believing that the person who is the subject of the application never was or has ceased to be qualified as a member of council; and (

b) pay into court the sum of $500 as security for costs.

(4) An application pursuant to this

section may only be made within three years after the date the disqualification is alleged to have occurred.

(5) An application pursuant to this

section may be started or continued whether or not: (

a) an election has been held between the time the disqualification is alleged to have occurred and the time the application is or was commenced; and (

b) the person with respect to whom the application is being brought: (

i) resigns before or after the election; (ii) was re-elected in the election; (iii) was not re-elected or did not run in the election; or (iv) has completed a term of office.

(6) After hearing an application pursuant to clause (2)(

b) and any evidence, either oral or by affidavit, that is required, a judge of the court may: (

a) declare the person to be disqualified and a position on council to be vacant; (

b) declare the person able to remain a member of council; (b.1) declare the person eligible to be nominated in the next election; or (

c) dismiss the application.

(7) If a judge declares a person disqualified because of a failure to disclose a conflict of interest pursuant to

section 144 and the judge finds that the contravention has resulted in personal financial gain, the judge may require the person to pay an amount equal to the amount of that gain to: (

a) the municipality; or (

b) any person who, in the judge’s discretion, is appropriate. Inadvertence or honest mistake 149 A judge who hears an application pursuant to

section 148 with respect to an alleged disqualification pursuant to clause 147(1)(

e) and finds that the person is disqualified shall dismiss the application if the judge is of the opinion that the disqualification arose through inadvertence or by reason of an honest mistake. [ 66 ] In Sherwood , the Court stated as follows in relation to disqualification: 48 I find that Mr. Probe violated s. 144 of the Act and, by virtue of the operation of s. 147(1)(e)(ii) he is, subject to the application of ss. 148 and 149 disqualified from the RM Council. 3.

Should the disqualification be enforced? 49 Section 148(1) of the Act stipulates that a member of council who is disqualified must resign immediately. 50 Mr. Probe did not do so. As a result, ss. 148(1)(b), 148(6) and 149 are brought into play. These provisions provide a process that authorizes the court to remove a councillor who does not resign as required. 51 The RM Council has brought such an application and seeks to have Mr. Probe removed from office since he has become disqualified due to conflicts of interest and has failed to voluntarily resign.

It should be recognized, as pointed out by Currie J. in Shellbrook No. 493 (Rural Municipality) v. Muller , that a finding of a conflict of interest and the disqualification that follows as a consequence, does not automatically result in a judicial pronouncement that the subject of the application be declared disqualified and removed from council. At paras. 35-36, Currie J. makes the following comments, with which I am in full agreement: 35 ... the Legislature has given the court not only the power to make the declarations but also the discretion to do otherwise.

The Legislature must have contemplated that there could be a circumstance in which, although a councillor had contravened s. 144, and although the contravention was not through inadvertence or honest mistake, it would be appropriate to do something short of removing that councillor from council. There can be no other reason for the Legislature having included s. 148(6)(b). 36 Accordingly, I consider the circumstances and, in particular, the effect of Mr. Muller’s contravention of s. 144. [ 67 ] And further: 57 In my view, the interests of justice require that Mr.

Probe be declared to be disqualified from the RM Council and, also, that his position be declared vacant. Anything less, in these circumstances, would amount to a disservice to the citizens of Sherwood and the administration of justice, in general. These were serious transgressions. There were no circumstances drawn to the Court's attention that would weigh in favour of any other option. 58 Finally, I need to determine whether s. 149 of the Act applies.

This provision states that, notwithstanding an alleged contravention of the conflict of interest provisions in s. 147(1)(e), the court is required to dismiss the action if the court is of the opinion that the disqualification arose through “inadvertence or by reason of an honest mistake”. There are no circumstances capable of permitting me to draw the conclusion that Mr. Probe's wilful and deliberate participation in matters which he knew would place him in a conflict of interest could be construed as inadvertent or as an honest mistake. Mr.

Probe was aware of the conflict of interest provisions in the Act , at least in a general way, and that they applied to the matter involving the possible repayment of the reimbursed legal fees. He recused himself at the October 2015 meetings and should have known enough to do so again at the January 13, 2016 meeting. 59 Here, the actions of Mr. Probe were deliberate, not inadvertent, and do not qualify as an honest mistake. VII. CONCLUSION 60 Mr. Probe placed himself in a conflict of interest situation respecting the matter of repayment of reimbursed legal fees at the January 13, 2016 council meeting. 61 Mr.

Probe contravened s. 144(1) of the Act by not disclosing his conflict of interest and by not recusing himself from the matter. By operation of s. 147(1)(e)(ii) he is considered disqualified from the RM Council. Section 148(1) stipulates that a disqualified member must resign immediately. Failure to do so can trigger the operation of s. 148(2) which is an application to this Court for an order declaring that Mr. Probe be disqualified from the RM Council.

The RM Council made such an application. 62 After hearing the application, I have determined that the RM Council is entitled to the declaration they seek. 63 Accordingly, I hereby order, pursuant to ss. 148(2)(

b) and 148(6)(

a) that Mr. Probe be declared to be disqualified and further order and declare that his position on the RM Council is vacant. [ 68 ] While the RM argues that one could infer retroactivity in the language used by the Court with reference to the disqualification, the plain language used by the Court and the statutory provisions cited suggest otherwise. [ 69 ] Both in paragraphs 57 and 63, the Court used the terms “be declared to be disqualified” which suggests an order

that is made in the present. The Court did not say “be declared to have been disqualified” which might have provided an element of retroactivity. [ 70 ] Section 148(2) (b)(

i) of The Municipalities Act contemplates that a Court could order that an individual was never qualified to be a member of council, which would very much be a retroactive order. However, the Court in Sherwood used the language in s. 148(2) (b)(ii), which indicated a present immediate effect rather than a date that would indicate the date he ceased to be a member of council some time in the past. [ 71 ] As well, the context of the

section in the statute militates against a suggestion of retroactivity. As noted in paragraph 51 of the decision, a finding of conflict of interest and the disqualification that follows does not necessarily result in a judicial pronouncement that he be disqualified due to s. 149 of The Municipalities Act , which provides that no disqualification order should result if the conflict of interest arose from inadvertence or honest mistake. This buffering procedure against immediate disqualification if a mistake was made demonstrates there was no automatic backdating effect in the disqualification process.

It would be reasonable for the legislature not to include such provisions as they may render past voting decisions suspect or invalid, which may cause all sorts of mischief to other legitimate legislation that would thereafter be found to have been potentially improperly passed given the absence of a voting member. [ 72 ] Given the clear language used and for the reasons noted above, I find the RM is obligated to pay his honoraria up until the date of the order in Sherwood , which was January 18, 2018. [ 73 ] While the agreement of facts noted that the plaintiff did appeal the order in Sherwood , s. 150 of The Municipalities Act is apposite in that regard: Appeal 150

(1) The decision of a judge pursuant to

section 148 or 149 may be appealed to the Court of Appeal.

(2) A person who is declared disqualified pursuant to

section 148 and appeals that declaration remains disqualified until the appeal is finally determined.

(3) If, on the final determination of the appeal, a declaration of disqualification is set aside: (

a) the Court of Appeal shall reinstate the person as a member of council for any unexpired portion of the term of office for which the person was elected and require any person who has been elected to fill the balance of that term to vacate the office; and (

b) the Court of Appeal may order that: (

i) any money paid to the municipality pursuant to subsection 148(7) be repaid; and (ii) a sum equal to the lost remuneration and benefits of the member be paid to the member by the municipality. [ 74 ] Therefore, while the plaintiff may have appealed the order until September 2018, there would be no stay of the disqualification order of the Court in Sherwood and he would remain disqualified given the clear language of the statute. [ 75 ] Therefore, I find the amount owing from the RM to Mr.

Probe in these circumstances is $27,150.00 Legal Fees at the Barclay Inquiry [ 76 ] The plaintiff argues that due to a contract with Ron McCullough, the then Chief Administrative Officer of the RM, as well as the statutory

interpretations related to the RM’s discretion, the RM must pay Mr. Probe’s legal costs at the Barclay Inquiry. [ 77 ] A bylaw was enacted by Council to require the RM to cover these legal fees, which it did pay out, but it was subsequently quashed. Despite the lack of bylaw, Mr. Probe suggests the agreement should be honored due to fairness and contractual principles. [ 78 ] The respondent states that the plaintiff cannot rely on an agreement with an unelected official and that the RM has the discretion pursuant to the legislative provisions not to provide legal fees to the plaintiff.

Further, in relation to this specific claim, given the amount has already been paid, no legal proceedings to recover a sum already paid can be successful. [ 79 ] As noted in the agreement of facts, the agreement with Ron McCullough is not disputed.

The issue for the Court to consider is whether the RM would be bound by his actions despite the quashing of the Bylaw . [ 80 ] The answer to this question is found in the decision of Baker , which quashed Bylaw 17/14. [ 81 ] In that decision, the Court reviews the statutory and legal authority under The Municipalities Act to delegate certain matters and states as follows: 80 The applicants submit that Provisions 4 c. and d. of the Bylaw are illegal in that the delegation of authority to the Chief Administrative Officer is contrary to the express wording of the Act , the scheme of the Act and the object of the Act .

Section 127 provides as follows: 127 No council shall delegate: . . . (

o) its power to set the remuneration for members of council and for members of council committees and other bodies established by the council pursuant to

section 81; ... 82 Other sections of the Act have some relevance. 83

Section 111 outlines the duties of the administrator of the municipality. Subsection (2)(

j) states that: 111(2) The administrator shall ensure that: . . . (

j) the funds of a municipality are disbursed only in the manner and to those persons that are directed by law or by the bylaws or resolutions of the council; ... 84

Section 92 stipulates that councillors have certain duties. These include the duty: 92 . . . (

d) to ensure that administrative practices and procedures are in place to implement the decision of counsel; . . . (

f) to maintain the financial integrity of the municipality; ... 85

Section 159 states that: 159 A municipality may only make an expenditure that is: (

a) included in its budget or otherwise authorized by its council; (

b) for an emergency; or (

c) legally required to be paid. 86 Section 192(1) provides that: 192(1) A member of council who knowingly makes an expenditure that is not authorized pursuant to

section 159, or who knowingly makes an investment that is not authorized pursuant to

section 160, is liable to the municipality for the expenditure, investment or amount spent, as the case may be. 87 The issue of delegation within municipal law is governed by the maxim delegatus non potest delegare , translated as “a delegate cannot delegate” ( Rogers at 381). In other words, in the absence of express statutory authority, a municipal council cannot assign, to any other individual or agency, any legislative or discretionary power with which it has been vested (Rogers at 381).

To determine the validity of a delegation of power by a municipal council, the courts will look for an express grant of authority to delegate (Stanley M. Makuch, Neil Craik & Signe B. Leisk, Canadian Municipal and Planning Law , 2d ed (Toronto: Thomson Carswell, 2004) at 106). In the absence of this authority, there is a presumption against delegation ( Canadian Municipal and Planning Law ). … 94 It would appear to be clear from the sections of the Act quoted supra and s. 151 quoted earlier that council bears the direct responsibility and authority for financial decisions and expenditures.

The CAO must carry out the directions of council but Bylaw 14/17 leaves significant discretion in his hands which is contrary to the scheme of the Act .

The CAO, an employee who reports to council, must decide whether the legal fees, costs or damages arose from an action or proceeding; whether the action or proceeding arose from acts or omissions of councillors in the course of their duties; whether the acts or omissions of councillors were done or made in good faith with a view to the best interests of the RM; whether the legal fees, costs and/or damages are/were not already covered by the RM's insurance; and lastly whether the legal fees, costs and/or damages are/were reasonable. 95 I would accordingly find that Bylaw 14/17 illegally delegates authority to the CAO. 96 The application is allowed.

The Bylaw is quashed. The applicants will have their costs to be taxed. [ 82 ] Given the tenor of the decision, it is clear that Mr. McCullough could not bind the RM to any action. Mr. McCullough is a delegate of Council. He cannot make agreements on Council’s behalf for which they solely have the discretionary power to authorize. As noted by the Court, there is no statutory power authorizing any delegation by council, so the agreement is not enforceable against the RM. As the RM is the only party to this action, this aspect of Mr.

Probe’s argument must fail. [ 83 ] The next argument to consider involves an analysis involving the statutory

interpretations of various provisions in The Municipalities Act to determine whether they require the RM to pay the plaintiff’s legal costs for the Barclay Inquiry and the other matters.

[ 84 ] The relevant sections of The Municipalities Act for consideration are as follows: Reimbursement 151

(1) The council may reimburse the person with respect to whom an application pursuant to this Part was made for any costs and expenses that the council considers reasonable, other than costs that have already been awarded to the person by the judge, if: (

a) the application is dismissed; or (

b) an order is issued declaring the person able to remain a member of council.

(2) The council may reimburse a voter for legal expenses incurred in bringing an application pursuant to this Part, in addition to costs awarded to the person by the judge, if: (

a) the application is successful; or (

b) an order is issued declaring that the person with respect to whom the application was made is disqualified to remain a member of council. … DIVISION 2 Liability of Members of Council and Municipal Officers

Interpretation of Division 354 In this Division: (a) “firefighter” means a fire chief and any person employed by, appointed by or performing duties for a municipality, whether for wages or otherwise, as a firefighter or to provide fire protection services; (b) “municipal officer” means all employees of the municipality, of any committee or other body established by council, of a public utility board established by council pursuant to subsection 33(2), and of a controlled corporation of a municipality; (c) “volunteer worker” means a volunteer member of an emergency measures organization established by a municipality, or any other volunteer performing duties under the direction of a municipality.

Immunity re acts of members of council and council committees 355

(1) No action or proceeding lies or shall be instituted against a member of council, a member of a committee or other body established by a council, a member of a public utility board established pursuant to subsection 33(2), a member of a controlled corporation of a municipality or any municipal officer, volunteer worker or agent of the municipality for any loss or damage suffered by a person by reason of anything in good faith done, caused, permitted or authorized to be done, attempted to be done or omitted to be done by any of them pursuant to or in the exercise or supposed exercise of any power conferred by this Act or the regulations or in the carrying out or supposed carrying out of any duty imposed by this Act or the regulations. (2) Subsection (1) does not affect the liability of a mere contractor with the municipality, nor of any official or employee of any contractor, by reason of whose act or neglect the damage was caused.

(3) A municipality may pay the cost of: (

a) defending an action or proceeding against a member of council, a member of a committee or other body established by a council, a member of a public utility board established pursuant to subsection 33(2) or a member of a controlled corporation that claims liability on the part of that person for acts or omissions done or made by the person in good faith in the course of his or her duties; or (

b) any sum required to settle the action or proceeding mentioned in clause (a). Acts of members of municipal bodies, municipal officers, volunteers, etc. 356

(1) A municipality is vicariously liable for loss or injury arising from any act or omission of a municipal officer, a volunteer worker or an agent of the municipality acting in the course of his or her duties if the officer, volunteer worker or agent would otherwise be personally liable.

(2) The municipality shall: (

a) pay the cost of defending an action or proceeding against a municipal officer, volunteer worker or agent of the municipality claiming liability on the part of that person for acts or omissions done or made by the person in the course of his or her duties or pay any sum required to settle the action or proceeding; and (

b) pay the damages and costs awarded against a municipal officer, volunteer worker or agent of the municipality as a result of a finding of liability on the part of any of them for acts or omissions done or made by any of them in the course of his or her duties.

[85] The plaintiff argues based on statutory

interpretation and certain judicial decisions that ss. 355 and 356 of TheMunicipalities Act compel the RM to pay his legal fees. [86] The respondent argues that this same statutory

interpretation inevitably leads the Court to conclude that payinglegal fees is in the complete discretion of the RM. [87] Firstly, the plaintiff states that the “may” in s. 355(3) of The Municipalities Act creates a mandatory duty on theRM to pay should the requirements stated later in the statute be met. [88] They argue the decision in Saskatchewan Government Insurance v Nipawin (Town) (1998), (SK CA), 172 Sask R 245 [Nipawin], as authority for this proposition. [89] That decision was recently referred to in Sagkeeng v Government of Manitoba [Sagkeeng], 2021 MBCA 88,[2022] 6 WWR 202, where the Court noted as follows: 88 Sagkeeng argues that an appeal to the LGC is inadequate because, although a minister must refer an appeal under section 28(1.1) tothe LGC, the LGC has a discretion whether to hear and decide that appeal or to take no further action.

Its argument is based on thewording of sections 28(1.1) and 28(2): section 28(1.1) states that the minister “must” refer an appeal to the LGC (obligatory), whilesection 28(2) states that the LGC “may”, not “shall”, grant one of several remedies (discretionary). 89 Sagkeeng's

interpretation of this provision as a hard and fast rule is not supported by the authorities. As discussed by Ruth Sullivanin Sullivan on the Construction of Statutes, 6th ed (Markham: LexisNexis, 2014), the word “may” in legislation does not necessarilyprovide wide-open discretion. She quotes Dickson CJ in R v S (S), (SCC), [1990] 2 SCR 254, and concludes that “theuse of 'may' implies discretion, but it does not preclude obligation” (at

section 4.62). She states (at

section 4.63): … …The word “may” alone cannot determine the outcome; it must be considered in context, having regard to the usual things — the Act asa whole, the purpose and scheme, the entire context. 90 A similar argument arose in Clarkson Co Ltd v White, (1979), (NS SC), 102 DLR (3d) 403 (NSSC(AD)). In thatcase, the legislation provided that the court “may” give judgment to a bankruptcy trustee against one or some of a number of parties. Thetrial judge found that, due to the discretionary language, he had the discretion not to grant judgment to the trustee at all, which is what hedid.

The trustees appealed, arguing that the only discretion was to whom among the other parties the judgment would be given. 91 Hart JA, for the Court, concluded that the trial judge had erred, and that whether the use of “may” in legislation is discretionary orobligatory “must be determined from an

interpretation of the statute as a whole” (at p 407). He concluded that, when the power could beexercised upon the establishment of legal rights, there was a duty to exercise that power once the rights had been established, and thelegislation did not leave the judge with an unfettered discretion to grant or withhold the remedy. (See also Bates v Bates (2000), (ON CA), 188 DLR (4th) 642 at para 24 (Ont CA); Sistem Mühendislik Inaat Sanayi Ve Ticaret Anomic Sirketi v KyrgyzRepublic, 2015 ONCA 447 at para 43; and Saskatchewan Government Insurance v Nipawin (Town) (1998), (SKCA), 169 DLR (4th) 713 at para 17 (Sask CA).) 92 Following the reasoning in Clarkson, it is clear that the intention of

section 28 of the EA is to permit anyone who is dissatisfied withthe minister's decision to appeal to the LGC. Once all of the pre-conditions have been met (i.e., the appeal is filed with the minister andthe minister refers it to the LGC), then, even though the remedies are presented in a permissive form, the LGC has a duty to grant one ofthe remedies listed, and does not have an unfettered right to withhold any remedy at all. 93 This

interpretation is more consistent with the principles of fairness to those who have filed an appeal and are expecting a decision.Further, it is also consistent with the intention of the Legislature when passing this provision, being that, if anyone was aggrieved by theminister's decision, the “appeal would then be to the Cabinet” (para 42 herein). There was no suggestion that the LGC could pass onmaking a decision. 94 In my opinion, the LGC is obliged to hear and determine any appeal remitted to it.

Thus, I am of the view that the application judgewas correct when he found that “in the present instance, the [LGC] is required to exercise its discretion in determining the appeal” (atpara 72). [90] Therefore, s. 356 which uses the word “shall” in a similar context is not necessarily determinative. In anexamination of this statute, the Court must look at the context, the ordinary sense of the word, the scheme of the Act and the intention ofthe legislature. [91] The plaintiff argues that a fair and purposive

interpretation of this

section of The Municipalities Act would takeinto account the public policy argument that no person would undertake the councillor role if they were not insured by the RM to paylegal fees in the event a proceeding was commenced against them for performing these duties in good faith. [92] However, the following comments of the Court in Goulet v Buena Vista (Village), 2012 SKQB 503, 408 Sask R267 [Goulet], are relevant: 27 The language of the statute would have to be far clearer to support the

interpretation advanced by the applicant. It would beextraordinary for a legislature to provide that a council member, faced with censure or changes in council procedures driven by a politicalor administrative disagreements between members of council, had the right to recover his or her legal costs of obtaining legal advice orseeking redress in the courts, from the public purse. That is so regardless of whether, as alleged by the applicant, there was a breach of aduty of fairness or bias on the part of councillors.

Section 356 was simply not intended to deal with matters of this kind.

[ 93 ] One also notes the comments of the Court in Baker : 39 The respondent submits that the ratio of Goulet is that the mayor could not seek compensation under ss. 356(1) as she did not fit within the category of persons named in ss. 356(1). The respondent submits that any additional comments are obiter. I agree with the position taken by the respondent to the extent that the general comments of Barrington-Foote J. in respect to the

interpretation of s. 356 are for the most part obiter and not binding upon me in any event. However I would say that I find his reasoning to be persuasive. [ 94 ] While these comments were made with respect to the

interpretation of s. 356, the following comments made by the Court in Baker are perhaps more instructive: 42 Section 355(3) uses the word “may” whereas the Bylaw uses the word “shall”. The Act limits the circumstances to those where there is an action or proceeding in which liability is claimed against the member of council (or other named categories of individuals) for acts or omissions done or made by the person in good faith in the course of his or her duties.

The Bylaw applies to all actions or proceedings arising out of acts or omissions done or made by the member of council (or other named categories of individuals) if the person acted honestly and in good faith with a view to the best interests of the RM. There is no requirement in provision 4(

a) of the Bylaw that the person to be indemnified be named as a defendant in the action or a respondent in the proceeding. 43 The potential liability for the ratepayers is significantly greater if Bylaw 14/17 is found to be intra vires than it would be on a simple

interpretation of s. 355 of the Act . 44 Considering the context in which this Bylaw was passed, the RM was highly critical of the fact that the Inspector and Inquiry Officer had the benefit of publicly funded counsel and that individual councillors did not. The Barclay Report makes reference to this issue at p. 11: In addition to the submissions on disclosure and adjournment, various parties also made submissions - both oral and written - requesting an order in relation to the reimbursement of legal fees associated with their participation in the Inspection/Inquiry.

As I was provided no jurisdiction to make any orders as to funding, these applications were all dismissed. 45 The RM points to the process followed by the Inspector and Inquiry Officer in conducting his investigation and inquiry as being very like a superior court trial. In the view of the respondent, this would be persuasive to a councillor that counsel would be advisable. 46 However it might be said that the formality of the process and the procedures put in place by the Inquiry Officer served to promote the fairness of the process.

A review of the Barclay Report makes it clear that the hearings were not open to the public, that all witnesses were provided with information on how to claim immunity and that they were entitled to have counsel present. 47 The RM also provided for the court's review the legal opinion provided to the RM. This was done, I presume, to show that the RM considered its position thoughtfully prior to passing the impugned Bylaw. 48 Even taking a purposive approach to the

interpretation of the relevant provisions of the Act and the terms of the Bylaw, I cannot conclude that the Bylaw was intra vires . Council has exceeded its authority in purporting to provide for indemnification of councillors in circumstances where they are not the subject of a claim for liability. [ 95 ] Using the statutory

interpretation guidance provided by our Court of Appeal, I find that the “may” used in s. 355(3) is discretionary. While councillors are likely underpaid for the amount of time and effort they put in towards their employment, the legal costs they endure may be best addressed by training and insurance rather than a reliance on ratepayer funds.

It would not be wise to have the ratepayers mandatorily fund every single legal issue arising from a councillor’s service, good faith or not, as not every issue facing a councillor will necessarily be worthy of funding and the democratic nature of council will involve disparate views.

From my review, the legislature recognized that a democratic entity could be vested with the discretional responsibility to make such decisions. [ 96 ] Unlike the situations in Sagkeeng and Nipawin , there is a valid public policy reason noted above by the courts to withhold a remedy even if some of the statutory preconditions are met. Given the comments in Baker , public policy reasons and a purposive

interpretation of statutes, I find that the word “may” in s. 355(3) is discretionary and the

section cannot be relied on to require the RM to pay the plaintiff his legal fees. [ 97 ] While I have determined the s. 355(3) matter without referring to good faith, I would make the following additional observations should it have been required. [ 98 ] I note that the agreement of facts between the parties asserts that Mr. Probe acted in good faith except as it may be inconsistent with a finding of fact made in any of the judgments. [ 99 ] In that regard, I note the comments of the Court in Sherwood : 58 Finally, I need to determine whether s. 149 of the Act applies.

This provision states that, notwithstanding an alleged contravention of the conflict of interest provisions in s. 147(1)(e), the court is required to dismiss the action if the court is of the opinion that the disqualification arose through “inadvertence or by reason of an honest mistake”. There are no circumstances capable of permitting me to draw the conclusion that Mr. Probe's wilful and deliberate participation in matters which he knew would place him in a conflict of interest could be construed as inadvertent or as an honest mistake. Mr.

Probe was aware of the conflict of interest provisions in the Act, at least in a general way, and that the

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