Canada: Municipal Process: Conflict Of Interest And Its Effect On Quorum

Last Updated: October 7 2015
Article by Olga Rivkin

Municipal Council members may not vote on or discuss a matter in which they have a conflict of interest. When more than one Council member has a conflict of interest in the same matter, Council may have insufficient members to constitute a quorum (i.e. majority needed to conduct business).  A recent decision of the BC Supreme Court in Port Clements (Village) (Re), 2015 BCSC 1675 is instructive about how to proceed if that happens.

The Village of Port Clements is a small municipality of approximately 350 people. The Village received a rezoning application in connection with the construction of a barge facility (the "Development"), and Council voted on three readings of the proposed rezoning.  No conflict of interest was disclosed during the process.

Residents opposing the Development presented a legal opinion to Council identifying that one of the Council members had a conflict of interest in the matter, following which Council tabled the rezoning and did not proceed with it.  Subsequently, the Mayor and two Council members determined that they indeed had a conflict of interest, as a result of which the Village could not achieve the quorum necessary to consider the Development. 

Section 129 of the Community Charter stipulates that if, as a result of a conflict of interest, the number of Council members who may discuss and vote on a matter falls below the quorum, the municipality may apply to the Supreme Court for an order that all or some Council members may discuss and vote on the matter, despite the conflict.  The municipality need not notify the public of the application.

The Village applied and obtained an order (the "Order") of the Supreme Court that the Mayor and the two Council members may consider the Development, despite the conflict.  Subsequently, the Village introduced a new rezoning bylaw in connection with the Development and proceeded to consider this bylaw.  A few residents (the "Residents") applied to the Supreme Court to set aside the Order.

Section 129 of the Community Charter has not been considered to date.  Port Clements is the first case interpreting this section.  In particular, the ruling in Port Clements clarifies that members of the public may be able to challenge a section 129 order, and provides guidance about the information which must be submitted in support of such an order.

1. Public interest standing

The Court held that the Residents had standing to challenge the Order.  To quote the relevant paragraphs of the decision:

[37] In my view, insofar as s. 129(5) allows elected officials to be involved in a matter despite a declared conflict of interest, it is an exceptional remedy – which the legislature has determined will only be permitted with court approval and subject to judicial oversight.

[38] In considering whether the Residents have a genuine interest in bringing the matter before me, I note that there was no obligation on the Village to give notice to the Residents of the Petition.  ... However, it does not necessarily follow that members of the public had no interest in the Petition.  As members of the public, they had a legitimate interest in whether the Council properly obtained the approval of the court to allow their elected representatives to discuss and vote on matters in which they had a declared conflict of interest.  The Residents are not, therefore, mere busybodies. ...

[39] [Section 129 of the Community Charter] grants a substantive right to the Village, in allowing it to proceed with its business despite the declared conflict of interest of certain council members.  ...

[40] Further, I am satisfied there is no other reasonable and effective means to bring forward the particular concern raised by the Residents.

2. Sufficiency of disclosure

The Residents argued that the Village did not disclose all relevant and material facts in support of the Order, including the fact that Council voted on three readings of the earlier rezoning bylaw without disclosing any conflict of interest.  The Court disagreed with the Residents on this point, but cautioned that municipalities should err on the side of full and frank disclosure.  In the Court's words:

[55] In my view, the Village should ideally have provided more of the factual context ....  The Village's affidavit material could best be described as "lean".  However, I note that section 129 does not provide any direction as to what information is to be contained in an application under section 129(4).  In its application, the Village did clearly disclose the nature of the declared conflicts of interest and, through the affidavit material it filed, it was apparent that [the] application for rezoning had previously been before Council .... 

[56] ... I agree with the Village that s. 129(4) is intended to provide an avenue to obtain prospective permission, in order that a municipality can conduct its business.  It is not intended to provide retroactive absolution.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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