Municipalities are engaged in risky operations, from maintaining sidewalks and ponds to managing roads and infrastructure.
Although municipalities have historically been protected from some of these risks, recent decisions from various levels of court seem to reveal a judicial shift toward imposing greater responsibilities upon them.
These recent decisions may impact the protections afforded by statutory defences that municipalities have historically relied upon. This article discusses the impacts of the decisions and offers a practical perspective on what these decisions mean for the provision of services to residents and visitors.
Limitations on the scope of policy decisions
Municipalities are typically protected from liability if a decision is policy-based. A policy decision is an exercise of discretion based on social, political, or economic factors. For instance, the decision to implement an inspection system for utility maintenance is a policy decision.
On the other hand, municipalities will be subject to liability if the decision is “operational.” For example, if the manner or quality of the utility inspection system causes a loss, the municipality may be liable for that loss.
In Nelson (City) v Marchi, 2021 SCC 41, the Supreme Court of Canada clarified the distinction between “core” and “non-core” policy decisions. The Court determined that a municipality may be held liable for non-core policy decisions.
The Court noted the definition of a core policy decision as follows: “decisions as to a course or principle of action that are based on public policy considerations, such as economic, social and political factors, provided they are neither irrational nor taken in bad faith.” Policy decisions falling outside this definition would be non-core.
Prior to this decision, municipalities could only be liable for operational decisions. Now, municipalities may be liable for operational decisions as well as non-core policy decisions.
Therefore, it is important for municipalities to ensure that their policies are reasonable and achievable. Municipalities should also review policies regularly to ensure that they are current and reflect the operational realities they face. If a policy is no longer being met or seems unnecessary, it should be amended and repealed. It is best practice to avoid retaining policies that do not apply anymore – they will inevitably come up in litigation.
Statutory defences under the Municipal Government Act
The Municipal Government Act (“MGA”) contains a number of provisions which limit the liability of municipalities.
Section 530 builds upon the policy versus operational concept discussed above. It states that a “municipality is not liable for damage caused by (a) a system of inspection, or the manner in which inspections are to be performed, or the frequency, infrequency or absence of inspections, and (b) a system of maintenance, or the manner in which maintenance is to be performed, or the frequency, infrequency or absence of maintenance.”
Section 529 protects the discretion of municipalities. It states that a “municipality that has the discretion to do something is not liable for deciding not to do that thing in good faith or for not doing that thing.”
Section 533 states that municipalities are not liable for damage caused by “things on or adjacent to roads.” This includes things like guardrails and curbs, as well as trees and rocks that are not a part of the travelled portion of the road.
Section 532, however, imposes statutory duties upon municipalities. According to this provision, a municipality must keep all roads and public places in a “reasonable state of repair.” It also states that municipalities are liable for damage caused due to their failure to meet this obligation if:
- They knew or ought to have known about the state of disrepair, and
- They took reasonable steps to address the disrepair.
Municipalities have long argued that the duties in section 532 are qualified by the other statutory defences in the MGA and the general policy/operations dichotomy. For instance, if a municipality decided not to inspect trees younger than a certain age, and then a tree below that threshold falls and causes damage to a car, the municipality would not be liable for that damage if their policy decision was made in good faith.
But in Pyke v Calgary (City), 2022 ABQB 198 (“Pyke”), the judge concluded that the duties imposed upon municipalities in section 532 take precedence over any defences available to the municipality. The decision was upheld on appeal: Pyke v Calgary (City), 2023 ABCA 304.
In the decision, the Court considered alleged negligence related to a vehicle crash. A vehicle lost control after experiencing icy conditions, after which it launched over a median and collided with another vehicle, causing a death and serious injuries. The plaintiffs alleged that the City of Calgary (the “City”) made unsafe road conditions and failed to keep the road in a reasonable state of repair by allowing dirt and gravel to build up around the median, functionally creating a dangerous ramp.
The Court considered whether policy considerations could negate the City's duties to the plaintiffs. Accordingly, the Court decided that the “policy/operational distinction is not relevant to the existence of the statutory duty to keep roads in a reasonable state of repair.” In the alternative, however, the Court held that the implementation of the inadequate median barrier was operational, and the ongoing failure to address its shortcomings, while continuing to invite the public to use the road, was an operational omission without a reasonable explanation. Since the matters in issue were operational, there was no reason to relieve the City from its duty of care to the plaintiffs. The Court ultimately found that the City bore some liability for the accident as the City failed to keep the median in a reasonable state of repair.
This issue was considered again in Legare v Acme (Village), 2023 ABKB 145 (“Legare”). Here, the plaintiff made a claim against the municipality for damage caused by sewer backup. The case was first heard by a lower court, where damages were awarded to the Village of Acme (the “Village”) before it was appealed to the Court of King's Bench. The appeal was heard by the same judge in the Pyke case.
In Legare it was found at trial that the Village was aware that its sewer pipes were narrower than required by provincial standards. The Court agreed with the lower court that the Village did not take reasonable steps under section 532 of the MGA because a yearly visual inspection was not a reasonable step. Instead, the Village would have had to go above the norm for their system of inspection and maintenance given it was aware of the narrow sewer lines. As in the Pyke decision, the Court confirmed that section 530 of the MGA, which normally protects municipalities from some forms of liability, will not provide a municipality immunity from section 532, which imposes statutory duties on municipalities as discussed above, as that would essentially render section 532 inoperative.
Both the Pyke and Legare decisions have altered the state of the law in Alberta regarding a municipality's duties. The cases suggest that once a municipality is aware that a road or any other public place is in a state of disrepair, the municipality will have a positive duty to address the issue. It seems that this duty would exist notwithstanding any policy that directs that enhanced maintenance, inspections, or upgrades will not occur, given the reasoning of the courts that the obligations in section 532 take precedence over any defences. Failing to remedy the disrepair may result in liability to the municipality. Practically speaking, municipalities will need to assess their current policies and operations and make potentially difficult decisions about maintenance and repairs. For example, municipalities may wish to implement enhanced inspections to limit the risk of damage or injury occurring. They may wish to limit the use of a road or other public space when an issue is identified to minimize the risk of injury.
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.