J. 1999 SKQB 29 Q.B.G. A.D. 1999 No. 128 J.C.M. IN THE QUEEN’S BENCH JUDICIAL CENTRE OF MELFORT BETWEEN: KINGFISHER INNS LIMITED, RATZLAFF HOLDINGS LIMITED, TOBIN LAKE MOTEL LIMITED, DENNIS AND RAE COOPER operating under the firm and style of NIPAWIN MOTOR INN and ELAINE and ERVIN JOHNSON operating under the firm and style of GREEN GROVES MOTEL and TOWN OF NIPAWIN RESPONDENT L.M. Balicki for the applicants J.W.R. Taylor, Q.C. for the respondent FIAT GEREIN J. August 26, 1999 [1] Pursuant to Queen’s Bench Rule 664(1), the applicants seek an order prohibiting the respondent: a) from holding public hearing with respect to Bylaw 756/99, Bylaw to amend Bylaw 465/82, the Zoning Bylaw of the Town of Nipawin; b) from giving third reading to and adopting Bylaw 756/99; c) from holding hearing with respect to an alleged application for discretionary use permit by Kathy and Gary Palidwar for new hotel development; and d) from further considering an application for discretionary use permit by Kathy and Gary Palidwar for private hotel development connected with the community facility known as the Evergreen Centre. The two issues to be determined are:(a) Were the respondent’s proceedings in respect to a proposed hotel development, including the subject bylaw, invalid by reason of bad faith?(b) Has the respondent met the statutory prerequisites for a public meeting? have concluded that the requested relief should be granted in part. [2] The respondent, the Town of Nipawin, is community of some 5,000 people located in northeastern Saskatchewan. The applicants are hoteliers who operate five of the six hotels and motels within the community and who have joined together in an informal association. The River Inn is the sixth place of lodging within the Town and is not party to this application. [3] The Town owns recreation and sports centre, known as the Evergreen Centre, which is located within the Town’s boundaries. proposal has been submitted to develop new hotel in close proximity to the Evergreen Centre. To that end the Town Council has taken certain steps to bring the proposal to fruition. These include tentative sale of public lands and the introduction of Bylaw 756/99. The applicants are opposed to the development and take exception to what has transpired to this point. [4] The chronology of events begins in 1987. In April of that year lengthy report entitled, “Nipawin Tourism Destination Strategy”, was provided to the Nipawin Economic Development Committee. That report discussed many subjects, one of which was the availability and quality of accommodation. The competing parties read the report differently. The applicants say that it recommended no more than improving the quality of existing accommodation. The respondent says that it recommended increased accommodation. agree with the latter upon reading of the following which is to be found at p. 26 of the report: Despite the potential negative impact of new hotel/motel on existing establishments and the challenge associated with achieving strong profitability in the local/regional market, it can be concluded that new establishment offering first-class accommodation, leisure activities such as an indoor pool and active participation in promoting Nipawin as destination for wide variety of tourists and visitors, would be major asset to the area’s tourism base. This report also suggested it would be advantageous to locate any such facility close to the Evergreen Centre. [5] Following receipt of the report the Economic Development and Promotions Officer of the Town of Nipawin promoted the construction of new hotel which could well operate in conjunction with the Evergreen Centre. However, nothing materialized. On April 1, 1992, the Town Council discussed the prospects of new hotel being constructed and on April 14, 1992, the topic was again discussed at joint meeting with the Evergreen board of directors. In the end, the matter was referred to the Economic Development Committee with the suggestion that it be advertised as business opportunity. This was done, but no developer came forward. [6] On February 12, 1997, the Economic Development Committee hosted an Economic Development Round Table and one of the comments in the written summary is that the Committee get out the word about the opportunities for an RV park or hotel near Evergreen Centre. Lastly, there is document entitled, “Nipawin Strategic Planning”, which is dated June 23, 1998. Goal #1 is to increase tourism activity in the area and one of the steps recommended is “to increase conference and convention occupancy” and for that purpose to “encourage hotel expansion and re-investment”. [7] From the foregoing it is clear that the idea of new hotel, together with it being located near the Evergreen Centre, is one of long duration. In addition, the idea was well known throughout the Town of Nipawin as from time to time it was topic in the local newspaper. Against that background turn to the current events which have resulted in this application. [8] It all began with the following letter of April 9, 1999, sent by Gary Palidwar and Kathy Palidwar to the Mayor and Council of Nipawin: Please accept this letter as request to meet with Nipawin Town Council, Monday April 12. We would need approximately one hour of Councils’ time in order to make presentation for new business venture in out (sic) town which will involve an existing public facility. This project has been strictly confidential to this point therefore we will require an in camera meeting with Town Council. Gary Palidwar is one of five shareholders in 622659 Saskatchewan Ltd. which owns the River Inn, which was mentioned earlier as being hotel located in Nipawin. Two of the other shareholders are Glen Day and Allan Mochoruk, respectively, the mayor of the Town and an alderman on Council. [9] The Palidwars attended the Council meeting on April 12, 1999, and “in camera” presented their proposal to construct hotel as an addition to the Evergreen Centre. The proposal appeared to elicit some support, but the Palidwars were instructed to meet with the Regional Park Board and the Evergreen Centre Board and thereafter return to Council. It was agreed that the fact of the proposal would be kept confidential. [10] At the next meeting of Council, which was on April 26, 1999, the Palidwars again attended and another “in camera” discussion took place with the Committee-of-the-Whole. Following that, the Council meeting continued and it was then moved by Alderman Mochoruk: That we agree in principle to proposal from Gary and Kathy Palidwar for private development on Town property adjacent to the Evergreen Centre. CARRIED Mayor Day voted in favour of the resolution. The Palidwars then met with the directors of the Evergreen Centre on April 28, 1999. An article about the proposed hotel appeared on May 5, 1999 in the Nipawin Journal. That is when the applicants first learned of the project and they responded with paid announcement in the same newspaper wherein they set forth their objections to the project. [11] The next meeting of Council was May 25, 1999. When the hotel project came up for discussion Mayor Day and Alderman Mochoruk read statement into the minutes denying any conflict of interest. However, they chose to withdraw from the meeting and did so. The group opposed to the project presented their objections and closed with these questions: 1. Now that Mayor Day and Alderman Mochoruk have excused themselves from further discussions will the original motion to accept the proposal in principle be declared null and void? Deputy Mayor Snaith advised that the issue has not been discussed. 2. When similar issue was before Council six years ago, you must have known there would be some backlash. Will Council have an open debate on the issue? 3. How is it possible to attach private facility to public facility? Council needs to examine this. 4. Does Council believe this proposal provides level playing field? If so, based on what research? 5. What is fair market value? 6. If the project goes ahead, will the existing hotels be given review of their tax assessments? After the Palidwars spoke in favour of the project, the matter was taken under advisement by Council and the parties were invited to stay for the rest of the meeting. The group in opposition departed and as result the proposal was not dealt with later in the meeting, which would have been the usual procedure. [12] At the next meeting on June 14, 1999, the Palidwars presented somewhat different proposal. The hotel was to be located across the street from the Evergreen Centre as opposed to being adjacent to it. It was suggested that walkway be constructed between the two structures. At this meeting Council declined to answer the six questions posed at the earlier meeting. Without discussion or debate the earlier resolution approving the proposal as quoted above was rescinded and this resolution was passed: That the second proposal submitted by Gary and Kathy Palidwar for development of hotel on Town property across the street from the Evergreen Centre be approved in principle; Further That the issue of developing price for land be referred to the Committee-of-the-Whole. Mayor Day and Alderman Mochoruk were absent throughout the discussion and the vote. [13] After the above resolution was passed, the opposition group departed. However, later that same evening the Committee-of-the-Whole met and determined selling price. They then adjourned out of committee and Council passed this resolution: THAT we offer to sell Lots and 7, Block 14, Plan CM 6842 to Gary Kate Palidwar for price of $53,200.00 plus GST for their proposed hotel development; FURTHER THAT they be responsible for all legal, survey and service costs to the hotel plus all costs related to any re-routing or replacement of existing water and sewer services, pavement, curb and gutter; AND FURTHERMORE THAT we carry on negotiations with the developers on the proposed walkway. Mayor Day and Alderman Mochoruk again excused themselves from the discussions about the selling price and the vote on the resolution to make the stated offer to the Palidwars. By letter dated June 22, 1999, the Palidwars responded as follows: Upon review of the motion at regular Council June 14, 1999, to sell lots and 7, block 14, Plan CM 6842, we are prepared to provide deposit in trust to secure this property. However, we also request private meeting with Council to negotiate the following points as conditions of the sale. 1) clarification of “all related costs to any re-routing or replacement of existing water and sewer, pavement, curb and gutter.” 2) agreements must be in place regarding the required walkway access. 3) all necessary zoning, permits and regulations to be addressed. 4) understanding of future intended use for adjacent property. [14] At the next meeting of Council, on June 28, 1999, several things took place. First, in the absence of Mayor Day and Alderman Mochoruk, the Palidwars accepted the Town’s offer to sell land, subject to clarification about the matters raised in their letter. They then requested private meeting to discuss the issues and Council referred the matter to the Committee-of-the-Whole. Later the Committee met “in camera” and then reported out as follows as recorded in the minutes: 35. RISE AND REPORT: BRUCE: THAT we rise and report. CARRIED Deputy Mayor Snaith reported that discussions were held with Gary and Kathy Palidwar on clarification of other costs for land acquisition for their proposed hotel development. Mayor Day and Alderman Mochoruk were excused from the meeting during discussions with the Palidwar’s. Shortly after, in that same meeting of Council, these two resolutions were passed: 39. DISCRETIONARY USE PERMIT REQUEST PALIDWARS: Mayor Day and Alderman Mochoruk were excused from the meeting. Deputy Mayor Snaith assumed the Chair. BRUCE: THAT the request from Gary and Kathy Palidwar for discretionary use permit for development of hotel on Lots and 7, Block 14, Plan CM 6842 be advertised for two successive weeks for public input and to be considered at Special Meeting of Council to be held July 26, 1999 at 7:30 p.m. 40. AGREEMENT DEVELOPMENT OF WALKWAY, ETC. FOR PROPOSED HOTEL: MOISAN: THAT the Town Administrator be authorized to meet with our Town Solicitor to discuss terms and prepare draft agreement with Gary and Kathy Palidwar for development of walkway from their proposed hotel to the Evergreen Centre site, on the understanding that the proposed walkway will not be attached to the Evergreen Centre building. CARRIED Mayor Day and Alderman Mochoruk returned to the meeting. Mayor Day resumed the Chair. To date the indicated agreement has not been prepared. [15] Earlier in the same Council meeting Bylaw 754/99 was given first and second reading. This was recorded in the minutes as follows: 32. BYLAW 754/99 INTRODUCTION FIRST READING: SNAITH: THAT Bylaw 754/99 being bylaw to amend Bylaw 465/82 known as the Zoning Bylaw be introduced and read first time. 33. BYLAW 754/99 SECOND READING: MOISAN: THAT Bylaw 754/99 being bylaw to amend Bylaw 465/82 known as the Zoning Bylaw be read second time. CARRIED Both Mayor Day and Alderman Mochoruk were present and voted in favour of the bylaw. The next day the applicants received by letter responses to the questions which had been posed to Council on May 25, 1999. [16] Public notice of the amending bylaw was published in the Nipawin Journal and notice was given of public hearing to be held on July 26, 1999. Because the notice was two days less than that required by statute, the meeting was cancelled. As result, Town Council held special meeting on July 26, 1999, in the course of which two bylaws were given first and second reading. The events are recorded in the minutes in this way: 23. BYLAW NO. 755/99 INTRODUCTION FIRST READING: SKLAR: THAT Bylaw No. 755/99 being bylaw to amend Bylaw 465/82, known as the Zoning Bylaw, be introduced and read first time. 24. BYLAW NO. 755/99 SECOND READING: MOCHORUK: THAT Bylaw No. 755/99 being bylaw to amend bylaw 465/82, known as the Zoning Bylaw, be read second time. CARRIED Mayor Day Alderman Mochoruk were excused from the meeting. 25. BYLAW NO. 756/99 INTRODUCTION FIRST READING: BRUCE: THAT Bylaw No. 756/99, being bylaw to amend Bylaw No. 465/82, known as the Zoning Bylaw, be introduced and read first time. 26. BYLAW NO. 756/99 SECOND READING: TRANN: THAT Bylaw No. 756/99, being bylaw to amend Bylaw No. 465/82, known as the Zoning Bylaw, be read second time. CARRIED Mayor Day and Alderman Mochoruk returned. Bylaw 755/99 is in respect to an unrelated project. have included it here because its content was also part of the earlier Bylaw 754/99 as was the content of Bylaw 756/99. The earlier Bylaw was simply split into the two present ones. [17] Public notice of Bylaw 756/99 was published in the Nipawin Journal on August 4, 1999, and notice was given of public meeting to be held August 30, 1999. Notice of an intention by Council to consider, on that same day 15 minutes later, request by Palidwars for discretionary use was published adjacent to the bylaw notice. [18] If enacted, Bylaw 756/99 will amend the existing zoning bylaw by changing an area, consisting of eight lots, which now is described as “open space” to “community service” and “discretionary uses”. It is this bylaw and the request for approval of discretionary use, i.e. construction of hotel, which are under attack in this application. [19] Section 90 of The Urban Municipality Act, 1984, S.S., c. U-11, empowers electors to apply to this Court to quash bylaw or resolution of council “. in whole or in part for illegality .”. The challenge can take number of forms, including an application for prohibition as contemplated by Queen’s Bench Rule 664(1). In Pappenfus, Board of Governors of The Spalding Union Hospital et al. v. Pearce, 1980 CanLII 2301 (SK CA), [1981] W.W.R. 291 (Sask. C.A.), at p. 295, Culliton, C.J.S. said this: The right to question the validity of municipal by-law or resolution other than by motion to quash, in my opinion, is correctly stated in Rogers, The Law of Canadian Municipal Corporations, 2nd ed. (1971), vol. 2, para. 192.1, as follows: “It is well established that the validity of municipal by-laws and resolutions may be incidentally questioned otherwise than by motion to quash. In particular, by-law may be brought into question in the following ways: by motion to quash or an appeal from conviction thereunder; by an action for declaration that by-law is invalid; incidentally in the trial of an action; by an action to declare assessments invalid under the by-law attacked; in proceedings to obtain mandamus; in proceedings to obtain prohibition or certiorari; by an action for trespass against an officer acting under its authority; or in an action for an injunction to restrain the breach of by-law or to restrain the municipality from enforcing or acting under the by-law; in an action for replevin; or in an arbitration to determine compensation for expropriated land.” (The italics are mine) These comments were most recently adopted in E.C. Argue Holdings Ltd. et al. v. Rural Municipality of Edenwold No. 158, 1999 CanLII 12500 (SK QB), [1999] S.J. 48 (Q.L. Q.B.). [20] In this case there are some facts which are in issue. This has caused me to give thought to whether the matter should proceed by way of the trial of an issue. have concluded that such is not necessary. ISSUE OF BAD FAITH [21] municipal council and its individual members have duty to always act in good faith. Should they fail to do so, their enactments are nullity. The onus of proving bad faith lies with those who allege it. Mr. Justice Estey said it this way in Kuchma v. The Rural Municipality of Tache, 1945 CanLII 27 (SCC), [1945] S.C.R. 234 at p. 239: These conclusions, however, do not dispose of the case. by-law which has not been passed by municipal corporation in good faith and in the public interest, when passed is nullity, and cannot be changed or made otherwise by lapse of time, approval, registration or promulgation. Canada Atlantic Railway Co. v. Corporation of the Township of Cambridge (1). The appellant here contends that the “by-law is not in the public interest” and further, that the council acted “in bad faith and through fraud and partiality”. The authorities are clear that the onus of proving these allegations rests upon the applicant. They are equally clear that if the applicant succeeds in proving these allegations, the by-law is invalid. useful discussion of bad faith is contained in Re Equity Waste Management of Canada et al. and Corporation of the Town of Halton Hills (1997), 1997 CanLII 2742 (ON CA), 35 O.R. (3d) 321 (Ont. C.A.) commencing at p. 340: Bad faith by municipality connotes lack of candour, frankness and impartiality. It includes arbitrary or unfair conduct and the exercise of power to serve private purposes at the expense of the public interest: see Makuch, Canadian Municipal and Planning Law (Toronto: Carswell, 1983) at pp. 215-19. The signs of bad faith were discussed in the following passage in Howard v. Toronto (City), supra, at pp. 574-75, cited by the motion judge: The Court is prohibited from quashing by-law on the ground of unreasonableness, real or supposed, provided the council in passing it acted in good faith, but the unreasonableness of the by-law may be given in evidence to establish want of good faith in the council who passed it: Consolidated Municipal Act, 1922, sec. 249, subsec. (originally enacted in 1913). The powers of the council must be exercised bona fide, and the action of its members must not be founded upon fraud, oppression, or improper motives: ... and as to refusal to hear interested parties by-law may be quashed if the council in passing it was not using its power in good faith in the interest of the public, but simply to subserve the interests of private persons ... where the principle of In re Morton and City of St. Thomas is recognised by the Court of Appeal as continuing unaffected by the statute of 1913. What is or is not in the public interest is matter to be determined by the judgment of the municipal council; and what it determines, if in reaching its conclusion it acted honestly and within the limit of its powers, is not open to review by the Court (Citations omitted) The more recent judgment of Robins J. in H.G. Winton Ltd. v. North York (Borough) (1978), 1978 CanLII 1566 (ON SC), 20 O.R. (2d) 737 at pp. 744-45, 88 D.L.R. (3d) 733 (Div. Ct.), contains similar but perhaps even broader definition of bad faith: To say that council acted in what is characterized in law as “bad faith” is not to imply or suggest any wrongdoing or personal advantage on the part of any of its members: Re Hamilton Powder Co. and Township of Gloucester (1909), 13 O.W.R. 661. But it is to say, in the factual situation of this case, that Council acted unreasonably and arbitrarily and without the degree of fairness, openness, and impartiality required of municipal government [22] The applicants submit that the Town Council has acted in bad faith and in support of their submission point to these several indicia: (1) lack of openness, frankness and candor; (2) advancement of the interests of private individuals rather than the public interest; (3) the selling price of the land is not reasonable; (4) there is pre-existing commitment to the hotel project; and (5) officials of Council had pecuniary interest in the advancement of the hotel project. will deal with each in turn. (1) Lack of Openness, Frankness and Candor [23] Exception is taken to the fact that the initial discussions between the Town Council and the Palidwars were kept confidential. While this approach may not have been the wisest, see nothing sinister or illegal about it. The purpose was solely for both sides to obtain information. It is understandable that developer may seek confidentiality until after it has been ascertained whether public body will at least entertain proposal. What is important is that the proposal not be adopted in secret. [24] The applicants seem to believe that Council had duty from the very outset to inform them of the proposal because the applicants are involved in the hotel industry. This is an erroneous belief. No such duty exists. What is required in certain instances is that the public as whole be informed about certain matters and be afforded an opportunity to make representations about them prior to decision being made. [25] In this case there were three “in camera” meetings. The first was on April 12 when the proposal was first disclosed and confidentiality was sought. At that time there appeared to be some support, but no decision was made. The second meeting was on April 26 after which Council in open session passed resolution agreeing to the proposal, but only in principle. Again no lasting decision was made and the proposal was then in the public domain. The third meeting was on June 28, when there were discussions about clarification of certain costs. This was reported out when the Council meeting resumed in open session. [26] In summary, the Palidwars’ proposal was not disclosed for two weeks. During that time no action was taken by the Council, although the members may have given thought to the proposal, something which they were entitled to do. formal decision to actually facilitate the hotel development did not occur until June 14, 1999, when resolution was passed to offer to sell land to the Palidwars. Prior to this the applicants had made their representations in opposition to the project. Accordingly, find nothing improper about the initial confidentiality of the proposal or the meetings “in camera”. [27] Another complaint is that the Council and the Palidwars arrived at certain understandings within the “in camera” meetings. agree that there were discussions, but can see no rational basis to conclude that understandings were reached. It is suggested that because Gary Palidwar stated that financing was largely in place, he somehow knew what was to be the selling price of the land. This simply does not follow. Any knowledgeable person could estimate the price and accordingly arrange contingent financing. In any event, in each instance the fact of the “in camera” meeting was recorded and the Council’s consequent action was made part of the public record. In the circumstances, reject the suggestion that there were any improper understandings. [28] The applicants are aggrieved that Town Council conducted further business on May 25 and June 14, 1999, after the applicants had departed. It was the practice of the Council to move to the Committee-of-the-Whole and then return to open session to complete its business. On each occasion the applicants were invited to stay. When they failed to do so on the first occasion, the intended resolution was deferred to the next meeting. It was the applicants’ decision to leave the meetings. They cannot now be heard to complain. In any event, nothing turned on their presence or absence and it is ludicrous to suggest that procedures were orchestrated so matters could be dealt with in their absence. [29] When look at what transpired, have no hesitation in concluding that the Town Council did not conceal anything or attempt to do so. Rather, they acted openly and with candor. (2) Advancement of Private Interests [30] The applicants submit that the Town Council is seeking to advance the interests of the Palidwars rather than those of the community. This is somewhat intriguing submission. While the applicants speak of the public interest, it appears to be intimately entwined with their personal self-interest. It may well be that new hotel will have somewhat adverse economic effect on the existing hotels and motels. However, it does not necessarily follow that new hotel will be detriment to the community as whole. It may well be in the community’s best interest. There certainly is no evidence before me to establish otherwise. [31] There is specific complaint of unfair advantage or discrimination by reason of the fact that the proposed hotel will be connected to the Evergreen Centre. My answer is this. From my reading of the material filed, and contrary to the assertions of the applicants, the Town of Nipawin has been seeking to improve its public accommodation for more than ten years. During that whole time there was an opportunity available to anyone who chose to pursue it, including the applicants. When someone finally comes along, it is not correct to say they are being afforded an unfair advantage and others are suffering discrimination. [32] Speaking specifically about the “connection”, point out that it is most nebulous. The hotel will be located across the street from the Evergreen Centre. While walkway is being discussed, it is not yet agreed upon. Even if it does come into existence, do not know what form it will take or what impact it may have. While walkway may benefit the proposed hotel, it may equally benefit the Centre. Such result would not be unheard of. In any event, absent something more than negotiations, it is not appropriate for this Court to intervene. [33] In the end am unable to conclude that the Palidwars’ interests are being advanced rather than the community’s best interest. [34] As to the last, am mindful of s. 91(2) of The Urban Municipality Act, 1984, which prohibits an attack upon bylaw or resolution “. on account of the unreasonableness or supposed unreasonableness of any of its provisions.” am also mindful of the admonition that “. the courts should respect the political process and only act where the process has descended to farce.” Harker v. Regina (City), 1995 CanLII 3906 (SK CA), [1995] W.W.R. 276 at 284 (Sask. C.A.). (3) Selling Price [35] It is proposed by the Town to sell two lots for $53,200.00. The applicants say this is not fair market value, but they have produced no evidence in support of the allegation. Equally, they have produced no evidence as to what would be proper price. On the other hand, in his affidavit the Town administrator has set out how the selling price was arrived at. see nothing erroneous or improper in the method and therefore accept $53,200.00 as the fair market value of the land. It follows that no effect can be given to this assertion by the applicants. (4) Pre-Existing Commitment [36] The applicants argue that the resolution of June 14, 1999, to offer the land for sale is an unconditional commitment by the Town of Nipawin and as result it has fettered its discretion such that it has no choice but to enact the bylaw amending the existing zoning bylaw. The critical question is whether the Town Council has actually fettered its discretion. [37] The test to be applied in determining whether there has been prejudgment so as to constitute bias was set out in Old St. Boniface Residents Assn. Inc. v. Winnipeg (City), 1990 CanLII 31 (SCC), [1990] S.C.R. 1170 at p. 1197: In my opinion, the test that is consistent with the functions of municipal councillor and enables him or her to carry out the political and legislative duties entrusted to the councillor is one which requires that the objectors or supporters be heard by members of Council who are capable of being persuaded. The Legislature could not have intended to have hearing before body who has already made decision which is irreversible. The party alleging disqualifying bias must establish that there is prejudgment of the matter, in fact, to the extent that any representations at variance with the view, which has been adopted, would be futile. Statements by individual members of Council while they may very well give rise to an appearance of bias will not satisfy the test unless the court concludes that they are the expression of final opinion on the matter, which cannot be dislodged. In this regard it is important to keep in mind that support in favour of measure before committee and vote in favour will not constitute disqualifying bias in the absence of some indication that the position taken is incapable of change. The contrary conclusion would result in the disqualification of majority of Council in respect of all matters that are decided at public meetings at which objectors are entitled to be heard. This test was adopted by the Saskatchewan Court of Appeal in Harker v. Regina (City), supra. [38] To begin, do not believe that an unconditional commitment has been made by the Town. An offer was extended, but the offer has not been accepted. Rather response was given to the offer, but that response purported to impose conditions, which were to be negotiated. To the present time that has not occurred. Thus, the whole question of the sale is still open and at this time the Town is not subject to an unconditional commitment. [39] With that situation in mind, can it be said that the discretion of Council is fettered in respect to Bylaw 756/99? think not. The aldermen are clearly in favour of the hotel project. They have all voted in favour of it. However, they are not bound individually or collectively to maintain that position. The new bylaw is intended to facilitate the hotel project. Yet the evidence before me does not establish that the alderman will not take into account, when they ultimately vote on the bylaw, any representations made by the public. There is no legitimate reason to conclude that the minds of the aldermen are utterly closed and any representations will be futile. The considerations in respect to the zoning bylaw are broader and more extensive in scope than those pertaining to the hotel project and there is no reason to suppose that they will receive anything less than full review by the various aldermen. [40] must say that it was something of bizarre decision to entertain an application for discretionary use when such is not authorized by the existing zoning bylaw. It is obviously assumed that the amending bylaw will be approved and enacted. At best, this is presumptuous; at worst, it is extreme arrogance. agree with the applicants that it demonstrates where the Town Council is headed. However, it does not establish that they will of necessity proceed to the indicated decision. As result, it is not possible for court to intervene. (5) Pecuniary Interest [41] The Urban Municipality Act, 1984 addresses the subject of pecuniary interest of members of council. Section 33(1) provides: 33(1) When member of council has pecuniary interest in any matter in which the council or committee, board, association, commission or other organization established pursuant to this Act by council is concerned and is present at meeting of the council, committee, board, association, commission or other organization at which the matter is considered, he shall: (a) when the matter arises, disclose that he has pecuniary interest; and (b) leave the meeting while the matter is under discussion. Section 31(b) defines pecuniary interest in this way: (b) “pecuniary interest” means an interest that member of council has in any matter if: (i) he or his agent, partner, spouse, parent or child has controlling interest in, or is senior officer of, corporation that could make financial profit from or be adversely affected financially by decision of council; or (ii) he or his spouse, parent or child could make financial profit from or be adversely affected financially by decision of council. The terms “partner” and “partnership” are defined in The Dictionary of Canadian Law, 1991, as follows: Partner. n. member of partnership. Partnership. n. The relationship that subsists between two or more persons carrying on business in common with view to profit. Like definitions are to be found in Black’s Law Dictionary, 5th ed. (St. Paul, Minn.: West Pub. Co., 1979). [42] The purpose of the pecuniary interest rule was stated in Re Moll and Fisher et al. (1979), 1979 CanLII 2020 (ON SC), 96 D.L.R. (3d) 506 (Ont.Div.Ct.), at pp. 508-9: The obvious purpose of the Act is to prohibit members of councils and local boards from engaging in the decision-making process in respect to matters in which they have personal economic interest. The scope of the Act is not limited by exception or proviso but applies to all situations in which the member has, or is deemed to have, any direct or indirect pecuniary interest. There is no need to find corruption on his part or actual loss on the part of the council or board. So long as the member fails to honour the standard of conduct prescribed by the statute, then, regardless of his good faith or the propriety of his motive, he is in contravention of the statute. And should say at once, that in so far as this case is concerned there is no suggestion that the appellants acted out of any improper motive or lack of good faith. The enactment, like all conflict-of-interest rules, is based on the moral principle, long embodied in our jurisprudence, that no man can serve two masters. It recognizes the fact that the judgment of even the most well-meaning men and women may be impaired when their personal financial interests are affected. Public office is trust conferred by public authority for public purpose. And the Act, by its broad proscription, enjoins holders of public offices within its ambit from any participation in matters in which their economic self-interest may be in conflict with their public duty. The public’s confidence in its elected representatives demands no less. [43] In the instant case, Glen Day is the mayor of Nipawin and Allan Mochoruk is an alderman. Both are shareholders and directors of 622659 Saskatchewan Ltd. which owns the River Inn, a hotel located in Nipawin. Gary Palidwar, along with two others, is an equal shareholder and director of that company. Taking into account that the individuals are involved in a small, closely held private corporation, I am of the opinion that the individuals fall within the definition of partnership and they are all senior officers of the corporation. It would be otherwise were the relationship different within the corporation or if it were public corporation. [44] In addition, there is possibility that the two officials could make profit by the decision of Council. If the hotel project is allowed to go ahead, it may happen that it will be successful such that it cannot accommodate all those who seek lodging within its premises. In such event, the management may refer excess guests to the River Inn. These would result in an increased revenue for that establishment with increased profit for the two public officials. recognize that the described scenario is somewhat extreme. However, the test is not whether there will be, but whether there could be financial profit. [45] In my opinion, both Mr. Day and Mr. Mochoruk had a pecuniary interest in the Palidwar proposal within the meaning of the legislation. As such they should not have participated in any discussions or votes in respect to that proposal. Having come to that conclusion, deliberately make no finding that they intentionally acted with dishonest or wrongful intent. [46] As it happened, neither individual participated in the discussion or reading of Bylaw 756/99 which is the subject of these proceedings. However, that does no more than dance around the problem. Each did participate in the discussion surrounding Bylaw 754/99 and each did vote for it. The present bylaw is nothing more than an extension of the earlier bylaw and the criticism of the first continues into the second. In the circumstances the process as a whole is tainted and should be set aside. [47] There is one additional complaint. The applicants submit that the Town has acted in violation of s. 150 of The Urban Municipality Act, 1984, and in particular s. 150(e). simply point out that there is no evidence before me that the Town has or intends to make public facilities available to the Palidwars. Accordingly, this complaint must be rejected. ISSUE OF STATUTORY NON-COMPLIANCE [48] Section 207 of The Planning and Development Act, 1983, S.S., c. P-13.1, requires that notice be given of any intention to amend zoning bylaw and that public meeting be held for the purpose of hearing representations as to the proposed amendment. The legislation further sets out what must be contained in the notice. The applicants submit that the notice is deficient in several respects. In the light of my earlier conclusion about pecuniary interest, this application can be disposed of without determination of the adequacy of the notice. This being so, decline to make any such determination. DISCRETIONARY USE [49] The applicants seek an order prohibiting hearing in respect to the application for discretionary use by the Palidwars. Those individuals are not parties to these proceedings and accordingly, it is beyond my jurisdiction to make any order in respect to this part of the application. [50] also want to make it clear that my decision herein relates only to what has already happened. It is not anticipatory in nature and is not intended to address future conduct by the Town of Nipawin. To attempt such would be an unwarranted and wrongful intrusion into the legislative process. This Court does not belong there and has no intention of going there. Were there to be an entirely new process, totally absent the presence of Messrs. Day and Mochoruk, different result may ensue. [51] In the result, it is ordered as follows: (1) the Town of Nipawin is prohibited from holding a public hearing on August 30, 1999, in respect to Bylaw 756/99, being a bylaw to amend Bylaw 465/82, the Zoning Bylaw of the Town of Nipawin; (2) the Town of Nipawin is prohibited from giving third reading to and adopting Bylaw 756/99; (3) the application is dismissed in respect to the application for discretionary use by Kathy and Gary Palidwar; and (4) the applicants will have taxable costs of the application, which costs fix at $400.00.
In issue was whether the Town Council's proceedings in respect to a proposed hotel development, including the bylaw, were invalid by reason of bad faith and whether it met the statutory prerequisites for a public meeting. HELD: The Town was prohibited from holding a public hearing with respect to the amendment to the zoning bylaw and from giving third reading to and adopting the bylaw. The application was dismissed in respect to the application for a discretionary use for a hotel development by the Palidwars. 1)The Town Council had acted openly and with candor. It did not have a duty to inform the applicants of the proposal because they were involved in the hotel industry. There was nothing improper about the initial confidentiality of the proposal and meetings in camera. 2)The shareholders' private interests were not being advanced rather than the community's best interest. Section 91(2) of the Urban Municipality Act and Harker v. Regina were noted. 3)There was nothing erroneous or improper in the method used to determine the selling price. 4)The question of the sale was still open. The Town was not subject to an unconditional commitment. The court could not intervene as it had not been established that the Town Council had fettered its discretion. 5)The process as a whole was tainted and should be set aside. The mayor and alderman, both shareholders and directors of the corporation, fell within the definition of partnership. They both had a pecuniary interest in the proposal within the meaning of the legislation. No finding was made that they acted with a dishonest or wrongful intent. The complaint respecting a violation of s.150(e) was not established. 6)It was not necessary to determine the adequacy of the notice required by s.207 of the Planning and Development Act. 7)It was beyond the court's jurisdiction to make an order prohibiting a hearing in respect to the application for a discretionary use by the Palidwars as they were not parties to these proceedings. The court's decision is not anticipatory in nature. 8)The applicants were awarded taxable costs of the application fixed at $400.