Casual Legal: Successful litigation can still be costly

DISCLAIMER: This article is meant to provide information to Alberta Municipalities members only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated. This content is not intended for the general public.

By Sean Ward
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider

A recent Manitoba decision serves as a reminder that municipalities must be cautious about their conduct and the positions they take in any litigation, even when they are confident they will prevail in the lawsuit.

The case arose from a lawsuit against the City of Winnipeg by an individual who was banned from doing any further contracting work for the city. The ban arose out of allegations of lying, trespass and attempted theft by the individual, which he argued were entirely baseless. He sued the city for loss of income based on:

• Misfeasance in public office
• Causing loss by unlawful means
• Breach of a common-law duty of procedural fairness or natural justice.

The trial judge found that the plaintiff was unable prove the necessary legal elements for any of those three causes of action, so the claim was dismissed. However, the trial judge also expressly noted that the decision was not a vindication of the city’s actions or conduct, finding instead that the plaintiff was not treated fairly and that the bans were not well-grounded or just. The trial judge expressly encouraged the city to act honourably and voluntarily lift the ban to allow the plaintiff to take on future work for the city, something the City’s counsel had earlier indicated it would do if the ban was found to be unreasonable.

The successful party in the litigation, the City of Winnipeg, then applied for an award of costs against the unsuccessful plaintiff. In assessing the proper award of costs, the trial judge noted that following the judgment dismissing the claim the city reneged on its position that it would lift the ban if the judge found it to be unreasonable. The trial judge found that the city had treated the plaintiff badly and unfairly in connection with imposing the ban, and again by maintaining it following the judgment.

Remarkably, not only did the trial judge deny the city any award of costs despite being successful in the litigation, but instead ordered the city to pay costs to the losing party in the sum of $100,000. The trial judge found the city’s conduct was deserving of rebuke, and that this award was the plaintiff’s “last chance for some modicum of justice”, or at a minimum, would moderate the sting and toll of the city’s behaviour.

This case was highly unusual and may be subject to appeal. However, it helps illustrates that even where a municipality has a sound legal position in defending a claim, courts will carefully scrutinize the behaviour of a public body, and conduct considered to be unfair or heavy-handed can result in negative consequences even where a municipality prevails in defending a claim.

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or casuallegal [at] abmunis.ca (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please call 310-MUNI (6864) or riskcontrol [at] abmunis.ca (email) to connect with Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.