In Kamoto Holdings Ltd v Central Kootenay (Regional District), 2022 BCCA 282, the British Columbia Court of Appeal recently held that a BC couple, Gordon and Jill Cann (collectively, the “Canns”) were not able to bring a claim against the Regional District of Central Kootenay (the “District”) as a result of the District’s alleged misinterpretation of the BC Building Code (the “Code”) requirements, which the Canns claimed caused them economic loss. The Court of Appeal held that there was not a sufficient relationship of proximity between the District and the Canns to warrant a finding that the District owed the Canns a duty of care.
The Canns owned a parcel of land (the “Property”) in the Village of Nakusp (“Nakusp”) which they applied to subdivide. The approving officer from Nakusp sent the Canns’ subdivision application to the District for review. The District’s building inspector (the “Inspector”) found a number of faults with the Canns’ application. Specifically, the District advised that the spatial separation between the buildings that the Canns intended to construct on the Property, once subdivided, violated sections 14 and 15 of the Code. A certain level of closeness between particular buildings could only be approved if the District’s fire department would be able to respond to an emergency call on the particular property in less than ten minutes.
The District’s position reflected their manager’s understanding of these Code provisions gained at a conference she attended prior to the Code coming into force. The manager circulated a memorandum to all other building inspectors within the District advising that the requisite ten-minute response time was a very high standard, and all inspectors ought to be operating under the assumption that it was unattainable in the District. This memorandum was referred to by the District as a policy (the “Policy”).
As a result of the Policy, the District’s approving officer placed a number of conditions on the Canns’ subdivision application. The Canns decided to abandon their application due to the fact that fulfilling the approving officer’s conditions would have been too expensive. The Canns purchased another piece of property through their company, Kamoto Holdings Ltd.
The Policy’s position pertaining to the spatial requirements between buildings on the Property was later deemed to be incorrect, as the Village advised that the Property was well-within an area where the fire department could meet the ten-minute response time.
The District eventually removed the conditions from the initial application. However, the Canns decided not to proceed with the subdivision.
The Canns brought an action against Nakusp and the District for economic damages as a result of the losses they suffered due to the erroneous imposition of the subdivision application conditions. They took the position that the Inspector and the District were negligent in assuming that the fire department was not able to meet the ten-minute response time, and that the District breached a duty of care owed to them by failing to ensure that their comments on their subdivision application were accurate.
Nakusp and the District brought an application to strike the Canns’ claim pursuant to Supreme Court Civil Rule 9-5(1)(a) on the basis that it amounted to an improper collateral attack on an administrative process and that there was no reasonable cause of action.
The Trial Judge held that Nakusp and the District did not owe the Canns a private duty of care and dismissed their claim.
While the Canns did not pursue their action against Nakusp after the trial decision was issued, they appealed the lower court’s decision with respect to the District. They took the position that the Judge erred in the factual findings. Further, the Court of Appeal also considered whether the Trial Judge erred in considering the large body of evidence that the parties filed, given that Rule 9-5(2) provides that no evidence is admissible on an application to strike pursuant to sub-rule 1(a).
The Court of Appeal decided not to apply Rule 9-5(2) given that the “issues properly before this Court should be resolved notwithstanding any technical concerns about the evidence.” The Court of Appeal focused on whether a reasonable cause of action was raised in the Canns’ initial claim against the District and whether the District owed the Canns a duty of care.
The Court of Appeal held, as the Trial Judge did, that the Canns’ claim failed at the first stage of the Anns/Cooper analysis, which determines the existence of a duty of care. There was not a sufficient degree of proximity between the Canns and the District to give rise to a duty of care. The court explained that an action for negligent misrepresentation is dependent on the defendant, in this case the District, undertaking a responsibility to a plaintiff, such as the Canns, and on the plaintiff being induced to rely on the defendant’s misrepresentation. With respect to the matter at issue, the Court of Appeal found as follows:
- It cannot be suggested that the Regional District, in making representations to the approving officer, manifested any intention to induce the plaintiff to rely on its information. The Regional District was providing the information to the approving officer to assist her in making a decision on approving the subdivision. It was not giving advice to the appellants.
- The approving officer’s function is one of protecting the public against inappropriate subdivisions. She was required to take into account a multiplicity of considerations and reach a conclusion as to how to act in the public interest. Her conditional approval of the subdivision also did not take the form of advice to the appellants. Rather, it was a statutory decision.
While it was recognized that it was reasonably foreseeable that the Canns may suffer economic loss as a result of the District’s negligence, the Court of Appeal dismissed the Canns’ appeal on the basis that there was no proximate relationship which would entitle individuals such as themselves to rely on the District, given that their role as a public entity is to protect the public.
Bodies that perform public law functions are not often held liable to individuals who suffer damages as a result of their negligence. The nature of the relationship between a public body and a private citizen must be carefully scrutinized on a case-by-case basis to determine whether a duty of care can be established in a particular situation.