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Law Column

April 2010 Law Column

MUNICIPAL RESPONSIBILITY

Unwarranted refusal to issue a permit

Albert Prévost, lawyer

 

 

On December 10, 2009, the Québec Court of Appeal rendered an interesting decision regarding municipal responsibility in the matter of Municipalité de Saint-Hilarion v. 3104-9364 Québec inc., (JE 2010-64). In this case, after some hesitation, a municipal officer confirmed that the construction of a residence for persons with physical and intellectual disabilities in a residential zone of the municipality was permitted under municipal regulations.

 

Upon receiving the news, the Centre de santé et des services sociaux de Charlevoix (CSSS) called for tenders for the construction of the building and selected the winning bidder, who then applied for a municipal building permit in due form.

 

Area residents soon got wind of the project and presented a petition to the municipal council, expressing their dissatisfaction. Given this turn of events, the municipality sought legal counsel to confirm the lawfulness of the project with regards to the applicable regulations.

 

Legal advisers concluded that the project went against the municipality’s zoning regulations, and the contractor’s permit was denied. The CSSS therefore called for tenders a second time, and the contract was awarded to another bidder. The contractor whose bid was initially selected then sought damages against the municipality, claiming that the building permit had been unlawfully denied. At trial, the Superior Court judge concluded that the CSSS project aimed to build a residence, that the municipality’s zoning regulations allowed for the construction and that the permit was therefore unlawfully refused. The contractor received $48,640 in damages.

 

The case was appealed, and the Court of Appeal was of the opinion that the trial judge had been right to conclude that the building’s projected purpose was residential and not public and institutional as the municipality claimed. The Court confirmed that the permit had been unlawfully denied.

But the municipality argued that denying the building permit did not constitute a fault entailing responsibility, stating that “if it had made an error in refusing the permit, it was not at fault since, under the same circumstances, any reasonable person would have made the same decision.”

 

The Court of Appeal upheld the municipality’s argument and concluded that it had not committed a fault entailing responsibility. It should be noted that the conclusion was not based on the municipality’s good faith, which was not a defence in first instance, but rather on the fact that the municipality had “acted according to a legal opinion that, firstly, was not complacent and which, secondly, if ill-founded with regards to the determinations of the this judgement, was defendable.”

 

However, the Court added that “this does not mean that, in all cases, a municipality may evade responsibility owing to a legal opinion but, so long as this opinion is not frivolous or manifestly incorrect, the municipality is not at fault.” When in doubt, it is therefore important for a municipality to make thorough verifications and, if necessary, seek legal counsel before denying a permit or making any other decisions that could be prejudicial to taxpayers.