Vlanich v Typhair: Municipal Liability for a Failure to Enforce By-laws?

Municipalities can breathe a bit easier following the decision in Vlanich v Typhair, wherein the Court of Appeal was not satisfied that a municipality should be found liable in negligence for a failure to enforce its municipal by-laws.

The decision provides us with an opportunity to take a step back, look at municipal by-law enforcement and identify best practices for avoiding liability.

In June 2008, the Plaintiffs were injured in a motor vehicle accident involving a taxi. The Plaintiffs’ insurance policy included coverage in the event that an at-fault motorist is uninsured or underinsured.

In addition to the standard Defendants, the Plaintiffs named the Township on the theory that it had failed to enforce the provisions of its taxi licensing by-law. This by-law required all licensed taxis to carry a minimum of $1,000,000 in third-party liability insurance coverage. At the time of the accident, the taxi company was only insured up to $200,000.

The taxi company had been licensed on and off in the years leading up to the accident. The last time it applied to be licensed, it submitted a signed declaration and pink slip that was silent on the level of insurance coverage.

At trial, the judge determined that the Township owed a duty of care to the Plaintiffs, but that the Township’s practice of enforcement did not fall below the standard of care required of it.

On appeal, the Court disagreed with part of the trial judge’s decision, concluding that the Township did not owe a duty of care to the Plaintiffs.

The Court acknowledged that an administering public authority owes a general duty to the public to ensure that by-laws are being complied with; however, that general public duty does not amount to a private law duty of care.

Additionally, the Court noted that a finding of liability on small municipalities with limited resources would be a significant burden if a duty of care were to exist.

Although the Township avoided liability, there is one broadly applicable takeaway from the decision.

In its analysis, the Court stated that if a duty of care exists, it must be founded on the language of the Township’s by-law in question. This highlights the importance of consulting with counsel prior to enacting a by-law, as draft language can have unintended consequences, potentially creating unintended duties that may otherwise be avoided.

If your municipality has questions or concerns relating to local by-laws, enforcement practices, or other legal matters, please contact the author, municipal lawyer Gregory Sills of Thomson Rogers at (416) 868.3229.