The B.C. Court of Appeal has ruled the Strathcona Regional District (SRD) board was “unreasonable” in its decision to censure a former director.
The ruling by Justice Gail Dickson is in response to former SRD director Noba Anderson’s appeal to review a decision by the board of directors to censure her for disclosing confidential information to her lawyer, and declining to indemnify her for legal costs incurred for defending an earlier petition to disqualify her from holding office. Justices Gregory Fitch and Lauri Ann Fenlon concurred with Dickson’s ruling.
“Does a person breach confidence by disclosing confidential information to a lawyer for the purpose of obtaining personal legal advice? That is the question at the heart of this appeal,” Justice Dickson wrote in her reasons for judgement. “In my view, a director does not breach confidence by disclosing confidential board information to a lawyer to obtain legal advice on matters that affect them personally.”
In January 2019, a group of Cortes Island residents made a petition to the Supreme Court of B.C. to remove Anderson from office. The petition alleged that Anderson had profited from her constituents, who had received political favours in return. The SRD hired a private investigator to look into the allegations, and found that the claims were baseless. That suit was dropped. After the issue was resolved, Anderson requested that her legal fees be covered by the regional district under the indemnification bylaw. However, the board decided that Anderson would not be indemnified, a move which is allowed under the bylaw as long as the official in question either fails to notify the regional district in accordance with the requirements of the bylaw, fails to cooperate with the district in its defence of the claim, prosecution, appeal or other proceeding, interferes with the regional district’s investigation into the claim or with the settlement, negotiation or other proceeding related to that claim or, voluntarily assumes liability or settles a claim without notifying the district beforehand.
On Oct. 24, 2019, the board decided to censure Anderson for releasing information from an in-camera meeting.
“In response, Ms. Anderson submitted that the confidentiality requirement imposed by s. 117 of the Community Charter over materials considered at closed Board meetings is not lost or breached when a Board member seeks independent legal advice related to those materials,” Justice Dickson’s reasons for judgement says.
Anderson then sued the regional district, filing a judicial review petition looking to have the censure motion quashed, and her original legal fees indemnified by the regional district.
The judge in that case found that while the board did not give reasons for the indemnification decision, “it was not unreasonable for the Board to refuse to indemnify Ms. Anderson ‘because the issues in play in [the Disqualification Petition] did not involve her exercise of official powers or duties as a member of the Board.’”
That judge also found that the censure motion was reasonable, saying that “Ms. Anderson could have, and in my respectful opinion should have, requested permission from the Board to share the confidential information in question with her legal counsel, for the purposes of obtaining independent legal advice. If that request had been denied, then she would have had grounds to seek a judicial review of that decision. However, that is not what occurred.”
However, Anderson filed an appeal of that decision. Dickson wrote in her decision that “Solicitor-client privilege is essential to the proper functioning of our legal system. For that reason, it is the privilege the law has protected most zealously and is most reluctant to water down by exceptions.”
“The question is whether the Board’s interpretation of the confidentiality requirements under the Community Charter and the SRD Code of Conduct Bylaw is legally untenable because it limits a director’s right to obtain legal advice on confidential Board matters that affect them personally,” Dickson writes, saying that in her interpretation, they “do not preclude an official such as Ms. Anderson from disclosing confidential Board information to a lawyer to obtain personal legal advice without prior authorization … In the result, the Censure Decision cannot be justified.”
Justice Dickson also wrote concerning the indemnification decision that “there is only one reasonable interpretation … namely, that Ms. Anderson is entitled to be indemnified for her reasonable legal costs incurred in relation to the Disqualification Petition. It follows that the Indemnification Decisions were also unreasonable.”
Dickson ruled that the censure and indemnification decisions be quashed, and that the SRD pay Anderson for her legal costs associated with the disqualification petition. The decision does not note what those costs are.
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