Bad Faith

Grosvenor v. East Luther Grand Valley (Township), 2007 ONCA 55 (CanLII)

[27] "Illegality' is a generic term covering any act not in accordance with the law": Immeubles Port Louis Ltée v. Lafontaine (Village), 1991 CanLII 82 (SCC), [1991] 1 S.C.R. 326, [1991] S.C.J. No. 14, at p. 343 S.C.R. As I will explain, it encompasses by-laws that are passed in bad faith.

[43] What, then, constitutes "bad faith"? Many authorities on this question draw upon the decision of Robins J. in Winton, supra. That, too, was a case involving the enactment of a by- law that was within the statutory authority of the municipality (a spot zoning by-law). The Borough of North York rezoned a piece of property in a hasty fashion and with no notice to the property owner in order to prevent its purchase for use as a Zorastrian temple. The existing zoning had permitted use of the property as a church but there was strong community opposition to the proposed use. No planning purpose was put forward to justify the zoning change or the selection of a single spot in the borough as the subject of the amending by-law. The Divisional Court found, at p. 745 O.R., that the by-law was "simply spot zoning calculated to defeat existing land use rights" and concluded that it had been passed in bad faith and did not constitute a valid exercise of the legislative power of North York.

[44] In a frequently cited statement regarding "bad faith", Robins J. said, at p. 744 O.R.:

To say that Council acted in what is characterized in law as "bad faith" is not to imply or suggest any wrongdoing or personal advantage on the part of any of its members: Re Hamilton Powder Co. and Township of Gloucester (1909), 13 O.W.R. 661. But it is to say, in the factual situation of this case, that Council acted unreasonably and arbitrarily and without the degree of fairness, openness, and impartiality required of a municipal government.

(Underlining added)

[45] In Equity Waste Management, supra, at p. 340 O.R., Laskin J.A. concluded that "[b]ad faith by a municipality connotes a lack of candour, frankness and impartiality", and that it "includes arbitrary or unfair conduct and the exercise of power to serve private purposes at the expense of the public interest". He cited the foregoing passage from Winton with approval. [page360]

[46] The application judge adopted the Winton approach to bad faith as well, holding that the Township Council had "acted unreasonably and arbitrarily and without the degree of fairness, openness and impartiality required of a municipal government". There was ample evidence in the record to support that finding.