Resolution No. 35B-01M

WHEREAS, various pieces of provincial legislation provide that if a corporation has committed an offence, any officer, director or agent of the corporation who directed, authorized, assented to or acquiesced in the commission of the offence is a party to and guilty of the offence; and

WHEREAS, rural municipalities are bodies corporate and members of council may, therefore, be subject to prosecution for acts committed on behalf of the municipality; and

WHEREAS, such provisions could be applied notwithstanding that the members of council may have been acting in what they honestly believed to be the best interests of their ratepayers;

THEREFORE BE IT RESOLVED, that SARM lobby the Provincial Government to provide an exemption from prosecution for individual members of council in circumstances where the municipality could be prosecuted and the individual members of council were acting in what they honestly believed to be the best interests of their ratepayers.

Response from Honorable Chris Axworthy, Q.C., Minister of Justice and Attorney General:

Exemption from Prosecution for RM Councillors I regret I cannot recommend to the government that such an exemption be put into our laws. To do so would create a special class of citizens who are able to ignore the law when they think it is beneficial to themselves or others to do so. Our system of government is based on the principle that no one, not even an elected official, is above the law, regardless of the motivation for his or her actions.

The exemption you are asking for would offend this fundamental principle and would likely be repugnant to most people of this province. Resolution 35-A Section 16 of The Interpretation Act, 1995 currently applies with great respect to rural municipalities and the members of their councils to the following effect:

Corporate rights and powers
16(6) Every officer and director of a corporation, in exercising his or her powers and in performing his or her duties, shall:
(a) act honestly and in good faith with a view to the best interests of the corporation;
(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances; and
(c) comply with the enactment by or pursuant to which the corporation is governed.
(7) An officer or director is not liable for a breach of his or her duty pursuant to subsection
(6) if he or she relies in good faith on:
(a) financial statements of the corporation represented to the officer or director by an officer of the corporation or in a written report of the auditor of the corporation to reflect fairly the financial condition of the corporation; or
(b)a report of a lawyer, accountant, engineer, appraiser or other person whose position or profession lends credibility to his or her statement.
(8) No officer or director of a corporation is personally liable for any debt, liability, obligation, act or default of the corporation.

Extending this existing significant protection from civil liability to a blanket exemption from prosecution for provincial offences (Criminal Code offences being outside provincial jurisdiction) would require careful consideration. The majority of applicable provincial offences require intentional acts on behalf of the offender.

As a matter of broad public policy, it is not at all clear that the belief of an individual that their actions may help local ratepayers is a proper legal justification for the full range of potential intentional illegal acts that could be committed by rural municipality council members. With these concerns in mind, I am of the view that additional information from SARM would be required to address these issues in more detail before reviewing the matter further.