The B.C. Court of Appeal has ruled in favour of a former Strathcona Regional District director who went to court after being censured for sharing confidential information with her own lawyer.
Noba Anderson was found not to have breached confidentiality.
At the heart of the case is whether a person breaches confidence by disclosing confidential information to a lawyer to get legal advice, said Appeal Court Justice Gail Dickson, who called the Strathcona Regional District board’s decisions “unreasonable” in the Jan. 24 ruling.
Justices Lauri Ann Fenlon and Gregory Fitch concurred.
The appeal court also ruled that the board was wrong to refuse to cover Anderson’s legal costs after she successfully defended a petition aimed at disqualifying her from serving as a director.
The district’s own indemnification bylaw requires it to pay Anderson, Dickson said.
Anderson represented the Cortes Island electoral area at the time. She did not run in the most recent local government election.
The years-long matter has its roots in a fire that destroyed Anderson’s father’s cabin on Cortes Island in early 2018. Anderson’s friends set up an online fundraising campaign, which brought in about $3,700 to rebuild the cabin.
Complaints were made to the regional district that fall alleging that Anderson was in a potential conflict of interest because of the money-raising effort. At a closed meeting, the district’s board reviewed a confidential report about the matter and decided to hire an outside investigator.
Anderson sought legal advice. Her lawyer wrote to the board expressing concern about the investigation and mentioned the confidential report.
In January 2019, 10 Cortes Island residents filed a petition to the Supreme Court of B.C. to disqualify Anderson from holding office in the next election because of the-conflict-of-interest matter.
Anderson’s lawyer wrote to the board asking the district to cover her legal costs to defend the disqualification petition.
The board decided not to make that decision until the private investigation was completed and there was a court decision on the disqualification petition.
Under B.C.’s Local Government Act, a regional district can indemnify directors, or secure them from legal liability.
The regional district’s own bylaw says it must indemnify board members for “any claim, action or prosecution” brought against them in connection with the exercise of their official roles, the appeal court noted.
In February, staff gave the board two confidential reports, one from the investigator, who absolved Anderson of any wrongdoing.
Another contained a legal opinion from the district’s own lawyer. Anderson gave her lawyer those reports.
Her lawyer contacted the board again, asking for legal fees to be covered and also referred to the two new reports.
District staff sent board members a fourth confidential report but then stopped giving Anderson confidential reports related to her issues in the matter.
In May, the board voted not to cover Anderson’s legal fees, even though the Supreme Court decision had not yet been made.
The board’s lawyer contacted Anderson’s lawyer, saying the board had not waived solicitor-client privilege and by sharing those opinions and the investigator’s report, Anderson had contravened the Community Charter and the board’s Code of Conduct Bylaw.
Anderson’s lawyer was told that those materials must be returned and deleted.
In June, the Supreme Court disqualification petition was heard by Justice Ronald Skolrood, who ruled that Anderson had not accepted gifts contrary to the Community Charter and that she was qualified to hold office. Skolrood also awarded Anderson her costs.
A few months later, the district’s board held a censure hearing against Anderson for disclosing confidential information. Anderson argued that board members are entitled to obtain independent legal advice regarding matters before the board and that the Community Charter had not been breached.
Anderson turned to the Supreme Court to seek an order to quash the board’s censure decision and to win a declaration that her legal costs should be indemnified for defending the disqualification petition.
A chambers judge decided that Anderson had not established that the indemnifications and censure decisions were unreasonable. He rejected Anderson’s submission that she was entitled to disclose the confidential information to her lawyer.
Anderson appealed, and Dickson and the other judges agreed to “quash the censure decision and the indemnification decisions.”
Appeal justices also declared that the regional district must cover Anderson’s costs to defend the disqualification petition.
>>> To comment on this article, write a letter to the editor: [email protected]
