The District of Mission spent about $70

Lawsuit cost District of Mission more than $70,000

Documents shed light on council decision to settle pharmacy case

Newly released documents by the District of Mission show the municipality spent more than $60,000 unsuccessfully defending itself in a lawsuit it eventually concluded it was destined to lose.

A settlement reached in early 2013 – prior to the presiding judge making a final ruling – also saw the district pay $8,199 for the legal costs of the plaintiff, who alleged the municipality failed to comply with the Local Government Act and acted in bad faith when it changed a bylaw to prohibit a pharmacy from opening on First Avenue. The total cost to the district was $70,028, with staff time not included in that number.

In November of 2014, prior to the municipal election, council unanimously voted to release documents relating to the court case. Those documents, including emails from the district’s lawyers and minutes from closed sessions of council, shed new light on the origins of the bylaw, and the resulting legal action.

In February 2012, a group approached the district to inquire about the likelihood of obtaining a business licence for a medical marijuana dispensary downtown, according to the documents.

Two months later, on April 17, the district received an application to build a medical clinic and pharmacy for a First Avenue property. There was no mention made of marijuana, but the district began inquiring about how it could block the application.

Two weeks later, on May 2, council ordered staff to prepare to overhaul its zoning bylaw to prohibit pharmacies and medical clinics in the downtown area.

The company working to establish the pharmacy said they had no intentions to be involved in medical marijuana and filed a lawsuit, saying it had received assurances such an operation was allowed and alleging the district had operated in bad faith. The company said it was losing $17,500 per month because it had already recruited a pharmacist and pharmacy technician and was paying mortgage and other building costs.

The city however, said the building permit filed by the applicants prior to the development of the bylaw was “incomplete” at the time of its original submission.

The district was aware that its actions could prompt legal action, but according to the minutes of an August 2012 closed council meeting, district legal counsel Kathryn Stuart told councillors “that the district’s case is very strong on a number of fronts and, though she cannot guarantee that the court will decide in the district’s favour, she would expect a positive outcome based on similar cases in the past.”

But Coun. Nelson Tilbury – who voted against the bylaw along with Coun. Jenny Stevens – had begun asking questions about the decision to block the pharmacy.

In a document from September 2012, the plaintiff’s legal counsel quoted a conversation with Tilbury in which the councillor remembered asking the district’s deputy chief administrative officer, Paul Gipps, why the pharmacy was being blocked.

Tilbury said Gipps told him in the spring that Mission was taking a “proactive” approach to stopping a medical marijuana dispensary.

In the same conversation with the lawyer, Tilbury said he did not receive confirmation that the would-be pharmacy developers were not connected to the medical marijuana group until just before final reading of the rezoning bylaw that prompted the lawsuit.

Citing “more conservative” views, Tilbury announced in September of 2012 that he was resigning from the Mayor’s Citizens for Responsible Municipal Government (CRMG) slate.

The documents also include minutes from a Sept. 17, 2012, closed council meeting at which Mayor Ted Adlem noted that a council member had spoken to plaintiffs “potentially complicating the District of Mission’s legal position.”

Adlem warned that “strategic discussions among the mayor, council and staff are confidential” and that councillors could “be held personally responsible for losses incurred by the District of Mission resulting from a breach of confidentiality.”

The matter went before a judge in late January. The proceedings did not go well for the district, according to the documents.

In a report to council, the district’s lawyers said they believed the judge would most likely rule in favour of the plaintiffs. They said the judge appeared to strongly favour the plaintiff’s interpretation of a key statute and the timing of the application. The judge also warned the district’s counsel that he would likely find that the district acted in bad faith in its dealings and “that the district certainly would not wish that the court ‘go there.’ ”

A finding of bad faith could result in damages, which the district’s lawyers would later report could reach as high as $250,000. Lawyers also warned a ruling could have “political ramifications,” noting that “there would be of course discomfort in reasons issued which imply or conclude that the district acted unfairly or improperly.”

After council received the report, Tilbury tabled a motion for the district to pursue a settlement with the plaintiffs prior to a ruling. The motion passed, with Mayor Ted Adlem and Coun. Dave Hensman opposing any settlement that didn’t involve the district buying the property in question.

According to the minutes of that meeting, Stevens, who at the time was still a member of CRMG, “registered her objection to the way in which this matter was discussed, characterizing the mayor’s behaviour, in some cases, as aggressive and intimidating.”

Stevens would later leave CRMG, along with Couns. Tony Luck and Jeff Jewell.

Two weeks after telling counsel to pursue a settlement, Stevens, Luck, Jewell, Tilbury and Coun. Larry Nundal voted to approve a deal.

Adlem and Hensman again voted against, and “expressed their strong opposition,” according to meeting minutes.

The initiative left the district on the hook for the plaintiff’s legal costs, but avoided a costly finding of bad faith and the awarding of significant damages.