Judge made 'palpable' errors in ruling city deliberately stalled Parker lands development: appeal court

The City of Winnipeg has been exonerated from stalling a 1,900-unit residential development planned for the former Parker lands.

Manitoba's highest court overturned a King's Bench judge's decision that found two planning officials deliberately slowed Fulton Grove's progress.

Developer Andrew Marquess of Gem Equities filed a lawsuit against the city, borne out of his frustration with the pace of development on lands he acquired from the city in a 2009 swap for land he owned in Fort Rouge.

In his initial statement of claim in 2018 and subsequent hearings in 2021, Marquess argued the city and its officials acted improperly when they refused to allow the development to proceed.

In a July 2023 decision, Manitoba Court of King's Bench Judge Shauna McCarthy wrote there were "several instances of bad faith and deliberate conduct" on the part of chief city planner Braden Smith and senior planner Michael Robinson, for taking actions that stymied efforts by Marquess to develop 19 hectares in Fort Garry.

She wrote the two planners did this at the direction of River Heights-Fort Garry Coun. John Orlikow, who was not a defendant in the case.

While Marquess was seeking $18 million in damages, the court awarded him $5 million.

The city appealed the decision with Manitoba's highest court last year and a panel of three judges ruled McCarthy made "palpable and overriding errors" in some findings as well as in the inferences she drew from the evidence to determine Smith and Robinson engaged in unlawful and deliberate conduct as public officers. 

In a 99-page decision, written by Court of Appeal Justice James G. Edmond on behalf of the panel and released on Thursday, the court determined McCarthy "erred in her application of the law in two respects."

The trial judge failed to examine the parameters Smith and Robinson were compelled to act within as public officers, according to the appeal's decision.

She also failed to address if the two city employees were aware of their conduct's unlawfulness and the likelihood of harm to the developer in order to support her findings. 

"The evidence falls short of meeting the high bar of proving that Smith and Robinson are liable for misfeasance in public office," the appeal's decision said. 

'Nothing nefarious'

The Court of Appeal said there must be an assessment of a public officer's authority before it can be determined whether it was exceeded. However, the trial judge didn't consider the relevant policy framework of the city planners to determine if they breached their obligations. 

In one instance, McCarthy found Robinson's attempt to persuade an administrator of the zoning and permits division to deny the developer a permit to stockpile and grade fill at the Parker Lands site "was an abuse of his authority and was done for an improper purpose with conscious disregard for the consequences to Gem."

But the panel of judges, who reviewed other alleged errors from the trial judge, said the evidence showed Robinson had instead investigated the "appropriateness of the permit applications." 

"Robinson was performing his job as a planner when he raised concerns regarding grades, drainage and the effect on the forest located within the Parker Lands," the appeal court's decision said. 

"The evidence does not establish that Robinson did anything unlawful for an improper purpose or outside his statutory authority."

McCarthy had also concluded Smith and Robinson breached their duty by seeking feedback from Orlikow. But the appeal court disagreed, saying there was "nothing nefarious about meeting with and receiving feedback" from the councillor. 

The Court of Appeal decision said planners go to stakeholders, including local area councillors to solicit feedback to develop a robust plan.

In a similar fashion "Marquess and other representatives of Gem met with Orlikow on numerous occasions as well to discuss his views and the planning process," the appeal's decision said. 

While public officials may at some point act outside their authority by seeking feedback from a councillor, McCarthy failed to determine how Smith and Robinson could have crossed that line.

The trial judge had also found Smith and Robinson had a reckless or conscious disregard for the interests of the developer. 

But the appeal court said she did not do a robust assessment to determine the city employees' conduct was deliberate attempts to slow down the development application and that they consciously disregarded its interest with the misconduct. 

"Absent some awareness of harm, there is no basis on which to conclude that Smith and Robinson breached an obligation that they owed to [the developer]," the appeal's decision said. 

Regarding Smith, the trial judge found he made deliberate attempts to thwart the development applications when he ordered the peer review of the project's secondary plan, shortly after Orlikow expressed his lack of support for the proposed development.

But the Court of Appeal found Smith's conduct was more consistent with performing his duties as the chief planner, ensuring the development was consistent with bylaws.

His actions "do not support an inference that he acted deliberately for an illegal or improper purpose" to slow down the development, according to the appeal's decision.

"I would allow the appeals, set aside the judgment … and dismiss the action in its entirety," Edmond said in the decision.

Mayor Scott Gillingham applauded the decision and said the city is continuing to work with the developer to move the Fulton Grove project forward, with the hope that construction can begin this year.

"This is a significant legal and financial win for the City of Winnipeg, and it confirms that our staff acted in good faith while managing a complex file," Gillingham said a statement provided to CBC News.

"It also makes clear that Coun. Orlikow was doing his job appropriately in representing his constituents. Dialogue between councillors and staff is essential to serving the public effectively."