Court Of King's Bench Confirms Stigma Damages And Strict Interpretation Of MGA Defences | Legare v Acme (Village), 2023 ABKB 145

• Jurisdiction: Canada
• Law Firm: CLC (Canadian Litigation Counsel)
• Subject Matter: Government, Public Sector, Real Estate and Construction, Transport, Rail, Road & Cycling, Constitutional & Administrative Law, Construction & Planning
• Author: Mr Drew Wilson ( Brownlee LLP)
• Published date: 24 March 2023

In Legare v Acme (Village), 2022 ABPC 54, the Provincial Court of Alberta determined the Village of Acme was liable to the Plaintiff resident homeowners for a sewage block that caused extensive damage to their house. Most of their damages were covered by insurance but they were awarded stigma damages. Stigma damages compensate a property owner for the diminution in value of property caused by negative perceptions despite the property being remedied to a high standard.

The Village recently appealed to the Alberta Court of King's Bench but the Provincial Court's decision was upheld on appeal (Legare v Acme (Village), 2023 ABKB 145).

Background

It was found at trial that the Village was aware their sewer lines were narrower in diameter than required by Provincial standards which made it more susceptible to blockage. Regardless, the Village relied heavily on 530 of the Municipal Government Act, RSA 2000, c M-26, which exempts municipalities from liability for damage attributable to its system of inspection and maintenance (or even a lack of a system). It is a broad statutory defence for municipalities.

At trial, the Village argued they performed visual inspections of the sewer lines once per year and were exempted from liability by virtue of section 530. While a more in-depth inspection may have prevented the sewage blockage, this was the system of inspection the Village had chosen and section 530 protects municipalities from liability for their system of maintenance and inspection it relies on.

However, section 530 often conflicts with section 532 of the Municipal Government Act which places a positive duty on municipalities to keep every road or public place in a reasonable state of repair. A municipality can avoid liability under section 532 of the Municipal Government Act if it did not know about the state of disrepair or demonstrates it took reasonable steps to prevent the disrepair from arising. Both sections 530 and 532 are broad in scope. Section 532 will apply to every road and "public place" but public place is not defined and could be applied to a number of areas.

Last year, in Pyke v Calgary (City), 2022 ABQB 198, the Honourable Justice Colin C.J. Feasby made a definitive ruling for sections 530 and 532 finding section 530 will not provide a municipality immunity from section 532 as that would essentially render section 532 inoperative.

Here, the Provincial Court followed Justice Feasby's interpretation of sections 530 and 532 and determined...