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Bad Faith

'Bad faith' is used in a number of different legal contexts, related but not always identical. Generally though it is a heightened standard of liability, akin to malice. It is used commonly in Ontario law with respect to a government entity, where they must be shown to have acted in 'bad faith' otherwise they are immune from liability.

1. General
2. Municipal Bad Faith
3. Crown Liability

1. General

. 1582235 Ontario Limited v. Ontario

In 1582235 Ontario Limited v. Ontario (Ont CA, 2020) the Divisional Court cited this characterization of bad faith:
[27] In Enterprise Sibeca Inc. v. Frelighsburg (Municipality),[11] the Supreme Court described bad faith as “acts that are so markedly inconsistent with the relevant legislative context that a court cannot reasonably conclude that they were performed in good faith.”

2. Municipal Bad Faith

. Seguin (Township) v Hamer

In Seguin (Township) v Hamer (Ont CA, 2014) the court briefly discusses what constitutes 'bad faith' by a municipality sufficient to invalidate a by-law:
[8] As Laskin J.A. explained in Equity Waste Management of Canada v. Halton Hills (Town) (1997), 1997 CanLII 2742 (ON CA), 35 O.R. (3d) 321 (C.A.), at p. 340:
Bad faith by a municipality connotes a lack of candour, frankness and impartiality. It includes arbitrary or unfair conduct and the exercise of power to serve private purposes at the expense of the public interest…

3. Crown Liability

. Salehi v. Association of Professional Engineers of Ontario

Here in Salehi v. Association of Professional Engineers of Ontario (Ont CA, 2016) the Court of Appeal briefly characterized the intention requirement of 'bad faith' as it sometimes occurs in provisions limiting the liability of the Crown, Crown agents, and other statutory entities:
[8] In Finney v. Barreau du Québec, 2004 SCC 36 (CanLII), [2004] 2 S.C.R. 17, at para. 39, the Supreme Court held that bad faith conduct includes not only intentional fault, but also serious carelessness or recklessness amounting to a “fundamental breakdown of the orderly exercise of authority” or “an actual abuse of power”.

[9] The party claiming bad faith must provide specific allegations of it. For example, he or she must allege conduct founded upon fraud or oppression, or an improper purpose or motive, such as an intention to mislead or deceive or to deliberately cause harm: see e.g. Sampogna v. Smithies, 2012 ONSC 610 (CanLII), 94 M.P.L.R. (4th) 320, at para. 16; and Burns v. Johnston, 2003 CanLII 44408 (ON SC), 2003 CanLII 44408 (Ont. S.C.), at paras. 29-34. A mere error or omission is not evidence of bad faith: Burns v. Johnston, at para. 32. See also Toronto Sun Wah Trading Inc. v. Canada (Canadian Food Inspection Agency), 2014 ONCA 803 (CanLII); and Deep v. Massel, 2007 CanLII 27969 (ON SC), 2007 CanLII 27969 (Ont S.C.), aff’d 2008 ONCA 4 (CanLII).


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