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Bad Faith - Meaning
COMMENT
The terms 'bad faith' and 'malice' are notoriously difficult to define, which in this case to me reflects law where judge's want to retain some political control over the case outcome. This would not be surprising given the natural tension of 'justiciability' that exists between the judiciary and the executive government, as different principal branches of government.
CASE DICTA
. New Sunlight Inc. v. Ontario (Minister of Infrastructure)
In New Sunlight Inc. v. Ontario (Minister of Infrastructure) (Ont Divisional Ct, 2025) the Divisional Court dismissed a JR "seeking to set aside two pieces of subordinate legislation [SS: Orders-in-Council] issued by the Lieutenant Governor in Council", here respecting a Toronto transit expropriation and a designation under the Transit-Oriented Communities Act, 2020.
Here the court considers the applicant's argument that the OICs were in 'bad faith':Issue 2(a): Was the Second OIC made in bad faith?
[72] New Sunlight submits that Auer does not affect this Court’s ability to quash subordinate legislation made in bad faith. It argues that Ontario has acted in bad faith by threatening to expropriate the entirety of certain properties even though not all of the land is needed to support its projects. Ontario has continued to apply pressure even as they negotiate a potential TOC agreement and is abusing their power of expropriation.
[73] New Sunlight further submits these efforts have been part of Ontario’s broader bad faith strategy throughout this dispute, including its decision to wait two weeks after the Second OIC was signed before serving New Sunlight with a copy. New Sunlight also highlights that Ontario chose to do so in the midst of its legal challenge to the First OIC.
New Sunlight has failed to meet the heavy burden to establish bad faith
[74] Bad faith/improper purpose refers to “acts committed deliberately with intent to harm” as well 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.”[15] The party alleging bad faith bears the onus of proving it, and in doing so must meet a “heavy burden”.[16] Speculation and innuendo are not evidence capable of proving bad faith.[17]
[75] It is important not to conflate any adverse impact that may be faced or suffered by the claimant with “deliberate intent to harm”. As the Supreme Court has held, “In a democracy, public officers must retain the authority to make decisions that, where appropriate, are adverse to the interests of certain citizens.”[18] . Hardick v. College of Chiropractors of Ontario
In Hardick v. College of Chiropractors of Ontario (Div Court, 2023) the Divisional Court considers when by-laws (here, of a professional College) may be impugned by bad faith:[36] Bad faith 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: Equity Waste Management of Canada Corp v. Halton Hills (Town), 1997 CanLII 2742 (Ont. C.A.), 35 O.R. (3d) 321, at para. 61. Bylaws also may be set aside where they are passed for an improper purpose, including a purpose collateral to the one for which the power to make the bylaw was granted: Hummel Properties Inc. v. Niagara-on-the Lake (Town), 2022 ONCA 737, at para. 26; Markham v. Sandwich South (Township of), 1998 CanLII 5312 (Ont. C.A.), at para. 24.
[37] Dr. Hardick faces a heavy burden in seeking to demonstrate bad faith on the part of the majority of Council members: Friends of Lansdowne Inc. v. Ottawa (City), 2012 ONCA 273, 110 O.R. (3d) 1, at para. 79. . Wise Elephant Family Health Team v. Ontario (Minister of Health)
In Wise Elephant Family Health Team v. Ontario (Minister of Health) (Div Ct, 2021) the Divisional Court considered an issue of bad faith:Bad Faith/Improper Purpose
[82] Wise Elephant submits that Ontario made the decision to terminate the Agreement on the basis of bad faith, or for an improper purpose. While Wise Elephant took the court to several cases defining bad faith, the decision of Emery J. in Seelster Farms et al. v. Her Majesty the Queen and OLG, 2020 ONSC 4013, at para. 120, broadly summarizes some of the main aspects of bad faith:Bad faith has been defined as conduct that covers “acts committed deliberately with intent to harm.” It also has been used to characterize acts that are “so markedly inconsistent” with the events in which they are carried out that a court “cannot reasonably conclude that they were performed in good faith.” Descriptions of such conduct found in the jurisprudence include “reckless behavior;” conduct that “implies a fundamental breakdown in the orderly exercise of authority;” conduct that implies a “lack of candour, frankness and impartiality;” and irrational decision-making that is arbitrary, or plainly unreasonable because it fails to consider the appropriate information on which to decide. See Enterprises Sibeca Inc. c. Frelighsburg (Municipalite), 2004 SCC 61 and Grosvenor v. East Luther Grand Valley (Township), 2007 ONCA 55. [83] In Entreprises Sibeca Inc. v. Frelighsburg (Municipality), 2004 SCC 61, [2004] 3 S.C.R. 304, at para. 26, 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” (emphasis added). Wise Elephant also relied extensively on Roncarelli v. Duplessis, 1959 CanLII 50 (SCC), [1959] S.C.R. 121 in oral argument. Roncarelli had his liquor licence cancelled by the Quebec Liquor Commission because he had posted bond for Jehovah’s Witnesses arrested for proselytizing. Premier Duplessis recommended the licence be cancelled forever. Roncarelli is the seminal Canadian case involving judicial review for the abuse of discretion. Rand J. stated at pp. 140-141:In public regulation of this sort there is no such thing as absolute and untrammelled “discretion”, that is that action can be taken on any ground or for any reason that can be suggested to the mind of the administrator; no legislative Act can, without express language, be taken to contemplate an unlimited arbitrary power exercisable for any purpose, however capricious or irrelevant, regardless of the nature or purpose of the statute. Fraud and corruption in the Commission may not be mentioned in such statutes but they are always implied as exceptions. “Discretion” necessarily implies good faith in discharging public duty; there is always a perspective within which a statute is intended to operate; and any clear departure from its lines or objects is just as objectionable as fraud or corruption. Could an applicant be refused a permit because he had been born in another province, or because of the colour of his hair? The ordinary language of the legislature cannot be so distorted.
To deny or revoke a permit because a citizen exercises an unchallengeable right totally irrelevant to the sale of liquor in a restaurant is equally beyond the scope of the discretion conferred. There was here not only revocation of the existing permit but a declaration of a future, definitive disqualification of the appellant to obtain one: it was to be “forever”. [84] Bad faith is a serious allegation. In dealing with acts of public administration, the burden is on the party challenging the acts to establish bad faith on a balance of probabilities. Moreover, innuendo and speculation are not evidence.
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[100] In this case there are no acts that are “so markedly inconsistent with the relevant legislative context”, or so arbitrary or reckless that the only reasonable conclusion that this court can draw is that they were performed in bad faith. This is a far cry from the “unlimited arbitrary power exercisable for any purpose, however capricious or irrelevant, regardless of the nature or purpose of the statute” set out in Roncarelli v. Duplessis, upon which Wise Elephant relied. There is no factual basis for the serious allegations of bad faith and improper purpose made against Ministry personnel. The Ministry showed remarkable forbearance, attempting to remedy governance failures on the part of Wise Elephant. After the 2018 Audit, it continued to fund and work with Wise Elephant. The remarkable litany of problems presented here does not give any basis for inferring bad faith or improper purpose in terminating Wise Elephant as a transfer payment recipient, and there is no evidence that would support such an inference: only innuendo and speculation. . 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.” . 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… . 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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