HomeMy WebLinkAboutBy-law No. 2025-067THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
BY-LAW NO. 2025-067
A BY-LAW TO PROVIDE FOR THE INDEMNITY AND DEFENCE OF MEMBERS OF
COUNCIL, MEMBERS OF LOCAL BOARDS, AND EMPLOYEES OF THE
MUNCIPALITY OF BAYHAM AGAINST LOSS OR LIABILITY INCURRED WHILE
ACTING ON BEHALF OF THE MUNCIPALITY
WHEREAS Section 8 of the Municipal Act, 2001, S.O. 2001, c. 25 as amended,
provides that the powers of a municipality under this or any other Act shall be
interpreted broadly so as to confer broad authority on the municipality to enable the
municipality to govern its affairs as it considers appropriate and to enhance the
municipality's ability to govern;
AND WHEREAS Section 223.3 of the Municipal Act, 2001 provides that a municipality
shall indemnify the Integrity Commissioner or any person acting under the instructions
of that officer for costs reasonably incurred by either of them in connection with the
defence of a proceeding if the proceeding relates to an act done in good faith in the
performance or intended performance of a duty or authority under this Part or a by-law
passed under it or an alleged neglect or default in the performance in good faith of the
duty or authority;
AND WHEREAS s. 279(1) of the Municipal Act, 2001, S.O. 2001, c. 25, as amended,
states that despite the Insurance Act, a municipality may be or act as an insurer and
may exchange with other municipalities in Ontario reciprocal contracts of indemnity or
inter -insurance in accordance with Part XIII of the Insurance Act with respect to the
following matters:
1. Protection against risks that may involve pecuniary loss or liability on the part of
the municipality or any local board of the municipality.
2.. The protection of its employees or former employees or those of any local board
of the municipality against risks that may involve pecuniary loss or liability on the
part of those employees.
�. Subject to section 14 of the Municipal Conflict of Interest Act, the protection of
the members or former members of the council or of any local board of the
municipality or any class of those members against risks that may involve
pecuniary loss or liability on the part of the members.
4 Subject to section 14 of the Municipal Conflict of Interest Act, the payment of any
damages or costs awarded against any of its employees, members, former
employees or former members or expenses incurred by them as a result of any
action or other proceeding arising out of acts or omissions done or made by them
in their capacity as employees or members, including while acting in the
performance of any statutory duty.
5. Subject to section 14 of the Municipal Conflict of Interest Act, the payment of any
sum required in connection with the settlement of an action or other proceeding
referred to in paragraph 4 and for assuming the cost of defending the employees
or members in the action or proceeding;
AND WHEREAS Section 283(1) of the Municipal Act, 2001, as amended, provides that
municipalities may pay any part of the remuneration and expenses of the members of
any local board of the municipality and the officers and employees of the local board;
AND WHEREAS Section 283(2) of the Municipal Act, 2001 as amended, provides that
a municipality may only pay the expenses of members of council, local boards,
employees, and officers if the expenses are of those persons in their capacity as
members, officers or employees, among other considerations,
AND WHEREAS s. 448(1) of the Municipal Act, 2001, S.O. 2001, c. 25, as amended,
states that no proceeding for damages or otherwise shall be commenced against a
member of council or an officer, employee or agent of a municipality or a person acting
under the instructions of the officer, employee or agent for any act done in good faith in
the performance or intended performance of a duty or authority under this Act or a by-
law passed under it or for any alleged neglect or default in the performance in good faith
of the duty or authority;
AND WHEREAS s. 448(2) of the Municipal Act, 2001, S.O. 2001, c. 25, as amended,
states that s. 448(1) does not relieve a municipality of liability to which it would
otherwise be subject in respect of a tort committed by a member of council or an officer,
employee or agent of the municipality or a person acting under the instructions of the
officer, employee or agent;
AND WHEREAS Section 8 of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.
50, as amended, allows an elector, an Integrity Commissioner of a municipality or a
person demonstrably acting in the public interest to apply to a judge for a determination
of the question of whether a member, or former member, has contravened section 5,
5.1, 5.2, or 5.3 of the Municipal Conflict of Interest Act;
AND WHEREAS s. 14 of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50, as
amended, states that despite section 279 of the Municipal Act, 2001, the council of
every municipality may at any time pass by-laws, despite the Insurance Act, to enable
the municipality to act as an insurer to protect a member of the council or of any local
board thereof who has been found not to have contravened section 5, 5.1, 5.2, or 5.3
against any costs or expenses incurred by the member as a result of a proceeding
brought under the Municipal Conflict of Interest Act, and for paying on behalf of or
reimbursing the member for any such costs or expenses,
AND WHEREAS the Council of The Corporation of the Municipality of Bayham finds
that it is in the public interest to ensure that Eligible Persons acting in good faith to
perform their duties are indemnified against the costs of Legal Proceedings;
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE
MUNICIPALITY OF BAYHAM ENACTS AS FOLLOWS:
I . SHORT TITLE
1.1 This by-law may be cited as the "Indemnification By-law" for the Corporation of
the Municipality of Bayham.
2. DEFINITIONS
In this by-law:
2.1 "Board" means a local board of the Municipality, as defined in the Act.
2.2 "Chief Administrative Officer" means the Chief Administrative Officer of the
Municipality, the delegate thereof, or any person to whom the powers thereof
are delegated by Council for the purposes of this by-law.
2.3 "Code Complaint" means a formal or informal complaint made to the Integrity
Commissioner pursuant to the Municipality's Code of Conduct and includes an
inquiry under section 223.4 or 223.4.1 of the Municipal Act, 2001.
2.4 "Council" means the Council of the Municipality.
2.5 "Municipality" means the Corporation of the Municipality of Bayham.
2.6 "Eligible Person" means any of the following persons of the Municipality:
2.6.1 a current or former member of Council;
2.6.2 a current or former member of a local board,
2.6.3 the current or former Integrity Commissioner, including any person
acting under the instructions of the Integrity Commissioner; and
2.6.4 current or former employees.
2.7 "Employee" means any salaried officer or any other person in the employ of the
Municipality or of a Board, and includes persons that provide their services on
behalf of the Municipality without remuneration, exclusive of the reimbursement
of expenses or honoraria, provided that such persons are appointees of the
Municipality or volunteers acting under the direction of a person in the employ of
the Municipality.
2.8 "Former Employee" means a person who was formerly an employee of the
Municipality or a Board.
2.9 "Former Member" means a person who was formerly a Member.
2.10 "Legal Proceeding"
2.10.1 means:
2.10.1.1 a civil proceeding or administrative action, including but not
limited to an action, application, motion, hearing, trial;
2.10.1.2 a proceeding wherein a person is charged with an offence
under the Criminal Code, R.S.C. 1985, c. C. 46 or the
Highway Traffic Act, R.S.O. 1990, s. H.8; or
2.10.1.3 a proceeding brought under section 8 of the Municipal Conflict
of Interest Act, R.S.0.1990, c. M. 50, as amended (the
"MCIA"); or
2.10.1.4 a Code Complaint; or
2.10.1.5 a complaint to a professional association;
2.10.2 But excludes:
2.10.2.1 any proceeding commenced by the Municipality;
2.10.2.2 any proceeding in which the Municipality is a party adverse in
interest, including municipal parking and traffic by-laws. For
greater certainty, this section does not prevent indemnification
of Members of Council and Local Boards in the context of a
proceeding brought under the MCIA, subject to the restrictions
at s. 14 of the MCIA; or
2.10.2.3 any proceeding under the Municipal Elections Act, 1996, S.O.
1996, c. 32, Sched., as amended.
2.11 "Member" means a person who is a member of the Council or of a Board.
3. EXCLUSIONS
3.1 This by-law does not apply to:
3.1.1 any proceeding in which the Municipality is an adverse party to the
otherwise Eligible Person;
3.1.2 any proceeding in which the interests of the otherwise Eligible Person are
adverse to the Municipality's interests;
3.1.3 any Legal Proceeding that relates to a grievance filed under the provisions
of a collective agreement or to disciplinary action taken by the Municipality
as an employer;
3.1.4 any Legal Proceeding arising from a Code of Conduct enacted pursuant to
section 223.2 of the Municipal Act, 2001;
3.1.5 any Legal Proceeding resulting from any dishonest, bad faith, fraudulent
or criminal act committed by an individual, including an otherwise Eligible
Person, including abuse of public office. For clarity, this exclusion does not
apply to an Eligible Person who did not participate in such act and who did
not have personal or constructive knowledge thereof;
3.1.6 any Legal Proceeding resulting from an individual, including an otherwise
Eligible Person, gaining a personal profit or advantage to which he or she
was not legally entitled, or the return by the Eligible Person of any money
paid to him or her, if payment of such money is held to be in violation of
law;
3.1.7 any Legal Proceeding relating to conduct which falls outside the scope of
the Eligible Person's duty or authority, unless the Eligible Person was
acting in good faith and held an honest and reasonable belief that the
conduct was within his or her duty or authority and was in the best interest
of the Municipality;
3.1.8 any Legal Proceeding involving sexual misconduct, harassment, or
bullying. For clarity, this exclusion does not apply to an Eligible Person
who did not participate in such act and who did not have personal or
constructive knowledge thereof, nor to an Eligible Person who is the victim
of such act;
3.1.9 any Legal Proceeding that relates to defamation. For clarity, this exclusion
does not apply to an Eligible Person who is the victim of the defamation;
3.1.10 any Legal Proceeding that relates to section 5, 5.1, 5.2 or 5.3 of the MCIA.
except where the Eligible Person has been found not to have contravened
sections 5, 5.1, 5.2 and 5.3 of the MCIA.; and,
3.1.11 any expenses incurred by a Member in obtaining personal legal advice to
determine whether the Member has a pecuniary interest in a matter which
is the subject of a determination or consideration by Council or a Board as
defined herein,
4. INDEMNIFICATION
Subject to the exclusions, exceptions, and other terms set out in this by-law, the
Municipality shall indemnify an Eligible Person in the manner and to the extent provided
by this by-law in respect of any legal proceeding, including appeals, initiated by a third
party for:
4.1 Acts, errors or omissions arising out of the scope of the Eligible Person's
authority or duty or within the course of an Individual's employment or office if:
4.1.1 the Eligible Person was acting within the individual's scope of authority or
duty;
4.1.2 the Eligible Person acted honestly and in good faith; and
4.1.3 in the case of administrative action or proceeding that is enforced by a
monetary penalty, the Eligible Person had reasonable grounds for
believing that his or her conduct was lawful;
4.2 acts or omissions relating to the conduct which falls outside of the Eligible
Person's duty or authority, provided that:
4.2.1 the Eligible Person was acting in good faith and held an honest and
reasonable belief that the conduct was within his or her duty or authority
and was in the best interest of the Municipality; and
4.2.2 in the case of administrative action or proceeding enforced by a
monetary penalty, the Eligible Person had reasonable grounds for
believing that his or her conduct was lawful.
4.3 In the event that any determination is required as to whether an Eligible Person
meets the requirements of this by-law, the Chief Administrative Officer shall
procure a legal opinion in that regard, which shall include advice on any terms
and conditions that should apply to the indemnification of an Eligible Person. If,
in the Chief Administrative Officer's opinion, it would be impractical, inefficient,
or uneconomical to procure such an opinion, then the question may be brought
to Council for determination under s. 7.4 of this by-law.
5. MANNER AND EXTENT OF INDEMNIFICATION
5.1 Subject to Section 5.2, the Municipality shall indemnify an Eligible Person who
meets the requirements of Section 4 of this by-law by:
5.1.1 assuming the reasonable cost of defending such Eligible Person in a
Legal Proceeding;
5.1.2 paying any damages or costs, including a monetary penalty, awarded
against such Eligible Person as a result of a Legal Proceeding;
5.1.3 paying, either by direct payment or by reimbursement, any expenses
reasonably incurred by such Eligible Person as a result of a Legal
Proceeding; and
5.1.4 paying any sum required in connection with the settlement of a Legal
Proceeding;
5.2 Notwithstanding any other provision in this by-law, the Municipality will only
indemnify an Eligible Person to the extent that costs, damages, expenses, or
sums are not assumed, paid, or reimbursed under any provision of the
Municipality's Insurance program or any other insurance program for the benefit
and protection of such Individual against liability. The provisions of this by-law
are intended to supplement the protection provided by such policies of
insurance; accordingly, in the event of conflict between this by-law and the
terms of such a policy of insurance, the terms of the policy of insurance shall
prevail.
5.3 Except where an applicable policy of insurance requires otherwise, Council shall
have the right to approve or reject the settlement of any indemnified Legal
Proceeding.
6_ PROVISION OF LEGAL COUNSEL
6.1 The Municipality shall have the right to select and retain the lawyer to represent
an Eligible Person, having regard to whether the lawyer has the expertise and
can provide the commitment of time and resources required, and the Chief
Administrative Officer shall:
6.1.1 advise such Eligible Person of the lawyer selected to represent them;
and
6.1.2 advise Council of the final disposition of the matter.
6.2 Subject to the provisions of this Section, an Eligible Person may request
approval to be represented by the lawyer of the person's choice by writing to the
Chief Administrative Officer. The Chief Administrative Officer shall, within ten
(10) days of receipt of the request, either approve or deny the request and
advise the person in writing of such decision.
6.3 The Municipality shall be provided with copies of the lawyer's statements of
account on a monthly basis. Statements of account shall outline all fees and
disbursements and shall be provided with information relating to these accounts,
as may be requested from time to time, in order to determine reasonableness of
the account before any payment is made.
6.4 The Municipality may, through a decision of Council, require that an account for
reimbursement be assessed by a Court Assessment Officer, where applicable.
6.5 Notwithstanding any other provision of this by-law to the contrary, any lawyer
retained by the Municipality's insurers from time to time to defend the
Municipality in any Legal Proceeding shall represent an Eligible Person with
respect to that Proceeding unless the Municipality instructs otherwise.
7. RIGHTS OF THE MUNICIPALITY
7.1 Decision -making authority under this by-law, including the authority to execute
necessary documents on behalf of the Municipality in order to give effect to this
by-law, is designated to the Chief Administrative Officer, except where
otherwise specified. When exercising delegated authority, the Chief
Administrative Officer shall have regard to the potential costs to the Municipality
of a decision and shall seek Council's approval for decisions with financial
implications in excess of the Approval Authority of the Chief Administrative
Officer under the Municipality's by-law defining the procurement policies and
procedures, as amended from time to time.
7.2 Nothing in this by-law shall prevent the Chief Administrative Officer from
bringing a report to Council to seek direction on any matter related to
indemnification under this by-law.
7.3 The Municipality may refuse to indemnify an Eligible Person or his or her lawyer
for steps taken in a Legal Proceeding that are, in the sole discretion of the
Municipality, deemed unnecessary, inadvisable, or otherwise prejudicial to the
conduct of the Legal Proceeding.
7.3.1 For clarity, "steps taken in a Legal Proceeding" in this section includes,
but is not limited to, counterclaims, crossclaims, third party claims,
settlement offers, demand letters, motions, applications, and alternative
dispute resolution.
7.3.2 An Eligible Person or his or her lawyer may seek the approval of the
Municipality prior to taking discretionary steps in a Legal Proceeding by
making a request in writing to the Chief Administrative Officer. Such
request must:
7.3.2.1 be provided with reasonable notice;
7.3.2.2 state the potential benefit of said step; and
7.3.2.3 estimate the cost to the Municipality of said step.
Upon receipt of such a request, the Chief Administrative Officer shall
either:
7.3.2.4 approve or deny the request, or
7.3.2.5 determine a decision -making process that must be followed
to approve or deny the request, which may include
presenting the issue to Council or seeking a further legal
opinion.
The Chief Administrative Officer shall convey their decision to the
Eligible Person or their lawyer in writing within ten (10) days of the
receipt of the request, having regard to any urgency associated with
the request. The Chief Administrative Officer shall, in the event that
further steps must be taken:
7.3.2.6 communicate the decision -making process to be followed;
7.3.2.7 list the reasonable steps that the Municipality will take to
ensure that the rights of the Eligible Person are not
prejudiced by the decision -making process, and
7.3.2.8 provide a timeline for the final determination of the request.
7.4 Notwithstanding any other provision of this By -Law, Council may, at any time:
7.4.1 determine that a person is ineligible for indemnification under this by-
law; or
7.4.2 set a cap on the indemnification to be provided under this by-law.
8. APPLICATION FOR INDEMNIFICATION AND DUTY TO CO-OPERATE
8.1 Where an Eligible Person is served with any process issued out of or authorized
by any court, administrative tribunal or other administrative, investigative or
quasi-judicial body, other than a subpoena, in connection with any Legal
Proceeding the person shall forthwith deliver the process or a copy thereof to
the Chief Administrative Officer.
8.2 An Eligible Person involved in any Legal Proceeding shall co-operate fully with
the Municipality, the Chief Administrative Officer and any lawyer retained by the
Municipality to defend such Legal Proceeding, shall make available to the Chief
Administrative Officer or such lawyer all information and documentation relevant
to the matter as are within his or her knowledge, possession or control, and
shall attend at all proceedings when requested to do so by the Chief
Administrative Officer or such lawyer.
8.3 Notwithstanding any other provision of this by-law to the contrary, if a person
fails or refuses to comply with the provisions of this by-law, the Municipality shall
not be liable to assume or pay any of the costs, damages, expenses or sums
arising from the Legal Proceeding and shall not be subject to the obligations of
this by-law.
9. REIMBURSEMENT
9.1 Where an Eligible Person is indemnified pursuant to the provisions of this by-
law, the amount of the indemnity shall be reduced by the amount of any costs
recovered by the Eligible Person and, where the indemnity has been paid, any
costs recovered by the Eligible Person shall be paid or assigned to the
Municipality up to the amount of the indemnity.
10.APPEALS
10.1 Where an Eligible Person seeks to appeal a judgment in a Legal Proceeding
and wishes the Municipality to indemnify the costs of that appeal, the
Municipality shall have the sole discretion to determine whether that appeal
should be pursued and to what extent the costs of the appeal will be
indemnified.
10.2 If an Individual pursues an appeal without representation by the Municipality
and is successful in that appeal:
10.2.1 the Municipality shall have the sole discretion to determine whether the
Individual shall be retroactively indemnified for his or her legal fees;
10.2.2 the Municipality shall have the right to recoup legal fees paid in any costs
awards for indemnified Legal Proceedings that were appealed; and
10.2.3 the Municipality shall have the right to recoup any costs awards for legal
fees in indemnified proceedings awarded by the body hearing the appeal.
11. EXCEPTION: DUTY TO THIRD PARTY UNDER SHARED SERVICES
AGREEMENT
11.1 In the event that a proceeding arises against an Eligible Person and a term,
condition, or limitation of this by-law, including conditions expressed at Sections
6.5 and 8 herein, would violate the confidentiality conditions of a shared
services agreement, any professional obligation of the Eligible Person imposed
by a regulatory body, or any other similar, legally binding obligation of
confidentiality, then the term, condition, or limitation that would constitute or
impose a violation is of no force and effect and:
11.1.1 The Chief Administrative Officer of the Municipality or their delegate
shall, in consultation with the Eligible Person, the third party, and, as
applicable, the legal counsel for the Municipality, the Eligible Person,
and/or the third party, propose alternate terms, conditions, or limitations
that conform with the stated intent of this by-law as well as the intent(s) of
the void terms, conditions, or limitations; and
11.1.1.1 Said alternate terms, conditions, or limitations shall be
presented to Council for approval prior to any disbursement of
an indemnification.
11.2 The Municipality may, pursuant to s. 279 of the Municipal Act, exchange with
other municipalities in Ontario reciprocal contracts of indemnity or inter -
insurance. In the event that such a reciprocal contract contains provisions that
indemnify an Eligible Person under this by-law, the terms of that reciprocal
contract supersede those of this by-law to the extent that a conflict exists.
12. SEVERABILITY
12.1 If any sections, section or part of a section of this by-law are found by any Court
to be illegal or beyond the power of Council to enact, such sections or section or
part of a section shall be deemed to be severable and all other sections or parts
of sections of this by-law shall be deemed to separate and independent and shall
continue in full force and effect.
READ A FIRST, SECOND AND THIRD TIME AND FINALLY PASSED THIS 20t" DAY
OF NOVEMBER, 2025.
MAYOR CLERK