Nanaimo lawsuit ‘highly unusual,’ expert says

“Highly unusual” and challenging to succeed are descriptions being used by experts to describe lawsuits involving the City of Nanaimo and its mayor.

In one case, the municipality is seeking damages against Mayor Bill McKay, stating he provided confidential information to a former municipal employee, in contravention of B.C.’s Community Charter and its privacy legislation. The notice of claim was filed in the Supreme Court of B.C. on Dec. 28.

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Michael Prince, UVic Lansdowne Professor of Social Policy, called the situation “highly unusual” and said he is unable to find a similar Canadian case in which a mayor has been sued by their own municipality.

In the other case, 10 Nanaimo residents filed a petition on Dec. 22, also in the Supreme Court of B.C., seeking to have McKay disqualified from holding office.

The group alleges conflict in McKay’s dealings with Clipper Navigation Inc., one of the potential providers of a passenger ferry service. It alleges conflict through receiving what it calls a gift from Andre Sullivan, the former board chairman with the city’s Nanaimo Economic Development Corp.

John Alexander, a Victoria lawyer with extensive experience in municipal law, says it may be a challenge for either group to prove its allegations in court.

McKay said Wednesday that he is waiting for documents to be served and, because of that, it is difficult for him to comment.

Nanaimo has an indemnity bylaw for municipal officials, providing security or protection against loss or other financial burden arising from their duties.

It hasn’t been determined if McKay would receive indemnity, but it sets up a situation where taxpayers could pay for both sides in the lawsuit involving the city and the mayor.

The municipality’s claim said that McKay helped Marilyn Smith, who served as administrative assistant, in bringing a claim against the city. Smith’s duties changed in April 2016, she went on sick leave, and a confidential email was sent by the administration to council members and the mayor.

That email was shared with Smith and supported her claim against the city, Nanaimo’s notice of claim said.

McKay said that as far as he knows, Smith never filed a claim in court, although there was a threat of one. He said there was a negotiated settlement, which he was not a party to. The amount was discussed in camera, meaning it is not publicly available.

He said he did not take part in any council discussions regarding Smith after September.

Alexander said in this case, “it is difficult to see how the disclosure of this kind of information, which would have been disclosed in a litigation process anyway, actually causes any loss to the city.”

When it comes to the petition alleging conflict, Alexander said: “This area of law is very complex. The court is very exacting in its requirements and it is difficult, even with the best of legal advice and counsel work, to be successful in these proceedings.”

McKay said he met with Clipper officials in February 2015 at a time when the city did not have an economic development officer. He signed a non-disclosure agreement and informed council, he said.

No agreement regarding any ferry service was struck, he said.

A Clipper official said earlier that the company paid for ferry fare, of about $129, for McKay to meet with the company in Seattle in September 2015.

Sullivan said that he changed flights for himself and McKay for their return from China to Nanaimo to avoid a layover in Hong Kong. Sullivan said he personally covered the cost of changing the flights. McKay’s portion was $800. The two were members of the premier’s trade mission to China in November 2015.

McKay said that Sullivan wanted to change the flight. He said he told Sullivan to seek compensation from the municipality but that did not happen.

“How anyone could stretch that to the point of calling it a gift to the mayor is beyond me,” McKay said. “I was on a business trip representing the City of Nanaimo.”

cjwilson@timescolonist.com

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