Court of appeal allows offshore wind claim to proceed on narrow grounds

15 novembre 2013

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In March of this year the Ontario Court of Appeal (ONCA) heard Trillium Power Wind Corporation’s (TPWC) appeal from the decision of the Superior Court of Ontario to strike its claim against the province of Ontario.

Earlier this week, the ONCA released its decision in Trillium Power Wind Corporation v Ontario (Ministry of Natural Resources).  TPWC is a Toronto-based developer interested in building offshore wind turbines in Lake Ontario. Its proposed wind power project was progressing under the regulatory structure and had achieved Applicant of Record status when, in February 2011, Ontario cancelled all offshore wind farm projects. In a news release, Ontario explained the projects were cancelled “while further scientific research [was] conducted.”

TPWC subsequently brought numerous claims against Ontario seeking over $2 billion in damages for, among other things, breach of contract, unjust enrichment, negligent misrepresentation and negligence, misfeasance in public office, and intentional infliction of economic harm. Last year, Justice Goldstein of the Ontario Superior Court struck Trillium’s claim on the basis that it disclosed no reasonable cause of action against Ontario. (see our post on that decision here)

The ONCA agreed with Justice Goldstein on all but one of the claims, allowing the appeal on the cause of action alleging misfeasance in public office, but only on the narrower basis that Ontario’s conduct was specifically targeted to injure TPWC.

In its decision, the ONCA defined TPWC’s claim as essentially raising two complaints: (1) that Ontario unlawfully deprived it of a lucrative off-shore wind-powered electric generation project for an improper political purpose, namely to win more seats at the upcoming election; and (2) that Ontario’s decision specifically targeted TPWC with a view to crippling it financially so that it would not be able to contest the government’s actions. The latter assertion was based on the fact that Ontario’s news release was issued just hours before the financing arrangement for TPWC’s project was to close, of which Ontario was aware.

As Ontario’s decision to cancel the projects was a governmental decision involving “political factors”, at law the decision was immune from attack unless it was irrational or “taken in bad faith”. TPWC argued, therefore, that Ontario acted in bad faith and for an improper purpose of gaining electoral votes. The ONCA disagreed. Except to the extent that it specifically targeted TPWC in order to injure it financially, the ONCA found that Ontario’s decision to suspend all wind farm projects was neither irrational nor in bad faith.

Even if Ontario’s decision was motivated by electoral expediency, and not the need for further research as it claimed, the ONCA did not find this to constitute “bad faith” for the purposes of a tort claim. In order to make out “bad faith” for the purposes of the tort of misfeasance in a public office, Ontario must have acted deliberately in a manner that was “inconsistent with the obligations of office”. In its decision, the ONCA noted:

“Ministerial policy decisions made on the basis of “political expediency” are part and parcel of the policymaking process and, without more, there is nothing unlawful or in the nature of “bad faith“ about a government taking into account public response to a policy matter and reacting accordingly.”

Having determined that “political/electoral expediency” motivations for a governmental decision cannot, alone, provide a basis for a claim in tort for misfeasance of public office, the ONCA held that that part of TPWC’s claim was properly struck.

It was only to the extent that Ontario’s decision had not been made for political purposes that the decision was subject to attack in tort. Accordingly, TPWC was entitled to proceed based on the allegations that Ontario’s actions were specifically meant to injure it financially.

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