Off-Shore Wind Law Suit Against Ontario Will Proceed

By Meredith James

Trillium Power Wind Corporation’s planned off-shore wind farm in Lake Ontario was effectively cancelled by the provincial moratorium on off-shore wind development, openly adopted for political reasons. Trillium sued the Province for $2.25 billion in costs thrown away and loss of profit, under numerous causes of action. As we wrote earlier, the law suit was thrown out when the Province obtained a Rule 21 judgment, striking out the claim as disclosing no reasonable cause of action. Trillium appealed, and can now proceed to trial on the basis of one of its causes of action: misfeasance by the provincial government in public office.

In a decision released on November 12, the Court of Appeal continued to dismiss most of Trillium’s claims. It was “plain and obvious, and beyond all reasonable doubt, that the appellant could not succeed in its claims for breach of contract, unjust enrichment, taking without compensation, negligent misrepresentation and negligence, and intentional infliction of economic harm.”

However, it found that the claim for misfeasance in public office should be allowed to proceed “but only on the narrower basis that Ontario’s conduct was specifically targeted to injure Trillium.” Trillium’s claim, as summarized by the Court (at para. 36):

As we read the statement of claim, the essence of Trillium’s complaint in support of the misfeasance in public office claim is two-fold. Trillium asserts that the Premier, his Ministers named above, and their staff acted in bad faith:

a) for purely political motives of electoral expediency in order to win more seats in the upcoming election, when they knew that their actions would harm Trillium; and,

b) in a way that specifically targeted Trillium by cancelling Ontario’s wind power projects in order to undercut Trillium’s pending financing and thereby place Trillium in a position where it would not have the resources to litigate against Ontario.

Trillium argued that these allegations fell within the Imperial Tobacco qualification that a governmental decision is immune from suit, unless it is “taken in bad faith”. The Court of Appeal agreed in part (see paras. 42, 54-57):

We would set aside the dismissal of the claim for misfeasance in public office, but we would permit the action for misfeasance to continue based only upon the allegation that the Government’s decision to suspend or cancel the province’s wind power program was specifically targeted at Trillium in order to injure it by crippling its financial capacity. We would not permit it to continue in conjunction with what we would call the “political/electoral expediency” allegations.

[I]t is not “inconsistent with the obligations of office” for the Premier and his or her Ministers to respond to public pressure, even where that response is designed to shore up the government’s electoral base and win more seats in an election. 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. That is what governments do, in pursuit of their political and partisan goals in a democratic society. See Comeau’s Sea Foods Ltd. v. Canada (Minister of Fisheries & Oceans), [1997] 1 S.C.R. 12;Ontario Federation of Anglers & Hunters v. Ontario (Minister of Natural Resources), [2002] O.J. No. 1445 (C.A.); Equity Waste Management of Canada v. Halton Hills (Town) (1997), 35 O.R. (3d) 321 (C.A.).

Accordingly, it is only to the extent that Ontario’s decision was not made for political purposes, but was made with the specific intention of injuring the plaintiff, that the decision is subject to attack in tort. Political motivation for the decision may or may not become relevant – should Ontario choose to raise it by way of defence, for example – in determining what was, in fact, the real motivation for the decision. But the “political/electoral expediency” aspects of such a decision cannot, standing alone, provide a basis for a claim in tort for misfeasance in public office. Therefore, they are not properly a part of the allegations in the statement of claim in this case. [1]

It follows that Trillium should be entitled to proceed based on the allegations that the Government’s actions were specifically meant to injure the appellant. The appellant asserts that the Government’s actions were targeted to stop Trillium’s offshore wind project before Trillium’s financing was in place in order to deprive Trillium of the resources to contest the Government’s decision to cancel the wind projects in Ontario. Paragraphs 54 and 61 of the statement of claim (except for the reference to “confiscation”) are examples of this plea.

It cannot be said, at this stage of the proceedings, that it is “plain and obvious” that those allegations will not succeed at trial.

Trillium announced that it intends proceed with its $2.25 billion claim.

    Dianne Saxe, Ontario Environmental Lawyer

Reprinted with permission from the Environmental Law and Litigation Blog.

For more information about LexisNexis products and solutions connect with us through our corporate site