Glenn Zacher

The Ontario Electricity Financial Corporation (OEFC) brought a motion to stay portions of judgments requiring it to pay approximately $160 million in retroactive payments to several non-utility generators, pending its application for leave to appeal to the Supreme Court of Canada.

The Court of Appeal dismissed the motion, finding that OEFC failed to establish a serious issue to be adjudicated, as the proposed appeal issues were highly fact-specific and lacked precedential value.

Furthermore, OEFC failed to demonstrate that it would suffer irreparable harm if the stay was not granted.

The appellant, Ontario Electricity Financial Corporation, appealed a decision regarding the calculation of amounts payable to the respondent non-utility generators under long-term power purchase agreements.

The dispute centered on whether a new government regulation reallocating the Global Adjustment Mechanism (GA) altered the calculation of Total Market Costs (TMC) under the agreements.

The application judge found that the new GA calculation was inconsistent with the definition of TMC, which required costs to be allocated pro rata to consumption.

The Court of Appeal dismissed the appeal, finding that the application judge did not decide the case on an unargued issue, made no palpable and overriding factual errors, and properly interpreted the agreements without improperly implying a term.

The Ontario Energy Board appealed a decision that had required it to apply a mandatory prudence framework when assessing Ontario Power Generation compensation costs in rate-setting.

The majority held tribunal participation in defending its own decision was proper in this regulatory context and found no impermissible bootstrapping on appeal.

The Court held the governing statute did not require a single prudence methodology and permitted the Board to use a mixed approach for costs that were partly committed and partly subject to managerial discretion.

The Board’s disallowance of $145 million in compensation costs was found reasonable, and its original decision was reinstated.

Applicants under multiple long-term power purchase agreements sought declarations that the respondent miscalculated Total Market Cost after the 2011 global adjustment reallocation regime came into force.

The court held that the contractual definition of TMC implicitly required aggregated electricity costs to be allocated pro rata based on electricity consumption, and that the respondent's new formula improperly reflected a regulatory reallocation between customer classes rather than the underlying costs of generation and supply.

Although the court found the respondent breached the PPAs, it also held that neither the change of law clauses nor the material change provisions were triggered by the reallocation regulation.

Declaratory and consequential relief was granted requiring recalculation from January 1, 2011 and compensation with interest.

An employer sought an interlocutory injunction enforcing a non‑competition covenant against a former executive who joined a competitor.

The employer alleged breach of a 2008 employment agreement and argued that, where a clear negative covenant is breached, the usual injunction test should not apply.

The court applied a modified RJR‑MacDonald test and held the employer failed to establish a strong prima facie case because the covenant may have been superseded by a later agreement and was arguably overly broad and unnecessary to protect legitimate interests.

The court also noted that the inevitable disclosure doctrine is not recognized in Canada and that evidence of irreparable harm was speculative.

The motion to enjoin the employee and the competitor was dismissed, although the employee was ordered not to disclose confidential information or solicit the employer’s customers.

The appellants challenged a regulatory decision reducing a power generator's proposed revenue requirements for nuclear compensation costs during a forward test period.

The Court of Appeal held that future compensation costs mandated by existing collective agreements were committed costs, not forecast costs that could simply be managed downward.

The Board acted unreasonably by relying on hindsight and current benchmarking information unavailable when the collective agreements were made, and by failing to conduct a prudence review based on what was known or ought to have been known at the time of the commitments.

The matter was remitted to the Board for rehearing in accordance with those principles.

The appellant electricity distributor appealed a Divisional Court decision upholding the Ontario Energy Board's refusal to allow recovery of $14.9 million from a rate deferral account.

The appellant argued that a 2002 interim order had approved its revenue requirement and rate deferral plan, and that subsequent legislation (Bill 210) had deemed the interim order final.

The Court of Appeal dismissed the appeal, finding it reasonable for the Board to conclude that the interim order did not approve the revenue requirement or deferral plan, as no prudency review had occurred.

The Court noted the appellant could still apply to the Board for a proper prudency review.

The Ontario Energy Board (OEB) imposed a condition on Toronto Hydro-Electric System Limited (THESL) requiring approval from a majority of its independent directors before declaring future dividends to its affiliates, due to concerns over large dividend payouts amidst aging infrastructure.

The Divisional Court struck down this condition, finding the OEB exceeded its jurisdiction.

The OEB appealed.

The Court of Appeal allowed the appeal, holding that the OEB's broad rate-setting powers under the Ontario Energy Board Act included the jurisdiction to impose such a condition to protect ratepayers.

The Court found the OEB's decision was reasonable and did not improperly usurp corporate law principles, as it merely added a regulatory check to the directors' discretion.

The appellant, a licensed electricity distributor, appealed a decision of the Ontario Energy Board denying the recovery of approximately $15 million in deferred costs accumulated in a regulatory asset account.

The appellant argued that a 2002 interim rate order implicitly approved the deferral plan and that subsequent legislation freezing rates made the order final, entitling them to recovery.

The Divisional Court dismissed the appeal, finding the Board's decision reasonable.

The Court held that the interim order did not approve the deferral plan and that the Board was justified in requiring a prudency review before allowing the recovery of costs from ratepayers.

The plaintiffs sought leave to appeal an interlocutory injunction granted in favour of the defendants in a dispute between two family-owned companies over commercial lease rent payments.

The plaintiffs argued the motions judge erred in finding irreparable harm and exceeded his jurisdiction by characterizing their conduct as illegal.

The Divisional Court dismissed the motion for leave to appeal, finding no reason to doubt the correctness of the motions judge's decision and concluding the matter did not raise issues of public importance justifying a hearing by a full panel.

Toronto Hydro-Electric System Ltd. appealed a decision of the Ontario Energy Board that required any dividend paid by the utility to its parent company be approved by a majority of its independent directors.

The Divisional Court allowed the appeal, finding that the Board lacked both express and implied jurisdiction under the Ontario Energy Board Act, 1998 to impose restrictions on the corporate process for declaring dividends.

The condition was found to be an unwarranted intrusion into corporate governance and contrary to established corporate law principles.

The moving party, the first wife of the respondent husband, sought leave to intervene in an appeal regarding a vesting order made in favour of the husband's second wife.

The trial judge had ordered the husband's beneficial interest in certain corporate properties vested in the second wife to satisfy substantial support arrears.

The moving party, who also held foreign judgments for support arrears against the husband, sought to intervene to protect her interests.

The Court of Appeal dismissed the motion, finding that the intervention was instigated by the husband to frustrate the second wife's recovery, and that allowing it at this late stage would unduly delay and prejudice the second wife's rights.

The appellant gas distributor sought to recover unrecorded gas costs, regulatory costs, and interest charges resulting from an accounting error.

The Ontario Energy Board allowed the recovery of the unrecorded costs deferred over three years but denied the recovery of regulatory costs and interest charges.

The Court of Appeal determined the applicable standard of review was reasonableness and upheld the Board's decision, finding it was open to the Board to balance the utility's right to recover prudently incurred costs against the impact on consumers caused by the utility's own accounting error.

The landlords appealed an order of the Tribunal regarding the calculation of rent.

The Divisional Court found that the Tribunal erred in law by failing to attribute the cost of renovations made by the tenants to the amount of rent payable, as defined in the Tenant Protection Act.

Despite the lack of a transcript due to an inaudible recording, the Court allowed the appeal, set aside the Tribunal's order, and fixed the legal monthly rent at $3,000, requiring the tenants to pay arrears.

The appellant, a natural gas distributor, appealed a decision of the Ontario Energy Board that denied the recovery of interest and regulatory costs associated with $531,794 in prudently incurred but late-reported gas costs.

The Board had allowed the recovery of the principal amount over three years to mitigate the impact on customers.

The Divisional Court dismissed the appeal, finding that the Board's decision involved policy considerations and rate-setting expertise, was subject to a reasonableness standard of review, and was a reasonable balancing of utility and customer interests.