City of Ottawa v. Attorney General for Ontario et al.

[Indexed as: Ottawa (City) v. Ontario (Attorney General)]

64 O.R. (3d) 703

[2002] O.J. No. 2501

Docket No. C36418

Court of Appeal for Ontario

McMurtry C.J.O., Charron and Goudge JJ.A.

June 26, 2002**

*Application for leave to appeal to the Supreme Court of Canada dismissed without costs February 27, 2003 (Iacobucci, Binnie and LeBel JJ.).

**This case was recently brought to the attention of the editors.

Administrative law -- Boards and tribunals -- Ontario Energy Board -- Jurisdiction to state case for opinion of Divisional Court -- Board not limited to stating case in context of particular application -- Energy Board may state case where opinion of Divisional Court would be useful in connection with Board's statutory mandate -- Sufficiency of factual [page704] record for stated case -- Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sched. B, s. 32.

Pursuant to s. 92(1) of the Ontario Energy Board Act, 1998, on July 5, 2000, Hydro One Networks Inc. ("Hydro One") applied to the Ontario Energy Board for leave to construct an electricity transmission line in the City of Ottawa. Section 96 of the Act requires the Board to make the order granting leave if it concludes that the proposed construction is in the public interest. Section 1 of the Act sets out certain broad objectives by which the Board must be guided in carrying out its responsibilities in relation to electricity, including, among other things, environmental concerns. Just prior to the application, on June 23, 2000, O. Reg. 365/00 came into effect. It defined "public interest" for applications in respect of electricity as meaning "the interests of consumers, as defined in Part V of the Act, with respect to the pricing, availability, reliability and quality of electricity service."

The City of Ottawa intervened in the application in order to oppose the proposed use of lattice towers and it asked that steel poles be used. Pollution Probe also intervened to raise environmental issues. Hydro One took the position that the City's and Pollution Probe's concerns were both beyond the Board's jurisdiction because of O. Reg. 365/00. The Board responded by deciding to hear Hydro One's application on the merits while at the same time stating a case on a question of law to the Divisional Court pursuant to s. 32 of the Act. The question was: "When s. 1 of Regulation 365/00 is interpreted in conjunction with the Ontario Energy Board Act, 1998, is that section consistent with the statute and therefore to be applied to applications made under s. 92 of the Act?"

On January 12, 2001, the Board set out its question for the stated case and it also released its order on the merits of the application under s. 92 with reasons to follow. Its order granted leave to construct the line subject to certain conditions, including the use of steel poles. On January 26, 2001, the Attorney General for Ontario moved to quash the stated case. On February 15, 2001, the Divisional Court quashed the stated case. It did so on the grounds that (1) the Board had been able to render its decision, and it was functus officio for the purposes of stating a case; (2) the stated case was academic and ought not to be decided because the Board had not made any findings of fact related to it; and (3) the Board had no jurisdiction to state a case to ask if a regulation is valid. The City of Ottawa appealed.

Held, the appeal should be allowed.

The Board was not functus officio for the purposes of stating a case under the Act and was not limited to stating a case only in the context of a particular application. Subsection 32(1) contemplates that the Board may state a case (1) when invited to do so by the Lieutenant Governor in Council; (2) on its own motion; and (3) on request of any party to a proceeding before it. Here, although the stated case originated out of Hydro One's application, the question stated was one of general application. While the Board might be functus officio in relation to Hydro One's application, s. 32(1) remained available where the opinion of the Divisional Court would be useful in connection with the Board's statutory mandate.

Before the Divisional Court will entertain the question, it is not necessary for the Board to make findings of fact on the question posed. Section 32(1) contained no such limitation. While it was undoubtedly preferable that all necessary facts be included in the stated case, there was no reason why the record before the Divisional Court could not be supplemented by uncontested facts presented by affidavit. Unlike this case, however, where facts are contested, the Board must hear and decide those facts first. It was open to the Divisional Court to conclude that on the record it was not possible to opine without additional facts; however, [page705] the court should strive to answer the question if it can to assist the Board in the discharge of its statutory mandate.

The Divisional Court erred in characterizing the question posed as a request for the court to determine the validity of the regulation. The Board asked the more limited question of whether the regulation is effective to determine the boundary of the Board's jurisdiction. The question did not seek to determine the validity of O. Reg. 365/00, but was a question which the Board could state and the Divisional Court had jurisdiction to answer.

APPEAL from an order of the Divisional Court (Farley, Dunnet and Sedgwick JJ.) (2001), 146 O.A.C. 46, [2001] O.J. No. 552 quashing a case stated by the Ontario Energy Board pursuant to s. 32 of the Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sched. B.

Cases referred to

Canadian Pacific Ltd. v. Matsqui Indian Band (1995), 1995 145 (SCC), [1995] 1 S.C.R. 3, 122 D.L.R. (4th) 129, 177 N.R. 325, 85 F.T.R. 79n; Manitoba (Public Utilities Board) v. Manitoba (Attorney- General), 1989 7456 (MB CA), [1989] M.J. No. 491 (QL), 61 Man. R. (2d) 164 (C.A.); Ontario (Energy Board) v. Consumers' Gas Co. (1987), 1987 4400 (ON SC), 59 O.R. (2d) 766, 22 O.A.C. 142, 39 D.L.R. (4th) 161 (Div. Ct.); Ontario Energy Board (Re) (1985), 1985 2086 (ON SC), 51 O.R. (2d) 333, 11 O.A.C. 26, 19 D.L.R. (4th) 753, 2 C.P.C. (2d) 226 (Div. Ct.); Public Service Staff Relations Act (Canada) (Re), 1973 2283 (FCA), [1973] F.C. 604, 38 D.L.R. (3d) 437 (C.A.); Rosen (Re), 1987 8567 (FCA), [1987] 3 F.C. 238, 80 N.R. 47, 31 Admin. L.R. 276, [1987] F.C.J. No. 320 (QL) (C.A.)

Statutes referred to

Federal Court Act, R.S.C. 1985, c. F-7, s. 28(4) Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sched. B, ss. 1, 2, 19(1), 32, 90, 92, 96

Rules and regulations referred to

O. Reg. 365/00 ("Ontario Energy Board Act"), s. 1

Counsel

Peter K. Doody and Michelle A. Flaherty, for appellant City of Ottawa. Patrick Moran, for intervenor Ontario Energy Board. Sara Blake, for respondent Attorney General for Ontario. Allyn Abbott, for Hydro One Networks Inc.

The judgment of the court was delivered by

[1] GOUDGE J.A.: -- Pursuant to s. 32 of the Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Schedule B (the "Act"), the Ontario Energy Board stated a case for the opinion of the Divisional Court on the following question of law:

When s. 1 of Regulation 365/00 is interpreted in conjunction with the Ontario Energy Board Act, 1998, is that section consistent with the statute and therefore to be applied to applications made under s. 92 of the Act? [page706]

[2] On the motion of the Attorney General for Ontario, the Divisional Court quashed the stated case without considering it on the merits.

[3] It gave three reasons for doing so. First, without the benefit of the Divisional Court's opinion, the Board had been able to render its decision in the proceeding from which the stated case originated and, as a result, the Board was functus officio and unable to state the case. Second, the stated case was academic and hypothetical and ought not to be addressed because the Board had not made any findings of fact related to it. Third, the Board stated a case which, in effect, asked if a regulation is valid and has no jurisdiction to do so.

[4] With respect, I disagree with each of these reasons. I would therefore allow the appeal and remit the stated case to the Divisional Court for disposition on the merits.

The Background to the Stated Case

[5] The Board is an administrative tribunal with a wide range of responsibilities. While s. 19(1) of the Act gives the Board authority to hear and determine all questions of law and fact in all matters within its jurisdiction, s. 32 permits it to seek the assistance of the Divisional Court on any question of law. That section reads as follows:

32(1) The Board may, at the request of the Lieutenant Governor in Council or of its own motion or upon the motion of any party to proceedings before the Board and upon such security being given as it directs, state a case in writing for the opinion of the Divisional Court upon any question that, in the opinion of the Board, is a question of law.

(2) The Divisional Court shall hear and determine the stated case and remit it to the Board with its opinion.

[6] Section 92(1) of the Act requires that anyone seeking to construct an electricity transmission line obtain an order from the Board granting leave to construct. Section 90 is the counterpart for those seeking to construct a gas transmission line. Section 96 requires that in both cases, the Board make the order if it concludes that the proposed construction is in the public interest. Section 96 reads as follows:

96. If, after considering an application under section 90, 91 or 92 the Board is of the opinion that the construction, expansion or reinforcement of the proposed work is in the public interest, it shall make an order granting leave to carry out the work.

[7] Section 1 of the Act sets out certain broad objectives by which the Board must be guided in carrying out its responsibilities in relation to electricity. Section 2 does the same in relation to gas. Section 1 is in the following terms: [page707]

1. The Board, in carrying out its responsibilities under this or any other Act in relation to electricity, shall be guided by the following objectives:

2. To facilitate competition in the generation and sale of electricity and to facilitate a smooth transition to competition.

3. To provide generators, retailers and consumers with non-discriminatory access to transmission and distribution systems in Ontario.

4. To protect the interests of consumers with respect to prices and the reliability and quality of electricity service.

5. To promote economic efficiency in the generation, transmission and distribution of electricity.

6. To facilitate the maintenance of a financially viable electricity industry.

7. To facilitate energy efficiency and the use of cleaner, more environmentally benign energy sources in a manner consistent with the policies of the Government of Ontario.

[8] On June 23, 2000, O. Reg. 365/00 came into effect. It specifically defined "public interest" in s. 96 of the Act, but only for applications in respect of electricity, namely applications made pursuant to s. 92. Section 1 of the regulation says this:

(2) In section 96 of the Act,

"the public interest" means the interests of consumers, as defined in Part V of the Act, with respect to the pricing, availability, reliability and quality of electricity service.

(3) Subsection (2) applies only in respect of applications under section 92 of the Act.

[9] On July 5, 2000, Hydro One Networks Inc. applied to the Board for an order for leave to construct an electricity transmission line which would run through the City of Ottawa. The subsequent hearing was one of the first held pursuant to s. 92 of the Act after the making of O. Reg. 365/00.

[10] The City intervened in the application in order to oppose the use of lattice towers as proposed by Hydro One. The City asked the Board to condition any order granting leave to construct on a requirement that steel poles be used rather than lattice towers to lessen the visual impact of the proposal in the urban areas of the city to be traversed by the line. The City advised that it would challenge the validity of O. Reg. 365/00 in so far as it purported to exclude this argument and limit the Board's jurisdiction to decide what was in the public interest in electricity applications in a way that did not apply to gas applications. [page708]

[11] Pollution Probe also intervened and advised that it wished to raise environmental considerations relating to the proposal, which O. Reg. 365/00 appeared to preclude, but which s. 1 of the Act appeared to expressly require the Board to consider.

[12] Hydro One took the position that the City's argument that steel poles should be required and Pollution Probe's environmental concerns were both beyond the Board's jurisdiction because of O. Reg. 365/00.

[13] After receiving submissions on how it should deal with this issue, the Board announced that it would be stating a case to the Divisional Court and would not itself hear arguments on the validity of the regulation. In addition, it accepted the agreement of the affected parties that to avoid delay, it should proceed to hear the Hydro One application on its merits while at the same time proceeding with the stated case.

[14] The Board heard evidence from November 22 to 24, 2000. On January 12, 2001, it released its order with reasons to follow. It granted leave to construct the line subject to certain conditions including the use of steel poles instead of lattice towers on part of the route through the City of Ottawa. While the Board has not yet issued its reasons, since it left the challenge to the applicability of O. Reg. 365/00 to the stated case, it may be presumed that the Board proceeded to make its order on the basis that the regulation did apply and concluded that it permitted the imposition of this condition.

[15] Also on January 12, 2001, the Board gave notice of the case stated for the opinion of the Divisional Court. After setting out the question posed, the notice described the background facts leading up to the stated case, most of which I have just recited.

[16] On January 26, 2001, the Attorney General for Ontario moved to quash the stated case.

[17] On February 7, 2001, Hydro One filed a notice of appeal of the order of the Board. Its first ground of appeal is that the Board exceeded its jurisdiction by ordering the construction of steel poles instead of lattice towers through the City of Ottawa in contravention of O. Reg. 365/00.

[18] On February 15, 2001, the Divisional Court issued its decision quashing the stated case. Its three reasons, which I recited above, are sufficiently succinct that they can be quoted in full.

On January 12, 2001 the board released its order without reasons, granting the application subject to certain conditions. The board is functus officio with respect to this application. This in itself is sufficient ground to quash the stated case, since it was made within the proceedings of that subject case as outlined in the style of proceedings and the board was able to make its decision without the benefit of the court's opinion. [page709]

Secondly however, in addition, the board has not made any findings of fact on these issues nor has it determined that these issues fall within or outside the scope of the "public interest" as defined by the subject regulation. In this case the City of Ottawa and others challenged the validity of the regulation. However, the board takes no position with respect to the application of the regulation. Statutory interpretation is best accompanied in the context of a concrete set of facts. While the majority of the Manitoba Court of Appeal in Manitoba (Public Utilities Board) v. Manitoba (Attorney General), 1989 7456 (MB CA), [1989] M.J. No. 491 answered the question, we are of the opinion that the view of Twaddle J.A. is the preferable approach. The stated case clause in that case was for all material purposes identical with section 32 of the Ontario Energy Board Act, here in the case before us. We find that the stated case is an academic and hypothetical one. We decline to give an opinion in such circumstances.

Thirdly, further, the board has no jurisdiction to state a case asking if a regulation is valid. It has attempted to justify its approach by analogising with respect to two Charter cases: Cuddy Chicks Ltd. v. Ontario (Labour Relations Board), 1992 107 (SCC), [1992] 2 S.C.R. 5 and Cooper v. Canada (Human Rights Commission), 1996 152 (SCC), [1996] 3 S.C.R. 854 that it is not questioning the validity of the regulation, but rather only whether it has to apply it. The case before us is not a Charter case. In any event this seems to be a distinction without a functional difference. The board's jurisdiction under section 96 of the Ontario Energy Board Act is restricted to determining whether the proposed transmission line is in the public interest. When the board asks this court to determine the "applicability", but in substance the validity of the regulation, it is exceeding its jurisdiction as a creature of statute. Therefore, the court has no jurisdiction to decide the validity of the regulation within the context of this stated case.

[19] Pursuant to leave, the City of Ottawa has appealed to this Court. It is supported by the Board as intervenor and opposed by the Attorney General for Ontario as respondent.

Analysis

[20] The arguments raised by the parties all address one way or another the three issues dealt with by the Divisional Court. I propose to deal with each of these issues in turn.

[21] The first issue is whether s. 32(1) of the Act can be utilized by the Board only in the context of a particular application in which the Board requires the Divisional Court's opinion? In the context of this case, once having decided the Hydro One application, is the Board functus officio and no longer empowered to state a question for the opinion of the Divisional Court?

[22] In my view, s. 32(1) contains no such limiting condition. It contemplates that the Board may state a case in three circumstances: (1) when invited to do so by the Lieutenant Governor in Council; or (2) on its own motion; or (3) on request of any party to proceedings before it. The section ties neither of the first two circumstances to a proceeding before the Board. Both are in that sense free standing, and not required to be founded on a particular proceeding. This flexibility is consistent with the purpose of the [page710] statutory provision, namely to provide the assistance of the Divisional Court on a question of law when the Board is of the view that this would be useful in connection with its statutory mandate.

[23] In this case there is no doubt that the stated case originated out of the Hydro One application and that the Board was able to go on to decide the application without the Divisional Court's assistance. However, there is also no doubt that the question stated for the Divisional Court's opinion is one of general application. The enacting of O. Reg. 365/00 has clearly resulted in some uncertainty about the extent of the Board's jurisdiction in hearing applications to construct electricity transmission lines in Ontario. Counsel for the Board made it plain in argument that the Divisional Court's opinion would be a great assistance to applicants, intervenors and the Board itself in such applications. I think s. 32(1) encompasses just such a circumstance. While the Board may be functus officio in relation to the Hydro One application, s. 32(1) nonetheless remains available to it where it determines that the opinion of the Divisional Court would be useful in connection with its statutory mandate. That is this case.

[24] This interpretation is consistent with the past application of the section. In Re Ontario Energy Board (1985), 1985 2086 (ON SC), 51 O.R. (2d) 333, 19 D.L.R. (4th) 753 (Div. Ct.), the Divisional Court gave its opinion on the Board's jurisdiction to award costs in response to a case stated by the Board that was unrelated to any particular application before it. The court considered that the matter was of such obvious importance to all those who had occasion to appear before the Board that it should not only answer the question stated, but should accord liberal rights of intervention to a number of parties to assist the court in reaching its opinion.

[25] In Ontario (Energy Board) v. Consumers' Gas Co. (1987), 1987 4400 (ON SC), 59 O.R. (2d) 766, 39 D.L.R. (4th) 161 (Div. Ct.), the Divisional Court gave its opinion in response to a stated case where the Board had already issued reasons for decision on the question referred to the court. In doing so, the Divisional Court stated that the Board had jurisdiction to state the case, where it was seeking the Divisional Court's opinion not to facilitate its own decision, but to determine if it had decided the issue correctly.

[26] In Manitoba (Public Utilities Board) v. Manitoba (Attorney-General), 1989 7456 (MB CA), [1989] M.J. No. 491 (QL), 61 Man. R. (2d) 164 (C.A.), a majority of the Manitoba Court of Appeal acted under a provision very similar to s. 32 to offer its opinion on a case stated by the Manitoba Public Utilities Board although the latter had disposed of the rate approval application from which the stated case originated without requiring the court's opinion on the question. [page711]

[27] In dissent, Twaddle J.A. said [at p. 166 Man. R.] that "the statutory power to state a case is limited to stating a case on an issue which actually arises before the Board and which must be decided in order that a decision can be made." He reached this conclusion because he thought it essential to ensure that the question posed not be abstract, but be sufficiently grounded in fact. While no doubt this is a valid concern, it cannot justify reading into s. 32(1) the condition that a case may be stated only where the issue must be decided in a particular application before the Board. As I have said, the language of the section and its purpose are inconsistent with such a limitation.

[28] The respondent seeks support from two cases arising in the context of s. 28(4) of the Federal Court Act, R.S.C. 1985, c. F-7: Re Public Service Staff Relations Act (Canada), 1973 2283 (FCA), [1973] F.C. 604, 38 D.L.R. (3d) 437 (C.A.) and Re Rosen, 1987 8567 (FCA), [1987] 3 F.C. 238, 80 N.R. 47 (C.A.). However, s. 28(4) is worded quite differently from s. 32(1). It provides that a federal board may at any stage of its proceedings refer any question of law to the Court of Appeal for determination. The presence of the underlined phrase in the relevant legislation explains the decisions in these two cases which confine such references to questions of law that must be determined for the purpose of dealing with the proceeding that is then before the referring tribunal. Without a proceeding before it, a federal board cannot state a case. There is no such constraint in the Ontario Energy Board Act.

[29] To summarize the first issue, I disagree with the Divisional Court and conclude that s. 32(1) does not require that the opinion sought be needed to assist the Board in deciding a particular application then before it.

[30] The second issue is whether the Board must make findings of fact on the question posed to the Divisional Court before the Court will entertain it.

[31] Again in my view, the simple answer is that s. 32(1) contains no such limitation.

[32] Having said that, I am sympathetic to the concern of Twaddle J.A. in Manitoba (Public Utilities Board), supra, that the court must be provided with a sufficient factual context to answer the questions posed. But every stated case does not require the same level of factual detail for proper resolution. Here, the appellant argues that the question posed is a pure question of law requiring no facts beyond the background facts included by the Board in the stated case. The respondent does not challenge these facts, but says additional facts are necessary such as a description of the mischief that the Lieutenant Governor in Council was attempting to address with O. Reg. 365/00. [page712]

[33] While it is undoubtedly preferable that all necessary facts be included in the stated case, there is no reason why the record before the Divisional Court in this case cannot be supplemented by uncontested facts presented by affidavit. This is not like an appeal by way of stated case, where the record must remain as it was before the original trier.

[34] However, while it does not appear to be this case, if facts are contested, I think the Board must hear and decide those facts first. Its decision would then form the basis for the stated case. That is what happened in Ontario Energy Board v. Consumers' Gas Co., supra.

[35] Undoubtedly, it will be open to the Divisional Court, when the stated case is remitted, to conclude that on the record before it, it is not possible to offer an opinion without additional facts. However, given the purpose of s. 32(1), I think that the Divisional Court will strive to answer the question if it can, to assist the Board in the discharge of its statutory mandate.

[36] In this case, however, the Divisional Court did not examine the factual context provided by the stated case to determine if it was sufficient to permit the question to be answered. Rather, it simply focussed on the absence of findings of fact by the Board as a reason to refuse to address the question stated for its opinion. In this I think it erred.

[37] The third issue is whether the Divisional Court was correct to quash the stated case on the basis that the Board was really asking if O. Reg. 365/00 was valid and had no jurisdiction to state such a case.

[38] With respect, I think that the Divisional Court erred in characterizing the question posed in the stated case as a request that the Court determine the validity of the regulation. The stated case poses the more limited question of whether the regulation is to be applied by the Board in hearing applications under s. 92 of the Act or whether, as asserted by the appellant, it is inconsistent with the Act and therefore not to be applied.

[39] The stated case does not seek a determination of whether the regulation is valid for all purposes. It simply asks whether the regulation is effective to determine the boundary of the Board's jurisdiction. In stating the case the Board seeks the assistance of the Divisional Court in defining the Board's jurisdiction in s. 92 applications, following the making of O. Reg. 365/00. The question posed is one which the Board could put to itself and equally one it could put to the Divisional Court by way of stated case. As Lamer C.J. said in Canadian Pacific Ltd. v. Matsqui Indian Band, 1995 145 (SCC), [1995] 1 S.C.R. 3, 122 D.L.R. (4th) 129, at pp. 25-26 S.C.R.: [page713]

It is now settled that while the decisions of administrative tribunals lack the force of res judicata, nevertheless tribunals may embark upon an examination of the boundaries of their jurisdiction. Of course, they must be correct in any determination they make, and courts will generally afford such determinations little deference.

[40] In short, I think the question posed did not seek to determine the validity of O. Reg. 365/00, but was a question which the Board could state and the Divisional Court had the jurisdiction to answer.

[41] In conclusion, this appeal is not about the appropriate answer to the stated case, but only about whether the Divisional Court should address the question to see if it can offer an opinion. For the reasons given, I think the Divisional Court was wrong to stop short of this and quash the stated case. The appeal must therefore be allowed and the stated case remitted so that the Divisional Court can try, if possible, to help the Board and the parties that appear before it to get on with their task.

[42] Counsel for the appellant shall deliver brief written submissions on costs here and below and any proposed bill of costs within ten days from the date of this judgment. Counsel for the respondent may deliver a response, if any, within ten days thereafter.

Appeal allowed.