Court File and Parties

COURT OF APPEAL FOR ONTARIO

DATE: 20241213 DOCKET: M53285

Brown, Huscroft and Miller JJ.A.

BETWEEN

West Whitby Landowners Group Inc. Applicant (Moving Party)

and

Elexicon Energy Inc. and Ontario Energy Board Respondents (Responding Parties)

Counsel: Christopher Lee and Kiren Purba, for the moving party Laura M. Wagner, Teagan Markin and Patrick J. Leger, for the responding party Elexicon Energy Inc. M. Philip Tunley, for the responding party Ontario Energy Board

Heard: in writing

Reasons for Decision

Background

[1] West Whitby Landowners Group Inc. (the “Landowners” or “WWLG”) seeks leave to appeal from the decision of the Divisional Court dated February 24, 2022, with reasons reported at 2022 ONSC 1035.

[2] The Landowners are developing residential lots in the Whitby area. Their developments require connection to the provincial electricity grid. The connection must be made through the distribution facilities of the local electricity distribution company, Elexicon Energy Inc. A dispute arose between the Landowners and Elexicon regarding the allocation of costs between the parties for a substation to service the connection. The costs may be as high as $4.2 million.

[3] The Ontario Energy Board regulates electricity distribution companies. One regulatory tool the Board uses to that end is the Distribution System Code (“DSC”), which the Board issues under the Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sched. B. The DSC contains provisions regarding the allocation of connection costs. Under its terms, if the substation is characterized as a system “expansion”, the Landowners would bear the cost of its construction and connection. If the substation is an “enhancement”, Elexicon, as the local distribution company, bears the cost.

[4] The Landowners referred their cost allocation dispute with Elexicon to the Board for its opinion. In an August 16, 2019 letter, Board staff expressed the conclusion that “Elexicon has applied the regulatory provisions of the DSC correctly to the [Landowners] expansion.” That prompted the Landowners to file a formal complaint with the Board. In a December 18, 2020 letter, Board staff responded, in part:

[I]t remains OEB staff’s conclusion that Elexicon Energy has applied the regulatory requirements of the DSC correctly to the WWLG expansion (including relocation costs and the five-year connection horizon). However, OEB staff has also taken into account the unique circumstances in this case (i.e., not a pure expansion project) and, in doing so, also concluded that there should be a reduction in costs attributed to WWLG, as described above.

In my view, this concludes OEB staff’s review of this complaint. We trust that WWLG and Elexicon will be able to resolve the valuations of the incremental four-transformer costs and the land costs based on the conclusions set out above.

[5] The Landowners applied to the Divisional Court for judicial review of the decisions contained in the two letters. The Divisional Court dismissed the application. Paragraph 4 of its reasons explains the basis for its decision:

[T]the application for judicial review is dismissed. I agree with the respondents’ preliminary arguments. In my view, this Court does not have jurisdiction over the OEB’s opinion that the project is primarily an expansion because this was not the exercise of a statutory power of decision. In addition, WWLG does not have standing to compel the OEB to hold a hearing or to challenge the OEB’s assessment of its complaint. At most, WWLG would have standing to compel the OEB to deal with its complaint, which the OEB did.

[6] The Landowners seek leave to appeal the Order. They raise two issues for an appeal:

(i) Did the Divisional Court err in finding that it lacked jurisdiction to consider the application for judicial review because (a) the Board did not exercise a statutory power of decision and (b) the Board’s decision did not affect the legal rights, powers, or liabilities of the Landowners? (ii) Did the Divisional Court err in finding that an order in the nature of certiorari was not available?

Analysis

[7] The respondents begin their opposition to the Landowners’ leave application by pointing to the brief endorsement of this court in Re Sault Dock Co. Ltd. and City of Sault Ste. Marie, [1973] 2 O.R. 479 (C.A.). They remind this panel that in applying Sault Dock the view has been taken that decisions of the Divisional Court – whether in the exercise of its original or appellate jurisdiction – are intended to be final and not reviewable by this Court save in exceptional cases. Over the years, the Sault Dock decision has been regarded, by some, as establishing a stringent test for leave to appeal.

[8] As often happens when certain judicial decisions take on the reputation as eternal pronouncements carved in tablets of stone, two unhealthy features work their way into the resulting jurisprudence.

[9] First, the flexibility of the canonical decision is forgotten in favour of a multi‑factor test that can be applied easily by rote. The panel in Sault Dock recognized that “it may not be desirable to attempt to formulate a catalogue of the circumstances under which leave to appeal would be granted by this Court”, as any such endeavour carries the risk of a judicial walk on thin ice. Which, no doubt, is why that panel described its list merely as suggesting “matters such as the following”, a qualification that has been forgotten over the ensuing years.

[10] More significantly, before suggesting a list “such as the following”, the panel identified the key consideration underpinning any decision to grant leave to appeal. Section 6(1)(a) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that an appeal from an order of the Divisional Court lies, with leave, “on a question that is not a question of fact alone”. The Sault Dock panel noted the consequence of that statutory limit: “Every decision of a Court is of importance to the parties affected but when no appeal is allowed on questions involving fact alone, then the importance of the decision to the individual is not to be the sole or perhaps the paramount consideration.” The panel then continued:

It is rather the impact which the decision on the question will have on the development of the jurisprudence of Ontario. If the resolution of the question would largely have significance only to the parties and would not settle for the future a question of general interest to the public or a broad segment of the public, the requirements to obtain leave will not have been met. [Emphasis added.]

[11] Therein lies the heart of the consideration of an application for leave to appeal: not whether the issue falls into some pigeon-hole on a checklist, but “the impact which the decision on the question will have on the development of the jurisprudence of Ontario.”

[12] Of the three levels of court in Ontario, it is the responsibility of the Court of Appeal for Ontario to monitor, clarify, and develop the jurisprudence of Ontario.

[13] In discharging that responsibility, the lens this court should bring to any question brought before it for leave mimics, with appropriate modification, the lens employed by the Supreme Court of Canada when considering its leave applications, namely:

Is the question on which leave is sought one that, by reason of its public importance, the importance of any issue of law or mixed law and fact involved, or for any other reason is of such a nature or significance that it ought to be decided by the Court of Appeal for Ontario?

If so, leave to appeal should be granted.

[14] The second unhealthy feature of continuing a slavish adherence to Sault Dock’s “checklist” approach is that it forgets the age of the Sault Dock decision. It’s an old decision. So old, in fact, that it pre-dates the enactment of the Canadian Charter of Rights and Freedoms. The Charter now plays an important role in judicial review litigation before the Divisional Court, from which there is no right of appeal. The development of administrative law, and public law more generally, will often require the oversight of the Court of Appeal for Ontario.

[15] Turning to the present case, there is no secret that both the federal and provincial governments are pursuing polices to promote much greater use of electricity in the economy. There is no secret that the Ontario government is pursuing an aggressive policy to support the construction of more residential accommodation, including subdivision projects such as those being pursued by the Landowners. Against that backdrop, the question of whether some decisions of the state actor responsible for regulating the allocation of costs associated with the greater use of electricity are immune from judicial review is one of great public importance.

[16] Applying an updated and more flexible approach to the leave application before us, the Divisional Court’s decision appears to insulate certain decisions of the Board from judicial review. This has impact well beyond the immediate parties in this case. It also has broader implications for the Ontario public and their economic interests. The questions on which the Landowners seek leave to appeal plainly merit consideration by this court.

[17] Consequently, we grant the Landowners leave to appeal from the decision of the Divisional Court on the following two issues:

(i) Did the Divisional Court err in finding that it lacked jurisdiction to consider the application for judicial review because (a) the Board did not exercise a statutory power of decision and (b) the Board’s decision did not affect the legal rights, powers, or liabilities of the Landowners? (ii) Did the Divisional Court err in finding that an order in the nature of certiorari was not available?

[18] The Landowners are entitled to their costs of this application fixed in the amount of $5,000, inclusive of disbursements and applicable taxes.

“David Brown J.A.”

“Grant Huscroft J.A.”

“B.W. Miller J.A.”