Court File and Parties
CITATION: West Whitby Landowners Group Inc. v. Elixicon Energy, 2022 ONSC 1035
DIVISIONAL COURT FILE NO.: 055/21
DATE: 20220224
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
McWatt ACJ SCJ., and Coats and Favreau JJ.
BETWEEN:
West Whitby Landowners Group Inc.
Applicant
– and –
Elexicon Energy and Ontario Energy Board
Respondents
COUNSEL:
Christopher Lee and Tamara Watson, for the Applicant
Ewa Krajewska and Brianne Taylor, for the Respondent Elexicon Energy
M. Philip Tunley, for the Respondent Ontario Energy Board
HEARD at Toronto (by videoconference): November 22, 2021
REASONS FOR DECISION
Favreau J.
Overview
[1] The applicant, West Whitby Landlowners Group (“WWLG”), seeks to judicially review two letters issued by the Ontario Energy Board (the “OEB”). The first letter responded to a request from WWLG that the OEB provide its opinion on whether a project to which the respondent, Elexicon Energy (“Elexicon”), was going to supply electricity was an “enhancement” or an “expansion”. The second letter sought to make a complaint against Elexicon for treating the project as an “expansion” and thereby passing on the cost of building the necessary electric transformer and other infrastructure to the project developers. With a minor exception, in both responding letters, the OEB agreed with Elexicon that the project was an expansion. The OEB therefore did not refer the matter for further investigation or a hearing.
[2] WWLG claims that the OEB’s decision was procedurally unfair because it did not refer the matter to a full hearing and because it did not share all communications it received from Elexicon with WWLG. WWLG also claims that the decision was unreasonable because the OEB did not take into consideration many elements of the history and scope of the project, which, it says, should have led to the conclusion that the project is an enhancement and not an expansion.
[3] For their part, the OEB and Elexicon argue that the Divisional Court does not have jurisdiction over this matter because the OEB did not exercise a statutory power of decision. Alternatively, they argue that the decision was procedurally fair and reasonable.
[4] For the reasons below, 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.
Background
Parties and the Offer to Connect Agreement
[5] WWLG is an incorporated cost sharing trustee established to act for eleven developers in west Whitby, who are collectively developing 3,913 lots.
[6] Elexicon is a licensed monopoly electricity distributor for Whitby and other parts of centre-east Ontario.
[7] Amongst other governing authorities, Elexicon is required to comply with the Ontario Energy Board Act, 1998, S.O. 1998, c. 15 and the Distribution System Code (the “Code”) established by the OEB. The Code sets out the minimum conditions a distributor must meet under its licence. It also addresses the distinction between an enhancement and an expansion, providing that where an improvement qualifies as an expansion, the newly connecting customers are required to pay a capital contribution if the forecasted future revenues fall short of the costs of expansion.
[8] From 2013 to 2017, Elexicon and WWLG were in negotiations about connecting the developments to Elexicon’s energy grid and constructing a municipal substation to service the developments. The parties refer to the substation as “MS16”.
[9] On December 20, 2018, the parties finalized an Offer to Connect Agreement. In the Agreement, the parties agreed to refer any dispute about whether the works at issue constitute an “expansion” or an “enhancement” under the Code to the OEB. If the MS16 is considered an “expansion”, WWLG is to pay for the work. If it is considered an “enhancement”, Elexicon is to pay. The relevant provision of the agreement states that “the parties agree that the Dispute will be finally settled by the OEB. The decision of the OEB on the Dispute shall be final and binding upon all parties to the Dispute and there shall be no appeal therefrom.”
Referral of the dispute to the OEB
[10] On February 15, 2019, WWLG wrote to the OEB seeking its opinion over whether the work was an enhancement or an expansion
[11] On August 16, 2019, the OEB wrote back advising that it was the OEB staff’s conclusion that the work was an expansion rather than an enhancement. After reviewing the factual circumstances and positions of the parties, the OEB staff member reasoned as follows:
As stated above, the MS 16 station is required to provide capacity for the growth that WWLG will bring in new residential and commercial developments in west Whitby. WWLG and its eventual customers are therefore the beneficiaries of the new capacity. If Elexicon treated MS16 as an enhancement, the costs would be recovered from all their existing customers; i.e. those that will not benefit from the investment. It was unfortunate if WWLG was led to believe that the station would be considered an enhancement because that would have been contrary to the beneficiary pays principle. It is OEB staff’s conclusion that Elexicon has correctly applied the provisions of the DSC by treating MS16 and any related facilities as an expansion.
[12] On November 18, 2019, WWLG made a formal complaint to the OEB. In doing so, WWLG’s counsel stated that their client did not believe that its arguments had been addressed and stated that “we have been directed to elevate our inquiry to that of a formal complaint under the Act and would request that an investigation be conducted in this matter as well as the prior actions of Whitby Hydro (now “Elexicon”) whereby upstream charge [sic] were collected in contravention of the Code”. The letter went on to set out WWLG’s points of disagreement with the OEB’s prior letter.
[13] The OEB responded on December 18, 2020. In its response, the OEB maintained its view that the project was an expansion rather than an enhancement. However, the OEB stated that a portion of the project would not benefit WWLG’s residents and therefore WWLG should not be responsible for paying for that portion of the expansion. On that basis, the OEB stated that WWLG should receive a $710,109 credit for the MS16. The OEB concluded its letter as follows:
In summary, based on the information we obtained, it 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. Should you have any questions about the conclusions set out in this letter, please contact me.
Positions of the parties
[14] WWGL raises the following issues:
a. The OEB should have held a hearing to address the issue of whether the project is an expansion or an enhancement rather than having a staff member provide an opinion on the issue;
b. The decision-making process was procedurally unfair because the OEB received communications from Elexicon that it did not share with WWLG; and
c. The decision was unreasonable because the OEB did not take into account or consider a number of factors, including the fact that growth had been planned for that part of west Whitby for many years.
[15] Elexicon disagrees that the process followed by the OEB was procedurally unfair or that the decisions were unreasonable. Elexicon also argues that the Divisional Court does not have jurisdiction over this matter because the OEB did not exercise a statutory power of decision.
[16] The OEB also argues that this Court does not have jurisdiction over the matter because it did not exercise a statutory power of decision and because the Ontario Energy Board Act does not give complainants standing to require the OEB to hold a hearing.
[17] In my view, as set out below, this Court does not have jurisdiction to review the OEB’s opinion that the MS16 is primarily an expansion rather than an enhancement. In addition, complainants such as WWLG have no standing to compel the OEB to hold a hearing.
Review of statutory scheme
[18] Before addressing the specific issues raised by the parties, it is helpful to review the statutory scheme within which these events fit.
[19] Part VII of the Ontario Energy Board Act sets out the OEB’s powers to appoint inspectors and conduct inspections.
[20] In that context, section 105 of the Ontario Energy Board Act provides that the OEB may receive complaints and sets out theOEB’s powers for disposing of a complaint:
The Board may,
(a) receive complaints concerning conduct that may be in contravention of an enforceable provision whether the conduct constitutes an offence or not; and
(b) make inquiries, gather information and attempt to mediate or resolve complaints, as appropriate, concerning any matter that comes to its attention that may be in contravention of an enforceable provision whether the matter constitutes an offence or not.
[21] Part VII also sets out the extensive powers given to inspectors under the Act, including powers to obtain documents and conduct searches.
[22] Part VII.1 of the Ontario Energy Board Act is titled “Compliance” and sets out the OEB’s powers to enforce compliance with the Act. This Part gives the Board the power to make various orders directed at compliance:
a. Section 112.3 gives the OEB the power to make an order to comply with the Act where “it is satisfied that a person has contravened or is likely to contravene an enforceable provision”;
b. Section 112.4 gives the OEB the power to suspend or revoke a licence where it is satisfied that a person who holds a licence has contravened the Act; and
c. Section 112.5 gives the OEB the power to impose an administrative penalty if it is satisfied a person has contravened the Act.
[23] It is in the context of this Part that the Board may hold a hearing. In accordance with section 112.2(2) of the Act, when the OEB exercises any of its powers under sections 112.3, 112.4 or 112.5, it must give written notice to the person against who it intends to make an order. Pursuant to section 112(3), that person is entitled to request that the Board hold a hearing.
[24] Section 112.2(1) of the Act provides that an “order under section 112.3, 112.4 or 112.5 may only be made on the Board’s own motion”.
The Court does not have jurisdiction
[25] The respondents argue that the Divisional Court does not have jurisdiction over the application because the Board did not exercise a statutory power of decision. They approach this issue from two different perspectives. First, they argue that the Board did not make a decision because it only provided an opinion for the purpose of helping the parties resolve their differences. Second, they argue that, even if the Board made a decision, the only decision it made was not to refer the matter for a hearing. WWLG does not have standing to challenge such a decision.
[26] I agree with the respondents.
[27] One of the challenges in this case is to tease out the role of the agreement between the parties from the OEB’s statutory functions. While the parties can agree to be bound by an OEB opinion or determination, they have no power to require the OEB to do anything or follow any process that is not provided for by statute or regulation. Accordingly, the agreement is irrelevant to the issue of what the OEB should have done and how it should have handled the communications from the parties, and, therefore, ultimately irrelevant to the issue of whether WWLG can challenge the OEB’s opinion and decision not to refer the issue to a hearing.
[28] In looking at WWLG’s allegations, the first step is to assess how and where its interactions with the OEB fit into the statutory scheme. In its first letter, WWLG stated that it was seeking the OEB’s opinion. In its second letter, WWLG stated that it was elevating the matter to a formal complaint. In response to the first letter, the OEB provided its opinion. In response to the second letter, the OEB revised its opinion and said that it would take no further steps in relation to the complaint.
[29] As reviewed above, section 105(a) of the Ontario Energy Board Act gives the OEB the power to receive complaints and section 105(b) gives the OEB the power to “make inquiries, gather information and attempt to mediate or resolve complaints”. Therefore, the starting point for assessing this Court’s jurisdiction over the application for judicial review is whether this Court has jurisdiction to consider an application for judicial review of a decision made by the OEB over how to deal with a complaint under section 105 of the Act.
[30] In this case, as reviewed above, there are two aspects to WWLG’s challenge to how the OEB handled its complaint. First, it argues that the OEB should have referred the matter for a full hearing to a panel of the OEB. Second, even if there was no such obligation, WWLG challenges the substance of the opinion and the process the OEB followed in arriving at that opinion. Given the statutory scheme setting out how the OEB is to handle complaints and investigations, in my view the analysis that applies to these two lines of arguments is different and I address them separately below.
WWLG has no standing to compel an OEB hearing
[31] On the first issue, in my view, WWLG has no standing to ask this Court to compel the OEB to hold a hearing. Looking at section 105 in combination with the provisions in Part VII.1, it is evident that, while WWLG can make a complaint, it has no standing to require that the Board hold a hearing if it is not satisfied with the manner in which the Board has handled the complaint. As reviewed above, the Ontario Energy Board Act sets out a clear process leading to a hearing. That process provides that the OEB can conduct an investigation and make an order against an electricity provider, after which the provider can request a hearing to challenge the order. There is nothing in this process that gives a complainant status to request or compel a hearing. The wording of section 112.2(1) of the Ontario Energy Board Act is clear; it provides that an “order under section 112.3, 112.4 or 112.5 may only be made on the Board’s own motion” [emphasis added]. As held in Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control and Licensing Branch), 2001 SCC 52, at para. 22, the principles of natural justice can be ousted by clear and unambiguous language. Here, the legislature has made it clear that only the OEB can trigger the process leading to a hearing into a concern that an electricity provider is not complying with the law, including the Code. In Graywood Investments Ltd. v. OEB[^1], at para. 22, Molloy J. reached a similar conclusion when dealing with predecessor legislation, holding that:
There is no requirement that the Board hold a hearing every time a complaint is referred to it. Rather, the right to a hearing arises only where, after its initial investigation, the Board is inclined to issue a notice of non-compliance. Even then, it is the licensee rather than the complainant who is entitled to request a hearing. Apart from that, it is entirely within the discretion of the Board whether to hold a hearing in this type of situation…
[32] Accordingly, in my view, WWLG has no standing to ask this Court to compel the OEB to hold a hearing.
The OEB opinion is not the exercise of a statutory power of decision
[33] On the second issue, in my view, this Court does not have the jurisdiction to review the OEB’s opinion and how it arrived at that opinion.
[34] Section 2(1) of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1, provides that on an application for judicial review, the Divisional Court can grant an “order in the nature of mandamus, prohibition or certiorari” or a declaration “in relation to the exercise, refusal to exercise or proposed or purported exercise of a statutory power”.
[35] In this case, WWLG seeks an order in the nature of certiorari. As held in Martineau v. Matsqui Institution, [1980] 1 S.C.R. 602, at p. 628:
Certiorari is available as a general remedy for supervision of the machinery of government decision-making. The order may go to any public body with power to decide any matter affecting the rights, interests, property, privileges, or liberty of any person. The basis for the broad reach of this remedy is the general duty of fairness resting on all public decision-makers.
[36] As held by this Court in Trost v. Conservative Party of Canada, 2018 ONSC 2733, at para. 11, the Judicial Review Procedure Act does not specify when certiorari may be available, so it is necessary to turn to common law principles to decide that issue. In such cases, the courts look at the list of factors set out by the Federal Court of Appeal in Air Canada v. Toronto Port Authority, 2011 FCA 347, at para. 34, to determine whether a decision is of sufficient public character to engage public law remedies such as certiorari. As described in Trost, at para. 13, these factors are as follows:
-- the character of the matter for which review is sought;
-- the nature of the decision-maker and its responsibilities;
-- the extent to which a decision is founded in and shaped by law as opposed to private discretion;
-- the body's relationship to other statutory schemes or other parts of government;
-- the extent to which a decision-maker is an agent of government or is directed, controlled or significantly influenced by a public entity;
-- the suitability of public law remedies;
-- the existence of a compulsory power;
-- an "exceptional" category of cases where the conduct has attained a serious public dimension
[37] In my view, the OEB’s opinion regarding whether the MS16 is an expansion or an enhancement is not a decision giving rise to the public law remedy of certiarori. While the OEB is a public body that makes many decisions of a public character, in this case, the first factor, namely the character of the matter, weighs heavily against the availability of public law remedies. The parties sought the opinion for the purpose of resolving their private dispute. The fact that they agreed to be bound by the OEB’s opinion does not turn the opinion into a decision of a public character. Ultimately, the only decision made by the OEB was not to refer the matter for further investigation or not to make an order against Elexicon which, as reviewed above, is a decision that WWLG does not have standing to challenge.
[38] The analysis is similar if WWLG had sought declaratory relief under section 2(1)2 of the Judicial Review Procedure Act. Section 1 of the Act defines the “exercise of a statutory power of decision” as follows:
“statutory power of decision” means a power or right conferred by or under a statute to make a decision deciding or prescribing,
(a) the legal rights, powers, privileges, immunities, duties or liabilities of any person or party, or
(b) the eligibility of any person or party to receive, or to the continuation of, a benefit or licence, whether the person or party is legally entitled thereto or not,
and includes the powers of an inferior court.
[39] The OEB and Elexicon argue that the OEB did not exercise a statutory power of decision and the Court therefore cannot review the decision. They point to a distinction in the case law between different complaint regimes and submit that the OEB complaint process falls into the category of cases where courts have found that a decision not to take further steps in relation to a complaint is not the exercise of a statutory power of decision.
[40] In Endicott v. Ontario (Independent Police Review Office), 2014 ONCA 363, the Court of Appeal for Ontario considered whether the Independent Police Review Office exercised a statutory power of decision when handling complaints made by a member of the public against a police officer. In that context, the Court held that the Independent Police Review Office was exercising a statutory power of decision because the relevant legislation required, through the use of the word “shall”, that the Office process the complaint in accordance with specified criteria. In that context, the Court contrasted the relevant statutory regime with the regime applicable in Batacharya v. The College of Midwives of Ontario, 2012 ONSC 1072, where the Divisional Court held that the College was not exercising a statutory power of decision when processing a complaint under the Health Professions Procedural Code, being Schedule 2 to the Regulated Health Professions Act, 1991, S.O. 1991, c. 18. In Batacharaya, the Court held that the College had discretion, through the use of the word “may”, not to investigate the complaint.
[41] There are several cases other than Batacharaya where the courts have held that a person making a complaint in the professional discipline context has no standing to judicially review the outcome of the complaint: see, for example, Pieters v. Ontario College of Teachers; Friends of the Old Man River Society v. Association of Professional Engineers, Geologists and Geophysicists of Alberta, 2001 ABCA 107; and Emerman v. Association of Professional Engineers, 2008 BCSC 1186.
[42] Here, section 105 of the Ontario Energy Board Act is similar to the wording of the legislation in Batacharaya rather than in Endicott. Section 105 of the Act uses the discretionary word “may”, thereby giving the OEB discretion over whether to receive a complaint and how to handle it. Accordingly, the OEB is not exercising a statutory power of decision. Given the legislative scheme at issue, the decision does not affect the “legal rights, powers, privileges, immunities, duties or liabilities” of WWLG, because WWLG has no entitlement to have the complaint handled in any particular way. At most, WWLG has a right to have the OEB consider its complaint, but it has no right to challenge the procedure the OEB follows in handling the complaint or the outcome of the complaint.
[43] WWLG argues that the analogy with professional discipline cases is misplaced because, in this case, the OEB’s opinion that the project is an expansion rather than an enhancement directly affects its financial interests. However, WWLG’s interests are affected because of the parties’ agreement that they would be bound by a determination made by the OEB. As mentioned above, the agreement has no bearing on the analysis of whether the decision is amenable to judicial review.
[44] From the perspective of the statutory scheme, WWLG is in no different position than any member of the public who makes a complaint against an electricity supplier. Pursuant to section 105 of the Ontario Energy Board Act, the OEB is given broad discretion over how it will handle the complaint. This includes the ability to help the parties resolve the complaint, which is what the OEB did here by providing its opinion. However, this does not mean that a complainant can seek to judicially review the OEB’s opinion. The only statutory decision the OEB makes when receiving a complaint is whether to conduct an investigation and, ultimately, whether to make an order against a regulated entity. The Act makes clear that only the OEB has the power to make such an order and members of the public have no right to compel an investigation or an order against a regulated entitled.
[45] Accordingly, in my view, the OEB’s opinion on whether the MS16 is an enhancement or an expansion is not subject to judicial review. This was not the exercise of a statutory power. The OEB provided this opinion to the parties because they requested that it do so as part of their dispute resolution process. In addition, WWLG has no standing to challenge the decision of the OEB not to conduct an investigation and not to make an order against Elexicon. At most, if the OEB had not processed the complaint, Elexicon could have challenged its failure to do so. But there is no legal basis on which WWLG can seek to judicial review the process the OEB followed in handling the complaint or the opinion given by the OEB on the nature of the MS16.
Conclusion
[46] For the reasons above, the application for judicial review is dismissed.
[47] No costs are awarded to or against the OEB. As agreed between the parties, Elexicon is entitled to costs of $32,000 all inclusive to be paid within 30 days.
Favreau J.
I agree _______________________________
McWatt ACJ SCJ
I agree _______________________________
Coats J.
Released: February 24, 2022
CITATION: West Whitby Landowners Group Inc. v. Elixicon Energy, 2022 ONSC 1035
DIVISIONAL COURT FILE NO.: 055/21
DATE: 20220224
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
McWatt ACJ SCJ., and Coats and Favreau JJ.
BETWEEN:
West Whitby Landowners Group Inc.
Applicant
– and –
Elexicon Energy and Ontario Energy Board
Respondents
REASONS FOR JUDGMENT
Favreau J.
Released: February 24, 2022
[^1]: The Divisional Court’s decision was reversed by the Court of Appeal on other grounds; see Graywood Investments Ltd. v. Toronto Hydro-Electric Systems Ltd. (2006), 2006 16823 (ON CA), 80 O.R. (3d) 492 (C.A.).