COURT FILE NO.: CV-14-501593
DATE: 20141215
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SKYPOWER CL 1 LP, SUNSPARK LP, GREENGIANT LP, LUMINESCENT LP, BRILLIANCE LP, SHINYLIGHT LP, CLEARLIGHT LP, CENTERLIGHT LP, PANELIGHT LP, AVIDLIGHT LP, STARLIGHT LP, WINTERLIGHT LP, SPRINGLIGHT LP, AUTUMNLIGHT LP, STAGELIGHT LP, SUNNYPARK LP, BRIGHTPARK LP, OXFORD SOLAR PARK LP, CRYSTALLIGHT LP, NOVAPARK LP, STANFORD LP, SURELIGHT LP, SOLARCELLS LP, ABSOLUTELIGHT LP, ASTRALLIGHT LP, BLAZINGLIGHT LP, EASTLIGHT LP, GLOWINGLIGHT LP, HOUSELIGHT LP, RADIANTLIGHT LP, REALSUNNY LP, SHIMMERLIGHT LP, TWINKLELIGHT LP, MAXLIGHT LP, KEYLIGHT LP, MAGLIGHT LP, HORIZONLIGHT LP, GLOBALLIGHT LP, WESTERNLIGHT LP, SOUTHLIGHT LP, STORMLIGHT LP, ASTROLIGHT LP, SUPERLIGHT LP, SPOTLIGHT SOLAR PARK LP, SPARKLIGHT LP, SAGELIGHT LP, REALLIGHT SOLAR PARK LP, ORANGELIGHT LP, ONELIGHT SOLAR PARK LP, GLOWLIGHT LP, FIRELIGHT LP, FINITELIGHT LP, EVERLIGHT SOLAR PARK LP, COPPERLIGHT LP, BRIGHTLIGHT SOLAR PARK LP, BLUELIGHT SOLAR PARK LP, PHOTONLIGHT LP, CLEANLIGHT LP, SMARTLIGHT SOLAR PARK LP, EMITTINGLIGHT LP, PURELIGHT LP, NEWLIGHT SOLAR PARK LP, SILICONLIGHT LP, MAINLIGHT LP, BRILLIANTLIGHT SOLAR PARK LP, EXTRALIGHT LP, SHININGSTAR SOLAR PARK LP, INFINITELIGHT SOLAR PARK LP, DIRECTLIGHT SOLAR PARK LP, FORWARDLIGHT LP, PROGRESSIVELIGHT LP, ADVANCELIGHT LP, NEXTLIGHT LP, DAWNLIGHT LP, FUTURELIGHT LP, ZOOMLIGHT LP, YELLOWLIGHT LP, ROYALLIGHT LP, MIDLIGHT LP, KINGLIGHT LP, SOLLIGHT SOLAR PARK LP, HUBBLELIGHT LP, GALAXYLIGHT LP, LASERLIGHT SOLAR PARK LP, ATOMLIGHT LP, JOYLIGHT LP, ALPHALIGHT LP, BETALIGHT SOLAR PARK LP, GAMMALIGHT LP, OMEGALIGHT LP, PRISMLIGHT LP, AQUALIGHT SOLAR PARK LP, SIGMALIGHT LP, ROLLINGLIGHT LP, RAINBOWLIGHT SOLAR PARK LP, DISTINCTLIGHT LP, MISTLIGHT LP, GLITTERLIGHT LP, SAPPHIRELIGHT LP, RUBYLIGHT LP, MAGNIFICENTLIGHT LP, FLARELIGHT LP, SHEERLIGHT LP, VIVIDLIGHT LP, FULLLIGHT LP, MAJESTICLIGHT LP, ORIENTLIGHT LP, ANCIENTLIGHT LP, REGALLIGHT LP, EXTRAVAGANTLIGHT LP, ILLUSTRIOUSLIGHT LP, VIOLETLIGHT LP, EVENINGLIGHT LP, BLOOMLIGHT SOLAR PARK LP, SUNNYDAYLIGHT LP, CALMLIGHT LP, CLASSICLIGHT SOLAR PARK LP, FLASHLIGHT LP, Plaintiffs
AND:
ONTARIO POWER AUTHORITY and HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, Defendants
BEFORE: CHIAPPETTA J.
COUNSEL: Matthew Diskin and Andrew Moeser, for the Plaintiffs
Lisa La Horey and David Elmaleh, for the Defendant Ontario Power Authority
Lise Favreau and Kristin Smith, for Her Majesty the Queen in Right of Ontario
HEARD: November 18, 2014
ENDORSEMENT
[1] The defendants, the Ontario Power Authority (“OPA”) and Her Majesty the Queen in Right of Ontario (“Ontario”) seek to strike out and dismiss the action by the Plaintiffs for misfeasance in public office and unjust enrichment. They argue first that the action is an abuse of process considering a previously determined application for judicial review and second that in any event the pleading fails to disclose a reasonable cause of action. Ontario also attacks the claim alleging a failure of proper notice under the Proceedings Against the Crown Act, R.S.O. 1990, c. P.27.
[2] For reasons set out below I have concluded that the Plaintiffs’ action retells a complaint and restates a legal claim previously considered and finally determined by another forum. It is therefore properly dismissed as an abuse of process. Further, the pleading is deficient and fails to disclose a reasonable cause of action. The Defendants’ motion is allowed.
Background
[3] The Plaintiffs comprise 118 partnerships. All of the limited partnerships are owned by the same persons and similarly affected by the actions of the Defendants. They are collectively referred to as SkyPower.
[4] In August 2012, SkyPower made an application for judicial review to the Divisional Court: Skypower CL 1 LP v. Ontario (Minister of Energy), 2012 ONSC 4979, 298 O.A.C. 204. It sought a declaration that the OPA and Ontario acted unreasonably in failing to process applications in accordance with OPA’s own rules; to declare that the Minister of Energy’s new directions were unfair, discriminatory and ultra vires the enabling legislation; and to order the Minister to direct the OPA to process existing applications in accordance with the Feed-In Tariff (FIT) Program Rules 1.0.
[5] The facts upon which the Divisional Court considered the application are summarized in their reasons at paras 4 to 48 as follows:
• In May 2009, the Legislature of Ontario made various legislative changes to provide for a new streamlined renewable energy approval process (para. 4).
• The Electricity Act, 1998 was amended to provide for the development of a FIT Program, defined as:
... a program for procurement, including a procurement process, providing standard program rules, standard contracts and standard pricing regarding classes of generation facilities differentiated by energy source or fuel type, generator capacity and the manner by which the generation facility is used, deployed, installed or located.
The Minister of Energy may issue directions that set out program goals, which are to be followed by the OPA in preparing the FIT Program (para. 6).
• On September 24, 2009, the Minister gave directions to the OPA, to create a FIT Program open to projects that produce electricity from renewable sources including wind, solar photovoltaic, bioenergy and waterpower up to 50 MW. On the same day, the OPA issued the FIT Rules version 1.0 defining the specific procedure pursuant to which applications would be received and processed for FIT Contracts (para. 8).
• Significant features of the FIT Rules 1.0 included: (a) defining the lands where solar photovoltaic projects could be located; (b) a Time Stamp priority for applications; (c) a review process by the OPA; (d) an assessment, in two stages, as to the connection availability for any particular Project (para. 10).
• The FIT Rules 1.0 that governed the FIT program evolved as the program was reviewed and revised from time to time (para. 11).
• Considerable latitude was given within the FIT Program for it to evolve and change. The FIT Program was to be reviewed periodically and could be amended in accordance with the Rules. The FIT Program, Rules, forms of contract and pricing were subject to periodic program review and amendment at least every two years. Apart from the scheduled program reviews, the OPA could amend the FIT Program and Rules in response to ministerial directions, changes in laws, or significant changes in the market place. In addition, any changes to the FIT Rules can apply with respect to existing applications (para. 12).
• The FIT Rules are said to reflect a number of competing interests and values as expressed in the policy objectives outlined in the Minister's direction to the OPA to create the FIT Program:
(a) the creation of a green renewable energy industry had to be as cost effective as possible;
(b) the FIT Program was subject to review and change within the discretion of the Minister and the OPA;
(c) review and change was a function of public policy decision-making and broad-based stakeholder involvement; and
(d) the financial risk in submitting applications was assumed by the applicant and for certain projects, timelines for processing the applications were approximate (para. 13).
• The applicants say that their President had been assured by the then Minister of Energy, George Smitherman, that the Green Energy Act, 2009 provided for a "right to connect", and that the only reason for not connecting would be if the lines were full or if there was a technical impediment to connecting (para. 14).
• The President of the applicants acknowledges that the FIT Rules "contain a provision whereby the OPA could make changes to the FIT Rules". He adds, however, that he was also assured by Minister Smitherman and his successor Minister, Brad Duguid, that changes to the FIT Program would only be undertaken within the context of the Program Review and would not affect existing applications (para. 15).
• Applications submitted to the OPA were time-stamped and assessed on a first-come, first-served basis. FIT Contracts were to be offered in the order applicants applied, subject to eligibility and availability on the transmission and/or distribution system to connect the project (para. 17).
• OPA also had reserved rights under the FIT Rules. These included that the OPA had the right not to offer a FIT contract to an eligible application even if connectivity was available. In making such a decision, the OPA would consider any changes in government policy, limits or targets, considerations such as efficacy, efficiency, ratepayer value and value to the system (para. 19).
• The FIT Program created significant interest. Between the program launch on September 24, 2009 and June 4, 2010, over 2,300 applications were submitted by large-scale project developers (including the applicants). This level of interest signalled the need for a long-term plan for the supply of renewable energy to ensure that connection capacity was sufficiently economical and feasible to support the FIT Program (para. 22).
• Following extensive consultations with stakeholders and recommendations from the OPA, in November 2010 the Ministry published its Long-Term Energy Plan ("LTEP"). The LTEP represented a significant policy shift for the FIT program (para. 23).
• Between November 2010 and October 2011, the Ministry and OPA reviewed and considered whether and to what extent the FIT Program should be changed to align with the goals of the LTEP (para. 24).
• A scheduled review of the FIT Program began on October 31, 2011 to examine a range of issues and make recommendations related to all aspects of the program (para. 28).
• When the FIT Review was launched, the OPA announced that FIT applications would not be processed during the Review. It also announced that:
Amendments to the FIT Rules as a result of the FIT Review will apply to all applications that have not received a FIT Contract offer by October 31, 2011.
• Existing applicants were informed that they could withdraw from the FIT Program and receive a refund of their application security deposits and application fees. The applicants chose not to withdraw any of their applications (para. 29).
• On March 22, 2012, the Ministry published recommended changes to the FIT Program. One of the key recommendations was to change the FIT Program from a first-come, first-served approach to a priority point system that would rank applications based on the ability of the project to achieve a number of FIT Program objectives including (1) community and Aboriginal equity participation in the program; (2) local and municipal support for the program; and (3) project readiness (para. 30).
• On April 5, 2012, the Minister gave directions to the OPA to make changes to the Rules to implement the recommendations. Following a consultation process, the FIT Rules 2.0 were posted on August 10, 2012 (para. 32).
• The applicants say that they have made significant investments in time and money to prepare complete and eligible. These investments included: obtaining the rights to land; purchasing data layers and software; conducting analyses to determine appropriate project siting; applications fees; posting security in excess of $20 million; and staffing and consultant costs (para. 35).
• The President of the applicants says that he directed such significant resources to be committed to the existing applications on the understanding that the government would follow through with processing applications in accordance with the FIT Rules 1.0, and would assess applications and assign priority in the order that they were received (para. 36).
• The new FIT Rules 2.0 made some significant changes to the process by which applications are considered for approval. FIT Rules 2.0 overhaul the priority system for applications. Applications are now awarded points whereby projects with community or Aboriginal participation receive 3 points, projects with municipal or Aboriginal council support receive 2 points, and projects in the queue before July 4, 2011 receive 1 point. An application's time stamp is no longer relevant except as a tie breaker between two projects (para. 41).
• As they relate to the applicants, the FIT Rules 2.0 introduce eligibility restrictions based on municipal zoning. The FIT Rules 2.0 preclude any such projects from being located on a "Residential Property" or a property abutting a "Residential Property" unless it is an "Exempt Residential Property". The FIT Rules 2.0 also prohibit solar projects on commercial or industrial zoned lands for which the Solar Projects would constitute the Principal Use of the property (para. 42).
• In order to submit an application under FIT Rules 2.0 for a ground mounted solar project, an applicant must determine the zoning of the site and the zoning of abutting properties. This process is time-consuming. Furthermore, the eligibility depends upon the specifics of the zoning by-laws in each municipality. There are over four hundred municipalities in Ontario (para. 44).
• In addition, the transition provisions of the FIT Rules 2.0 prohibit applicants from changing the project lands on resubmission, severely limiting an existing applicant's ability to revise an application. According to the applicants, this fact is a significant reason why it is not feasible for them to simply withdraw and resubmit their applications for consideration under FIT Rules 2.0 (para. 45).
[6] On September 10, 2012, the Divisional Court unanimously dismissed the Plaintiffs’ application for judicial review on all grounds raised by the Plaintiffs. Upon detailed analysis, the Divisional Court concluded as follows:
The implementation of FIT Rules 2.0 is not ultra vires the enabling legislation (para. 50).
SkyPower expended considerable effort and significant amounts of money making a large number of applications for approvals for various projects (para. 52).
The OPA failed to process applications according to procedure set out in the FIT Rules 1.0, including the timelines in its representations (para. 37).
SkyPower must have been aware that there was no guarantee of success for any application that might be submitted (para. 53).
Even assuming that the applications met all of the criteria set out in FIT Rules 1.0, there was clearly no obligation on the OPA to permit any of those projects to be connected to the electricity grid in Ontario (para. 53).
SkyPower cannot reasonably claim that they were not aware of, exempt from, the ever present reality that government policies and priorities can change (para. 53).
FIT Rules 1.0 gave the OPA an almost unlimited discretion in how the FIT Program will be run (para. 54).
The application process for the FIT program and the contents of the FIT Rules 1.0 are not akin or equivalent to a tender process (para. 56).
There were many considerations outside of the formal FIT Rules that would impact on the awarding of contracts; including policy considerations (para. 58).
The FIT program arose out of objectives that are matters of public policy and the Plaintiffs were fully aware that that was the fundamental underpinning for the endeavor in which they chose to become engaged (para. 60).
There was no intention by the OPA or the Minister to create contractual obligations through the submission of a proposed project under the FIT Program, even if all of the necessary criteria for the project identified under the FIT Program were met (para. 61).
The Plaintiffs did not have any legitimate expectations that the OPA would abide by the timelines in the FIT Rules for the processing of applications (para. 72).
The OPA had a legitimate reason for not running the Economic Connection Test as originally planned. It was simply overwhelmed with the applications that were received under the FIT Program (para. 71).
The Plaintiffs acquired no vested rights through the FIT Program when they made their applications for various projects under FIT Rules 1.0 (para. 78).
The Plaintiffs were aware that the terms of the FIT program could be changed at any time (para. 80).
The Plaintiffs assumed the risk in making their applications to the FIT program that the terms of the program might change because of the ever present prospect that government policy and priorities change over time (para. 84).
[7] The Plaintiffs brought a motion for leave to appeal, which was dismissed by the Court of Appeal.
[8] In July 2012, the Plaintiffs issued a Statement of Claim as against the OPA and Ontario but did not serve it. In January 2013, the Plaintiffs issued and served a Fresh as Amended Statement of Claim (“the January 2013 claim”). In the January 2013 claim the Plaintiffs claimed $450,000,000 as against the OPA and Ontario for breach of contract, including breach of contract and/or negligent misrepresentation based on the same factual and legal matrix that was before the Divisional Court. The Defendants brought a motion for an order striking out the January 2013 claim on the basis that it was res judicata, an abuse of process and disclosed no reasonable cause of action. Following delivery of the factums of the Defendants, the Plaintiffs discontinued the January 2013 claim and issued and served the within claim.
[9] The within claim seeks damages for misfeasance in public office of $450,000,000. In the alternative, the Plaintiffs seek equitable compensation as against the OPA for unjust enrichment and in the further alternative, interest in relation to application fees and application security. The claim relies on primarily the same factual matrix that was before the Divisional Court and includes one additional allegation around which a new motive for the change in the FIT Rules is alleged.
[10] The only allegation in the claim that was not present in the application for judicial review is the allegation that the Minister had some dislike of SkyPower’s owners due to the latter’s criticism of Ministerial actions, and the decision to amend FIT Rules 1.0 was made for the purpose of harming SkyPower. The claim is centered on the allegation that in failing to follow the FIT Rules 1.0 and fundamentally changing the eligibility criteria, priority ranking and assessment process of the FIT Program, the Minister and the OPA specifically targeted SkyPower in a manner that they both knew would injure SkyPower and that the OPA and the Minister therefore committed the tort of misfeasance in public office.
[11] In paragraph 24 of the claim the Plaintiffs allege that in the years leading up to 2010 they “had been a major supporter of the Liberal Party and [were] on good terms with the Minister” however “this relationship soured when [the Plaintiffs] became outspoken in its criticism of the procurement program and of the Minister’s decision to award a large direct contract for renewable energy to Samsung”.
[12] In paragraph 43 of the claim the Plaintiffs go on to allege that because the Plaintiffs fell out of favour with the Minister, and given the likelihood the Plaintiffs would discontinue Liberal party campaign support, as well as the Minister’s dislike of the owners of the Plaintiffs, the Minister used his discretionary power to render the Plaintiffs formerly eligible applications, ineligible.
[13] The Plaintiffs therefore advance a different theory of unreasonable and unlawful conduct, a different cause of action and a different narrative in terms of why Ontario changed the eligibility criteria, priority ranking and assessment process of the FIT Program. In my view, although the claim is presented in a different forum and seeks damages, it is nonetheless substantively the same complaint put before the Divisional Court and in essence an attempt to re-litigate the complaint despite it being finally determined by the Divisional Court.
Analysis
Abuse of Process
[14] Rule 21.01(3)(d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that “a defendant may move before a judge to have an action stayed or dismissed on the ground that the action is frivolous or vexatious or is otherwise an abuse of the process of the court and the judge may make an order or grant judgment accordingly”.
[15] Rule 25.11 provides that the court may strike out all or part of a pleading, with or without leave to amend, on the grounds that the pleading is scandalous, frivolous or vexatious, or it is an abuse of process of the court.
[16] Evidence is admissible on a motion based on Rules 21.01(3)(d) and 25.11.
[17] The leading case on the doctrine of abuse of process is the Supreme Court of Canada's decision in Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77. The case involved a recreation instructor who was convicted of sexually assaulting a boy under his supervision and was fired after his conviction. He grieved the dismissal. The arbitrator decided that the conviction was admissible evidence but not binding on the arbitration. As a result, the arbitrator concluded that the instructor had been dismissed without cause.
[18] Arbour J. found that the arbitrator was wrong not to give full effect to the criminal conviction even though neither res judicata nor the rule against collateral attack strictly applied. Because the effect of the arbitrator's decision was to relitigate the conviction for sexual assault, the proceeding amounted to a "blatant abuse of process" (para. 56).
[19] Abuse of process is a broad and flexible concept: Ghaeinizadeh v. Bennett Jones LLP, 2014 ONCA 267; 317 O.A.C. 345, at para. 21. In C.U.P.E. Arbour J. explained, at paras. 35-37, that this doctrine represents the inherent and residual discretion to "prevent an abuse of the court's process" when other doctrines such as issue estoppel may not be available. At para. 35, Arbour J. adopted the words of McLachlin J. (as she then was) in dissent in R. v. Scott, 1990 27 (SCC), [1990] 3 S.C.R. 979, at para. 70, as follows:
[A]buse of process may be established where: (1) the proceedings are oppressive or vexatious; and, (2) violate the fundamental principles of justice underlying the community's sense of fair play and decency.
[20] Citing the C.U.P.E. decision in British Columbia (Workers’ Compensation Board) v. Figliola, 2011 SCC 52, [2011] 3 S.C.R. 422 at para. 33, Abella J. stated:
Even where res judicata is not strictly available, Arbour J. concluded, the doctrine of abuse of process can be triggered where allowing the litigation to proceed would violate principles such as "judicial economy, consistency, finality and the integrity of the administration of justice" (para. 37). She stressed the goals of avoiding inconsistency and wasting judicial and private resources:
[Even] if the same result is reached in the subsequent proceeding, the relitigation will prove to have been a waste of judicial resources as well as an unnecessary expense for the parties and possibly an additional hardship for some witnesses. Finally, if the result in the subsequent proceeding is different from the conclusion reached in the first on the very same issue, the inconsistency, in and of itself, will undermine the credibility of the entire judicial process, thereby diminishing its authority, its credibility and its aim of finality (para. 51).
[21] SkyPower’s claim for misfeasance in public office is premised on the assertion that the Minister’s decision to direct the OPA to make changes to the FIT Program was an unlawful exercise of its discretionary power because the direction was made for the specific purpose of injuring SkyPower. SkyPower claims that the Minister was motivated by some alleged ill-will between the Minister and SkyPower.
[22] The conduct of the Minister and the OPA and the reasons for the changes to the FIT Rules was carefully reviewed and analyzed by the Divisional Court on a standard of lawfulness generally and reasonableness specifically to SkyPower. As set out above, the Divisional Court found that the Minister’s direction to the OPA to make changes to the FIT Program was both lawful and reasonable.
[23] The Divisional Court recognized that the Minister is given very broad discretion under the Electricity Act, 1998, S.O. 1998, c. 15, Sch. A to direct the OPA to develop a FIT program. The Court considered whether the decision was made within the bounds of the jurisdiction conferred by the statute and found no foundation for the assertion that the implementation of FIT Rules 2.0 was ultra vires the enabling legislation (paras. 48-50). The Divisional Court further considered each of the reasons advanced by the Plaintiffs as to why the Defendants would be precluded nonetheless from relying on FIT Rules 2.0 in respect of the Plaintiffs’ specific applications. The Plaintiffs asserted four grounds upon which they submitted the Divisional Court should conclude that the Ministry and the OPA have acted unreasonably (para. 55). The Divisional Court disagreed on all four grounds.
[24] By its claim SkyPower asks this Court to again review the same conduct of the Minister and the OPA. It asserts a new ground upon which it says the Court should conclude the conduct was improper. There is no denying however that the essential character of the challenge is the same; namely that the Minister’s decision to direct the OPA to make changes to the FIT Program was a misuse of its discretionary power.
[25] SkyPower offers no explanation as to why, in challenging the reasonableness of the conduct before the Divisional Court, it failed to allege self-targeting. The Plaintiffs’ President, Kerry Adler, swore an affidavit on July 12, 2012 in support of the application for judicial review of the Defendants conduct. No assertions of self-targeting were included therein.
[26] Further, the Plaintiffs’ theory before the Divisional Court was just the opposite; that the conduct was unreasonable and its effect was largely general. For example, the Plaintiffs put forward their belief that approximately 1,400 solar ground mount applications submitted by other parties were similarly affected by the Defendants’ unlawful and unreasonable actions. The Plaintiffs filed affidavit evidence from Hamid Hashemi, another FIT applicant that was also affected and, in seeking leave to appeal the Divisional Court’s findings to the Court of Appeal, the Plaintiffs’ alleged that the proposed appeal would have been “of significance to all existing and future applicants”.
[27] The Divisional Court found that there were 6,475 existing applications submitted under FIT Rules 1.0 awaiting review that would be affected by FIT Rules 2.0 and a further 353 applications that were screened by the OPA but not offered a FIT Contract that would be similarly affected. In total, out of the 6,828 FIT applications, only 118 of them belonged to the Plaintiffs, or 1.7% of the FIT applications that were impacted by the institution of the FIT Rules 2.0 (para. 34).
[28] Moreover, the Plaintiffs made no submission before the Divisional Court, challenging the Defendants’ evidence, explaining the motivation for the Minister’s directions to the OPA and the resulting changes to the FIT Program. The Defendants went to considerable effort to explain to the Divisional Court the reasons for changing the FIT Rules when they did.
[29] The Plaintiffs did not object to the motivation for the directive as advanced by the Defendants; they did not deny that they had full opportunity to make submissions with respect to the changes prior to imposition and they did not raise the allegation of self-targeting as even a motivating factor in response. The Divisional Court accepted the Defendants’ evidence that the FIT Program was changed in an attempt to achieve a number of its original objectives and reviewed in detail the evolution of the changes:
The OPA's transmission advice was based on a streamlined [Economic Connection Test (“ECT”)] analysis which identified three key bulk transmission projects that were "immediately identified as likely economic because of substantial amounts of renewable interest". The advice formed the basis for the Ministry's Long-Term Energy Plan ("LTEP"), published in November 2010 following extensive consultations with stakeholders. Among other policy goals, the LTEP set a target for non-hydroelectric renewable energy capacity of 10,700 MW by 2018 and committed to developing five priority transmission projects, three of which were to support renewable energy projects. The LTEP represented a significant policy shift for the FIT program (para. 23).
Between November 2010 and October 2011, the Ministry and OPA reviewed and considered whether and to what extent the FIT Program should be changed to align with the goals of the LTEP. They developed a three-part plan: (1) conduct [Transmission Availability Test (“TAT”) and Distribution Availability Test (“DAT”)] assessment for large projects submitted as of June 4, 2010; (2) make FIT Contract offers for large projects; (3) conduct a regional ECT and make FIT Contract offers for up to 1,050 MW for a defined geographic area to connect projects enabled by the Bruce-Milton transmission line, which predated the FIT Program. This plan was carried out by the OPA in 2011 (para. 24).
Under the FIT Program 1.0, two hundred and forty-nine FIT contracts were offered for large projects for both solar and wind totalling 4339 MW, and one thousand six hundred and seventy-five FIT contracts were offered for small projects for a total of 300 MW. Despite the original program objectives of encouraging Aboriginal and community participation, as a result of the first-come, first-served approach which encouraged sophisticated and experienced commercial developers, less than 5% of the contracts awarded were for projects with Aboriginal and community participation (para. 26).
A scheduled review of the FIT Program began on October 31, 2011 to examine a range of issues and make recommendations related to all aspects of the program. The FIT Review was announced as a comprehensive review to examine "program rules and pricing." Extensive consultations were held with industry, developers, community groups, municipalities, Aboriginal communities, environmental groups, consumer advocate groups, and interested individuals. The applicants had an opportunity to make submissions. The success of the FIT Program raised certain challenges that had to be addressed in the two year review. These included: the allocation of remaining non-hydro energy capacity to applicants within the LTEP targets; the cost of energy to ratepayers; technical challenges including connection constraints in various parts of the Province; concerns expressed by municipalities with respect to their limited ability to participate in the approvals process; and the limited involvement of Aboriginal and community projects in FIT (para. 28).
On March 22, 2012, the Ministry published Ontario's Feed-in Tariff Program: Two-Year Review Report, which recommended changes to the FIT Program design. One of the key recommend-ations was to change the FIT Program from the assessment of applications based on a first-come, first-served approach to a priority point system that would rank applications based on the ability of the project to achieve a number of FIT Program objectives including (1) community and Aboriginal equity participation in the program; (2) local and municipal support for the program; and (3) project readiness (para. 30).
The Report also made recommendations to ensure that the FIT Program achieved the objectives, to address concerns about project siting, and to align the program with the LTEP, including:
(a) set aside 10% of the remaining FIT contract capacity for projects that have 50% or more community or Aboriginal ownership;
(b) clarify and strengthen project siting rules by removing zoning exemptions and prohibiting solar ground-mount projects on prime agricultural lands that contain Class 1, 2 and 3 soils and in residential areas and lands bordering residential areas; projects would be allowed on commercial or industrial lands if renewable energy is a secondary land use;
(c) as a result of the identification of three planned transmission projects, as well as other system upgrades underway or planned, the OPA should not conduct the ECT;
(d) reduce FIT prices by more than twenty per cent for solar and approximately fifteen per cent for wind projects to reflect lower capital and operating costs for developers; and
(e) provide a transition process for existing FIT applications to allow applicants to withdraw applications or retain original time-stamps in the FIT Program 2.0 (para. 31).
On April 5, 2012, the Minister gave directions to the OPA pursuant to sections 25.32 and 25.35 of the Electricity Act, 1998 requiring the OPA to make changes to the Rules to implement the recommendations of the Review Report. The OPA posted Draft FIT Rules 2.0 on April 6, 2012 for comment. The applicants made submissions to the Minister. As a result of all of the comments received on the Draft FIT Rules 2.0, the Minister issued a direction to the OPA on July 11, 2012 to make further amendments to the FIT Rules, in particular a commitment to re-examine the project siting restrictions. The FIT Rules 2.0 were posted on August 10, 2012 (para. 32).
The changes introduced by the Minister's directions apply to both existing and new FIT applications. According to the respondents, maintaining the first-come, first-served approach as the only means by which to offer a FIT Contract would not allow the OPA to implement the points system that is integral to achieving the program objectives of facilitating greater Aboriginal and community participation and ensuring that, as the LTEP target of 10,700 MW is approached, renewable energy projects are developed on sites that are supported by the local community (para. 33).
…The fluid nature of the FIT Rules, as evidenced by the myriad of provisions (some of which are referred to above) that allowed the OPA almost unlimited discretion in terms of when and in what manner the review process would unfold, undermines any contention that persons making applications acquired rights in the process of the nature that the applicants now assert. I would add, on this point, that the running of the ECT was dependent on the completion of the TAT/DAT process. The TAT/DAT process itself was not scheduled to run at any specific point in time but had only a target start date (see s. 5.1(b) of the FIT Rules 1.0). Those facts reinforce the conclusion that the time for the running of the ECT was never a fixed or immoveable date to which s. 12.4(k) could apply (para. 69).
The fact is that the OPA had a legitimate reason for not running the ECT as originally planned. It was simply overwhelmed with the applications that were received under the FIT Program. The OPA regrouped and set out new timeframes for the ECT but those could not be met either at least, in part, because of the outcome of the LTEP. Again, the applicants did not seek any relief arising from that failure. Finally, circumstances overtook the intention to run the ECT when the Minister directed the OPA, on April 5, 2012, not to do so (para. 71).
[30] No explanation is offered by the Plaintiffs on this motion as to why their theory of self-targeting was not put before the Divisional Court. It certainly could have been raised and should have been raised in the context of the Divisional Court’s review and findings on the conduct of the Defendants and purpose for the changes to the FIT Rules.
[31] With this claim, SkyPower seeks damages and asks a different forum to consider the same conduct, asserting the conduct is unlawful by way of a new issue individual to it. In my view, this is litigation by installment. The factual matrix has been considered. Self-targeting was not raised although allegedly relevant. To permit SkyPower to once again challenge the lawfulness or the motivation of the Minister’s direction to the OPA and the resulting changes to the FIT Program would violate the principles of "judicial economy, consistency, finality and the integrity of the administration of justice" and offend the goals of avoiding inconsistency and wasting judicial and private resources. For these reasons I have concluded that the Plaintiffs’ claim is an abuse of process.
[32] The Plaintiffs submit that if the Court were to conclude that the conditions for abuse of process were met, it ought to exercise its discretion not to apply the doctrine in order to avoid unfairness to the parties. It is argued that the Defendants took a narrow approach to the scope and purpose of the judicial review application. In particular, the Defendants precluded the Plaintiffs from adducing evidence about the decision making process – such as who made the decisions, when they were made and why they were made, on the basis that these issues were to be dealt with in a subsequent civil claim. It is submitted that both Defendants refused to produce documents in the Notice of Examination of their respective witnesses and that the OPA refused to answer questions during the cross-examination of its witness as it characterized the questions “… a matter for the civil action”. It would therefore be manifestly unfair, it is submitted, to allow the Defendants to change their position and seek to rely on that prior proceeding as foreclosing SkyPower from bringing the very damages action which was the basis for their initial refusal. The Plaintiffs rely on Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460.
[33] In Danyluk, a dispute arose between an employee and employer over unpaid commissions. The employee sought relief through the Employment Standards Act, R.S.O. 1990, c. E.14 (“ESA”), which was rejected by an ESA officer. Before receiving the ESA decision the employee commenced a wrongful dismissal action. On receiving the ESA decision, rather than seeking judicial review of the decision, the employee decided to continue on with the wrongful dismissal action.
[34] Justice Binnie, at para. 33, articulated the flexible two-step test for issue estoppel. First, a court must determine whether the moving party has established the preconditions for issue estoppel: whether the same question has been decided; whether the decision said to create the estoppel is final; and whether the parties to the decision were the same in both proceedings: Angle v. Minister of National Revenue, 1974 168 (SCC), [1975] 2 S.C.R. 248, at p. 254. If these preconditions are met, the court must then determine whether, as a matter of discretion, issue estoppel ought to be applied.
[35] Justice Binnie listed seven factors for or against the exercise of discretion and noted the list of factors is open:
The wording of the statute from which the power to issue the administrative order derives;
The purpose of the legislation;
The availability of an appeal;
The safeguards available to the parties in the administrative procedure;
The expertise of the administrative decision maker;
The circumstances giving rise to the prior administrative proceeding; and
The potential injustice.
[36] In Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, [2013] 2 S.C.R. 125, at para. 33, a 4-3 majority of the Supreme Court of Canada reaffirmed the flexible test for issue estoppel, set out in Danyluk.
[37] Although a court considering an application of abuse of process by relitigation to a second proceeding may consider the discretionary factors of issue estoppels: Donald J. Lange, The Doctrine of Res Judicata in Canada, 3rd ed. (Markham: LexisNexis Canada Inc., 2010), the circumstances of this case are distinguished from those of Danyluk. This is not a case where process was not afforded. In this case, the decision barring the within claim is a decision of a three member panel of the Divisional Court and leave to appeal was denied by a three member panel of the Court of Appeal. The judicial review application was argued by senior counsel on a full record which included cross-examination of senior representatives of the Defendants.
[38] The Plaintiffs allege unfairness as a result of a refusal by the Defendants to bring the following documents with them on cross-examination: “correspondence between the Minister of Energy and the OPA regarding Ontario’s Long-Term Energy Plan dated November 23, 2010 as it relates to the Feed-In Tariff (FIT) program including drafts”. In my view however, this refusal does not amount to unfairness sufficient to deny the application of the doctrine of abuse of process. While the reason given for the refusal is unfortunate, there is no denying that the request for documents is overly broad, not relevant to the issues on judicial review and not relevant to the allegations of self-targeting.
[39] This is not an appropriate case to exercise my discretion not to apply the doctrine of abuse of process. The Plaintiffs have re-characterized the unlawfulness argument with a different cause of action and a different theory as to why the FIT Rules changed. They offer no explanation as to why this theory was not advanced until now, but rather use this fact as a reason they should be permitted to continue with their claim. In my view the Plaintiffs have crafted a claim, the substance of which is an attempt to re-litigate the issues that were fully explored and finally determined by the Divisional Court. SkyPower had a full and ample opportunity to argue the unlawfulness and the unreasonableness of the conduct of the Defendants. It chose not to use that opportunity to argue self-targeting. Not applying the doctrine of abuse of process in this case would offend the principle of finality and undermine the credibility of the judicial process.
[40] The claim is therefore struck and the action dismissed on the ground that it is an abuse of process of the Court.
No Reasonable Cause of Action
[41] Despite my findings with respect to the application of the doctrine of abuse of process I will nonetheless go on to consider whether the claim should be struck for failing to disclose a reasonable cause of action.
[42] The Defendants also move under Rule 21.01(1)(b) to dismiss the action because it does not disclose a reasonable cause of action. A claim will be struck under Rule 21.01(1)(b) where it is plain and obvious that it discloses no reasonable cause of action. The facts as alleged are assumed to be true and the question becomes whether they disclose a cause of action with some chance of success or is it plain and obvious that the action cannot succeed: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at paras. 17-25.
a. Misfeasance in Public Office
[43] The Plaintiffs’ claim against both Defendants for misfeasance in public office.
[44] In Trillium Power Wind Corp v. Ontario (Ministry of Natural Resources), 2013 ONCA 683, 117 O.R. (3d) 721, the Ontario Court of Appeal recently re-stated what is required in order to make a proper claim of misfeasance in public office. Trillium was a developer of off-shore wind power projects in Ontario. Trillium’s proposed wind power project was progressing under the regulatory structure set up under provincial legislation when all projects were cancelled by the Province of Ontario (“Ontario”) during a provincial election campaign. The motion judge struck Trillium’s Statement of Claims for failing to disclose a cause of action and dismissed an action against Ontario. The Ontario Court of Appeal agreed that it was plain and obvious that most of Trillium’s claims could not succeed; however the claim for misfeasance in public office was allowed to proceed on the basis that Ontario’s conduct was specifically targeted to injure Trillium.
[45] At para. 34 the Court referenced Trillium’s allegations of misfeasance in office found in paras. 54 and 61 of Trillium’s statement of claim:
Trillium Power states that the Defendant's decision to issue the press release on February 11, 2011, was done in bad faith and was specifically a consequence of Trillium Power's prior notification of their scheduled closing of financing with Dundee Corporation, with the intent to stop the process and confiscate Trillium Power's offshore wind power development before it could be financed for approximately $26 million dollars, to begin construction of its proposed initial site south-west of Main Duck Island, in east Lake Ontario.
Trillium Power further states that the Defendant's decision and the cancellation and confiscation in February, 2011 was specifically targeted to stop Trillium Power's offshore wind power project in Lake Ontario before Trillium Power had the financial resources to litigate with the Province of Ontario.
[46] In order to make a proper claim of misfeasance in public office, the Court of Appeal stated, at para. 58, that a plaintiff must plead material facts capable of establishing:
Deliberate and unlawful conduct by a public officer in the exercise of a public function, being conduct that he or she knows to be inconsistent with the obligations of the office;
Awareness that the conduct is unlawful and is likely to injure the plaintiff; and
Other requirements common to all torts including that the tortious conduct is the legal cause of the plaintiff’s injuries and that the injuries suffered are compensable in tort law.
[47] With respect to “unlawful conduct”, the Court of Appeal stated, at para. 39:
It is clear from Odhavji Estate as well that “bad faith” conduct in the exercise of executive or administrative authority - that is, the exercise of power for an improper or ulterior purpose….may constitute the type of “unlawful conduct” required for the tort.
[48] The Court of Appeal went on to direct that “the pleading must make specific allegations about specific public officials and their specific unlawful purpose in acting as they did” (para. 59).
[49] The allegations at issue in the claim are at paragraphs 24, and 42 - 46 of the statement of claim:
In the years leading up to 2010, SkyPower Group had been a major supporter of the Liberal Party and was on good terms with the Minister. This relationship soured when SkyPower Group became outspoken in its criticism of the implementation of the procurement program and of the Minister’s decision to award a large direct contract for renewable energy to Samsung Renewable Energy Inc. outside of the procurement process that applied to the renewable energy industry at large. In contrast, other companies in the renewable energy industry remained silent with respect to these developments (para. 24).
At the Minister’s instance, the OPA instituted and applied new FIT Rules that fundamentally alter the eligibility criteria, priority ranking and assessment process of FIT 1 Applications. SkyPower Group was specifically targeted by these actions, which constitute an unlawful exercise of discretion that the Minister and OPA were both aware would injure the SkyPower Group (para. 42).
Due to the criticisms of SkyPower Group related to the Samsung contract and the implementation of the procurement program, the likelihood SkyPower Group would discontinue Liberal Party campaign support, and the Minister’s dislike of the plaintiffs’ owners, the Minister misused his discretionary power to render SkyPower’s formerly eligible applications, ineligible (para. 43).
The unlawful exercise of the Minister’s direction had the effect of preventing the OPA from performing its duties under the procurement program, including its obligations:
a) to complete the connection availability assessment in a timely manner;
b) to consider applications according to the stated rules; and
c) to process applications fairly and in good faith (para. 44).
The Minister knew that the SkyPower Group had submitted eligible applications to the FIT Program, and that upon submission of a complete and eligible application the OPA would complete further steps and ultimately award FIT contracts (para. 45).
When directing the OPA to apply new FIT Rules that fundamentally alter the eligibility criteria, priority ranking and assessment process to FIT 1 Applications, the Minister knew that these New Directives would prevent FIT contracts from being awarded to the SkyPower Group and would result, or likely result, in financial harm (para. 46).
[50] In my view, unlike in Trillium, the Plaintiffs’ Statement of Claim is not sufficient to “pass muster as a valid pleading of misfeasance in public office” (para. 59). Rather, it more closely represents the type of pleading Stratas, J.A. pointed out as a problem in Adventure Tours Inc. v. St. John’s Port Authority, 2011 FCA 198, 420 N.R. 149, at para. 63. This pleading is a bald pleading, it lacks detail, it lacks facts and it fails to link the events with people, timelines and conduct.
[51] In Trillium, the Court of Appeal zeroed in and specifically distinguished the particularity of the pleading as it related to the timing of the press release as a specific consequence to Trillium’s prior notification. The broader allegation of bad faith was linked to particular documents, timelines, events and people.
[52] The within claim lacks this required particularity. There is no timeline linking the criticisms to the alleged unlawful exercise of discretion. There is no detail in terms of when statements were made, by whom, to whom or that they came to the attention of the Defendants’ representative, sufficient to link the statements to the direction to the OPA to change the FIT Rules. Rather, the allegations are bald, general and fail to link specific events to specific people. The pleading is further deficient as it fails to specifically identify an individual at the OPA either by title or name and fails to plead deliberate wrongdoing or knowledge of unlawful conduct by the OPA and Ontario.
[53] In Spurr v. Canada, 2009 SKQB 478, [2009] 353 Sask. R. 1, (Sask. Q.B.), in a certification motion for a class action regarding a claim for misfeasance in office Laing J. held that the failure to identify the public office holder was fatal. Laing J. held, at para. 38, that the Statement of Claim failed to identify the officeholder, either by name or by the office held, who acted in the manner alleged and the pleading was struck. Laing J. relied on Price v. British Columbia, 2001 BCSC 1494, [2001] 109 A.C.W.S. (3d) 400, where Meiklem J. at para. 11, noted:
… the pleading must be clear as to which office-holder has the necessary intention. Counsel for the plaintiff failed to assert that there are any identifiable individual Crown employees who might be named....
[54] Further, in Adventure Tours, Stratas J.A. relied on the British Columbia decision in Price stating at para. 58:
It is not every person employed by a corporate entity who will "count" for the purposes of the tort of abuse of public office. This suggests that it is not enough simply to plead that a public authority, agency, or, in the case of Merchant"government" engaged in the impugned conduct.
[55] I am mindful of the comments of Moldaver, J.A. (as he then was) in Granite Power Corp. v. Ontario, 2004 44786 (ON CA), [2004] 72 O.R. (3d) 194, 189 O.A.C. 128 (ONCA), at para. 40 wherein he states “there exists a narrow window of opportunity for [the plaintiff] to make out its claim in misfeasance”. I nonetheless conclude for reasons noted above that this pleading lacks the particularity sufficient for me to conclude that it is anything beyond a bald pleading alleging abuse in public office. For this reason, it is certain to fail.
b. Unjust Enrichment
[56] The Plaintiffs claim against the OPA for unjust enrichment for retention of application fees and interest on security. Paragraphs 50-55 of their Statement of Claim state:
As set out above, SkyPower Group submitted application fees to the OPA in excess of $500,000 and security in excess of $20 million. The OPA withheld all of these payments until approximately 2013 or 2014, when they were returned to SkyPower Group without any accounting for the profits earned by the OPA on such amounts during the period of time the payments were withheld. The timing of the return of these payments, and the amount of profit earned on these payments, is within the knowledge of the OPA (para. 50).
As part of the standard program rules drafted by the OPA, the OPA provided for itself the benefit of retaining any profits earned on the security (para. 51).
The Electricity Act and the Ministerial Directives do not direct or entitle the OPA to retain application fees, application security, or the profits earned thereupon (para. 52).
The OPA has received a monetary benefit from SkyPower Group (para. 53).
SkyPower Group has incurred a corresponding deprivation (para. 54).
As set out above, the procurement program’s standardized eligibility criteria contemplated that, following receipt of an application, the application would be reviewed for eligibility and assessed for capacity to connect to the system. If there was existing system capacity then the OPA would offer a FIT Contract. As set out above, applications were never reviewed for eligibility, never assessed for capacity to connect to the system, and/or FIT Contracts were not offered despite the availability of system capacity. There is no juristic reason for the monetary benefit received by the OPA because:
a) there was no “disposition of law” justifying the enrichment of the OPA;
b) SkyPower Group did not have a donative intent in favour of the OPA; and
c) there was no statutory obligation justifying the enrichment of the OPA (para. 55).
[57] The test for unjust enrichment is well-established in Canada. The cause of action has three elements; 1) an enrichment of the Defendant; 2) a corresponding deprivation of the Plaintiff; and 3) an absence of a juristic reason: Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 30.
[58] The first step of the juristic reason analysis applies the established categories of juristic reasons, one of which is “a disposition of law”. In the absence of an established juristic reason the second step in the analysis permits consideration of the reasonable expectations of the parties and public policy considerations to assess whether recovery should be denied: Garland, paras. 44-46.
[59] In my view the findings of the Divisional Court are sufficient to satisfy both the first and second step of the juristic reason analysis. I make this conclusion as a result of the following:
The Plaintiffs plead that there was no “disposition of law” justifying the enrichment of the OPA (para. 55). A valid statute however may be an example of a disposition of law that justifies an enrichment: Garland, para. 49. The Divisional Court found that the OPA acted within the scope of the enabling legislation (the Electricity Act) and the directions from the Minister in creating both FIT Rules 1.0 and FIT Rules 2.0 (para. 50-51). Both versions contain the same provisions regarding non-refundable application fees and retention of interest on security. This constitutes a disposition of law which justifies the enrichment and no reasonable expectation by the Plaintiffs that the amounts would be returned.
The Divisional Court found that the Plaintiffs “assumed the risk” (para. 84) in making their applications and that the OPA had no obligations to the Plaintiffs as a result of the filing of their applications. In such circumstances there is no injustice nor is there any legitimate reason which would lead the Plaintiffs to reasonably expect that their application fees would be returned or interest on their security disgorged.
[60] The Plaintiffs will therefore be unable to establish an absence of a juristic reason for the enrichment. For this reason, the claim in unjust enrichment is certain to fail.
c. The Claim is a Nullity
[61] Ontario argues that the claim is a nullity because SkyPower did not comply with the notice requirement in s. 7(1) of the Proceedings Against the Crown Act, RSO 1990. C.P.27 (“PACA”). Section 7(1) requires that “no action for a claim shall be commenced against the crown unless the claimant has, at least sixty days before the commencement of the action, served on the crown a notice of the claim containing sufficient particulars to identify the occasion out of which the claim arose”.
[62] SkyPower provided notice to Ontario pursuant to the PACA in July 2012. Following service of this notice, it commenced the January 2013 Claim. SkyPower discontinued the January 2013 claim before commencing the within claim. When SkyPower discontinued the January 2013 claim it did not provide any notice that it intended to commence a different action. Ontario submits that the claim is therefore a nullity.
[63] I disagree. In the circumstances of this case, the notice provided in January 2012 and the January 2013 claim were both sufficient to provide Ontario with notice of the occasion giving rise to the claim. When SkyPower discontinued the January 2013 claim it paid costs to both Ontario and the OPA. SkyPower did not settle the claim and did not provide a release to either Defendant. It then served the Defendants with the claim within 6 days after the discontinuance.
[64] The claim is therefore not a nullity. The Plaintiffs have complied with s. 7(1) of PACA.
Disposition
[65] For reasons noted above I have concluded that the claim is an abuse of process and that it fails to disclose a reasonable cause of action. The claim is therefore struck and the action is dismissed.
Costs
[66] Should the parties be unable to agree on an appropriate costs award for this motion, I will accept written submissions of not more than 2 pages, first jointly by the Defendants within 30 days followed by the Plaintiffs within 20 days thereafter.
CHIAPPETTA J.
Date: December 15, 2014