Canadian appeal court lets $2 billion wind farm lawsuit against government over alleged misfeasance but on narrow ground posted by Paul Dvorak, December 20, 2013, of article by Christine Duhaime, Duhaime Law: $2 billion green energy public misfeasance case is allowed to proceed and the remedy for political decisions may indeed be in the courtroom and not the ballot box after all
The Court of Appeal for Ontario has ruled that a prospective wind farm firm, Trillium Power Wind Corporation (“Trillium“), may proceed on its $2 billion litigation against the Ontario government over Ontario’s decision to impose a moratorium on the installation of offshore wind farms in that province. The win is a narrow one. Trillium sued the Ministry of Natural Resources, the Ministry of Energy and the Ministry of the Environment (collectively, the “Ministries“) on numerous grounds including breach of contract, unjust enrichment, expropriation, negligent misrepresentation, misfeasance in public office and economic harm. The Court ruled that Trillium could proceed only on the claim of misfeasance in public office. And in rendering its decision, the Court for the second time, drew attention to Trillium’s confused and prolix pleadings and struck the entire Statement of Claim, allowing Trillium a chance to undertake a complete re-write of the pleadings in support of the remaining claim of public office misfeasance.
The facts of the case are as follows. Trillium found what it believed to be an ideal location for an offshore wind farm in Ontario near Main Duck Island in Lake Ontario (the “Site“).
Lake Ontario is Crown property, the ownership and use thereof which is governed by overlapping international, federal, provincial and municipal laws and unresolved claims of aboriginal rights. In order to build a wind facility in Ontario on Crown land, a proponent must obtain certain regulatory approvals which take years to obtain by virtue of the fact that such approvals require engagement with affected stakeholders and multiple government agencies at various levels, and the conclusion of a favourable environmental risk assessment. The process is expensive and time consuming. Subsequent to the environmental risk assessment, an applicant must then negotiate a long-term lease for use of the Crown land and enter into a contract to connect to the power grid and supply energy. In 2004, Trillium applied for permission with the Ontario Ministry of Natural Resources (“MNR“) to lease the Site for a wind facility. In 2005, the MNR informed Trillium in writing that it was the applicant of record for the Site. Trillium believed that its status as the applicant of record meant that it had acquired certain legal rights, namely a contractual right to supply wind power subject to meeting certain conditions precedent.
Almost a year later, the MNR announced a first moratorium on offshore wind farm development in the province to evaluate the social and environmental impacts of offshore wind energy. A year later, the first moratorium was lifted. A year later, Trillium was reinstated as the applicant of record in respect of the Site. There were two phases involved to proceed as an applicant of record – firstly, a three-year wind farm test period, and secondly, an environmental risk assessment which could lead to the development of a wind farm if requisite approvals were obtained. The application of record status merely conferred on Trillium the right to conduct tests in respect of a prospective offshore wind facility. In February 2011, the MRN announced another moratorium (the “Moratorium“) on offshore wind energy, cancelling offshore wind leases which included the Site. [Emphasis added]