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Ontario court dismisses offshore wind damages claim
Credit: Stikeman Elliott LLP | Michael Nilevsky | November 7, 2012 | www.lexology.com ~~
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Trillium Power Wind Corporation (TPWC), the Toronto-based developer interested in building offshore wind turbines in Lake Ontario, is appealing a decision of the Superior Court of Ontario after a judge ruled in favor of the defendant, the province of Ontario, to strike TPWC’s statement of claim.
On October 5, 2012, the Ontario Superior Court of Justice delivered its decision with respect to Trillium Power Wind Corporation v. Ontario (Natural Resources) by striking out the action brought by TPWC against the Ontario government seeking $2.5 billion in damages in relation to the province’s February 2011 moratorium on offshore wind farms.
In 2004, TPWC applied to the government of Ontario and was approved by the Ministry of Natural Resources (MNR) as the Applicant of Record to construct and develop an offshore wind farm project in Lake Ontario near Main Duck Island off Prince Edward County, roughly 35 Km south of Kingston. However, in 2006 and then again in 2011, the province imposed a moratorium on offshore wind farms. As a result, TPWC was never able to get its project off the ground despite having spent over $5 million in development surveys and environmental reports. In September 2011, TPWC initiated their claim against the government setting out numerous causes of action, including but not limited to: breach of contract, unjust enrichment, negligent misrepresentation and intentional infliction of economic harm. In turn, the province brought a motion to dismiss the action on the grounds that the claim failed to disclose a reasonable cause of action.
Siding with the province, the court ruled that although TPWC obtained Applicant of Record status in 2004, they were never approved for an offshore wind project, nor did they ever obtain a Renewable Energy Approval. The MNR letter granting TPWC Applicant of Record status clearly stated that:
“There are no rights or tenure associated with this Applicant of Record status and it does not constitute MNR approvals of your proposed project. In addition, this Applicant of Record Status does not provide the right to make any alterations or improvements on Crown land.”
Furthermore, the court found that the Defendant, acting through various ministers of the Crown, was empowered to set and amend wind energy policies. That is, s. 47.3 of the Energy Protection Act clearly states that the Minister of the Environment may “in writing, issue, amend or revoke policies in respect of Renewable Energy Approvals.” As such, the court found in favor of the province’s argument that the decision to impose a moratorium was a core policy decision and could not be found to be illegal.
Overall, given that TPWC never obtained a contract with the government to develop a wind farm, nor was the government’s decision to impose a moratorium illegal, the court held that TPWC’s $2.25 billion dollar claim had no bearings.
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