Trillium Power Wind Corp. has won an appeal that will allow it to proceed with a $2.25-billion lawsuit against the government of Ontario for imposing what the company alleges was a politically motivated moratorium on offshore wind farm development during the 2011 election.
In a decision this week, the Ontario Court of Appeal ruled that Trillium should be allowed to argue its case that the decision constituted “misfeasance in public office.”
In doing so, it overturned in part an October 2012 decision by Superior Court Judge Robert Goldstein dismissing Trillium’s lawsuit.
The appeal court upheld Goldstein’s finding that most of Trillium’s allegations – including breach of contract, unjust enrichment, expropriation, negligent misrepresentation and intentional infliction of economic harm – had no prospect of success.
But that was not true, the court found, of the company’s misfeasance claim, which alleges that the government’s decision to suspend or cancel its offshore wind power program was specifically targeted at Trillium in order to injure it by crippling its financial capacity.
“It cannot be said, at this stage of the proceedings, that it is ‘plain and obvious’ that those allegations will not succeed at trial,” the appeal court panel found.
The Ontario government said it would be “inappropriate” to comment on the decision because the case is before the courts.
Asked if the province is considering an appeal to the Supreme Court of Canada, Energy Minister Bob Chiarelli’s press secretary, Becky Codd-Downey, said the government is considering its options and “no decisions have been made at this time.”
The Liberal government is still dealing with the fallout from another decision made during the 2011 election – its decision to cancel gas-fired power plants in Oakville and Mississauga to save Liberal seats.
Auditor General Bonnie Lysyk put the cost of the cancellations at about $1 billion in a report last month. And OPP detectives visited Premier Kathleen Wynne’s office Wednesday as part of their criminal investigation into the destruction of emails related to the two cancelled plants.
In its statement of claim, Trillium said its allegation of misfeasance applied to former premier Dalton McGuinty and three of his ministers – Brad Duguid, then energy minister, John Wilkinson, then environment minister, and Linda Jeffrey, then natural resources minister.
Trillium was well advanced in its plans for a 138-turbine wind farm in eastern Lake Ontario, 28 kilometres from the mainland, when McGuinty’s Liberal government announced that all offshore wind projects were being “suspended” to allow for further scientific research.
The announcement came on Feb. 11, 2011, two days after Trillum advised McGuinty’s office that it planned to close a $26-million financing deal with Dundee Corp. in the late afternoon of Feb. 11. After the moratorium announcement, the financing deal did not close.
In its statement of claim, Trillium said the province’s decision was “specifically targeted to stop Trillium Power’s offshore wind project in Lake Ontario before Trillium Power had the financial resources to litigate with the Province of Ontario.”
The company alleged that the government’s action constituted “bad faith ministerial decisions for political expediency.” It suggested the moratorium was prompted by opposition to other offshore wind farm developments in Lake Erie and Lake Huron near ridings the Liberals feared they might lose in the 2011 election.
Even if that was true, the appeal court said, “There is nothing unlawful or in the nature of ‘bad faith’ about a government taking into account public response to a policy matter and reacting accordingly. That is what governments do, in pursuit of their political and partisan goals in a democratic society.”
Trillium’s claim, the court said, was only entitled to proceed “based on the allegations that the government’s actions were specifically meant to injure (Trillium).”
In an interview Thursday, John Kourtoff, Trillium’s president and CEO, said litigation had always been his company’s last resort and called on the provincial government to work with Trillium to move its project forward.
He pointed out that earlier this year, the Ministry of Natural Resources recommended that the government proceed with a commercial-scale offshore wind pilot project so that best practices could be determined.
“We are that commercial-scale project,” Kourtoff said. “We’re ready to go. On a scale of one to 100, we’re at 98, and everyone else is within zero to five in the Great Lakes.
“Because our site is so good and we had everything ready to go, we could reconstitute it if there’s good will from the government side.”
Because of efficiency gains, Kourtoff said Trillium’s project could now produce about 500 megawatts of power with fewer turbines – between 90 and 100 – than originally planned.
“We would put out as much guaranteed base load power in the middle of the lake as you would get from one nuclear reactor,” he said. “It’s a unique site and the wind is beyond anything imaginable on shore.”
Kourtoff said offshore wind is a unique resource that Ontario hasn’t yet harnessed.
“It would be the same as having Niagara Falls and not harnessing it for hydro power. If we can move quickly to a resolution, we can still get Ontario back into the forefront of this in North America.”
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