In Capital Solar Power Corporation v The Ontario Power Authority,1 Howard Borlack of McCague Borlack LLP represented the Ontario Power Authority before Justice Toscano Reccamo of the Ontario Superior Court of Justice for a claim alleging the tort of misfeasance of public office.
Ontario Power Authority ("the OPA"), as an agent of the Ontario government, launched the microFIT program to encourage small businesses, homeowners, and farmers to develop small renewable energy projects. The plaintiff, Capital Solar Power ("Capital Solar"), was a small business that submitted applications to the microFIT program on behalf of their customers. Capital Solar relied on the microFIT Rules ("the Rules") and its pricing schedule to attract customers.
On October 31, 2011, the OPA made an announcement that it would amend the Rules to administer a new pricing schedule and that the cut-off date for consideration of applications under the old pricing schedule was August 31, 2011. The Rules required the OPA to provide 90 days' notice of changes. However, the OPA did not provide the required 90 days' notice to implement the new pricing schedule. As a result of the new price change, Capital Solar lost all of its potential customers. Capital Solar commenced a claim against the OPA for misfeasance of public office for amending the microFIT program without 90 days' notice.
The leading authority in Canada on misfeasance of public office is Odhavji Estate v Woodhouse.2 In order to establish a claim for misfeasance in public office, the plaintiff must show that (in addition to causation and damages) the public officer:
The key issues in trial were:
The Court found that the OPA's conduct did not give rise to misfeasance of public office.
On the first issue, the OPA's lack of notice was not understood by the Court to be with knowledge of an improper purpose. The OPA had not yet reviewed any of Capital Solar's applications for eligibility due to a 60-day backlog. The Court also noted Capital Solar's lack of experience in the industry and that in failing to read key parts of the Rules, Capital Solar did not consider the totality of the microFIT Rules that afforded the OPA broad discretion.
On the second issue, the court found that there was no element of bad faith or dishonesty in the OPA's actions. The Court was assured that the OPA made the price change in accordance with the mandate provided by the Minister of Energy and that in considering its options, the OPA aimed to achieve an appropriate balance among common interests; the notice provision could not be viewed in isolation. The Court emphasized that the OPA's actions must be considered in the context of the circumstances and facts it faced at the time the announcement was made.
The Court found that the plaintiff's evidence on damages was limited with respect to both causation and quantum. Accordingly, the plaintiff's claim for approximately $3,000,000 was reduced to the amount of $450,250. No amount was required to be paid since the Court held that the plaintiff failed to establish liability for any of the claims as against the Ontario Power Authority.
With this decision, the Ontario Superior Court of Justice has clarified the importance of considering a variety of factors when applying the test for misfeasance of public office. Even if a small business has failed and alleges it lost all of its potential customers as a result, the totality of the circumstances must be considered in order to attract liability for misfeasance of public office.
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