COURT OF APPEAL FOR ONTARIO

CITATION: Royal Bank
    of Canada v. Datanet Wireless Inc., 2013 ONCA 706

DATE: 20131118

DOCKET: C57035

Cronk, Pepall and Strathy JJ.A.

BETWEEN

Royal Bank of Canada

Plaintiff (Respondent)

and

Datanet
    Wireless Inc., Janet Nelson, Douglas Brent Hooton, 1754903
    Ontario Ltd., VirtuallyAnywhere.ca Inc., Wayne
    Cook, and Toronto Dominion Bank

Defendants (Appellant Janet Nelson)

Jeffrey C. Silver, for the appellant

Natalie Marconi, for the respondent

Heard: November 12, 2013

On appeal from the order of Justice James M. Spence of
    the Superior Court of Justice, dated May 30, 2013.

ENDORSEMENT

[1]

The appellant, Janet Nelson, appeals from the order of Spence J. of the Superior
    Court of Justice, dated May 30, 2013, dismissing her motion to set aside a
    default judgment granted against her on April 15, 2011.  By that judgment, the
    appellant and certain of her co-defendants were held liable to the respondent
    bank for damages for fraud in relation to a loan made to the defendant Datanet
    Wireless Inc.

[2]

The appellant advances four main grounds of appeal.  She argues, first,
    that the motion judge misapprehended and misapplied the governing test for
    setting aside a default judgment, in particular, the concept of an arguable
    defence under that test.  We do not accept this submission.

[3]

The motion judge explicitly addressed the applicable pre-requisites for
    the setting aside of a default judgment, as described in
HSBC Securities (Canada)
    Inc. v. Firestar Capital Management Corp
., 2008 ONCA 894, 245 O.A.C. 47,
    leave to appeal to S.C.C. refused (2009), 399 N.R. 398 (note) (S.C.C.),
Morgan
    v. Toronto (City) Police Services Board
(2003), 34 C.P.C. (5th) 46, 169
    O.A.C. 390 (C.A.) and related authorities.  He considered all the relevant
    factors in the context of the evidentiary record before him and concluded that
    the appellant had failed to satisfy any of the requirements for the setting
    aside of the judgment in question. He found that the appellant: (1) failed to
    provide a satisfactory explanation for her failure to appear on the motion to
    strike her statement of defence; (2) failed to furnish an adequate explanation
    for her delay of at least four months in moving to set aside the default
    judgment; and (3) failed to demonstrate that she had an arguable defence to the
    respondents action.

[4]

In our view, the motion judges identification of the relevant test and
    his consideration of the requirements for setting aside the default judgment
    reveal no error.  His pertinent findings were amply supported by the record.
    We see no basis for appellate intervention with his findings.

[5]

In particular, we note that there was evidence before the motion judge
    from both a Bank official and one of the co-defendants that almost one-half of
    the loan proceeds advanced by the respondent bank for the benefit of Datanet
    Wireless Inc. was transferred to a bank account controlled by the appellant in
    her personal capacity on the same day that the funds were advanced.  In the
    face of this powerful, inculpatory evidence, the appellants only explanation
    for the use of the loan proceeds was a bald denial that she personally had
    received any of the funds advanced by the respondent.

[6]

Second, the appellant contends that she was denied natural justice and
    procedural fairness when her pleading was struck and that this excuses her
    default.  The record belies this contention.

[7]

The appellants statement of defence was struck by court order dated
    February 11, 2011.  As we have said, default judgment was granted on April 15,
    2011.  The appellant was informed in mid-November 2010 that her former lawyers intended
    to seek an order removing them from the record.  She was also informed, as
    early as November 26, 2010, that the respondent`s motion to strike her
    statement of defence was scheduled to proceed on February 11, 2011.

[8]

Notwithstanding this advance notice, the appellant elected not to
    participate in either motion, instead ostensibly relying on her brother  a
    co-defendant who, like the appellant, had been accused of fraud by the
    respondent  to protect her interests.  Having decided for her own reasons to
    pursue this course of action, the appellant was not entitled to notice of any
    further steps taken by the respondent to collect the monies owed to it.

[9]

Third, the appellant claims that the motion judge erred by finding that
    there was undue delay in bringing the motion to set aside the default
    judgment.  We disagree.

[10]

Delay
    was but one factor considered by the motion judge when determining whether to
    set aside the default judgment.  Although the appellant maintains that she did
    not learn of the default judgment until she attended her
    examination-in-aid-of-execution in mid-December 2011, she took no steps to
    contact counsel until mid-April 2012.  By her own admission, the appellant had
    learned of the default judgment in December, approximately four months earlier.

[11]

In
    these circumstances, the motion judge did not err in finding that the appellant
    had delayed, without adequate explanation, in moving to set aside the default
    judgment.  By the time she did so, the respondent had compromised its claims
    against, and hence its ability to recover its judgment from, certain of the other
    key defendants.  This, too, was a factor that told against granting the
    discretionary relief sought by the appellant.

[12]

Finally,
    the appellant argues that the motion judge applied the foregoing factors as
    though they were rigid rules and without balancing the prejudice to the parties
    or the interests of justice. We disagree. The appellant failed to satisfy any
    of the factors and the respondent demonstrated actual prejudice. The motion
    judge was clearly of the view that the interests of justice did not favour
    setting aside the default judgment.

[13]

The
    appeal is dismissed.  The respondent is entitled to its costs of the appeal,
    fixed in the amount of $25,000, inclusive of disbursements and all applicable
    taxes.

E.A. Cronk J.A.

S.E. Pepall J.A.

G.R. Strathy J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Shekhdar v. K & M Engineering and Consulting
    Corporation, 2013 ONCA 709

DATE: 20131120

DOCKET: C49094

Doherty, Rosenberg and Tulloch JJ.A.

Kersasp Shekhdar

Plaintiff
    (Appellant)

and

K & M Engineering and Consulting Corporation,
    Freewills Inc., Freewills.com (U.S.) Inc., William Kappaz, Regina Guerin,
    Freewills.com (Bermuda) Limited also known as Freewills.com (Bermuda) Ltd.,
    Freewills.com (Canada) Inc. and 3693759 Canada Inc.

Defendants
    (Respondents)

Kersasp Shekhdar, appearing via videoconference

Matthew Moloci, for the respondents

Heard and released orally:  August 13, 2013

On appeal from the judgment of Justice J. Thorburn of the
    Superior Court of Justice, dated June 6, 2008.

COSTS ENDORSEMENT

[1]

Costs are awarded to the respondents in the amount of $20,000, inclusive
    of disbursements and all applicable taxes.

Doherty J.A.

M. Rosenberg J.A.

M. Tulloch J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Simopoulos (Re), 2013 ONCA 702

DATE: 20131115

DOCKET: C56767

Feldman, Gillese and Tulloch JJ.A.

IN THE MATTER OF: MASON SIMOPOULOS

AN APPEAL UNDER PART XX.1 OF THE
CODE

Mason Simopoulos, in person

Jill R. Presser and Lucy Saunders, appearing as
amicae
    curiae

Mabel Lai, for the Attorney General of Ontario

James Thomson, for the Person in Charge of the Centre
    for Addiction and Mental Health

Heard: November 13, 2013

On appeal from the disposition of the Ontario Review
    Board, dated February 7, 2013.

ENDORSEMENT

[1]

Mr. Simopoulos has been under the jurisdiction of the Ontario Review
    Board (the Board) since January 6, 2012, when he was found not criminally
    responsible on account of mental disorder in respect of criminal harassment and
    failing to comply with a recognizance.

[2]

By disposition dated February 7, 2013 (the Disposition), the Board
    ordered that he be detained in the secure unit, with an early review of the
    Disposition to take place within six months.  While the Board unanimously found
    that Mr. Simopoulos remained a significant threat to public safety, a minority
    would have ordered that Mr. Simopoulos be detained in the secure unit but with
    the potential for transfer to the general unit with community living
    privileges.

[3]

Mr. Simopoulos, with the support of
amicae curiae
, appeals.  He
    argues that the Disposition is unreasonable and that he should be granted an
    absolute discharge.  Alternatively, he seeks a conditional discharge or a
    detention order in the general unit with community living privileges.

[4]

The six-month review mandated by the Disposition commenced on September
    17, 2013, but did not finish.  It is scheduled to continue on November 18,
    2013.  Nonetheless, Mr. Simopoulos wishes to pursue this appeal.

[5]

The respondent Centre for Addiction and Mental Health (CAMH) submits
    that the ongoing review renders the appeal moot.  While the appeal may not
    technically be moot, through the review process now underway, in short order the
    appellant will have a decision on the relief he seeks. Significantly, the Board
    is in the best position to decide that matter because, through the review
    process, the Board will have the appellants most current and complete medical
    information.

[6]

Having said that, the court feels it is important to draw the following
    points to the Boards attention, as it completes the review process.

[7]

First, in the reasons for Disposition, the Board concluded that the
    appellant continues to pose a risk to the safety of the public.  The legal
    threshold on which the Board must be satisfied is whether the appellant is a
significant
    threat
to public safety.  A significant threat to the public safety means a
    real risk of physical or psychological harm to members of the public that is
    serious:  see
R. v. Winko
, [1999] 2 S.C.R. 625.

[8]

We cannot overemphasize the importance of the Boards obligation to make
    this determination based on the evidence.  In doing so, we remind the Board of
    the role that
amicus

plays as friend of the court and not the
    accuseds legal representative.  In the present case, although it appeared that
amicus

conceded the legal threshold had been met, the record
    shows that the accused did not concede that matter.  Consequently, the Board
    had to decide whether the legal threshold had been met.

[9]

Second and very importantly, the court is deeply concerned by the
    hospitals apparent failure to comply with the terms of the Disposition.
    Specifically, in the Disposition the Board ordered that the appellant be
    detained in a secure unit.   The Disposition was made on February 7, 2013, but
    the court understands that it was not until July 2013 that the appellant was
    actually moved from the Assessment and Triage Unit (ATU) to a secure unit.
    No satisfactory explanation was offered for this delay.  We understand that
    conditions in the ATU are much more onerous than those on a secure unit.  We
    expect that the Board, too, would be troubled by the hospitals apparent
    failure to comply with its order and that it will take steps to determine why
    the delay occurred and to ensure that it does not happen again.

[10]

For
    these reasons, the appeal is dismissed.

K.
    Feldman J.A.

E.E.
    Gillese J.A.

M.
    Tulloch J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Smith v. Inco Limited, 2013
    ONCA 724

DATE: 20131129

DOCKET: C57026

MacPherson, Watt and Pepall JJ.A.

BETWEEN

Ellen Smith

Plaintiff (Respondent)

and

Inco Limited

Defendant (Appellant)

Proceeding under the
Class
    Proceedings Act, 1992

Alan J. Lenczner, Q.C., Larry P. Lowenstein, Laura K.
    Fric and Lauren Tomasich, for the appellant

Kirk M. Baert, Celeste Poltak and Eric K. Gillespie, for
    the respondent Ellen Smith

Scott Hutchison and Aaron Dantowitz, for the respondent
    Law Foundation of Ontario

Heard: October 10, 2013

On appeal from the order of Justice J.R. Henderson of the
    Superior Court of Justice dated September 10, 2012, with reasons reported at 2012 ONSC 4749.

MacPherson
    J.A.:

A.

INTRODUCTION

[1]

The appellant Inco Limited (Inco) appeals from the order of Henderson
    J. of the Superior Court of Justice dated September 10, 2012, awarding Inco
    costs of $1,766,000 following a 45 day trial in a class action proceeding.  The
    appellant contends that the costs award should have been $5,340,563, and that
    the $3.6 million shortfall flows from three principal errors made by the trial
    judge: (1) he improperly reduced the appellants legal fees from $2.9 million
    to $2 million; (2) he erred by imposing a 50 per cent reduction on the legal
    fees and disbursements that he found were reasonable, pursuant to s. 31(1) of
    the
Class Proceedings Act
,

S.O. 1992, c. 6 (
CPA
); and
    (3) he erred by not awarding Inco costs on a substantial indemnity basis for
    the period after Incos valid and reasonable offer to settle.

B.

FACTS

(1)

The parties and events

[2]

The respondent Ellen Smith resides at 91 Rodney St. in Port Colborne.
    Her home is one block away from Incos refinery.  Inco opened the refinery in
    1918 to refine nickel and other metals in response to increased demand for
    these metals during World War I.  For most of the twentieth century, the
    refinery was one of the most important industries in the Port Colborne area, its
    largest employer, and a major contributor to its growth and development.

[3]

Inco ceased refining nickel at the refinery in 1984.

[4]

In 2000, it was disclosed that the Ministry of the Environment had found
    higher than expected nickel levels in a soil sample from a property adjacent to,
    and downwind of, the refinery in the Rodney St. area.  In 2001, a person who
    lived in the Rodney St. area brought an environmental action against Inco and
    sought to have it certified as a class proceeding under the
CPA
.  This
    court certified the action as a class proceeding in 2006: see
Pearson v.
    Inco Ltd.
(2006), 78 O.R. (3d) 641.

[5]

The certified class consisted of the owners of approximately 7,000
    properties in and around Port Colborne, who collectively claimed that the value
    of their properties had been negatively affected by nickel emissions from
    Incos refinery.  The certified action was restricted to a claim of diminution
    of property values and sounded in nuisance, negligence, trespass and strict
    liability in accordance with the doctrine in
Rylands v. Fletcher
(1866),
    L.R. 1 Ex. 265 (Ex. Ct.), affd (1868), L.R. 3 H.L. 330 (H.L.).

[6]

In 2008, the plaintiff class applied to the Class Proceedings Committee,
    a statutory committee created by s. 59.2 of the
Law Society Act
,
    R.S.O. 1990, c. L. 8 (
LSA
), for funds from the Class Proceedings
    Fund (the Fund).  The Fund is administered by the respondent Law Foundation
    of Ontario (LFO) pursuant to s. 59.1 of the
LSA
.  The plaintiff
    class was granted funds for its action.

[7]

As the trial approached, both parties made offers to settle.  On June
    13, 2007, the plaintiff class offered to settle for $37.5 million plus costs
    and administration fees of $2.5 million.  On June 10, 2009, Inco offered to
    settle for $2 million plus costs which were acknowledged to be about $2
    million.  On September 25, 2009, the plaintiff class offered to settle for $10
    million plus costs and administration fees of $3 million.  None of these offers
    was accepted.

[8]

The trial on the common issues was held in Welland over 45 days between
    October 2009 and January 2010.  On July 6, 2010, the trial judge delivered his
    decision.  He found that Inco was liable to the class members in private
    nuisance and pursuant to the doctrine in
Rylands v. Fletcher
.  He
    assessed the damages at $36 million.

[9]

On appeal, this court set aside the trial judges decision: see
Smith
    v. Inco Limited
, 2011 ONCA 628,
107 O.R. (3d)
    321
.  The appeal was allowed on the following bases:

(1)

With respect to the nuisance
    claim, the plaintiffs failed to establish actual physical  harm or damage to
    their properties as a result of the nickel particles becoming part of the soil;

(2)

With respect to the
Rylands v.
    Fletcher
claim, Ontario law does not provide for strict liability based
    exclusively on the abnormal risk posed by a defendants activity, and
    furthermore Incos activities did not present an abnormal risk to nearby
    property owners because the nickel particles caused no damage and had no effect
    on the plaintiffs ability to use their properties; and

(3)

With respect to damages, the claimants
    had suffered no actual loss.

[10]

In
    an endorsement dated November 18, 2011, Doherty J.A. remitted the matter back
    to the trial judge to consider the costs issue, having regard to the reasons
    of this court in its decision allowing the appeal.

(2)

The trial judges costs decision

[11]

The
    trial judge began by setting out the positions of the parties, at paras. 2-5:

As the party that was ultimately successful, Inco requests its
    costs on a partial indemnity basis from the date of certification until the
    date of Incos offer to settle, June 10, 2009, and on a substantial indemnity
    basis thereafter.

Inco has delivered a Bill of Costs by which it claims costs on
    the above-mentioned scale in the total amount of approximately $5,340,000.00
    including disbursements.  For comparison purposes, if Incos Bill of Costs were
    recalculated on a partial indemnity scale throughout the relevant period, the
    total costs claim would be approximately $4,603,000.00 including disbursements.

LFO submits that s. 31(1) of the
Class Proceedings Act
applies as this action raised novel points of law and involved matters of
    public interest.  Therefore, LFO submits that Inco should receive no costs, or
    in the alternative that Incos costs should be substantially discounted.  LFO
    also submits that in any event the quantum of costs claimed is excessive and
    that the scale of costs should not be higher than partial indemnity.

[12]

The
    trial judge fixed costs at $1,766,000.  The central features of his award were
    the following: (1) he refused to award Inco fees on a substantial indemnity
    basis; (2) he accepted Incos disbursements claim of $1,532,000; (3) he reduced
    Incos claimed fees on a partial indemnity basis from $2.9 million to $2
    million; (4) this left a starting point for fees and disbursements of
    $3,532,000; (5) taking into account s. 31(1) of the
CPA
, he reduced the
    starting point set out above by 50 per cent; and (6) this left a final costs
    award of $1,766,000.

[13]

Inco
    appeals from this costs order and seeks an order awarding costs of $5,340,563.

C.

ISSUES

[14]

It
    is possible, at a level of generality, to view this as a single issue appeal
    does the trial judges costs decision reflect an error in principle, or is it
    plainly wrong, such that this court should interfere?

[15]

However,
    the appellant, in its factum and in oral argument, identified eight alleged
    errors in the costs decision.  I find it useful to set these out as the issues
    to be determined on this appeal:

(1)

Did the trial judge err by failing
    to properly take account of this courts   reasons in allowing the appeal from
    the trial decision when he addressed the     matter of costs?

(2)

Did the trial judge err by failing
    to accord weight to the denial by the       Supreme Court of Canada of the
    plaintiffs motion for leave to appeal this   courts decision allowing the
    appeal from the trial judges decision?

(3)

Did the trial judge err in
    determining that the case raised novel points of law    pursuant to s. 31(1) of
    the
CPA
?

(4)

Did the trial judge err in
    determining that the case involved a matter of public   interest pursuant to s.
    31(1) of the
CPA
?

(5)

Did the trial judge err in
    lowering Incos fees from $2.9 million to $2 million?

(6)

Did the trial judge err by
    applying the s. 31(1) discount to Incos   disbursements?

(7)

Did the trial judge err by failing
    to take into account Incos offer to settle?

(8)

Did the trial judge err by taking
    into consideration the impact of a costs  award on the LFO?

D.

ANALYSIS

[16]

I
    propose to discuss the issues in the order raised by the appellant.  However,
    before doing so, I will discuss a preliminary issue  the standard of review.

[17]

This
    was a long (several years, including a 45 day trial) and complicated class
    action proceeding involving a great deal of evidence, several significant legal
    doctrines, and many millions of dollars.

[18]

However,
    this appeal is much narrower than the original action.  The subject matter of this
    appeal is the prosaic question of costs.  On this issue, the standard of review
    is crystal clear.  As expressed by a unanimous court in
Hamilton v. Open
    Window Bakery Ltd.
, 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27, [a]
    court should set aside a costs award on appeal only if the trial judge has made
    an error in principle or if the costs award is plainly wrong.  See also:
McDowell
    v. Barker
, 2012 ONCA 827, at para. 17.

[19]

Moreover,
    the standard of considerable deference to a trial judges costs award has
    been explicitly applied by this court to such awards in class proceedings
    cases: see
McNaughton Automotive Ltd. v. Co-operators General Insurance Co.
,
    2008 ONCA 597, O.R. (3d) 365, at para. 27.

[20]

Under
    this umbrella of deference, I turn to the arguments raised by the appellant.

(1)

Taking account of this courts
    reasons in allowing the appeal

[21]

The
    appellant asserts that the trial judge ignored Doherty J.A.s instruction that
    the trial judge was to determine the trial costs having regard to the reasons
    of this court.  Specifically, the appellant contends that the trial judge
    failed to assess costs on the basis that the plaintiffs case had no merit in
    law and did not establish damages; instead, he sought to justify what he had
    done previously, namely, decide in favour of the plaintiff class.

[22]

I
    do not accept this submission.  In my view, the trial judge was scrupulously
    faithful to the language in Doherty J.A.s endorsement returning the costs
    issue to him.  He carefully and comprehensively reviewed the relevant factors
    in his costs decision.  There is nothing in the wording of this decision to
    suggest that he was trying to retroactively justify his previous trial decision
    or do anything other than arrive at a fair costs award after a long and complex
    class action proceeding.

(2)

Supreme Court of Canadas denial of
    leave to appeal

[23]

The
    appellant submits that the trial judge erred in his treatment of the Supreme
    Court of Canadas refusal to grant leave to appeal in the main action.

[24]

The
    trial judge addressed this issue in this fashion, at para. 79 of his reasons:

I disagree with Incos submission that by dismissing the
    request for leave to appeal, the SCC has already determined that this case does
    not involve a matter of public importance.  If the Court had granted leave,
    then it would be clear that the SCC felt that this case involved a matter of
    public importance or an important issue of law.  However, I cannot assume that
    in dismissing the application for leave the SCC found that this case did not
    involve a matter of public importance.  The leave application could have been
    dismissed for any number of reasons, and unfortunately no reasons were
    provided.  Therefore, the SCC decision to deny leave is not determinative of
    this issue.

[25]

The
    appellant submits that this reasoning is flawed; it implicitly asserts that
    when the Supreme Court of Canada denies leave,
ipso facto
the appeal
    does not raise a question of public importance or a question involving an important
    issue of law
per
s. 40(1) of the
Supreme Court Act
, R.S.C.
    1985, c. S-26 (
SCA
).

[26]

I
    disagree.  Against the backdrop of several hundred applications for leave to
    appeal each year, the Supreme Court of Canadas long-standing practice has been
    to dispose of these applications without providing reasons.  The Court
    obviously does this under the umbrella of the statutory mandate in s. 40(1) of
    the
SCA
.  However, I would not stretch this reality to encompass the
    broad proposition implicitly advanced by the appellant, namely, that if the
    Court refuses leave, the appeal must not raise a question of public importance
    or an important issue of law.  In deciding whether a particular appeal deserves
    to be included on the limited docket of Canadas highest court, the Court may
    well consider a broad range of factors in addition to those set out in s. 40(1)
    of the
SCA
.  Accordingly, I agree with the trial judge that the
    Courts denial of leave is not determinative of the question of public
    importance.

(3)

Novel point of law

[27]

Section
    31(1) of the
CPA
provides:

In exercising its discretion with respect to costs under
    subsection 131 (1) of the
Courts of Justice Act
, the court may
    consider whether the class proceeding was a test case,
raised a novel point
    of law
or involved a matter of public interest.                                                                                [Emphasis
    added.]

[28]

The
    trial judge found that the class action proceeding raised a novel point of
    law.  He reasoned, in part, at paras. 94-97:

Regarding the question of whether this case raised a novel
    point of law, Inco correctly submits that this case was grounded in nuisance,
    trespass and the doctrine in
Rylands v. Fletcher
, all of which are
    old, if not ancient, causes of action.  There is nothing novel about any of
    these causes of action.

However, even though this case was grounded in traditional
    causes of action, I find that this action was novel in two general ways.
    First, this was one of the first cases to attempt to apply these traditional
    causes of action to modern environmental concerns.  I accept LFOs submission
    that this claim could be described as an environmental tort, which may be a
    way of describing the collective use of several traditional causes of action
    for the purpose of advancing environmental claims.

To my knowledge, this case was the first to attempt to deal
    with alleged physical environmental damage caused to a large number of properties
    by emissions from a refinery or industrial operation.  In that sense, this case
    was novel.

The second general way in which this case was novel is the fact
    that this claim for environmental damage was advanced through the vehicle of a
    class proceeding.  This case was the first mass environmental damage action to
    be certified as a class proceeding, and the first such action to proceed to
    trial.  I find that this case was also novel in that sense.

[29]

Like
    the trial judge, I do not think that there is always a bright line between old
    or settled and novel points of law.  Novelty exists on a continuum, and s.
    31(1) of the
CPA
permits costs awards to be made on a continuum, from
    full costs to reduced costs to no costs for the successful party: see
Ruffolo
    v. Sun Life Assurance Co. of Canada
, 2009 ONCA 274, 95 O.R. (3d) 709, at
    para. 35 (
Ruffolo
).

[30]

I
    do not fault the trial judge for finding that this case essentially came within
    a middle ground of novelty and for structuring his costs order accordingly.
    The appellant emphasizes, and the trial judge recognized, that this case was
    grounded in nuisance, trespass and the doctrine in
Rylands v. Fletcher
,
    all of which are old, if not ancient, causes of action.

[31]

However,
    the fact that a claim is grounded in a well-established cause of action does
    not remove the possibility that the claim raises a novel point of law.  In
Ruffolo
,
    at paras. 34-44, this court upheld a trial judges determination that a breach
    of contract case could be novel for s. 31(1)
CPA
purposes,
    notwithstanding that breach of contract is a traditional cause of action.  This
    court also upheld the trial judges determination that this novelty was not
    sufficient to justify a total denial of the successful defendants costs.

[32]

The
    appellant asserts that the trial judge erred by saying that this case was the
    first mass environmental damage action to be certified as a class proceeding,
    and the first such action to proceed to trial.  I agree with the appellant
    that one other mass environmental damage action has been certified and
    proceeded to trial:
St. Lawrence Cement Inc. v. Barrette
, 2008 SCC 64,
    [2008] 3 S.C.R. 392 (
Barrette
).  However,
Barrette
was
    resolved under the framework of the
Civil Code of Quebec
, S.Q. 1991,
    c. 64, which provides for an entirely different liability regime than the
    common law that governs in Ontario.  Thus the issues raised by this case, which
    largely pertain to nuisance law and the doctrine of
Rylands v. Fletcher
in the context of a mass environmental tort, were not present in
Barrette
.
    Similarly, while
Hollick v. Toronto (City)
, 2001 SCC 68, [2001] 3
    S.C.R. 158, made clear that environmental torts can be certified under the
CPA
,
    that case was not certified and did not proceed to trial.  Consequently,
    neither case raised the issues that were raised in this case during the trial.

[33]

Moreover,
    a review of this courts merits decision in
Smith v. Inco
further
    suggests that this case involved a moderate degree of novelty, at least with
    respect to the
Rylands v. Fletcher
claim.  While this court ultimately
    determined that strict liability based exclusively on extra hazardous
    activity should not be part of the law of Ontario, at least some leading
    authorities had previously endorsed this possibility: see
Smith v. Inco
,
    at para. 77.

[34]

As
    the LFO notes, at least one trial court decision has characterized this courts
    decision in
Smith v. Inco
as having clarified the nature and scope of
    strict liability in this province: see
Durling v. Sunrise Propane Energy
    Group Inc
., 2012 ONSC 6570, at para. 68.  While this is not determinative
    of the novelty issue, it does support the trial judges finding that this case
    raised an issue that was not previously adequately addressed by Ontario
    jurisprudence.

[35]

For
    these reasons, the trial judges conclusion that this case raised novel issues
    within the meaning of s. 31(1) of the
CPA
cannot be faulted.

(4)

Matter of public interest

[36]

I
    set out again s. 31(1) of the
CPA
:

In exercising its discretion with respect to costs
    under subsection 131 (1) of the
Courts of Justice Act
, the court may
    consider whether the class proceeding was a test case, raised a novel point of
    law, or involved
a matter of public interest
.                                                                                [Emphasis
    added.]

[37]

The
    trial judge found that the class action proceeding involved a matter of public
    interest.  He reasoned in part, at paras. 80-88:

[T]his case was an important one for the enhancement of access
    to justice, one of the goals of the
CPA
or any class proceeding.

It has been recognized that access to justice is often
    difficult for individual claimants who each may have relatively small claims.
    And, the problem is more acute if those individuals are vulnerable or
    disadvantaged....

The class members in the present case fall squarely within the
    segment of society that was intended to benefit from the enhanced access to
    justice provided by the
CPA
....

[M]any members of the class in this case were vulnerable
    members of society with limited incomes whose conditions may have been made
    worse by the alleged wrongs of Inco.  Individually, this group would have had a
    very difficult time mounting any litigation against Inco, and thus the class
    proceeding was a vehicle that provided access to justice for class members who
    had unresolved claims.

In addition to the
CPA
goal of enhanced access to
    justice, I accept that the other two goals of the
CPA
, judicial
    economy and behaviour modification, were also objectives that were advanced by
    this class action.  The judicial economy factor is obvious where approximately
    7,000 separate claims were heard in the context of one class action.  Further,
    behaviour modification, in my view, is one aspect of any tort claim.  Thus, I
    find that all three goals of the
CPA
were advanced in this case, and
    all three of those goals are matters of public interest.

[38]

The
    appellants core submission on this issue is that this class proceeding was all
    about private citizens seeking financial compensation from a corporation.  As
    expressed bluntly in its factum:

43. In this case, single family dwelling property owners wanted
    personal recompense for perceived diminution to their property values.
    Monetary gain, not public interest, was the motivation.

44. There is no public interest component to this claim as it
    was framed and presented.

45. This case was purely and simply a claim by Port Colborne
    residential land owners to obtain monies for some notional diminution in the
    value of their property.

[39]

In
    my view, the public interest element of this case is not undermined by the fact
    that the class plaintiffs sought,
inter alia
, to vindicate their own
    private property interests.  In many cases, there is a mix of private interest
    and public interest.  This court has consistently recognized the importance of
    the public interest factor and the availability of reduced costs awards to
    successful defendants because of this factor in cases where plaintiffs sought
    to vindicate their individual pecuniary interests; see, for example,
Ruffolo
,
    and
McCracken v. Canadian National Railway Co.
, 2012 ONCA 797.

[40]

The
    appellant further contends that the trial judge erred by finding that the goal
    of behaviour modification was advanced because behaviour modification  is one
    aspect of any tort claim.  The appellant submits that behaviour modification
    does not apply to this case because there were no actual damages and thus no
    need for behaviour modification.

[41]

This
    is too narrow a view of the role of behaviour modification in class action
    proceedings.  This court examined the scope of behaviour modification in its
    certification decision in this case,
Pearson v. Inco Ltd
.  Rosenberg
    J.A. said, at para. 88:

[M]odification of behaviour does not only look at the
    particular defendant but looks more broadly at similar defendants, such as the
    other operators of refineries who are able to avoid the full costs and consequences
    of their polluting activities because the impact is diverse and often has
    minimal impact on any one individual. This is why environmental claims are well
    suited to class proceedings.  To repeat what McLachlin C.J.C. said in
Western
    Canadian Shopping Centres
,
supra
, at para. 26 Environmental
    pollution may have consequences for citizens all over the country.

[42]

I
    have addressed the appellants specific arguments about the public/private
    dichotomy and behaviour modification because they were made and deserve a
    response.  However, in my view, a simple fact stands as a complete answer to
    the appellants position on this issue.  The problem with the appellants position
    is that this court has already said  three times  that this case involves the
    public interest.

[43]

The
    whole tenor of Rosenberg J.A.s reasons in the original certification appeal,
Pearson
    v. Inco Ltd.
, suggests that this class action proceeding is almost a
    paradigmatic example of a case that reflects the three goals of the
CPA
 access to justice, judicial economy and behaviour modification.  To cite but
    one example, Rosenberg J.A. said this about the access to justice factor, at
    para. 84:

[I]t may well be the case that many of the people whose
    property values were most seriously impacted, such as the Rodney Street owners,
    are also the most vulnerable and least able to prosecute their individual
    claims.  Many of them are elderly persons and others on fixed incomes, as
    well as partially employed or unemployed persons, persons with disabilities and
    recipients of social assistance (reasons of motion judge,

at para.
    22).  Obviously, not all of these people would be property owners and
    would therefore not fall within the class in any event.  However, those
    who do would find it extremely difficult to mount an action against Inco.

[44]

Similarly,
    Rosenberg J.A. found, in the context of the
Pearson v. Inco
costs decision,
    that this case involved a matter of public interest within the meaning of s.
    31(1) of the [
CPA
]:
Pearson v. Inco Ltd.
, (2006), 79 O.R. (3d)
    427, at para. 8. He stated the following on the issue of public interest:

[9] I agree with Cullity J. in
Williams v.
    Mutual Life Assurance Co. of Canada
, [2001] O.J. No. 445, 6 C.P.C. (5th)
    194 (S.C.J.), at para. 24 that a case involves a matter of public interest
    within the meaning of
s. 31(1)
if the class
    proceeding has "some specific, special significance for, or interest to,
    the community at large beyond the members of the proposed class". Also see
Moyes v. Fortune Financial Corp
., [2002] O.J. No. 4298, [2002] O.T.C.
    883 (S.C.J.), at para. 6.

[10] So far as I am aware, this is the first
    environmental claim to be certified as a class proceeding in Ontario since the
    decision of the Supreme Court of Canada in
Hollick
,
supra
,
    upholding this court's decision refusing certification of the environmental claim
    in that case. The case is of significance to the community at large beyond the
    members of the proposed class since it concerns the important issue of whether
    claims alleging widespread pollution can be suitable for certification.

[45]

I
    agree with Rosenberg J.A.s reasoning; in my view, it applies with equal force
    to the merits adjudication of these same claims.

[46]

Finally,
    in the merits appeal,
Smith v. Inco
, this court recorded, at para. 28,
    that [t]he trial judge accepted that widespread public concerns about the
    potential adverse health effects associated with the level of nickel particles
    in the soil developed in early 2000 and continued thereafter. He did so after a
    thorough review of the evidence.

[47]

Later
    in the judgment, this court said, at para. 29:

We are not persuaded we should interfere with the trial judges
    findings of fact.  On those findings, the reaction to the higher nickel levels
    by various governmental agencies and Inco itself, as extensively reported in
    the media, caused widespread concern in the public about the potential adverse
    health effects of the nickel levels in the soil on their properties.

[48]

The
    fact that a matter caused widespread concern in the public is not tantamount to
    the matter being one of public interest under s. 31(1) of the
CPA
.
Nonetheless,
this courts acceptance that the facts
    underlying this case caused widespread concern among the public supports a
    determination that this case involved some element of public interest.

[49]

For
    these reasons, the appellant cannot demonstrate that this case does not involve
    a matter of public interest within the accepted meaning of those words in s.
    31(1) of the
CPA
.

(5)

Lowering Incos legal fees

[50]

The
    appellant submits that the trial judge erred by reducing its legal fees from
    the $2.9 million claimed in the Bill of Costs to $2 million.

[51]

The
    appellant submitted a Bill of Costs claiming costs on a partial indemnity scale
    of $4,603,000, including $2.9 million for fees, $1,257,000 for expert
    disbursements, and $275,000 for other disbursements, plus GST/HST.

[52]

The
    trial judge observed that after the trial, where the plaintiffs succeeded to
    the tune of $36 million, the parties agreed that the costs of the plaintiff
    class should be fixed at $4.3 million, including $3,150,000 for legal fees.

[53]

The
    trial judge referred to the leading cases dealing with costs, especially
Boucher
    v. Public Accountants Council for the Province of Ontario
(2004), 71 O.R.
    (3d) 291 (C.A.),
per
Armstrong J.A., at para. 24:

While it is appropriate to do the costs grid calculation, it is
    also necessary to step back and consider the result produced and question
    whether, in all the circumstances, the result is fair and reasonable.

[54]

The
    trial judge then reasoned, at paras. 71-72:

However, I must also consider that the agreement as to the fees
    of the plaintiff class (i.e. $3,150,000) must have taken into account the fact
    that the class members beat their outstanding offer of $10,000,000.00 plus
    costs by a large margin.  Therefore, the class members would have had the benefit
    of Rule 49.10(1), and thus a large portion of the agreed fees of the plaintiff
    class would have been on a substantial indemnity scale.  In addition, because
    of their extreme success at trial there was an argument open to the class
    members that they would be entitled to enhanced costs.  For these reasons, I
    find that the agreed fees of the plaintiff class in the amount of $3,150,000.00
    would have included a significant premium.

Therefore, in order to determine the reasonable expectations of
    the plaintiff class on a partial indemnity basis in the present case, this
    agreed figure of $3,150,000.00 for fees should be reduced.  If I accept that
    this figure represents substantial indemnity fees for the entire trial and most
    of the preparation for the trial, I can estimate that the fees of the plaintiff
    class on a partial indemnity scale would have amounted to approximately
    $2,000,000.00.  That is, the $3,150,000.00 agreed upon for the fees of the
    plaintiff class, on a mostly substantial indemnity scale, represents
    approximately $2,000,000.00 on a partial indemnity scale.  This I find to be
    the amount of fees that the plaintiff class could reasonably have expected to
    pay on a partial indemnity scale if Inco were ultimately successful.

[55]

The
    appellant asserts that there was no evidence to support the trial judges
    conclusion that I can estimate that the fees of the plaintiff class on a
    partial indemnity scale would have amounted to approximately $2,000,000; the
    appellant labels this conclusion speculation.

[56]

I
    disagree.  In light of the timing and amount of the plaintiff classs offer to settle
    and the agreed fees for the plaintiff class post-trial, the trial judges
    analysis strikes me as methodical, logical and reasonable.

(6)

The 50 per cent discount to claimed disbursements

[57]

In
    a very brief submission, the appellant asserts that the trial judge erred in
    applying a 50 per cent reduction to disbursements claimed by the appellant.
    Its entire argument is set out in paragraphs 48 and 49 of its factum:

48. The Trial Judge allowed Incos total disbursements as
    submitted at $1,532,000 inclusive of all taxes.

49. It is illogical to apply any discount under section 31(1)
    of the
CPA
to disbursements for experts which the Trial Judge has
    deemed necessary and relevant.

[58]

The
    proposition in paragraph 49 misconceives what the trial judge did.  Having
    found that the appellants reasonable fees were $2 million and that all of its
    disbursements of $1,532,000 were reasonable, for a total of $3,532,000, he
    reduced this total amount by 50 per cent.  He concluded:

For these reasons, the award of costs to Inco should be
    reduced, but should not be eliminated.  In my view a fair approach is for Inco
    to have 50% of the costs that would have been awarded but for the application
    of s. 31(1) of the CPA.  Therefore, the costs awarded to Inco will be 50% of
    $3,532,000.00, for a total award of $1,766,000.00.

[59]

This
    is precisely the type of costs analysis that has been undertaken in several of
    the leading cases; s. 31(1) discounts are typically applied to the total amount
    of costs claimed by the successful party, including disbursements: see e.g.,
Ruffolo
and
McCracken
.

(7)

Incos offer to settle

[60]

The
    appellant contends that the trial judge erred by not awarding costs on a
    substantial indemnity basis for fees and disbursements incurred after its offer
    to settle.  The appellant concedes that rule 49.10 of the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194, does not apply in this case.  However,
    it argues that the trial judge retains the discretion to order substantial
    indemnity costs in appropriate cases and that he erred by refusing to do so in
    this case.

[61]

The
    trial judge agreed that Incos offer to settle was a factor he could consider
    in awarding costs.  However, he recognized this courts decisions in
Scapillati
    v. A. Potvin Construction Ltd.
(1999), 44 O.R. (3d) 737, and, especially,
Davies
    v. Clarington (Municipality)
,
2009 ONCA 722,
100
    O.R. (3d) 66, which held that, absent a rule 49.10 offer to settle, enhanced
    costs should be awarded only on a clear finding of reprehensible conduct on the
    part of the party against which the costs award is being made.  Applying these
    decisions, the trial judge found that the Class Proceedings Committee did not
    conduct itself in a reprehensible manner so as to justify an enhanced costs
    award in Incos favour. Accordingly, the trial judge did not award costs to
    the appellant on a substantial indemnity basis.

[62]

The
    appellant does not contest this finding.  Instead, it invites this court to
    revisit and reformulate the law enunciated in
Scapillati
and
Davies
.
    We decline the invitation.  The law as set out in
Scapillati
and
Davies
is clear and settled, and was applied appropriately by the trial judge in this
    case.

(8)

The impact of a costs award on the LFO

[63]

The
    appellant contends that the trial judge erred by speculating about the impact
    that a costs award might have on LFOs financial resources, at para. 107 of his
    reasons:

Further, in any costs award the court must balance the chilling
    effect of a large costs award against the need to discourage frivolous and
    unnecessary litigation, as discussed by Armstrong J.A. in the
Boucher
case at para. 37.  The Fund is available for the purpose of facilitating access
    to justice for large groups of the population who may wish to pursue a class
    proceeding.  However, the Fund is not bottomless and a costs order that would
    cripple the Fund should not be made as it could unduly stifle subsequent
    claims.

[64]

I
    do not accept this submission.  In the very next paragraph, the trial judge
    said:

In that respect, I must also consider that Inco does not have a
    bottomless supply of money with which to defend claims.  Inco is clearly
    out-of-pocket for its legal fees and for its legal disbursements.  Inco should
    not be made to suffer the consequences of an inadequate costs order.

[65]

These
    two paragraphs strike me as a balanced, even-handed treatment of considerations
    a trial judge may address when making a costs analysis and award.

[66]

Furthermore,
    this court has previously acknowledged that [i]f the Fund were required to
    absorb steep costs awards imposed on litigants even though the proposed action
    displays the factors in s. 31(1) of the
CPA
, this would have an
    undesirable chilling effect on class proceedings:
McCracken
, at para.
    10.  The trial judge cannot be faulted for making a similar observation in this
    case.

E.

DISPOSITION

[67]

The
    appeal is dismissed.  The respondents are entitled to their costs of the appeal
    fixed as follows: the plaintiff class - $5,000; LFO - $5,000; inclusive of
    disbursements and HST.

Released: November 29, 2013 (J.C.M.)

J.C. MacPherson J.A.

I agree. David Watt J.A.

I agree. S.E. Pepall J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: St. Lewis v. Rancourt, 2013 ONCA 701

DATE: 20131115

DOCKET: C56905

Hoy A.C.J.O., Sharpe and Blair JJ.A.

BETWEEN

Joanne St. Lewis

Plaintiff (Respondent)

and

Denis Rancourt

Defendant (Appellant)

Denis Rancourt, appearing in person

Richard Dearden, for the plaintiff (respondent) Joanne St.
    Lewis

Peter Doody, for the University of Ottawa

Heard:  November 8, 2013

On appeal from the order of Justice Robert J. Smith of
    the Superior Court of Justice, dated March 13, 2013.

APPEAL BOOK ENDORSEMENT

[1]

The appellant appeals the March 13, 2013 order of Smith J., dismissing
    the appellants motion to stay or dismiss the respondent, Joanne St. Lewis defamation
    order against him on the basis that it was the product of maintenance and
    champerty.  We are not persuaded that any of the several grounds he advances
    has merit.  We see no error of law on the part of the motion judge in
    concluding on the ample evidence before him that the respondents employers
    decision to fund the litigation did not amount to maintenance or champerty.
    Nor did the respondents unilateral decision to donate a portion of any
    punitive damages she might receive to a scholarship at the employer university
    make out maintenance or champerty.  Moreover, the underlying findings of fact
    made by the motion judge were reasonably supported by the record.

[2]

As to the appellants bias or appearance of bias submission, it in our
    view has no merit.  It was fully considered by Annis J. and rejected.  We agree
    with that decision and, in any event, that decision is not open to challenge in
    this court.

[3]

The appellant also argued in his factum that the motion judge had not
    given him adequate time to make his submissions.  We reject this argument.  The
    time allocated was clearly announced and reasonable.

[4]

This appeal is accordingly dismissed.  The appellant shall pay the
    respondent, Ms. St. Lewis, costs in the amount of $20,000, all inclusive, and
    pay the respondent university costs in the amount of $15,000, all inclusive.


COURT OF APPEAL FOR ONTARIO

CITATION: Straub v. Straub, 2013 ONCA 721

DATE: 20131127

DOCKET: C56600

Goudge, Juriansz and Epstein JJ.A.

BETWEEN

Laurie Straub

Applicant (Respondent by way of
    cross-appeal)

and

Roy Straub

Respondent
    (Appellant by way of cross-appeal)

Roy Straub, cross-appellant appearing in person

Reesa Heft, for the cross-respondent

Heard and released orally: November 25, 2013

On appeal from the judgment of Justice
Michael K. McKelvey
of the Superior Court of Justice,
    dated January 11, 2013.

APPEAL BOOK ENDORSEMENT

[1]

Mr. Straub raises four issues.  First, he says the trial judge erred in
    failing to treat his payments to his mother as interest payments rather than
    principal.  We do not agree.  The trial judge carefully explained why he
    concluded as he did.  Mr. Straub simply called no evidence credible to the
    trial judge that his payments were meant in any way to be interest.

[2]

Second, Mr. Straub challenges the trial judges treatment of the $96,500
    payment he made to his mother.  We cannot agree with his argument.  First, we
    see nothing to suggest that counsel for the respondent acted improperly in any
    way in tendering exhibits in this trial.  Second, we agree with the trial judges
    observation that the calculation of amounts in this case was challenging and
    difficult to say the least.  Third, in our view, it was entirely open to the
    trial judge to find that the $96,500 payment should be treated as repayment by
    the appellant of his of loan from his mother, and for the trial judge to accept
    his evidence of the amount of that loan.  This argument fails.

[3]

Third, he quarrels with the trial judges reduction of the valuation of
    the principal residence by $40,000.  The reasons of the trial judge clearly
    reveal why he did so, and there was ample evidence from Ms. Straubs expert to
    sustain his conclusion.  While the trial judge expressed some concern about
    parts of her evidence, it was open to him to accept this aspect of her
    testimony.

[4]

Finally, Mr. Straub challenges the trial judges valuation of the
    cottage property because Ms. Straubs expert had been criticized by his
    professional association on this very appraisal.  We reject this argument.  The
    trial judge explained that this criticism was not determining because it in no
    way touched the reliability of the amount.  The trial judge was performing the
    role required of him in determining whether or not to accept that opinion
    evidence.  There is no basis for us to interfere with what he did.  In the end,
    the appeal is dismissed.  Costs of the appeal to Ms. Straub in the amount of
    $8,000 inclusive of disbursements and applicable taxes.


COURT OF APPEAL FOR ONTARIO

CITATION: Trillium Power Wind
    Corporation v. Ontario (Natural Resources), 2013 ONCA 683

DATE: 20131112

DOCKET: C56208

Blair, Tulloch and Lauwers JJ.A.

BETWEEN

Trillium Power Wind Corporation

Plaintiff (Appellant)

and

Her Majesty The
    Queen, in right of the Province of Ontario, as represented by the Ministry of
    Natural Resources, the Ministry of the Environment, and the Ministry of Energy

Defendant (Respondent)

Morris Cooper, for the appellant

Kim Twohig, Eunice Machado and Kristin Smith, for the
    respondent

Heard: March 22, 2013

On appeal from the judgment of Justice Robert F.
    Goldstein of the Superior Court of Justice, dated October 5, 2012, with reasons
    reported at 2012 ONSC 5619.

By
    the Court:

[1]

The appellant Trillium Power Wind Corporation (Trillium) is a
    developer of off-shore wind power projects in Ontario.  Trilliums proposed
    wind power project was progressing under the regulatory structure set up under
    provincial legislation when all such projects were cancelled by the Province of
    Ontario (Ontario) in February 2011, during a provincial election campaign.

[2]

Trillium pleaded the following causes of action in the statement of
    claim: breach of contract; unjust enrichment; taking without compensation (which
    the appellant characterizes as expropriation); negligent misrepresentation and
    negligence; misfeasance in public office; and intentional infliction of
    economic harm.

[3]

Trillium has two complaints, in substance.  First, it asserts that
    Ontario unlawfully deprived it of a lucrative off-shore wind-powered electric
    generation project, for an improper political purpose, specifically an electoral
    purpose.  In a second, and narrower, complaint, it alleges that Ontarios
    decision specifically targeted Trillium with a view to crippling it financially
    so that it would not be able to contest the Governments actions. Trillium
    seeks to recover more than $2 billion in damages including more than $5 million
    in out-of-pocket expenses it incurred in pursuing the project.

[4]

Ontario moved to strike the statement of claim and to dismiss the action
    under rules 21.01(1)(b), 21.01(3)(b), 21.01(3)(d), 25.06(1)(2)(8), and 25.11 of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194. The motion judge struck
    the Statement of Claim without leave to amend and dismissed the action with
    costs on the basis that it disclosed no reasonable cause of action against
    Ontario.

[5]

Trillium appeals.

[6]

We agree with the motion judge that it was plain and obvious, and beyond
    all reasonable doubt, that the appellant could not succeed in its claims for breach
    of contract, unjust enrichment, taking without compensation, negligent misrepresentation
    and negligence, and intentional infliction of economic harm. These causes of
    action were therefore properly dismissed by him, for the reasons he gives. We
    do not reach the same conclusion, however, with respect to the claim for
    misfeasance in public office. We would allow the appeal on that cause of action
    alone and let the claim proceed, but only on the narrower basis that Ontarios
    conduct was specifically targeted to injury Trillium.

The Regulatory Context for Wind Power Projects

[7]

The motion judge described succinctly and fairly the regulatory scheme for
    wind power projects at paras. 25-30 of his decision:

The development and regulation of renewable energy projects
    engages several statutes and regulations, and at least three different
    ministers. The regulatory scheme for the production of power, the electricity
    market, and the development of renewable energy is complex and diverse. Failure
    to obtain every approval at every stage and from every authority will prevent
    the ultimate operation of a wind farm.

The generation and management of electricity resources is
    governed by the
Electricity Act
, which sets up a highly detailed
    structure for generating electricity, hooking up power generation facilities to
    the electrical grid, the creation of an electricity market and a power
    generation authority, and many other aspects of power generation. At every step
    of the regulatory process, the Minister of Energy has very broad discretion to
    issue policies and approvals. Of relevance here is the Feed-In-Tariff Program
    ("
the FIT
"). The FIT program is designed to procure energy
    from renewable energy sources. The
Electricity Act
provides the Minister
    of Energy with the discretionary authority to direct the Ontario Power
    Authority ("
the OPA
") to develop a FIT program. As an aside,
    Trillium claims that it provided expert data to the Ministry of Energy and that
    this data led to the enactment of the FIT sections of the
Electricity Act
,
    although this is a bare allegation with no facts pleaded in support of it.
    Trillium never obtained a contract to provide power to the OPA under the FIT.

Wind power projects must obtain a Renewable Energy Approval
    pursuant to s. 47.3 of the
Environmental Protection Act
, R.S.O. 1990, c.
    E.19 ("
the EPA
"). The Minister of the Environment has broad
    policy powers under the EPA:

47.7 (1) The Minister may, in writing, issue, amend or
    revoke policies in respect of Renewable Energy Approvals.

The Director under the Part V.O.1 of the EPA has very broad
    powers to grant, amend, or terminate Renewable Energy Approvals:

47.5 (1) After considering an
    application for the issue or renewal of a Renewable Energy Approval, the
    Director may, if in his or her opinion it is in the public interest to do so,

(a) issue or renew a renewable energy                             approval;
        or

(b) refuse to issue
    or renew a renewable       energy approval.

(2) In issuing or renewing a renewable
    energy approval, the Director may impose terms and conditions if in his or her
    opinion it is in the public interest to do so.

(3) On application or on his or
    her own initiative, the Director may, if in his or her opinion it is in the
    public interest to do so,

(a) alter the terms and
    conditions of a renewable energy approval after it is issued;

(b) impose new terms and
    conditions on a renewable energy approval; or

(c) suspend or revoke a
    renewable energy approval.

Trillium did not obtain a Renewable Energy Approval.

Finally, the release of Crown land for testing and, ultimately,
    the construction of wind farms is the responsibility of the Minister of Natural
    Resources, who has discretionary authority to manage Crown land under the
Public
    Lands Act,
R.S.O. 1990, c. P.43 ("
the Public Lands Act
").
    As noted earlier in these reasons, the MNR issued a wind power policy under
    which Trillium obtained Applicant of Record status. The policy provided for a
    three-stage process: first, testing and review; second, wind power development
    and review; and third, permits for the development of a wind farm. It is only
    after the third stage that Trillium would have been able to apply for any of
    the other approvals. Trillium had not yet reached the third stage of the approval
    process. [Emphasis in original.]

[8]

The regulatory regime has broad discretion built into it at many
    junctures in the public interest.

The Factual Context

[9]

We have largely adopted the specific factual context set out in the
    decision under appeal at paras. 4-15. The development of wind power was the
    subject of much discussion and study by federal and provincial agencies and
    departments, as well as non-governmental stakeholders. The Ministry of Natural
    Resources ("the MNR") issued Policy PL 4.10.04 on the subject of Wind
    Power Development on Crown Land In January 2004, which was updated in November
    2004 and in April 2008. It set out the process by which wind resources would be
    tested and developed on Crown land. It stated:

The Province of Ontario recognizes the economic and
    environmental benefits of increasing the use of wind energy to generate
    electricity and also recognizes that Crown land can play a role in providing
    areas for renewable energy production. To meet the need for a fair, consistent,
    orderly and timely approach to consideration of the disposition of Crown land to
    support wind energy, MNR has developed a windpower policy and procedure to
    provide for:

1)

the testing of wind
    resources on Crown land, and

2)

the subsequent
    development of wind farms on Crown land.

[10]

The
    policy expressly provided that it applied to the discretionary disposition of
    Crown lands, including a lake bed.

[11]

An
    offshore wind farm is used to generate electricity by connecting large wind
    turbines to the electrical grid. It is best set up beyond the sight of people
    on shore to avoid aesthetic issues. The water must be relatively shallow and
    the bedrock sufficiently hard to support the weight of large turbines. The wind
    must blow strongly and reliably. There must be ready access to the provincial
    power grid.

[12]

Trillium
    pleads that it had found such a spot in Lake Ontario near Main Duck Island off
    Prince Edward County. It entered into the required process to develop and
    construct a wind farm there. That process contemplated: the lease of part of the
    lake bed under Lake Ontario from the Crown; regulatory approvals for building a
    wind farm including an environmental assessment; and a contract to supply
    electricity to the power grid.

[13]

In
    May 2004 Osiris Energy Corporation, the corporate predecessor of Trillium,
    applied to lease Crown land in particular "grid cells" in the waters
    of Lake Ontario near Main Duck Island. The MNR responded with a letter
    acknowledging the receipt of the application and indicating the next steps, but
    cautioned: Acceptance of your application or a request to attend a
    pre-screening meeting does not in any way infer a commitment on the part of the
    Crown to further entertain your application.

[14]

In
    October 2004 Trillium paid about $35,000 in fees to MNR as part of the
    application. The MNR acknowledged the payment and further indicated in a letter:
    This letter acknowledges that the company is proceeding with the review of the
    site for the purpose of wind testing and that receipt of the above fees in no
    way guarantees that the site will be approved for wind power testing or
    development.

[15]

In
    December 2005 MNR informed Trillium that it was the Applicant of Record for the
    grid cells in the area of Main Duck Island. Trillium pleads that Applicant of
    Record status granted it specific rights that, subject to Trillium's compliance
    with "established steps," would in due course have led to contractual
    status as a wind power supplier.

[16]

In
    November 2006 MNR advised Trillium that it was imposing a moratorium on
    offshore wind power development in order to conduct environmental and social
    studies. The moratorium was lifted in January 2008. On December 1, 2008,
    Trillium received a letter from the MNR advising that it had been granted
    Applicant of Record status for the same grid cells. The letter advised that
    there were two phases of development related to Applicant of Record status. The
    first phase granted Trillium three years to test for wind power. The second
    phase gave Trillium the opportunity to go through the environmental assessment
    process and obtain the other necessary approvals to operate a wind farm. The
    letter continued:

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.

[17]

Applicant
    of Record status did not give Trillium any right or authority to begin
    constructing the wind farm.

[18]

The
    appellants factum describes the events leading to the lawsuit:

The Plaintiff then notified the Office of the Premier of
    Ontario on February 9, 2011, and the Office of the Ministry of Energy on
    February 10, 2011, that it intended to close its [$26 million] financing with
    Dundee Corporation late on the afternoon of Friday, February 11, 2011.  At 2:00
    p.m., on Friday, February 11, 2011, the Government of Ontario issued a press
    release stating that offshore wind development in Ontario would be cancelled.
    The press release appeared on the Ontario Environmental Bill of Rights Registry
    website.

The Plaintiff was never given any prior notification of the
    intention or decision to cancel offshore wind development, and no subsequent or
    other communications have ever been issued by any of the Ministries, nor has
    MNR made any proposal to refund the monies which the Plaintiff paid to obtain
    its status as Applicant of Record.  No Orders in Council, other legislation or
    policy statements have ever been issued.

[19]

A
    news release was issued at 2:00 p.m. on February 11, 2011 by the Ontario
    Ministry of Environment website. It stated that off-shore wind projects were
    being suspended:

Ontario is not proceeding with
    proposed offshore wind projects while further scientific research is
    conducted.

No
Renewable Energy Approvals
for offshore have been issued and no offshore projects will proceed at this
    time.  Applications for offshore wind projects in the Feed-In-Tariff program
    will no longer be accepted and current applications will be suspended. [Emphasis
    in original.]

[20]

By
    contrast, the policy decision notice registered on the Environmental Bill of
    Rights Registry on February 11, 2011 stated that the projects were being
    cancelled:

During this time [of necessary scientific research],
    applications for off-shore wind projects in the Feed-In-Tariff program will no
    longer be accepted and current applications will be cancelled; the MNR will be cancelling
    all existing Crown land applications for offshore wind development that do not
    have a Feed-In-Tariff contract, including those with Applicant of Record
    status.  MNR will not be accepting any new Crown land applications for offshore
    wind development.  When there is greater scientific certainty, consideration of
    offshore wind development will resume.

[21]

Trillium
    claims that Ontarios actions were precipitous, highhanded and constituted bad
    faith Ministerial decisions for political election expediency,  and that Ontarios
    decision and the cancellation and confiscation in February, 2011 was
    specifically targeted to stop Trillium Powers offshore wind project in Lake
    Ontario before Trillium Power had the financial resources to litigate with the
    Province of Ontario.  The latter assertion is based on the fact that the Provinces
    notice of cancellation occurred mere hours before the financing arranged by
    Trillium to complete the remaining approval process was to close, as the
    Province knew.  The financing did not close.

The Decision under Appeal

[22]

The
    motion judge dismissed all of the appellants claims, including the claims for
    negligence and negligent misrepresentation. He dismissed the claim for
    misfeasance in public office for related reasons.

[23]

The
    motion judge centered his decision in respect of negligence, negligent
    misrepresentation and misfeasance in public office on the reasoning of the
    Supreme Court of Canada in
R. v. Imperial Tobacco Canada Ltd.
, 2011
    SCC 42, [2011] 3 S.C.R. 45. The motion judge held, at para. 61, that core
    policy" decisions are immune from suit.  He relied particularly on certain
    observations made by McLachlin C.J.C. in
Imperial Tobacco
, who
said, at para. 87:

The weighing of social, economic, and political considerations
    to arrive at a course or principle of action is the proper role of government,
    not the courts. For this reason, decisions and conduct based on these
    considerations cannot ground an action in tort.

[24]

McLachlin
    C.J.C. described core policy government decisions, at para. 90 of
Imperial
    Tobacco
,

as being:
    decisions as to a course or principle of action that are based on public
    policy considerations, such as economic, social and political factors, provided
    they are neither irrational nor taken in bad faith.

[25]

This
    understanding of the decision in
Imperial Tobacco
led the motion judge
    to conclude, at para. 62:

In my view, the Defendant correctly characterizes the decision
    to impose a moratorium as a "core policy decision". The stated reason
    for the moratorium was that further scientific studies were required, a reason
    very directly "
based on public policy considerations, such as economic,
    social and political factors
". The Defendant clearly possessed the
    power to impose the moratorium. This is exactly the type of policy decision
    that is protected from suit. [Emphasis in original.]

[26]

The
    motion judge stated, at paras. 32 and 33:

In my view, it is clear that the Defendant, acting through
    various ministers of the Crown, was empowered to set or alter policy with
    regard to the development of wind power. Each of the statutes confers a broad
    discretion with regard to every aspect of renewable energy, from the release of
    Crown land for testing to the granting of a contract to supply energy and hook
    up to the grid...

Thus, I disagree with Trillium. It is clear that the actions of
    the Defendant were not illegal. It is also clear from a review of the Claim and
    the regulatory scheme that Trillium had not obtained the requisite approvals to
    construct and operate a wind farm at the time the moratorium was imposed. These
    basic findings determine much of what follows.

[27]

The
    motion judge added, at para. 52: In my view that is what has occurred here:
    the defendant exercised its regulatory authority to impose a moratorium.  He
    said, at para. 56: I see no reason why the Minister would not be permitted to
    change the policy in accordance with the public interest.

[28]

The
    motion judge addressed the claim of misfeasance in public office directly at
    paras. 20, 64, 65, and 66 of his decision, concluding at para. 69: Since I
    have already found that there was nothing unlawful about the decision to impose
    a moratorium on offshore wind power, that alone is sufficient to dismiss this
    aspect of the Claim.

Issues

[29]

The
    issues raised by the parties distil to two:

(i) Is the
    appellants claim for misfeasance in public office tenable as a matter of law?

(ii) Is the
    appellants claim for misfeasance in public office adequately pleaded?

Analysis

[30]

The
    analytical framework for assessing whether to strike out a pleading on the
    ground that it discloses no reasonable cause of action under Rule 21.01(1)(b)
    of the
Rules of Civil Procedure
, is set out by Paul M. Perell and John
    W. Morden in
The Law of Civil Procedure in Ontario
, 1st ed. (Markham:
    LexisNexis Canada Inc., 2010), at p. 445:

The following principles apply to a Rule 21 motion to strike a
    pleading for failing to disclose a reasonable cause of action or defence: (a)
    the material facts pleaded must be deemed to be proven or true, except to the
    extent that the alleged facts are patently ridiculous or incapable of proof;
    (b) the claim incorporates by reference any document pleaded and the court is
    entitled to read and rely on the terms of such documents as if they were fully
    quoted in the pleadings; (c) novelty of the cause of action is of no concern at
    this stage of the proceeding; (d) the statement of claim must be read
    generously to allow for drafting deficiencies; and (e) if the claim has some
    chance of success, it must be permitted to proceed.

[31]

The
    test is not in dispute: the claim will only be dismissed where it is plain and
    obvious that it has no reasonable prospect of success:
Hunt v. Carey Canada
    Inc.,
[1990] 2 S.C.R. 959;
Imperial Tobacco
, at paras. 17-19;
Taylor
    v. Canada (Attorney General)
, 2012 ONCA 479, 111 O.R. (3d) 161 at para 22.
    While the court must accept as true the material facts as pleaded, this
    obligation does not extend to bald conclusory statements of fact, unsupported
    by material facts.

[32]

We
    address the issues in turn.

(a)

What is the basis of
    the appellants misfeasance claim?

[33]

The
    motion judge gathered together the allegations in the statement of claim at
    paras. 64-65 of his reasons:

Trillium pleads misfeasance in public office:

74. Trillium Power further
    states that in the events as described herein the defendants had no legal
    authority and were not in the exercise of any statutory power or purpose. The
    defendant's February 11, 2011 decision to terminate offshore wind power in Lake
    Ontario constituted an invalid decision, either made negligently or, in the
    alternative, made deliberately as a misfeasance in office by Ministers of the
    Crown.

Although it is not entirely clear what facts Trillium relies on
    in support of this allegation, the following paragraphs appear to be connected:

58. Trillium Power states that
    the Government's actions were precipitous and high-handed, and constituted bad
    faith Ministerial decisions for political expediency, with specific concern for
    geographic areas of the Province completely unrelated to [the activities of] Trillium
    Power. Those areas, predominantly near Lake Erie and Lake Huron, constituted
    ridings that were perceived by the Provincial Government as susceptible to loss
    in the forthcoming election.

59. Trillium Power states
    further that the Defendant knew and was well aware that there were no water
    quality issues relating to offshore wind development in relation to Trillium
    Power specifically, and in relation to offshore wind generally. Consequently,
    Trillium power states and the fact is that the only science involved in the
    Defendant's February 11, 2011 decision was political science.

[34]

The
    motion judge also referred to para. 61 of the statement of claim. We would add
    para. 54 of the statement of claim to the group of allegations related to
    misfeasance in office. Paras. 54 and 61 state:

Trillium Power states that the Defendants decision to issue
    the press release on February 11, 2011, was done in bad faith and was
    specifically a consequence of Trillium Powers prior notification of their
    scheduled closing of financing with Dundee Corporation, with the intent to stop
    the process and confiscate Trillium Powers 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 Defendants decision and
    the cancellation and confiscation in February, 2011 was specifically targeted
    to stop Trillium Powers offshore wind power project in Lake Ontario before
    Trillium Power had the financial resources to litigate with the Province of
    Ontario.

[35]

To
    these paragraphs of the statement of claim we would also add the appellants
    response to the demand for particulars, to which the motion judge referred at
    para. 20 of his reasons:

Trillium further particularized that "misfeasance in
    public office" applied to Energy Minister Duguid, Environment Minister Wilkinson,
    Natural Resources Minister Jeffrey, and Premier McGuinty along with their
    senior staff. The particulars of the "misfeasance in public office"
    include:

1. The decision by the governing Liberal Party to place
    political expediency in relation to an upcoming election over the public
    interest in "Green Energy".

2. The named Ministers issued a press release in advance of
    the October 2011 provincial election for purely political reasons related to
    close races in ridings held by the Liberal Party. The named Ministers knew the
    press release would destroy Trillium's financing.

[36]

As
    we read the statement of claim, the essence of Trilliums complaint in support
    of the misfeasance in public office claim is two-fold.  Trillium asserts that
    the Premier, his Ministers named above, and their staff acted in bad faith:

a)

for purely political
    motives of electoral expediency in order to win more seats in the upcoming
    election, when they knew that their actions would harm Trillium; and,

b)

in a way that
    specifically targeted Trillium by cancelling Ontarios wind power projects in
    order to undercut Trilliums pending financing and thereby place Trillium in a
    position where it would not have the resources to litigate against Ontario.

(b)

Is the appellants
    claim for misfeasance in public office tenable as a matter of law?

[37]

The
    appellant pleads the tort of misfeasance in public office and does not assert a
    claim for judicial review of a governmental administrative decision.  Its claim
    is essentially based upon the two categories of bad faith allegations
    summarized in the preceding paragraph.  Trillium argues that these allegations
    fall within the
Imperial Tobacco
qualification that a governmental
    decision is immune from suit, unless it is taken in bad faith.

[38]

In
Odhavji Estate v. Woodhouse
, 2003 SCC 69, [2003] 3 S.C.R. 263, at paras.
    28, 30 and 32, Iacobucci J. set out the essential elements of a claim in tort
    for malfeasance in public office.  As explained there, and in subsequent
    decisions of this Court, the plaintiff must show that (in addition to the usual
    tort requirements of causation and consequent damages):

a)

The public official
    engaged in unlawful conduct in the exercise of his or her public functions;
    and,

b)

The public official
    was aware that the conduct in question was unlawful and was likely to injure
    the plaintiff.

See also,
Pikangikum First Nation v. Nault
,
    2012 ONCA 705, at para. 54, leave to appeal refused, [2013] S.C.C.A. No. 10;
St.
    Elizabeth Home Society v. Hamilton (City)
, 2010 ONCA 280, at para. 20;
Granite
    Power Corporation v. Ontario
(2004), 72 O.R. (3d) 194 (C.A.), leave to
    appeal to S.C.C. dismissed [2004] S.C.C.A No. 409, at paras. 37-39.

[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, such as doing so only for the
    specific purpose of injuring someone  may constitute the type of unlawful
    conduct required for the tort. It does not follow, however, that a public
    official may not make any decision that he or she knows may harm someones
    interests.  Iacobucci J. addressed this issue as well, at para. 28:

The requirement that the defendant must have been aware that his
    or her conduct was unlawful reflects the well-established principle that
    misfeasance in a public office requires
an element of bad faith or
    dishonesty
.  In a democracy, public officers must retain the authority to
    make decisions that, where appropriate, are adverse to the interests of certain
    citizens.  Knowledge of harm is thus an insufficient basis on which to conclude
    that the defendant has acted in bad faith or dishonestly.
A public officer
    may in good faith make a decision that she or he knows to be adverse to
    interests of certain members of the public.  In order for the conduct to fall
    within the scope of the tort, the officer must deliberately engage in conduct
    that he or she knows to be inconsistent with the obligations of the office
.
    [Emphasis added.]

[40]

Ontario
    roots its defence of the motion judges decision in the Supreme Courts
    determination in
Imperial Tobacco
. McLachlin C.J.C. stated, at para.
    91: [W]e may conclude that where it is plain and obvious that an impugned
    government decision is a policy decision, the claim may properly be struck on
    the ground that it cannot ground an action in tort. She added, however, that:
    If it is not plain and obvious, the matter must be allowed to go to trial.

[41]

The
    motion judge accepted Ontarios argument and dismissed the claim for
    misfeasance.

Discussion

[42]

We
    would set aside the dismissal of the claim for misfeasance in public office, but
    we would permit the action for misfeasance to continue based only upon the
    allegation that the Governments decision to suspend or cancel the provinces
    wind power program was specifically targeted at Trillium in order to injure it
    by crippling its financial capacity. We would not permit it to continue in
    conjunction with what we would call the political/electoral expediency
    allegations.

[43]

We
    first address the reasons for setting aside the dismissal and then turn to
    consider the permissible scope of the continuing action.

[44]

McLachlin
    C.J.C.s statement at para. 91 of
Imperial Tobacco
that summary
    judgment is available to enforce immunity must be read in the context of her earlier
    statement, that the immunity only applies to true or core policy decisions
    and then only to those that are neither irrational nor taken in bad faith:
    see paras. 74 and 90.

[45]

In
Imperial Tobacco
, no allegations were made that government officials
    acted in bad faith or for an improper purpose. This case is different.
    Trillium has pleaded that Ontarios actions were done in bad faith and for an
    improper purpose.

[46]

Once
    a plaintiff asserts a claim for bad faith in the context of a claim of misfeasance
    in public office that is at least plausible on the facts alleged, the motion
    judge is required to accept those facts as true for the purposes of a rule 21
    motion, provided that they are not patently ridiculous or incapable of proof.  To
    the extent the motion judge may have suggested otherwise, in his comment at
    para. 32 of his reasons that [t]he determination of whether the Defendants
    actions were illegal is a legal issue, we respectfully disagree.  The legal
    issue is whether the Defendants actions give rise to a claim in law, based on
    the facts as pleaded.

[47]

Here,
    the motion judge found that even if the Ministers whose conduct is being
    questioned in this case had exercised their authority for political purposes, the
    exercise of that authority was itself immune to judicial review. He said at
    para. 63:

Trillium also pleads that the moratorium was imposed for
    fundamentally political, specifically electoral reasons, and that it is untrue
    that scientific reasons were at the heart of the decision to proceed with a
    moratorium. Leaving aside the question of misfeasance in public office, which I
    turn to below, making a decision for a political purpose would still not ground
    a cause of action. Chief Justice McLachlin in
Imperial Tobacco
explicitly mentions political factors as a legitimate public policy consideration.
    The remedy for a political decision that a party does not agree with is found
    in the ballot box, not the courtroom. Political factors are not illegitimate. A
    government may well be justified in not proceeding with a project on the [basis]
    of vigorous community opposition. Democratic governments are supposed to be
    sensitive to public opinion. Courts are manifestly ill-equipped to determine
    which types of political considerations are legitimate and which are not, which
    is why our analysis is confined to legality.

[48]

We
    agree with the motion judge that political core policy decisions are
    generally immune from review by the courts in the context of a civil tort action.
    The exception for irrational and bad faith decisions, as McLachlin C.J.C.
    observed in
Imperial Tobacco
, and Iacobucci J. noted in
Odhavji
    Estate,
is quite narrow. The appellant takes its stand on that narrow
    exception, but, as we will explain, this affects the permissible scope of the
    continuing action.

[49]

At
    para. 32 of his reasons, the motion judge observed:

[T]he Defendant, acting through various ministers of the
    Crown, was empowered to set or alter policy with regard to the development of
    wind power.  Each of the statutes confers a broad discretion with regard to
    every aspect of renewable energy, from the release of Crown land for testing to
    the granting of a contract to supply energy and hook up to the grid.

[50]

In
    that respect, a decision by the Ontario Government to continue, suspend, or
    discontinue its province-wide offshore wind power policy initiative is a
    decision as to a course or principle of action that [is] based on public
    policy considerations:
Imperial Tobacco
, at para. 90.  Those
    considerations happen to involve political factors.  Ontarios decision therefore
    falls within the type of core policy decisions that are immune from attack
    unless they are irrational or taken in bad faith.  Here  except to the extent
    they specifically targeted Trillium in order to injure it financially
    Ontarios decision was neither irrational nor made in bad faith.

[51]

We
    do not see how the decision can be said to be irrational based on the allegations
    in the statement of claim.  The governments stated reason for suspending or
    cancelling its wind power policy was that further scientific study was
    required.  While Trillium does not accept that this was the real reason for the
    cancellation, and pleads that the government was well aware that there were no
    water quality issues relating to offshore wind development and that the only
    science involved [in the decision] was political science, those allegations
    may make the decision debateable, but they do not make it irrational.

[52]

Nor
    can the impugned decision be said to have been made in bad faith for purposes
    of the political/electoral expediency claim, in our view.  A core policy
    decision made by the Executive based on political considerations or electoral
    expediency does not, on its own, constitute bad faith for purposes of a tort claim
    based on misfeasance in public office.

[53]

This
    is so even if the government actors were aware that such a decision might
    negatively impact the interests of Trillium or other offshore wind-power.  To
    repeat the observations of Iacobucci J. in
Odhavji Estate
, cited above:

In a democracy, public officers must retain the authority to
    make decisions that, where appropriate, are adverse to the interests of certain
    citizens.  Knowledge of harm is thus an insufficient basis on which to conclude
    that the defendant has acted in bad faith or dishonestly...
In order for
    the conduct to fall within the scope of the tort, the officer must deliberately
    engage in conduct that he or she knows to be inconsistent with the obligations
    of office.
[Emphasis added.]

[54]

In
    that broader sense, it is not inconsistent with the obligations of office for
    the Premier and his or her Ministers to respond to public pressure, even where
    that response is designed to shore up the governments electoral base and win
    more seats in an election.  Ministerial policy decisions made on the basis of
    political expediency are part and parcel of the policymaking process and,
    without more, 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.  See
Comeaus Sea Foods Ltd. v.
    Canada (Minister of Fisheries & Oceans)
, [1997] 1 S.C.R. 12;
Ontario
    Federation of Anglers & Hunters v. Ontario (Minister of Natural Resources)
,
    [2002] O.J. No. 1445 (C.A.);
Equity Waste Management of Canada v. Halton
    Hills (Town)
(1997), 35 O.R. (3d) 321 (C.A.).

[55]

Accordingly,
    it is only to the extent that Ontarios decision was
not
made for
    political purposes, but was made with the specific intention of injuring the plaintiff,
    that the decision is subject to attack in tort.  Political motivation for the
    decision may or may not become relevant  should Ontario choose to raise it by
    way of defence, for example  in determining what was, in fact, the real motivation
    for the decision. But the political/electoral expediency aspects of such a decision
    cannot, standing alone, provide a basis for a claim in tort for misfeasance in
    public office. Therefore, they are not properly a part of the allegations in
    the statement of claim in this case.
[1]

[56]

It
    follows that Trillium should be entitled to proceed based on the allegations
    that the Governments actions were specifically meant to injure the appellant.
    The appellant asserts that the Governments actions were targeted to stop
    Trilliums offshore wind project before Trilliums financing was in place in
    order to deprive Trillium of the resources to contest the Governments decision
    to cancel the wind projects in Ontario.  Paragraphs 54 and 61 of the statement
    of claim (except for the reference to confiscation) are examples of this
    plea.

[57]

It
    cannot be said, at this stage of the proceedings, that it is plain and
    obvious that those allegations will not succeed at trial.

(c)

Is the appellants
    claim for misfeasance in public office adequately pleaded?

[58]

The
    necessary elements of a claim for misfeasance in public office, from the
    decision of the Supreme Court in
Odhavji Estate
, at paras. 28, 20 and
    32, are set out above. For convenience, we will repeat them here. To pass
    muster in pleading misfeasance in public office, Trillium must plead materials
    facts capable of establishing:

a)

deliberate 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;

b)

awareness that the conduct is unlawful and likely to
    injure the plaintiff; and

c)

other requirements common to all torts including that
    the tortious conduct is the legal cause of the plaintiffs injuries and that
    the injuries suffered are compensable in tort law.

Discussion

[59]

The
    pleading is disorganized and prolix, and must be brought into conformity with
    the ruling in the previous section of these reasons. That said, in our view the
    specific factual allegations in paras. 54 and 61 of the statement of claim are
    sufficient to pass muster as a valid pleading of misfeasance in public office.
    The pleading makes allegations about specific public officials and their
    specific unlawful purpose in acting as they did:
L.(A.) v. Ontario (Minister
    of Community and Social Services)
(2006), 83 O.R. (3d) 512, leave to appeal
    refused, [2007] S.C.C.A. No. 36, at para. 37.

[60]

We
    are alive to the problem pointed out by the Federal Court of Appeal in
St.
    Johns Port Authority

v. Adventure Tours Inc.,
2011 FCA 198, per
    Stratas J.A., at para. 63 that a bald pleading is especially problematic in
    cases alleging abuse in public office.  Stratas J.A. pointed out that: it is
    all too easy for a plaintiff who is aggrieved by governmental conduct to
    assert, perhaps without any evidence at all, that "the government"
    acted, "knowing" it did not have the authority to do so,
    "intending" to harm the plaintiff. That said, we do not agree with
    the motion judge that the pleading is completely bald. This pleading is
    detailed and as fact-specific as the appellant can be at this stage of the
    proceeding. The allegations link to actual events, documents and people.

[61]

To
    quote Moldaver J.A., in
Granite Power
at para. 40, on the facts pleaded,
    including the particulars, there exists a narrow window of opportunity for [the
    appellant] to make out its claim in misfeasance. The appellant cannot provide
    more particulars now because many of the necessary supporting facts would be
    within Ontarios knowledge and control, and there has been no document
    production or discovery.

[62]

For
    these reasons we allow the appeal on misfeasance in public office alone, and
    otherwise dismiss the appeal. We strike the statement of claim and grant the
    appellant thirty days in which to prepare, serve and file an amended statement
    of claim.

[63]

The
    appellant is entitled to costs in this court, fixed by agreement at $15,000
    all-inclusive, and at $20,000 all-inclusive for the motion below.

Released: November 12, 2013 RAB

R.
    A. Blair J.A.

M.
    Tulloch J.A.

P.
    Lauwers J.A.

[1]
Nothing in these reasons should be taken to suggest that the discretionary
    exercise of governmental authority is completely unfettered.  This case
    provides an example of circumstances in which that exercise of discretion may,
    within limits, be subject to attack in tort law. Generally, however, attacks on
    the exercise of Ministerial discretion are the  province of administrative law,
    not tort law, although the appellant has chosen to frame this action in tort
    law.