2017 Harvest

2017 Harvest

Wednesday, December 11, 2013

Divisional Court comments on OEB approval of forms of landowner agreements

As part of its decisions to approve energy transmission projects, the Ontario Energy Board (OEB) approves the form of agreement to be offered to landowners affected by the approval.  Recently, the Ontario Divisional Court decided an appeal of a decision to approve the construction of electricity transmission lines for a wind energy project in which the appellant argued that independent legal advice (ILA) clauses in the approved landowner agreements were "confusing, misleading and unfair".

The OEB may only approve a project where the applicant has satisfied the Board that it has offered or will offer to each landowner affected by the approved route, an agreement in a form approved by the Board. 

The party that appealed the OEB decision was Conserve Our Rural Environment (CORE) Inc.  It argued that the ILA clause in some of the 6 forms of land agreement to be approved was false and misleading because it gave the impression that the party requiring ILA was the tenant (the project proponent) rather than the landlord (the landowner).  ILA was to be obtained by the tenant even though it was the tenant who had prepared the agreements.

The Divisional Court determined that the appeal was not on a question of law or jurisdiction, which was the only basis on which the appeal could be made.  The OEB's authority to approve the form of contract is discretionary, and an arguably unreasonable exercise of discretion is not an error of law or jurisdiction.  Therefore, the Court dismissed the appeal.

In the event that it was wrong in this determination, the Divisional Court also went on to decide the appeal as if a question of law or jurisdiction had been raised.  It found that the applicable standard is one of reasonableness, and it found that the decision of the OEB was reasonable.  The Court stated, "It is important to understand that what the Board approved was a form of agreement which is the subject of subsequent negotiation between the parties.  It represents terms from which the party propounding the project may not unilaterally resile."

Read the decision at: Conserve Our Rural Environment v. Dufferin Wind Power Inc.