Ontario deliberately destroyed evidence in wind power project lawsuit: Ontario Court of Appeal

The Ontario Court of Appeal has found that the provincial government deliberately destroyed potentially relevant evidence related to lawsuits arising from the sudden termination of Ontario’s wind power projects.

The case of Trillium Power Wind Corporation v. Ontario, 2023 ONCA 412 stem from the Ontario government’s abrupt cancellation of its much-criticized wind power projects that it had promoted between 2009 and 2013. In response to the government’s promotion of its wind farm policies, Trillium Power Wind Corporation applied for authorization to operate a wind farm in the Lake Ontario Lakebed near Main Duck Island in Prince Edward Country.

Trillium had made a significant investment in performing the studies and other matters related in the approval process when Ontario announced a halt or “moratorium” to its consideration of any offshore wind farm projects until such time as the environmental impact of such projects could be studied.

Ontario’s announcement effectively terminated Trillium’s approval application, so it filed an action for damages incurred because of the failed windfarm project. Trillium alleged misfeasance in public office because Ontario allegedly timed its moratorium announcement to forestall the closing of Trillium’s project financing. Additionally, Trillium alleged “spoliation” after it learned that Ontario had destroyed thousands of documents and other evidence allegedly related to internal government communications leading up to the moratorium.

The motion judge dismissed Trillium’s complaints, so the company brought the matter to the Ontario Court of Appeal. Trillium claimed that the motion judge interpreted too narrowly the allegations of misfeasance in public office and spoliation. Trillium challenged the judge’s conclusion that there was no evidentiary basis to support the claim that the public announcement was timed to injure Trillium. Furthermore, Trillium claimed that the motion judge misstated and misapplied the test for spoliation.

Misfeasance in public office

The appeal court found no error in the motion judge’s treatment of the issue on misfeasance in public office. Trillium’s misfeasance claim was limited to the allegations that Ontario’s actions were targeted to stop Trillium’s offshore wind project before its financing was in place in order to deprive it of the resources to contest Ontario’s decision to cancel the wind projects.

The court found no evidence to counter the direct evidence in support of Ontario’s position that the timing of the public announcement about offshore windfarm projects was coincidental. Furthermore, the court found unchallenged evidence of other officials that the moratorium decision by the Environmental Minister and the timing of the announcement were independently made.

The court also said that Trillium “could not prove that it would have succeeded in reversing Ontario’s moratorium decision, no matter how large its war chest.” The court also did not see any error with the judge’s conclusion that the project was not economically feasible without the government funding program that was ended by the moratorium.

The court wrote in its judgment, “The appellant could not contest the wisdom of Ontario’s wind farm policies, including its decision to cancel the program.”

Spoliation claim

Spoliation arises out of the destruction of potentially relevant evidence by one party. This rule creates a rebuttable presumption that the destroyed evidence would have been unfavourable to the party responsible for its destruction.

The appeal court found that the judge should not have dismissed Trillium’s claim for spoliation because there was ample evidentiary basis to support the claim of spoliation by Ontario. The court said that the destruction was deliberate and in accordance with an improper government policy. The court noted an investigative report by the Information and Privacy Commissioner of Ontario, finding that the improper destruction of hand-held devices, emails, and documents by the Premier’s Office was “a notorious violation of record-keeping obligations and raised serious issues of political accountability.”

Furthermore, the court acknowledged that the destruction occurred subsequent to the commencement of Trillium’s claim and concerned likely relevant documents in the possession of individuals who were intimately involved in the relevant events who were aware of Trillium’s claim.

The court stressed that as a party to the proceedings, Ontario was required to preserve any potentially relevant documents in order to fulfill its disclosure obligations. The court found that the motion judge failed to look at the question of spoliation in the broader context of Ontario’s obligations to preserve and produce relevant documents. As a result, the motion judge applied a “very narrow” construction to the meaning and effective of Ontario’s intentional destruction of evidence that Ontario knew it had to preserve and produce.

The appeal court concluded that Ontario deliberately destroyed potentially relevant evidence from which the reasonable inference can be drawn that the destruction was done to affect litigation. The court held that the circumstances of Ontario’s spoliation amount to an abuse of process. Consequently, the court said that the appropriate remedy is to deprive Ontario of its costs and grant Trillium its costs of the appeal.