



COURT OF APPEAL FOR ONTARIO

CITATION: Canadian Union of Public Employees v. Ontario, 2018
    ONCA 309

DATE: 20180327

DOCKET: C64287

MacFarland, Huscroft and Nordheimer JJ.A.

BETWEEN

The Canadian Union of Public Employees, Fred Hahn
    on his own behalf and on behalf of all members of the Canadian Union of Public
    Employees in Ontario, John Clarke and Dianne Dowling

Plaintiffs (Appellants)

and

Her Majesty the Queen in Right of Ontario as
    represented by the Premier of Ontario, the Minister of Finance and the Minister
    of Energy

Defendants (Respondents)

Louis Century and Steven Shrybman, for the appellant

Brent Kettles, Christopher P. Thompson and Sunil Mathai,
    for the respondents

Heard: March 19, 2018

On appeal from the judgment of Justice Peter J. Cavanagh
    of the Superior Court of Justice, dated August 14, 2017.

REASONS FOR DECISION

[1]

The appellants, electricity ratepayers required
    to pay debt retirement charges to the Ontario Electricity Financial
    Corporation, brought an action seeking damages and declaratory relief
    concerning the sale of shares in Hydro One, pursuant to a plan to privatize the
    electricity utility. The respondents are the Premier of Ontario, the Minister
    of Energy, and the Minister of Finance, all of whom exercised Ministerial power
    and statutory authority in connection with the sale.

[2]

The appellants claim was based on the tort of
    misfeasance in public office. They alleged that the Premier and Ministers acted
    in bad faith in connection with the privatization plan, and in particular acted
    to reward past donors and to obtain further donations to the Ontario Liberal
    Party.

[3]

The motion judge struck out the appellants
    claim under Rule 21 and dismissed the action. The motion judge concluded that
    the action was not justiciable because it concerned a matter of core policy,
    and so was immune from suit unless the decision was irrational or made in bad
    faith. The appellants did not argue that the decision was irrational. The
    motion judge found that the material facts pleaded were inadequate to support
    either a conclusion or an inference that the Ministers had acted in bad faith.
    Specifically, he concluded that the appellants claim does not contain
    sufficiently detailed and fact-specific allegations linked to actual events,
    documents, and people, to pass muster as a valid pleading of bad faith conduct
    by the Ministers.

[4]

The appellants argue that the motion judge erred
    in three ways:

1.

By assessing the material facts in isolation
    rather than reading the claim generously and as a whole;

2.

By misconstruing material facts as independent
    challenges to government policy, rather than as particulars of the legal
    elements of the claim; and

3.

By failing to accept material facts as true and
    improperly reaching contrary factual findings.

[5]

In essence the appellants argue that, properly
    understood, their claim pleads facts that support a conclusion of bad faith and
    that it should not have been struck out.

[6]

We disagree.

[7]

The law governing the appeal is not in dispute.
    The motion judge was required to strike the appellants claim only if it was
    plain and obvious that it did not disclose a reasonable cause of action. In
    making this determination, the motion judge was required to read the claim
    generously, making allowances for drafting inadequacies:
Nash v.
    Ontario
,

27 O.R. (3d) 1 (C.A.) at para. 11.

[8]

As this court noted in
Trillium Power
    Wind Corp. v. Ontario (Natural Resources)
,

2013
    ONCA 683, 117 O.R. (3d) 721, at para. 52, the exception for irrational and bad
    faith decisions is quite narrow:  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. Decisions based on political expediency are to be expected. The
    check on them lies in democratic, not judicial, oversight. Thus, more is
    required to sustain a pleading than simply an allegation that government
    officials have acted in bad faith, or have acted for partisan political
    purposes.

[9]

The appellants argued that bad faith was
    established by the Ministers improper and ulterior purpose of rewarding political
    benefactors and enriching the Ontario Liberal Party in the knowledge that their
    decisions were unlawful and likely to harm the appellants.

[10]

The motion judge concluded that this allegation
    was pleaded baldly. He was concerned that a plaintiff not be permitted to
    easily transform a pleading that did not amount to a claim of bad faith into a
    bad faith claim, as he explained:

I do not accept that through the simple device
    of including in a pleading a bald allegation that a political actor
    subjectively knew or was recklessly indifferent or willfully blind to the fact
    that conduct and decisions in respect of the core policy (that are not
    objectively inconsistent with the relevant legislative context) were engaged in
    and taken for all ulterior, dishonest or improper purposes, a plaintiff is able
    to transform a pleading of acts that were not committed in bad faith into a
    pleading of acts that were committed in bad faith.  If such a bald pleading
    could have this effect, then the protection afforded to a core policy decision
    made by a government from interference through a civil tort action would be
    illusory.

[11]

The appellants complain that the motion judges
    concern about opening the litigation floodgates caused him to, in effect,
    elevate the pleading requirement. They contend that there is a fundamental
    difference between taking partisan political considerations into account when
    making policy decisions, which is permissible, and exercising statutory
    authority for the purpose of financially benefitting private benefactors and
    raising money for the Ontario Liberal Party, which is not. The appellants
    submit that they have done enough to plead that this is an example of the
    latter and not the former.

[12]

This submission must be rejected. There is no
    question that it is difficult to plead the tort of misfeasance in public
    office, but that is so because matters of core policy are supposed to be immune
    from suit, absent rare cases of irrationality or bad faith. The appellants say
    that a great deal will be revealed if the suit is permitted to proceed and
    discovery takes place, but to accept the pleading in order to facilitate
    discovery would be to undermine the important purpose of the immunity.

[13]

The appellants next contend that the motion
    judge erred in regarding the material facts as representing challenges to
    government policy, rather than as material facts pleaded in support of their
    central allegation concerning the respondents knowledge and purpose in
    privatizing Hydro One. For example, the appellants say that their submission
    concerning the absence of a plausible policy rationale for the decision is
    circumstantial evidence in support of their bad faith allegation, and not
    simply a substantive complaint about the policy. The same is true of their
    pleadings concerning legislative amendments that removed oversight of Hydro
    One; the structuring and implementation of the share sale and the beneficiaries
    of that sale; and the Ministers fundraising activities.

[14]

We do not accept that the motion judge
    misconstrued the material facts pleaded. He carefully reviewed all of the facts
    and found that they did not plausibly support either the conclusion or the
    inference that the respondents acted in bad faith. He did not reject the
    pleadings on the basis that they were simply an objection to the policy being
    pursued; he found that they were precisely the sort of objections to which the
    immunity was intended to apply. The appellants pleaded that the respondents
    engaged in fundraising activities that included institutions and law firms involved
    in the Hydro One share sale. These were no more than pleadings that the
    government had engaged in political activities that benefited the Ontario
    Liberal Party, which could not possibly support the conclusion or inference
    that they had acted in bad faith.

[15]

Finally, we do not accept that the motion judge
    treated the appellants motion as a summary judgment motion rather than a Rule
    21 motion. The motion judges reasons, read in context, indicated that there
    were innocent explanations for conduct the appellants contended was sinister.
    Execution of the Hydro One sale required considerable assistance from
    professional advisers, who were necessarily paid for their services. Read as a
    whole, his decision makes clear that the appellants allegations simply did not
    support a conclusion or inference that decisions concerning the sale were made
    in bad faith.

[16]

Given the conclusion that the claim was not
    justiciable, the claim was properly struck out and the action was properly
    dismissed. It is unnecessary to consider whether the action was in any event
    barred by parliamentary privilege, constituted an abuse of the courts
    processes, or should be struck out as disclosing no reasonable cause of action.

[17]

The appeal is dismissed.

[18]

The respondents are entitled to costs in the agreed amount of
    $15,000, inclusive of taxes and disbursements.

J. MacFarland J.A.

Grant Huscroft J.A.

I.V.B. Nordheimer J.A.


