The Court of Appeal's decision in Wpd Sumac Ridge Wind Inc. v Corporation of the City of Kawartha Lakes provides yet another warning to municipalities of the dangers of trying to frustrate provincial or federal action.

Wpd Sumac Ridge Wind Inc. ("Sumac") had applied for and obtained a Renewable Energy Approval from the Ministry of Environment and Climate Change ("MOECC") to build, operate, and retire five industrial wind turbines in the City of Kawartha Lakes. The City, however, opposed wind turbine projects and passed several resolutions that objected to the project, including one that called on the provincial government to reject it.

Once the MOECC approved Sumac's project, including access to a specific road that would be necessary to complete the project, the City passed a resolution noting that any requests by  Sumac for property access (i.e., use of the specific road) to support the project be refused. Sumac brought an application for judicial review to the Divisional Court, to quash the City's resolution for being ultra vires and passed in bad faith. The Divisional Court found that the resolution should be quashed on both bases. This is discussed in a previous blog entry.

The City appealed the Divisional Court's decision to the Court of Appeal for Ontario on the following bases:

  1. That its resolution to refuse any requests by Sumac to use an unopened municipal road allowance within its jurisdiction did not frustrate the purpose of the Renewable Energy Approval for the wind turbine project that provided for use of that same road;
  2. That the Divisional Court erred in ordering mandamus; and
  3. That the Divisional Court made palpable and overriding errors in finding that the resolution was passed in bad faith.

The Court of Appeal dismissed the appeal, finding that:

  1. That the purpose of the Renewable Energy Approval was effectively frustrated by the City's purported exercise of its jurisdiction over roads;
  2. That the Divisional Court's order is not an order of mandamus directing the result of a municipality's discretionary decision-making power as it does not require the City to alter or open the particular road – it merely prohibits the City from continuing to frustrate Sumac's approval and from acting in bad faith; and
  3. That the Divisional Court was entitled to draw the conclusion that the City had acted in bad faith by exercising its jurisdiction over roads for an improper purpose for numerous reasons after examining all evidence in its totality.

Municipalities should consider this decision before taking steps that may be viewed as trying to prevent or thwart projects that have been approved or permitted by the provincial or federal government.

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