Beruflich Dokumente
Kultur Dokumente
BETWEEN
Grasshopper Solar Corporation,
GSC Solar Fund I Inc., One Point Twenty One Gigawatts Inc.,
Egerton Solar Power LP, and MPI GM Solar 1 LP
and
and
[1] This is a motion to stay two orders of this court pending an application for
leave to appeal to the Supreme Court of Canada and, if leave is granted, pending
the final disposition of that appeal. For the reasons that follow, I would grant a stay
Background
[2] This case involves the decision of the respondent, the Independent
the applicants, renewable energy companies who construct and operate solar
power facilities. Under these contracts, called Feed-in Tariff Contracts (“FIT
Contracts”), the applicants were to construct solar facilities and provide clean
energy to Ontario’s electricity grid for a typical term of 20 years, at enhanced rates
(i.e., above market rates). The contracts required the applicants to achieve
commercial operation of their facilities by a certain date – the Milestone Date for
terminate the contracts without paying damages. The applicants failed to meet the
applicable MDCO. The respondent eventually gave notice that it would terminate
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their contracts. The termination of these agreements would mean that any energy
that the applicants supply to the IESO will be at the lower market rates.
commercial operation by the MDCO did not constitute a default of the contracts.
[4] A panel of this court dismissed the applicants’ appeal: Grasshopper Solar
for the court, Huscroft J.A. confirmed the application judge’s conclusion that the
respondent was entitled to terminate the contracts: see paras. 36-44. Further, at
paras. 53-78, he rejected the applicants’ submission that the respondent was
[5] The applicants seek leave to appeal that decision to the Supreme Court of
v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 663 as their starting point.
The KL Solar applicants also seek leave to appeal on further issues concerning
[6] Under the Rules of the Supreme Court of Canada, the respondent’s
[7] In the course of the litigation leading up to the determination of the appeal
in this court, the respondents agreed not to terminate the contracts. They have
incorporated the terms agreed upon into two interlocutory orders. The issue was
[8] The applicants take the position that, in both instances, the parties
contemplated that these arrangements would remain in place until matters are
finally determined in the Supreme Court of Canada. They submit that the
respondents should be “held to their word” and that this application should be
in this court.
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[9] I need not resolve this issue. These motions can be determined through the
[10] The applicants apply under s. 65.1 of the Supreme Court Act, R.S.C. 1985,
c. S-26. That section empowers the Supreme Court, the court of appeal, or a judge
of either court, to stay proceedings with respect to the judgment from which leave
to appeal is sought “on terms deemed appropriate.” The power is broad. In RJR-
MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Sopinka and
[11] In Livent Inc. v. Deloitte & Touche, 2016 ONCA 395, 131 O.R. (3d) 784, at
paras. 4-5, Strathy C.J.O. set out the test for a stay of proceedings pending an
application for leave to the Supreme Court. In deciding this kind of motion, the
court must consider the following factors: (1) whether there is a serious question
to be determined on the proposed appeal; (2) whether the moving party will suffer
irreparable harm if the stay is not granted; and (3) whether the balance of
convenience favours a stay. These factors are not to be treated as silos; strength
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on one factor may compensate for weakness on another: Livent Inc., at para. 5.
The “overriding question is whether the moving party has shown that it is in the
Dexia Investor Services Trust, 2011 ONCA 620, 283 O.A.C. 321, at para. 16. See
Application
[13] Applying these factors, the interests of justice warrant granting a stay of this
proposed merits of the application for leave to appeal. The threshold at this stage
[15] The applicants were unsuccessful before Hainey J., and a panel of this court
unanimously dismissed the applicants’ appeals. The applicants submit that the
decisions of both courts are wrong; whereas, the respondents claim that both
decisions are undoubtedly correct, based in part on the judicial consensus to date.
counsel on this motion, I did not share in the benefit of the arguments on appeal,
or the collegial deliberative process that culminated in the reasons of Huscroft J.A.
appeal to the Supreme Court of Canada. While this task is somewhat different, it
presentation of legal issues. This is especially the case in the broader framework
set out under s. 40(1) of the Supreme Court Act, which requires the proposed
Rensburg J.A. observed in Donovan, at para. 13, leave to appeal would appear to
as set out in para. 5, above. During oral argument on the motion, counsel for the
respondent submitted that the applicants do not assert errors of law; instead, they
raise questions about the application of settled law to the facts of this case. The
respondent also submits that the applicants do not raise issues of national or public
importance.
[19] I have concluded that the applicants have met the “low” threshold required
to satisfy the first part of the test. The applicants have raised issues that could “go
beyond the simple application of a known test to given facts and would transcend
the facts of this particular case”: Donovan, at para. 16. There may be merit in the
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respondent’s assertion that some of the issues pursued by the applicants do not
appear to raise questions of law. But that will be for the Supreme Court of Canada
[20] In my view, the applicants have satisfied the “low threshold” required at this
stage.
Irreparable Harm
[21] The applicants submit that, if the orders of this court are not stayed, they will
suffer irreparable prejudice that cannot be compensated with damages. If this court
does not grant a stay and the respondent is entitled to terminate the FIT Contracts,
the applicants will be driven out of business, causing “significant irreparable harm
[22] The respondent submits that any harm the applicants might suffer from
being deprived of FIT payments during proceedings in the Supreme Court can be
[23] To a large degree, this issue turns on the applicants’ credit arrangements.
Both parties relied on extensive evidence concerning the corporate structure of the
competing predictions of how the applicant’s main creditor will respond if FIT
payments are terminated and the applicants are unable to service their debt. The
applicants submit that their creditor will call their loan, which will trigger financial
The respondent submits that it would make no commercial sense for the
outstanding; the creditor’s only hope of recovering the considerable funds it has
already advanced is dependent upon the applicants’ success in the Supreme Court
of Canada.
[24] Based on the evidence and submissions before me, I am satisfied that a
failure to preserve the status quo could well result in the consequences the
payments could repair the purely commercial repercussions the applicants fear, I
[26] In addressing this factor in Livent Inc., Strathy C.J.O. said, at para. 12: “The
[27] In the previous section, I have outlined my findings about the impact on the
rights and terminate FIT payments. On the other side of the equation, the
respondent submits that a stay of proceedings order that requires the respondent
unable to recover the FIT payments it advances while the case is in the Supreme
Court of Canada. The respondent asserts that the security it currently holds in the
applicants’ assets is insufficient to cover this exposure. The applicants submit that
their pledge of security is in the range of $13 million and adequately protects the
respondent’s interests; the respondent submits that the pledged assets (i.e., solar
power equipment) are worth far less. If a stay is granted, the respondent requests
[28] I accept the respondent’s submission that the evidence supporting the value
“Grasshopper” stationary, which is short on detail. On the other hand, during his
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Conclusion
[31] Considering all three factors discussed above, I am satisfied that the
interests of justice require that the orders of this court be stayed pending the
applications for leave to appeal. However, I am not prepared to order a stay that
potentially extends further into the future. That is, the stay extends to the point in
time when the Supreme Court of Canada determines the applications for leave to
appeal. If it dismisses the applications, that will end the matter. If the Supreme
Court allows the applications, the applicants may apply for further orders, if so
Disposition
[32] I allow the motion and order a stay of this court’s orders until the applications
for leave to appeal have been determined. For clarity, the contracts in dispute will
would be able to agree on the costs of this motion. If they are unable to do so, they
may make submissions in writing. The applicants shall file written submissions of
no more than three pages in length within 10 days of the release of these reasons.
The respondent will have 10 days from the receipt of the applicant’s submissions
to file its submissions of similar length. No reply is permitted. Both parties shall