The Divisional Court has recently confirmed that the Ontario Energy Board ("OEB") may order a party which has contravened an "enforceable provision" to pay restitution to those affected by the breach. The case involved retail energy marketing but appears to support broad remedial powers across a wide range of the OEB's regulatory mandate.
the Summitt Energy case
Summitt Energy Management Inc. v Ontario Energy Board1 was an appeal of an OEB order against Summitt with respect to its door-to-door sales activities. After investigating complaints into Summitt's business practices, the OEB held a hearing and found that Summitt was responsible for the acts of five agents in respect of 43 contraventions of the Ontario Energy Board Act, 19982 (the "Act").3
Despite jurisdictional objections raised by Summitt, the OEB granted relief which included restitution to complainant customers.4 The OEB did not make a finding as to the enforceability of the customer contracts, but rather relied on the contraventions of the Act as the basis for restitution order. Summitt was ordered to pay compensation in an amount equivalent to the difference between the sums paid pursuant to the contracts and prevailing prices, as well as interest and repayment of liquidated damages paid for cancelation of customer contracts.5
One of the grounds which Summitt argued in the Divisional Court was that the OEB did not have jurisdiction to grant the equitable remedy of restitution in favour of complainants.
In making its order, the OEB had relied upon the Supreme Court of Canada decision of Royal Oak Mines Inc. v Canada(Labour Relations Board)6 to hold that section 112.3(1)(a) of the Act gave it the jurisdiction to order an equitable remedy. Royal Oak Mines considered whether the Canada Labour Code permitted the Labour Board to order an equitable remedy. It did not address restitution, but involved a remedial solution to a labour dispute which included the imposition of certain terms contained in a previous tentative agreement. Summitt argued that Royal Oak Mines was distinguishable on the basis that the Act does not expressly provide for jurisdiction to make an equitable remedy.7 The Court disagreed.
Section 112.3(1)(a) of the Act permits the OEB to require a person to "take any such action as the Board may specify to remedy a contravention that has occurred". The Court stated that, "[b]y any measure this is a clear and broad grant of remedial powers".8 The Court went on to refer to other authorities which relied upon the statutory purpose of a specialized tribunal to substantiate broad jurisdiction to award relief.
The Court's reasons on the restitution issue concluded with a concise endorsement of the OEB's authority:
"In our view the Board had express authority under s.112.3 of the Act to "remedy a contravention" of any of the enforceable provisions in issue, which the Board found had occurred. The Board's interpretation of this authority to include the specific remedial orders made in this case was a reasonable one, based upon the Board's specialized expertise in the regulation of retail energy marketing and is entitled to deference on appeal."9
The Summitt v OEB order was upheld based on the OEB's specialized expertise in the regulation of retail energy marketing. However, the regulation of retail energy marketing is merely one area of specialized expertise within the OEB's jurisdiction.
If the Court's logic is broadly construed, the OEB has the ability to make awards based on restitutionary principles in a variety of circumstances. The provision relied upon by the OEB for restitution to aggrieved retail customers is a general power to remedy contraventions of enforceable provisions. An "enforceable provision" is defined to include a provision of the Act or its regulations, certain provisions of the Energy Consumer Protection Act, 2010, a provision of the Ontario Clean Energy Benefit Act, 2010, the regulations made under these statutes, and other statutory provisions, licensing provisions and board orders. As a consequence of this broad definition, it is possible that restitution orders could be made regarding many types of contraventions of the Ontario energy regulatory regime.
The Court's reasoning also suggests that other types of remedies could be employed where the OEB considers them appropriate based on its specialized regulatory expertise.