Ontario Court Confirms Dismissal of Proposed Class Action Against Hydro One

On December 31, 2018, the Ontario Divisional Court dismissed an appeal of a November 2017 Decision denying certification of a class action against Hydro One Networks Inc. (Hydro One). The proposed class action relates to alleged overcharges resulting from the rollout of a new customer information system (CIS) starting in 2013. The Divisional Court confirmed that this is not an appropriate case for a class action, in part because the determination of each class member’s claim would require individual trials, and in part because an alternate remedy is available from the Ontario Energy Board (OEB).

As detailed in an earlier post, because of “a malfunctioning and a negligently implemented and administered CIS,” Hydro One undercharged or overcharged some of its 1.3 million customers. Some customers did not receive bills for extended periods of time and some customers received incorrect bills, including bills with large overcharge amounts. The proposed class action seeks damages of $100 million related to alleged overcharges. Hydro One asserts that it responded to and resolved all billing issues, and that ultimately no customer was overcharged.

The motion judge in the November 2017 Decision declined to certify the class action, finding that there were insufficient common issues and noting that a class action is not preferable in this case to individual lawsuits by class members. The motion judge found that even if the representative plaintiff was successful in establishing its overall claims (the common issues), there would be a host of remaining issues (largely around damages) to be established in individual damages trials. The motion judge also found that there are alternative administrative procedures that could be pursued through the OEB, such as the OEB’s complaint process. The motion judge noted that the OEB is guided by the objective of protecting the interests of customers with respect to prices, and that the OEB could be expected to respond in appropriate cases in accordance with its statutory mandate.

The Ontario Divisional Court did not disturb any of the findings of the motion judge. On the question of whether the proposed class action raises common issues, the Divisional Court Decision endorsed the findings of the motion judge, stating that:

A finding that some bills were wrong and the CIS was poorly designed and implemented does not advance the resolution of the claims for the class. It will still be necessary to determine for each individual, what loss, if any, was suffered, whether the loss was caused by the CIS or something else (computer malfunction or human error, for example), and what recompense has already been received. In other words there is no saving compared to individual trials. Alternatively expressed, no issue is off the table at individual trials because it has been resolved already at the common trial.

As a final comment, the Divisional Court judges declined to disturb the motion judge’s finding that a class action is not the preferable procedure. The judges agreed that the motion judge had properly weighed relevant factors in finding that “the goals of the [Class Proceedings Act] are met by the OEB, which is the legislature’s chosen and preferred vehicle to regulate the respondents’ behaviour.”