Executive Summary: Key Legal and Evidentiary Issues

• The central question was whether Alectra owed a duty of care to Morguard regarding the timing and manner of emergency electrical repairs.

• The adequacy of notice provided by Alectra to Morguard before the power outage and whether Morguard consented to the timing of the repairs were in dispute.

• The foreseeability of damage to Morguard’s hydronic heating system due to a power outage during extreme cold was a key factual issue.

• The contractual terms in Alectra’s Conditions of Service (COS), including liability exclusions and emergency provisions, were heavily analyzed.

• The admissibility and weight of expert evidence on causation and the necessity of emergency repairs were challenged.

• Ultimately, the court determined there was no genuine issue requiring a trial and dismissed Morguard’s claim.

Facts of the case

Morguard Investments Limited (“Morguard”) owned and operated two commercial office buildings in Mississauga, Ontario, both supplied with electricity by Alectra Utilities Corporation (“Alectra”). The buildings had different heating systems: one used electric heating, while the other (55 City Centre Drive) relied on a hydronic system that required electricity to prevent freezing. In January 2018, Alectra discovered a malfunctioning high-voltage switch in an underground vault serving the premises and over 1,200 other customers. Alectra deemed the issue an emergency, requiring urgent repairs and a temporary power outage.

Alectra notified Morguard of the need for a power shutdown, initially proposing a time, which Morguard later requested be delayed to accommodate a tenant. The repairs were rescheduled accordingly, and Morguard arranged for its own electrician to manage the shutdown and restoration of power. During the outage, temperatures dropped to -30°C to -32°C. The hydronic heating system at 55 City Centre Drive froze, causing pipes to burst and resulting in significant water damage. The other building, with electric heating, was unaffected.

Arguments and policy terms

Morguard sued Alectra and its parent company for negligence, alleging that Alectra failed to provide adequate notice, wrongly classified the repair as an emergency, and proceeded despite foreseeable risks. Morguard argued it could not arrange for backup power or alternative heating on short notice and that Alectra should have foreseen the risk of damage.

Alectra sought summary judgment, arguing there was no genuine issue for trial. It relied on its Conditions of Service (COS), which formed part of the contract with Morguard. Key COS provisions included:

• Section 2.2: Allowed Alectra to disconnect power for reliability or safety issues and excluded liability for resulting damages.

• Section 2.3.3.1: Required reasonable advance notice for outages, but not in emergencies.

• Section 2.3.1: Placed responsibility for backup power on customers needing higher reliability.

• Section 1.6: Limited Alectra’s liability to cases of willful misconduct or negligence and excluded indirect damages.
  Alectra also argued that Morguard was involved in scheduling the repairs, failed to inform Alectra of the hydronic system’s vulnerability, and did not request further delay or backup power.

Morguard presented expert evidence challenging the emergency classification and supporting its claim that the outage caused the damage. It also invoked s. 40(8) of the Electricity Act, arguing for statutory compensation for damages caused during repairs.

Court’s analysis and outcome

The court accepted that the power outage caused the pipes to freeze and burst, relying on Morguard’s expert evidence and common sense. However, the judge found that both parties had communicated and cooperated in arranging the repair schedule. Morguard had not alerted Alectra to the hydronic system’s vulnerability or requested a further delay despite having notice and time to consider the risks. The court noted that the COS contract made clear that outages could occur, especially in emergencies, and that customers were responsible for backup systems.

The judge determined that while Alectra may have owed a duty of care, there was no breach of the standard of care. Morguard was in the best position to understand and mitigate the risks to its own heating system. The court also found that the statutory compensation provision of the Electricity Act did not apply, as this was not a “power of entry” situation but a scheduled repair with Morguard’s cooperation.

Ruling and overall outcome

The Ontario Superior Court of Justice concluded that there was sufficient evidence to decide the matter without a trial. The action brought by Morguard against both Alectra defendants was dismissed. The court encouraged the parties to agree on costs, with a process set out for submissions if agreement could not be reached. No specific monetary award was ordered in favor of the successful party (Alectra), as the claim was dismissed and costs were left for further determination if needed.