Monday, August 31, 2015

Watson Island legal process seems destined to carry on until February of 2017

August 20th wasn't the City of Prince Rupert's best day at the British Columbia Supreme Court House in Vancouver.

That. following a ruling from the Honourable Justice Dev Dley that indicates that the city's legal requirements over the Watson Island files will carry on for at least eighteen more months.

The majority of the discussion in the Vancouver courtroom on July 30 and 31 revolved around the Certificate of Pending Litigation, known as a CPL, that order is currently is in place when it comes to the site and is the main impediment when it comes to the City's efforts to conduct a final sale of the industrial site.

Justice Dley observed  in his judgment of August 20th, that it appears that the CPL has provided the City of Prince Rupert with a fair bit of a burden owing to an inability to derive much in the way of revenue streams from the old pulp mill site.

Noting hat it appears that the CPL has already resulted in one potential buyer taking their leave of discussions for purchase of the industrial site. Yet, even with those observations noted in his judgment, Justice Dley doesn't at the moment see any need to remove that burden from the city.

The main focus from the recent court appearance by the City appears to be their quest to suggest to the court, that the Watco claim was one that was bound to fail, an approach that Justice Dley addressed as part of his lengthy review of the proceedings of late July.

If the evidence needs to be assessed then the City has not established that it is “plain and obvious” or “beyond a doubt” that the claim must fail. The result is that I have not been persuaded that Watco’s claim is bound to fail.
Since I have concluded that there is a triable issue regarding the claim of specific performance, I am, therefore, not convinced damages will provide adequate relief to Watco if it is successful at trial. The CPL shall not be cancelled.

A further review of the ruling outlines some of the particulars related to trial matters. Highlighting some of the differences of opinion on the nature of how much security related to the site, should posted by WATCO as the case moves forward.

On that theme,  Justice Dley rejected the City's suggestion of 5.7 million dollars in security as unnecessarily high, ruling that the appropriate amount of security should be set at $3,240,000

An amount that WATCO could recover, or lose outright, depending on the outcome of the trial to come.

To bring the August 20th proceedings to an end, Justice Dley then relayed the four key conclusions in the ongoing legal dispute between the City and WATCO

The City’s application for summary judgment is dismissed. The City’s application to remove the CPL from the Property is also dismissed. 

The CPL will remain on title to the Property. Watco shall enter into an undertaking that it will abide by any order the court makes regarding damages flowing from the registration of the CPL. Watco shall also post the sum of $3,240,000 either into a trust account agreeable to the City or into court. The undertaking and the posting of security shall be completed within 21 days of this judgment; failure to do so shall result in the CPL being cancelled. 

Watco has been generally successful in defending the application. It has succeeded in retaining significant aspects of its claim regarding specific performance and the continued registration of the CPL. 

Watco should therefore receive most of the costs associated with this application. Watco is awarded 2/3 of its costs on Scale B in any event of the cause.

As highlighted in the conclusion, should Watco not post their security sum by September 10th, the CPL would be cancelled, an outcome that one imagines the City would welcome.

However, it would seem unlikely, that WATCO having come this far with their legal efforts, would abandon their quest to become the eventual owners of the Watson Island site at this point.

Particularly after their rather successful day in the courts earlier this month.

With that as at the latest backdrop to the long running saga of Watson Island, the next important step in the legal process was noted by Justice Dley,  observing as part of his judgment, that it is expected that the trial related to the issues of the Watson Island case can be scheduled for February of 2017.

You can review some of the history of the dispute, as well as how the two day July trial went forward and where things stand at this point from the full release from the British Columbia Supreme Court.

With the prospect of more legal proceedings to come, it would seem that the prospect of more legal bills from the City of Prince Rupert lawyers will also continue to arrive in the mail.

The most recent tally of legal costs that the city made available to the public, was as part of its Budget Review of earlier this year, which noted that the law firm representing the City had received $699,891 for their services from 2014.

This years legal bills won't be finalized until the end of December and if the courts timetable holds true, it would appear that we will still be reading about the city's Watson Island legal fees obligations well into Budget preparations for 2016 and 2017.

Considering it was only a few weeks ago that the announcement of the Pulp Mill Clean up was described by the Mayor as a "big step forward and major win for the community", perhaps now is a timely moment for an update on the latest on the legal situation for the industrial site from the Mayor and Council.

The last public comment on the legal aspects of the Watson Island story came from Mayor Brain back in May, speaking to CBC Daybreak North's Carolina de Ryk, the Mayor at the time suggested that the end of the legal woes appeared on the horizon.

The latest ruling from the courts would seem to suggest differently.

Justice Dley's decision provides for an opportunity for the city's elected officials to speak publicly to the whole Watson Island situation, offering up some of their thoughts on the current status of the legal efforts related to the industrial site.

As well, a public update might provide the city's residents with some idea as to just how much more money the City will have to put aside, as they move forward with the required work to prepare for yet one more return to the court room.

Not to mention, if the prospect of a yet longer term engagement on the Watson Island case may impact on any of Council's other civic plans for the next eighteen months.

You can review some of the past history of the Watson Island files from our archive page here.

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