Political interference charged in $300 million lawsuit

The Ontario Ministry of Natural Resources yielded to “political interference” and failed to transfer 971 hectares of Crown land it sold to Adams Mine Rail Haul, the consortium alleges in a $302 million lawsuit it filed against the Ontario government.

The allegation is contained in a Statement of Claim obtained by baytoday.ca and filed by Adams Mine Rail Haul Oct. 9, ’03 at the Ontario Superior Court of Justice, in Sault Ste. Marie. The province was served with the statement Oct. 23.

The land in question is located in Boston and McElroy townships, in the district of Timiskaming, adjacent to the site of the former Adams Mine, which AMRH plans to turn into a landfill site for Toronto garbage.

AMRH is requesting $301 million in damages for breach of a purchase and sale agreement, and $1 million in punitive and “exemplary” damages.

Statements of claim contain allegations not yet proven in court.

Negotiated a deal
The province filed a statement of defence Tuesday denying "each and every" allegation.

“Her Majesty denies that it breached any agreement as alleged in the Statement of Claim. In fact, Her Majesty’s decision to exercise the prerogative to issue letters patent is currently under review. Her Majesty is currently undertaking consultations with First Nations pursuant to Her obligations arising under section 35 of the Constitution Act,” the Statement of Defence states.

"The defendant states that the plaintiff's characterization of the issuance of letters patent as a simple real estate transaction which Her Majesty has refused to close is wrong in law."

AMRH claims it negotiated a deal with the MNR to buy the land because it was one of the conditions attached to the Certificate of Approval issued by the Ontario Environment Ministry for the potential landfill site.

A deal was agreed to early this year for $51,360—with the timber and mineral rights for the land remaining with the province—and AMRH issued a certified cheque April 11, 2003.

“The defendant confirmed on May 6, ’03, that all documents required to transfer good title in the lands to the plaintiff had been received and were satisfactory, and further stated that the defendant would register the necessary documentation to complete the transaction,” the Statement of Claim states.

Estimated at $250 million
To date, AMRH claims, the MNR has failed to transfer title to the land despite a letter dated May 28, ’03, threatening legal proceedings if the transaction wasn’t completed within 10 days.

If the land isn’t transferred, AMRH claims, “then the plaintiff shall be frustrated in its ability to continue with its development and all past development money spent in respect of the site shall be lost, as shall all future earnings to be derived from the operation of a sanitary landfill site at the Adams Mine site. These future lost earnings and expenses incurred to date are estimated at $250 million.”

As well, AMRH claims, it will suffer a $50 million dollar loss by not being able to produce biogas if the land isn’t transferred and it can’t proceed with the landfill.

The province denies AMRH has suffered any losses.
“In the further alternative, if any losses were suffered, which is not admitted but expressly denied, such losses are remote and excessive. The defendant states that the plaintiff has failed to mitigate its damages. Her Majesty denies that the plaintiff is entitled to punitive damages and puts the plaintiff to the strict proof thereof.”

Intimately involved with its development
The province also denies AMRH would be entitled to punitive damages, “and pleads and relies upon the provisions of the Public Lands Act, the Proceedings Against the Crown Act, the Negligence Act, and the Constitution Act, 1982, and the regulations thereto.”

AMRH claims the MNR knew the sale of the land was part of the requirement for the Certificate of Approval, and knew the consortium had received the certificate “as it was intimately involved in its development together with the Ministry of the Environment.”

As well the MNR also knew the MOE had issued AMRH a permit in 2000 to take water out of the mine site.

“As such,” AMRH claims, “the defendant has at all times in 2000 and in 2003 been intimately aware of the business plans of the plaintiff and understood the critical necessity to transfer the lands in order that the licence to pump water could be issued.”

Political interference
AMRH contends that the MNR’s failure to transfer the lands resulted from political interference in June of 2003 from opposition members of the legislature “and that the defendant” was “influenced by such interference” and didn’t complete the transaction.

“The defendant, despite its intimate knowledge of the business requirements and the necessity to transfer the land to the plaintiff, has, in a high-handed and callous manner, not transferred the land despite that the plaintiff has satisfied all of the defendant’s requests,” AMRH states.

And even if the MNR did transfer the land right now, AMRH says in the Statement of Claim, there would still be added costs the consortium would have to bear “such as additional staff, correspondence, and discussions with the defendant’s representatives, additional maintenance and expense incurred in the maintenance of the Adams Mine site and the necessity to perform certain functions during winter months with intendant increases in costs as well as the loss, and potential loss of new business and customers requiring landfill services.”

AMRH requested the lawsuit be tried in Sault Ste. Marie, while the province “submits this action is wholly without merit and should be dismissed with costs.”