Multi-million dollar lawsuit launched against Town of Innisfil

Developer claims municipal staff and council acted in ‘bad faith’
By Chris Simon Innisfil Scope December 15 2010
A multi-million dollar legal battle is brewing between Maple Lane Developments, the Town of Innisfil and Ainley and Associates.
Maple Lane has formally launched a lawsuit against the town and its hired consultant, Ainley, regarding the first and second phases of the Wallace Mills subdivision. Maple Lane is seeking $10 million from both the town and Ainley, and has accused the municipality of breach of contract, negligence and acting in bad faith. Ainley has been accused of negligence. The dispute stems from issues with sump pump discharge connections between 2004 and 2010, Maple Lane’s lawyer, Michael Melling.
“Maple Lane was treated differently by the town, including council, since the sump pump ‘deficiency’ issue arose,” said Melling, in documents obtained by The Scope. “Approvals for other parts of the Wallace Mills project were denied, deferred or postponed without justification. Maple Lane was inappropriately branded as a ‘bad developer’ by the town, its staff and council, and put to significant additional time and expense when trying to obtain approvals. The town acted in bad faith … entitling Maple Lane to compensatory damages.”
According to the documents, the town required Maple Lane to connect 55 homes to the town’s storm sewer system, and classified the project as correcting a ‘deficiency’ in the subdivision design, rather than ‘additional work’. That difference in terminology has financial implication, and cost the developer money.
Approval process delays related to the dispute have also cost the developer 16 house sales, and millions of dollars in damages and lost property investments, he said.
“But for the lack of financial resources caused by the defendants’ improper actions, Maple Lane would have proceeded with planning applications, promotions and sales relating to each of these development projects,” he said. “As such, Maple Lane has lost significant business opportunities, and sustained several million dollars in damages and lost revenue.”
Meanwhile, the town has accused the developer of violating aspects of its subdivision agreement. In a statement of defence and counterclaim filed Dec. 9, town lawyer Charles Loopstra says the municipality is seeking $1 million in damages.
The counterclaim will attempt to recover costs related to overdue security payments, and the refusal to pay for necessary stormwater management and sewer infrastructure. Maple Lane also owes the town money for a pedestrian barricade, winter maintenance costs, regrading and curb, asphalt and manhole repair and completion.
“The damages claimed by Maple Lane are excessive, remote and non-compensable in law,” said Loopstra. “Maple Lane has contributed to the damages sustained, if any, and has failed to mitigate its damages. Maple Lane retained incompetent consultants or failed to properly instruct or direct its consultants with respect to the design and inspection of the works, thereby breaching the terms of the subdivision agreements.”
Loopstra claims the developer continually ignored the recommendations of the town, he said.
“Maple Lane failed to comply with town directives, or comply within a timely manner, with respect to the deficiencies in the works,” said Loopstra. “Furthermore, Maple Lane has failed to recify all outstanding deficiencies and pay outstanding accounts … as required by the subdivision agreement. Maple Lane failed to install an adequate drainage system for the lots, when it knew or ought to have known of the perched water table conditions and excessive sump pump discharges from the houses on such lots. (They) failed to construct the works as required by the agreements in a good and workmanlike manner, and comply with good engineering practices and the town’s design standards.”
A motion regarding this lawsuit will be discussed during tonight’s council meeting.