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Briar Hill condo corp lawyer asks Town to  deny water connection, 'in order to avoid costly litigation'

Posted December 11, 2017

A legal review by the solicitors representing Briar Hill/West condominium corporations recommends the Briar Hill Residential Servicing Organization (BHRSO), and the developer, 1204551 Ontario Ltd. (Lou Biffis), withdraw their proposal for municipal water connection, "and the Town to deny any and all requests for such."

The 11-page brief, obtained by Free Press Online, is dated Dec. 8, 2017, and signed by Tony Fleming of Cunningham, Swan, Carty, Little & Bonham LLP. It is addressed to Town solicitor Jay Feehely and BHRSO lawyer, Paul Grespan.

"Our clients became concerned when they discovered that because of this (municipal water connection) request, the Town of NewTecumseth might consider levying a one-time "connection fee," as well as backcharging for unpaid fees under a Communal Servicing Responsibility Agreement made between the Town, BHRSO, and 1204551 Ontario Ltd. (Mr. Biffis) on November 22nd, 2000," according to Mr. Fleming.

There are five "active issues that we have addressed:"

  • 1. Whether BHRSO is permitted to connect to the municipal supply under the provisions of the relevant agreements;
  • 2. Whether the Town is permitted to charge a connection fee to BHRSO or the Developer for connecting to the municipal supply;
  • 3. If the Town is permitted to charge a connection fee, whether such a fee can be allocated to our clients under the terms of the various Reciprocal Agreements;
  • 4. Whether the Town can back-charge for fees that were not charged and collected by the Town as provided under the Communal Servicing Responsibility Agreement dated November 22nd, 2000; and
  • 5. Whether the November 2000 Communal Servicing Responsibility Agreement imposes a positive obligation on the Town to provide BHRSO with the connection that it has requested.

Mr. Fleming's review suggests the original agreement dating back to 1997 did not contemplate anything but "a water supply system that was private, as specifically indicated by the requirement for a municipal responsibility agreement and approvals from the Ministry of Environment and Energy."

In November 2000, the agreement was amended to include:

4. Requirement to Purchase Municipal Water
(a) In recognition of the Municipality's contingent liability pursuant to MOE guidelines and this Agreement and the resultant need to guarantee a minimum water reserve and supply for the Subdivision Lands, the Municipality will be purchasing additional Water Capacity from its supply source in 2005 and 2010 (the "Water Capacity"). The Municipality may be called upon to supply said Water Capacity to the PSS for the Private Servicing Lands from the Municipal water system pursuant to subparagraphs 1 (d) or 1 (e) herein. The Developer, or the Servicing Company, may also elect to receive and utilize the Water Capacity from the dates and in the amounts described herein.

(b) Beginning January 1st, 2005 up to and including December 31st, 2009 the Developer and/or servicing company agrees to pay for the right to receive, whether actually received or not, 91m3/day of Water Capacity, calculated daily based on average day demand. The Developer and/or Servicing Company agrees to pay for this Water Capacity at a rate and in a manner then in force for the Area 1 Urban Service Area, or its successor.

Beginning January 1st, 2010 the Parties agree to increase the Water Capacity to a total amount of 228 m3/day, calculated daily based on average day demand. Payment will be in the manner described above.

c) The Municipality and the Developer shall in good faith prior to January 1st, 2005 determine the appropriate connection point or points between the municipal water supply system and the PSS or other water delivery system. The Municipality makes no representation respecting the fluctuations in water quality or pressure available at the connection point. The Developer shall be responsible, either directly or through the Servicing Company, for obtaining the required approvals, making connection at the connection point and providing any required treatment, storage and pressure adjustment, including all costs.

d) No representations or warranties are made by the Municipality as to the availability of additional water capacity in excess of the amounts stated in 4(b). The developer and/or Servicing Company may request from time to time additional water supply, and the Municipality agrees to consider such request for additional water supply from time to time in a fair and equitable manner, having regard to the availability of water supplied to the Municipality from time to time.

On November 27, New Tecumseth council moved the matter in camera providing "confidential direction to staff and the Town's Solicitor ... with regard to: The approach on the collection of arrears ($1.2 million) for water under Section 4 (b) of the 2000 Responsibility Agreement; The approach for the recuperation of the Town's costs associated with the current request of the RSO; Inclusion of the RSO request for water in future reports and agreements and the associated future cost recovery; and Enforcement of various issues associated with the current agreements.

"The provisions of the November 22nd, 2000 Communal Servicing Responsibility Agreement that required BHRSO or the Developer to pay fees for an ongoing supply of water were premised on the Town actually providing such supply. The required supply has never been made available by the Town. As such, BHRSO and the Developer have never been obligated to pay the fees contemplated," according to Mr. Fleming. "As well, the conduct of the parties in failing to enforce the relevant provisions of the agreement amounted to a waiver of these provisions, and the Town is effectively estopped from relying on such to levy any back-charges.

Our advice to our clients is to vigorously contest any attempt to impose such a charge. The provisions of the 2000 Communal Servicing Responsibility Agreement also impose no obligation on the Town to provide the municipal connection and supply that BHRSO is currently requesting. In the absence of a positive contractual obligation, and in the face of the fact that there is no authority to unilaterally alter the private servicing system, we urge the Town to refuse to connect in order to avoid costly litigation."

Mr. Fleming suggested in his review the Town and the developer nullified the agreement because neither side implemented its terms, and any connection would require consent of the condo corportations.

"We again emphasize that there are no issues with the supply of water to Briar Hill under the current private communal servicing system," concluded Mr. Fleming. "There is therefore no need for the connection to the municipal supply that has been proposed by BHRSO and the Developer, and it is a proposal that the residents of Briar Hill neither want nor require. We urge the Developer and BHRSO to withdraw their proposal for a municipal connection, and the Town to deny any and all requests for such."

Asked this morning why New Tecumseth never invoiced the BHRSO or Mr. Biffis's numbered company, Ward 3 councillor Paul Whiteside, who was the Town's Chief Financial Officer during that period, told Free Press Online via email, "these agreements were handled directly by the CAO and Director of Public Works." (At the time of these agreements, the CAO was Sterling Zeran, and George Degroot, Public Works Director. Larry Keogh was mayor).

"The practice was that public works staff were to advise finance utility billing staff of any billings required," according to Mr. Whiteside. "This included meter readings, new customers and any special utility billings." At this post, no further details could be confirmed.

Click here to read Mr. Fleming's full review

Click here to read Mr. Feehely's report'

Click here to read Mr. Grespan's report'

Click here to report typos/errors or send Letter to the Editor.

All stories, unless otherwise noted,
by Tony Veltri