Developer sues city for $4 million
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Nov 03, 2010  |  Vote 0    0

Developer sues city for $4 million

Local developer files lawsuit against City of Kawartha Lakes and CAO; alleges "abuse of power"

Peterborough This Week

(KAWARTHA LAKES) Yet another lawsuit concerning a developer has been filed against the City of Kawartha Lakes, the second in as many weeks.

A statement of claim filed on Oct. 29 seeks $4 million in damages and names the city and its CAO Jane Reynolds.

The suit was filed on behalf of Jencore Georgian Bluffs Inc. The statement of claim lists Douglas Wallace as the controller of the company and asks for $3 million in damages and another $1 million in punitive damages.

It alleges the city abused its power by refusing to deal with the plaintiff as he tried to proceed with a residential development project and later advised him the development would not proceed.

The statement of claim states that in 2006, Kawartha Lakes Waterfront Corporation, controlled by local developer William Curnew purchased several lands for residential housing. When the company ran into financial difficulties and was not able to complete the project, the lands were lost under power of sale.

The plaintiff (Jencore) bought the land in January 2010. The statement alleges that at the time of purchase, the plaintiff company was controlled by Mr. Curnew's wife, Jeannette. Mr. Curnew was the sole director, president and secretary of the plaintiff (company).

In June of this year, the claim states, Mr. Wallace purchased the company from Ms Curnew. Mr. Curnew resigned all of his positions and Mr. Wallace became president and chief officer, taking control of the corporation.

He then contacted the city to find out what steps he needed to take to further the development of the lands.

The statement of claim alleges that Mr. Wallace was advised of various outstanding issues, including servicing, hydro deficiencies, street light installation and shoreline restorations. The plaintiff claims he began the process to satisfy those issues, including obtaining a shoreline restoration plan that was submitted to the city, Parks Canada, Trent-Severn Waterway and Kawartha Conservation for approval. At the same time, he communicated with the city's development and engineering department to resolve the hydro and street light issues.

The suit alleges that in August, the defendants "began to engage in a course of conduct which included...delaying, not responding to the plaintiff's inquiries and generally failing to take steps deal with the outstanding issues."

One allegation claims the city "believed that William Curnew was still behind this project and demanded copies of the agreements wherein Wallace acquired the outstanding and common shares of the Plaintiff." It accuses the city of sabotaging the development process because it believed Mr. Curnew "was behind the plaintiff and effectively controlling" him.

Mr. Curnew himself filed a $41-million suit against the City, CAO and Mayor Ric McGee on Oct. 20. His suit alleges that the city abused its power and derailed phases of Mr. Curnew's subdivision in Riverview Estates.

At that time, Ms Reynolds said the city is not at liberty to discuss details of lawsuits, noting they are "a legal and insurance matter."

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