Developers behind a proposed residential project near Olds have lost their $32.3-million lawsuit alleging that Mountain View County acted in bad faith when it changed its plans.
Calgary-based Neurose Properties, Style Realty Inc., Abe Neufeld and a pair of numbered companies sued the county and two councillors, arguing that changes made to a Municipal Development Plan and the repealing of a concept plan for an area known as Netook Crossing North caused the company significant financial damage.
The lawsuit sought $28.75 million in loss of economic opportunity, along with $3.56 million in additional damages.
Naming the county and Councillors Paddy Munro and Kevin Good, the statement of claim from Neuroese Properties alleged the councillors and county acted in bad faith, used all powers at their disposal and attempted to deliberately sabotage Neuroese’s business with the dismantling of the Netook Crossing North Project, a commercial and industrial development near Hwys 2 and 27.
Netook Crossing North was to include an industrial-commercial subdivision and more than 400 homes in Netook Crossing Estates.
The developers claimed that planning changes that prohibited high-density residential developments along the lines proposed by Neurose were motivated by malice, not planning principles.
They was also alleged the county acted in bad faith by stalling Neurose’s project and in the way the planning changes were made, including the preceding review process. Bad faith was also alleged as being behind the termination of two planning employees at the county.
In his 28-page decision, Justice J.T. Prowse found that the county did not act in bad faith during their planning review process, although it did have some flaws.
“The developers’ attempt to build a case out of bad faith out of some shortcomings in the voluntary review process is hopeless,” Prowse writes.
The judge also takes issue with the developers’ assertion that if application had been dealt with before the Municipal Development Plan was changed, rezoning would have passed.
“There is no air of reality to that assertion,” says Prowse. He notes the county’s review of the plan had already been underway for a year before developers applied for rezoning.
The judge also dismissed suggestions of negligence, fraud, conspiracy or unlawful interference with economic interests in the county’s dealing with the developers.
Herb Styles, a realty adviser with Neuroese, was taken aback by the decision.
“It’s shocking that the judge would have leaned as far in the favour of the county,” said Styles.
“Some judges tend to give an awful lot of leeway to elected officials. We know the bar is much lower for elected officials than it is for you and I but I didn’t think it was that low.
“I’ll tell you, it certainly doesn’t look good what the county did but if they can get away with it, that’s even worse.”
Styles said developers plan to meet with their lawyers to discuss next steps.
Mountain View County said on Thursday that it expected to release a statement as early as today.
Citing the Alberta Municipal Government Act, the county had argued in its statement of defence that nothing in the planning and development part of the act gives a person a right to compensation and a municipality does not have to undertake any projects referred to in a statutory plan, which includes municipal development and area structure plans, adopted by council.
The justice made no decision on rewarding costs.