It may have been welcomed with a whimper rather than a bang, but the Town of Huntsville has finally settled with former tenant Rutland-Hunter Inc. at a price tag of $116,500.
The settlement involves legal costs as well as a router, which lies at the heart of the Town’s legal problems which began more than eight years ago. Claude Doughty was mayor at the time and John Finley was the Town’s Economic Development Officer.
The background story
The Town rented space to BlackBird Boats in the former MTO building, which at the time was owned by the municipality. BlackBird fell into arrears by allegedly more than $10,000, comprised of rent and utilities, and was evicted in July 2007.
At that time the tenant left a CNC router on the premises, which it reportedly intended to remove at a later date, but instead the Town sold it for $6,500 in July 2008. The proceeds from the sale were transferred to the mayor’s golf tournament, rather than going toward offsetting the tenant’s arrears, according to court records.
Using their corporate name, Hunter-Rutland Inc., the former owner of BlackBird Boats filed a civil lawsuit against the Town in August 2010. It stated the router was worth more than it was sold for and that Hunter-Rutland should have been notified of its sale.
The case of the missing router prompts OPP to lay charges
Before Dick Perdue, a principal with Hunter-Rutland Inc., filed the civil lawsuit against the Town, he went looking for the router and was told by Finley that he did not know where the router was. Police were involved and the router was eventually found. Finley was ultimately charged by police with perjury and obstructing a peace officer. The matter is still before the courts, with legal fees being paid for by the Town of Huntsville. The Town of Huntsville is obligated to pay the legal fees of someone in its employ unless the employee is found guilty of misconduct. At the time of the incident, Finley had not yet retired from the Town.
In terms of the router and the civil suit launched by Hunter-Rutland Inc., the matter was heard by Justice Wood in Bracebridge court on Sept. 29, 2014. Justice Wood ruled in favour of Hunter-Rutland on two counts. He said the company should have been notified that the Town was selling the router and the municipality should have attempted to sell the equipment at a properly assessed value to offset the tenant’s arrears.
The Town appealed Justice Wood’s decision and lost. It also countersued for arrears. On the appeal the Town was ordered to pay Hunter-Rutland’s legal fees, reported at $13,500. Further, the Town was ordered to pay the difference in the router’s assessed value less the amount of utilities, rent arrears and interest that the company owed the Town.
“We knew we were going to have to go back to court to decide costs and if we added up all of their costs and then had an independent person come in and determine what that router was actually worth at the time… There was I think a lot of fear around the (council) table that we would be exposed to an awful lot more money,” said Huntsville Mayor Scott Atichison, who met with the company’s principals to negotiate a settlement.
Aitchison said the Town lost at every turn. He said he thought Justice Wood felt the town had been a bully “and I think he felt like he needed to make an example of what had happened.”
Huge legal costs
Perdue said the situation should have been dealt with years ago and had the Town acted like a proper landlord in the first place, the issue would not have made its way into the courts. He is still gobsmacked by the whole incident.
They didn’t give notice. They didn’t tell anybody about the machine being sold. In fact they denied that it was sold. They denied any knowledge of it. And then not only that, but when they did get money from the sale of the machine, they didn’t apply it to the rent. They gave it away to the golf tournament. I mean, what was the whole point of this?
Dick Perdue, principal Hunter-Rutland
He also said the bulk of the company’s arrears were related to utility bills. “It wasn’t as though we were six months behind. The rent we were behind was primarily utilities,” according to Perdue, who said there were other tenants in the building the Town had to allocate utility costs to. “We would get the utility bills months after they’d come into the Town.”
Asked if he’s relieved to put the issue behind him, he said, “I was glad it was over. I mean, we were spending huge money on legal fees. The Town was spending more. I mean, they’ve got to be pretty close to $130,000… I mean they’ve got to be huge. They’re still paying Finley’s expenses.”
Aitchison said it was time to put an end to the situation.
Council wanted it to be over and I certainly wanted it to be over as well. I was tired of it. It’s expensive this business of fighting with people… I do know that we settled for a lot less money than potentially could’ve happened in court, but it was still a lot of money. I think all in, that whole file in terms of our legal costs, their legal costs, the back and forth and everything, and the settlement, I’m sure it’ll be almost $300,000 when it’s all said and done. Huntsville Mayor Scott Aitchison
Staff has been asked to bring a report to council in January summarizing a history of the file and the Town’s overall legal expenses to date.