Gordonstoun developer sues municipality

A New Brunswick outfit trying to set up a franchise of Scotland’s elite Gorsdonstoun boarding school in Nova Scotia is suing the Municipality of the County of Annapolis for breach of contract.

E.A. Farren Ltd. made a deal with Annapolis in 2019 where the municipality would borrow $7.2 million to acquire a suitable property for the school, said the statement of claim filed by Bedford lawyer Barry Mason.

Then in July of 2020, the municipality agreed to pay invoices from the company within 20 days, up to a maximum of $7.2 million, to develop and construct the school, said the statement of claim, which notes Annapolis was to be repaid, with interest.

“E.A. Farren was to be given the indefeasible right of use of the lands on which the school was built,” said the statement of claim. “The municipality was to receive a 1.2 per cent economic return commencing on the fourth year of operation on gross revenue from the school and thereafter in perpetuity.”

The deal also included paying E.A. Farren a development fee of $1,994,900, said Mason’s statement of claim.

The municipality acquired the former Upper Clements Park lands in April 2020.

E.A. Farren has spent $146,386 on security costs for the construction site, said the statement of claim.

But after a municipal election in the fall of the 2020, the new council “led by Warden Alan Parish, took steps to undermine the project,” said the lawsuit.

“The municipality began to take steps to default on its obligations … Specifically, the municipality failed to pay invoices issued by E.A. Farren that were incurred for the development of the school and failed to pay E.A. Farren its development fees.”

That’s a breach of contract, said the statement of claim, as is the municipality’s steps to terminate the Upper Clements land deal.

“The municipality exercised bad faith in contractual dealings after November of 2020,” said the statement of claim.

Instances of such include the municipality contacting Gordonstoun “to discuss and attempt to undermine the development of the school,” and the municipality’s chief administrative officer disparaging E.A. Farren to service providers working on the project, according to the claim, which has not been tested in court.

The municipality “blamed E.A. Farren for the non-advancement of the project and the project’s missed deadlines, when such non-advancement and missed deadlines resulted from the municipality’s own conduct in reneging on support for the project,” said the statement of claim.

CITED FOR DANGEROUS AND UNSIGHLY PREMISES

Annapolis also took “regulatory action against E.A. Farren for ‘unsightly/dangerous premises,’ resulting from E.A. Farren’s inability to pay continued security expenses in association with the construction site, which E.A. Farren had only agreed to pay on the assurance and understanding that the school would be built in the municipality and with the support of the municipality.”

The municipality took steps to terminate the transfer of the Upper Clements Park lands to E.A. Farren, “despite the existence of a binding agreement between the parties that the lands would be transferred,” said the statement of claim.

Parish, who had not yet seen the statement of claim when reached Jan. 6, declined comment.

E.A. Farren is seeking damages for unpaid invoices it sent the municipality, including out-of-pocket expenses incurred providing security for the school site, unpaid development fees, and loss of revenues “from the delay or non-opening of the school,” and loss of profit, said the statement of claim.

Last month, a judge ruled resolutions made by the former Annapolis County council regarding the transfer of Upper Clements Park lands to a developer were illegal.

Justice Scott Norton handed down a decision on Dec. 7 in a case involving an application by the Municipality of the County of Annapolis and the respondent, developer E.A. Farren Ltd.

Norton ruled the former council acted in violation of the applicable provisions of the Municipal Government Act and Municipal Elections Act in making resolutions regarding the transfer and lease of parcels of the former Upper Clements Park property.

Norton said in his written decision that law requires that the declaration of newly elected councillors, administration of the oaths and election of the new warden and deputy warden must take place at the first meeting of council held after the recount period closes. This was not the case in Annapolis County following the October 2020 municipal election.

“The former council contravened these requirements by continuing to meet and transact business when, according to the plain wording of the provisions and the clear intent of the legislative scheme, swearing-in of the newly elected councillors should have been the first order of business,” Norton said.