An Alberta Court of King’s Bench judge has quashed a $32 million lawsuit against Sturgeon Public involving a sewage lagoon.
Justice James T. Neilson of the Edmonton Court of King’s Bench issued his decision in the case of Ardmore Properties Inc. versus Sturgeon School Division No. 24 on Oct. 12. The hearing for the case happened last February.
Sturgeon Public has run a sewage lagoon just north of Sturgeon Composite High in Namao since the school opened in the 1970s. Many Namao buildings use it, including a church, museum, community hall, Namao School, and Sturgeon Composite.
Ardmore Properties bought land north of the lagoon in October 2009 for use in a proposed residential development. In 2016, Ardmore sued Sturgeon Public for $32 million in damages, alleging that the lagoon had leaked and contaminated their land. In 2018, Ardmore filed for an injunction to stop Sturgeon Public from operating the lagoon and force them to and reclaim it and the affected lands around it.
Sturgeon Public disputed Ardmore’s call for an injunction and asked the judge to issue a ruling on the lawsuit, asserting that the suit was without merit and barred under the Limitations Act.
The ruling
In his ruling, Neilson noted that the lagoon had been approved for operation by the provincial government and that Sturgeon Public lacked the money to build the sewers to replace it. He also noted that Ardmore could not apply to rezone this land as residential so long as the lagoon existed, as the Municipal Government Act barred governments from issuing development permits for homes within 300 m of sewage lagoons.
“This is the real issue for Ardmore, as it may impact the potential profitability of their desire to develop the land for residential use,” Neilson found, writing on the subtext of the suit.
Neilson denied Ardmore’s request for an injunction and dismissed its lawsuit for several reasons.
Most of Ardmore’s case was based on alleged contamination of its lands by the lagoon. Neilson accepted an expert analysis by professional geoscientist Margaret Allen which found that the lagoon had not caused such contamination. Neilson found no evidence that the lagoon had flowed over its berms or that any “contaminants” had harmed Ardmore’s lands.
The impacts of an injunction would also be unbalanced, Neilson found. Ardmore would reap great benefit from the injunction, as it would get to apply for residential property development if the lagoon was reclaimed. Sturgeon Public and other lagoon users would suffer “great inconvenience” and “substantial cost,” as they would lose use of the lagoon and have to close schools.
Neilson also found Ardmore had not filed its lawsuit within the time limits set by the Limitations Act, which states that a party must seek compensation for an injury within two years of learning of that injury and within 10 years of the act which caused the injury occurring.
Neilson determined that Sturgeon Public was entitled to seek compensation for its legal costs from Ardmore.
The parties react
In an Oct. 17 letter to the public, Sturgeon Public board chair Joe Dwyer noted that the board had spent almost $700,000 since 2016 fighting this lawsuit.
“The Board of Trustees is very pleased with the Court of King’s Bench decision,” he said in an email.
“We stand by the fact that, since its development in 1970, the lagoon has always functioned as intended. The Division will continue to monitor and maintain the lagoon as required.”
In an interview, Ardmore co-owner Rick Hinteregger said his company was disappointed, but not discouraged, by the ruling. Ardmore still believed its proposed development was viable, and was now considering its next steps.
“Bringing (sewer) services out to that area would be of great benefit to the school and the community,” he said.
Neilson’s ruling is available at bit.ly/3SnMwMO.
