Mixed victory for Williams in lawsuit against City of St. John’s
Arbitration is fine, but city can’t restrict developers from going to court, judge rules
Former premier and Galway developer Danny Williams scored a mixed victory over the City of St. John’s in a lawsuit that started in November.
Williams, through his 10718 NFLD Inc., filed the lawsuit last fall seeking an order to allow his company to avoid arbitration panels that were part of development agreements between his company and the city.
The arbitration panels allow disputes to be settled outside of
court, but prevented Williams — or any developer — from taking the city to court over any disagreements.
Justice Frances Knickle, in a judgment released Tuesday, said the city can’t force developers into arbitration and must allow matters to go to court as appropriate.
Williams now has the freedom to take the city to court, but he says he doesn’t have any immediate plans to do so.
The development agreements between Williams and the city no longer have the mandatory arbitration clauses anyway.
“In January, we basically got together with the city and said, ‘Look, let’s put this issue aside, let’s sign agreements … pending the court decision. When the court decision comes down, whatever that decision is, will be basically transferred to the agreements,” Williams said.
“These agreements now have the arbitration clause removed.”
Williams says it’s a good thing they came to that agreement in the interim, as it would have spelled a four-month delay in development while they awaited Knickle’s decision.
St. John’s Mayor Danny Breen says the city will continue using arbitration as an option instead of the courts, since arbitration is still a viable option to settle disputes.
“All it means is that it doesn’t automatically go to arbitration. There’s an opportunity for the developer to take it to court,” Breen said.
“A costlier, slower process would be the result.”
Knickle called the ruling a “mixed success” for Williams, to the point that neither side was awarded court costs as a result of the ruling. While the final figures aren’t known yet, city staff estimate the cost to the city to be about $100,000.
Elsewhere in the lawsuit, Williams alleged the city acted in bad faith by mandating the arbitration clauses, only seeking to prevent matters from heading to court.
Knickle noted that while the allegations appeared in affidavits from Williams, they weren’t pursued “with vigour at the hearing.”
“To the contrary, on a review of all the materials placed before the court, it is evident that the city has gone to great lengths to accommodate the developer,” Knickle wrote in her decision.
“It is unclear what the developer was seeking with this request.”
Breen says he doesn’t expect any issues to arise from the decision, relating to any other development agreements that would have had the mandated arbitration clause in place over the 20 years the city has been using them.
“I don’t see it as a loss. I see it as clarification of the use of the arbitration clause in the development agreement. I see it as a vindication on some of the allegations that have been made about our staff,” said Breen.