Water issue expected to burst on Bell Island
Law firm for town withdraws from case; company awaits town’s next move
Talk about the Town of Wabana mistakenly selling a valuable clean-water dispensary unit along with the sale of the old fire hall building to a local company seems to have slowed to a trickle in the past couple of weeks.
But you get the sense on Bell Island — particularly with the municipal election campaign underway — that a political dam is about to burst.
And there’s no telling what could come out in the wash.
The Telegram reported that Beachstone Enterprises Inc. purchased the old fire hall from the town last year and subsequently discovered the deed to the property takes in the town’s nearly $400,000 Advanced Drinking Water System housed in a small building next to the old fire hall.
Beachstone Enterprises owner Jim Bennett sent documents to the town asking it to pay rent of $3,000 per month for access to the facility. The lease agreement he proposed also included a $2,500 security deposit and a $50-per-day late fee should the rent not be paid on time.
The story drew national attention and many people were lambasting both the council and the business owner over the mess.
Wabana Mayor Gary Gosine threatened that if the company didn’t give the water unit back, the town would expropriate the company’s property, including the old fire hall, and effectively shut down Beachstone’s cabinet manufacturing shop housed in the building.
An Aug. 7 letter sent by the law firm Stewart, Mckelvey on behalf of the town to Beachstone Enterprises stated that neither party intended that the water system was to be included in the sale. Lawyer Christopher Lewis said his firm was preparing to forward a “deed of rectification” to Beachstone to correct the erroneous conveyance of the water system. If Beachstone was not willing to sign the deed of rectification, the town would take the matter to Newfoundland Supreme Court.
Gosine told The Telegram in an Aug. 23 story that another letter was sent to Bennett telling him to “either cough it up or it will be expropriated.”
When asked about that letter on Thursday, Bennett said he’s not heard anything since he received it and, in fact, has been told Stewart, Mckelvey no longer represents the town on the issue.
“We have no idea what’s going on,” Bennett said. “We don’t have a comment. They’ve fired their lawyers, so we don’t even know who we are dealing with.”
When asked on Thursday if the town had fired its lawyers, the normally outspoken Gosine said he’s since been asked at a council meeting to “not say a word.”
“I was told to say in the future, ‘I have no comment,’ because it’s in the hands of a lawyer now,” Gosine said.
Lewis, however, told The Telegram his law firm wasn’t fired, but withdrew from continuing to represent the town in the case against Beachstone. He said his firm still represents the town on other matters.
“We are not acting on that particular matter for them,” Lewis said. “We are still their counsel for other matters, but on that particular matter we’ve withdrawn, and there are various reasons for that, but nothing I can speak about. We didn’t leave the matter on bad terms or anything like that.”
He noted it is not uncommon to encounter issues during real estate transactions, but usually both sides are agreeable to sort the situation out fairly. In fact, he said, there are hundreds of cases in the Registry of Deeds where rectification of deed documents have been filed.
“I can tell you it’s not at all uncommon for deeds of rectification to have to be issued on real estate transactions for any number of reasons,” Lewis said. “Usually there’s no issue with the parties agreeing to rectification when there’s been a misunderstanding about what was to be conveyed.”
Gosine would not say which law firm would now represent the town on the issue.
The water system in question sits inside a roughly 12-foot by 20-foot building and is a potable-water dispensing unit — a small-scale water treatment system that pumps and treats water from the municipal supply and stores the water for residents to collect at their convenience.
Town minutes from 2016 show the town council issued a request for proposals regarding the original fire hall, rather than have the building torn down because of its rundown condition.
Beachstone Enterprises was the only proposal received and the town voted to proceed with the sale.
All seemed good until Beachstone read the deed and realized it had acquired more property than originally thought.