Grape Island Lawsuit Against City

By John Swartz

The City of Orillia was served with a Statement of Claim August 15 by the Grape Island Property Owners Association Inc. (GIPOA).  Monday’s committee meeting had a addition to the agenda that was not published along with the rest of the agenda last Friday recommending council approve spending $75,000 for legal fees to retain Robert Wood of Borden, Ladner, Gervais LLP to defend the City.

The GIPOA is seeking to have the temporary use by-law the City passed last year to regulate how and when the road allowance and dock at the end of Forest Avenue can be used as ‘no force and effect,” and that the by-law relating to the waterlot in Lake Simcoe has “no force and effect” by way of the legal principle of proprietary estoppel.

Proprietary estoppel can come into play when a property owner (in this case the City/road allowance-waterlot) allows use to another party and that party (GIPOA) believes the owner has granted certain rights and benefits; the other party acts on that belief to their detriment; and the owner then denies the perceived rights and benefits.

The statement of claim outlines a series of events dating back 60 years which lead residents to believe they had a right to, among other things, put docks in during the boating seasons and use the road allowance and waterlot as needed.

The GIPOA is asking for damages of $150,000 per vacant lot on the island and $540,000 per lot with a cottage. The total amount will be approximately $3.1 million if they win

In short the GIPOA is claiming the City has no right to regulate how the island residents use the access to Lake Simcoe and their homes by reason of 60 years of practices and events outlined in their claim

While the City in its Statement of Defence admits to some of the historical facts of the statement of claim, it does say current provincial law allows them to regulate as they have done.

There was little discussion when the item came up during the meeting, though some councillors expressed regrets.

“I’m sad to see that it has come to this point in time and it has come to this,” said councillor Mason Ainsworth. “I think it’s important, for future reference, when other issues do come up its very important the different community groups come together and do work at finding solutions.”

Councillor Dave Campbell said while campaigning he heard there was a willingness on both sides to come up with a solution. “I’m very disappoint its come to this,” he said.

Councillor Rob Kloostra, who chaired the meeting, also expressed his regret about the turn of events, and commented on having to approve the legal fees.

“Seventy five thousand dollars from the tax rate stabilization reserve is a potential amount of money that could be used somewhere else in the City,” said Kloostra. “Moving forward I hope there is a resolution that does not cost the taxpayers more than the allotted money that is being approved today.”

After the meeting Mayor Steve Clarke spoke with SUNonline/Orillia.

“Quite frankly I was disappointed. I will say the City had been working on options for a long-term solution and we’re actually coming forward with a report, I believe, right around now, maybe in October, with some proposals. Of course that message we received they were taking the action put a halt to that,” said Clarke.

He was asked about how long it might take for it to be dealt with, either through the court or by settlement.

“I’m not a lawyer, I don’t know. The City has a fairly broad jurisdiction to regulate road allowances and waterlots, we’ll let the process unfold. It’s also unfortunate because this is going to cost the City some money; we’ll be seeking relief of legal fees from (them).”

The City will file a motion to recover legal fees from the GIPOA.

Issues came to a head when complaints from island residents and residents adjacent to the Forest Avenue road allowance started making complaints to the City during the last few years.

In one case the property owner west of the road allowance put in a dock which crossed into the City’s waterlot. This caused some issues with the docks Grape Islander’s installed during the boating season.

There also has been over the past few years higher use of the road allowance and waterlot for barging operations. Trucks meet the barge, which then takes supplies and septic services to the island.

Sign at gangway to GIPOA dock.

Complaints about how often barging was done and the length of time trucks were parking, and issues with the congestion of docks prompted the council to pass a temporary use by-law restricting how often and time of the week barging would be permitted and placed other restrictions on the use of the waterlot by island residents until a permanent resolution among both groups of residents and the City could be reached.

“We did receive a number of complaints over the years about land use in that area. We’re really working towards finding a solution, a long term solution that’s amenable to both the land based and island residents,” Clarke told SUNonline/Orillia.

These days municipalities are wary of granting rights of use to any one group over municipally owned property, despite what may have historically been the case in any situation.

“The Grape Island property owners association are seeking proprietary rights over a City asset, so we have to always weigh what we allow one group to do a what the use is for everybody else in the City,” Clarke said.

Should the GIPOA win, the question rises whether any damages would come from tax revenue, or reserve accounts, or from the City’s liability insurance.

Clarke did not know the answer. Councillor Ted Emond thought insurance might have some involvement.

“It will depend on the terms of our liability insurance. That would be the first place I would suggest we go, but I don’t that,” Emond told SUNonline/Orillia, later adding, “Typically on something like this we’d go to the insurance company.”

“Ultimately the taxpayer is responsible whether we have a claim against us (for insurance purposes). The insurance rates would recuperate it (from future premiums).” Emond said.

Either way taxpayers lose, “It’s a significant liability that if we lose every tax payer would be vulnerable,” Emond said.

A statement from the City’s treasury department has been received.

“The City is inquiring with our insurance company to determine to what extent the claim would be eligible. The cost would be funded from the Tax Rate Stabilization Reserve and/or insurance, but will depend on the outcome.”

The decision needs to be ratified at next Monday’s regular council meeting, and it’s likely no councillor will mount opposition to the City spending money defending itself.

(Photo by Swartz – SUNonline/Orillia)

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