Council to seek separate legal opinion over Picton Terminals agreement

Shipping containers at Picton Terminals shown in this photo from Terminal – Picton Bay Facebook

By Sharon Harrison
The Picton Terminals saga didn’t move forward with bylaw approval as expected at Tuesday evening’s council meeting, where council decided instead (in closed session) to seek a separate legal opinion.

The bylaw not approved, would have authorized the mayor and chief administrative officer to execute the settlement agreement between County and ABNA Investments Limited (operating as Picton Terminals).

Council approved the motion in an 8-4 recorded vote (councillors Pennell, Nieman, Harrison and Grosso were opposed; Braney and Roberts were absent).

It was at the July 23 council meeting that County mayor Steve Ferguson announced to a surprised and packed Shire Hall that the settlement agreement had been accepted by Picton Terminals.

That meeting came on the heels of the June 25 council meeting where seven councillors voted (in closed session) in favour of pursuing a settlement with Picton Terminals.

Four deputations were heard at Tuesday’s meeting (slightly revised in some cases due to the bylaw update that began the meeting), along with comments from seven members of the public.

Lawyer Ryan Wallach, who has spoken on this topic several times at past meetings, gave his legal opinion, noting how Picton Terminals has not made a single argument in court, noting major flaws in the draft settlement agreement where he indicated how council should consider fixing four different issues if it plans to continue on this path.

“What’s interesting about the settlement agreement is the County hasn’t signed anything yet, so the County isn’t bound by its terms yet, and it can propose additional amendments.”

He also spoke to the natural escarpment and shoreline of the terminals’ properties, noting the settlement says, Picton Terminals will agree not to make alterations to the natural escarpment and shoreline without Quinte Conservation Authority approvals.

“The problem with the language is we’ve seen Picton Terminals claim that the entirety of its property is reserved for port operations, which means that there will be no part of the escarpment that is protected.“

Wallach also spoke to the hours of operations of the terminals, the logging and resolving of complaints, and aggregate extraction activities.

Here he reminded that “over the past decade, Picton Terminals has extracted aggregate and sold it for tens of millions of dollars without paying the County any royalties, all because it claimed it wasn’t engaging in aggregate extraction activities, but it was developing its port, and the rock it was selling was considered waste”.

“It is past time for the council to stop playing these settlement games with Picton Terminals, which is clearly behind this whole mess,” said Wallach. “I urge the council to reject this proposed settlement that Picton Terminals has put forward once and for all, and go have your day in court.”

Deputant David MacKinnon said he believes Picton Terminals will continue to be a threat to the health of everyone that lives in the County, and it will “continue to do serious damage, potentially catastrophic damage, to the County economy”.

He spoke to the legal advice the County has received, indicating how it should have been more substantial. He also referenced the word “draft” and his concern over wording in the agreement.

“A draft document, and everything enabled by it, remains a draft until the originator of the document removes that label, and you did not remove it,” said MacKinnon, “and that means the settlement as described as final is not, it must be viewed as a draft only, and is subject to change and negotiation.”

He noted that council now has the views of three lawyers on the purported settlement, in addition to the advice it has received from Gowlings in this matter.

“They generally agree with the advice to you in the comments that I am giving in this presentation, and the comments in it,” he said. “This opinion from several senior lawyers should be enough to encourage you to completely re-consider this matter, and deal with it very differently. “

“In any event, I do not think council can, or should, continue on the present path when a major national law firm describes the proposed settlement as illegal. It would simply be too risky to proceed in any way with that advice on the public record, and the implications would be serious if you did.”

“I welcome a new legal opinion, but this goes far beyond the law,” he added.

In his deputation, Michael Jowett said he found the 17-page settlement agreement “quite troubling”, specifically stating the reference to terms that are “really subjective and vague”. One example he gave was the word ‘reasonable’ or ‘reasonably’ were used 12 times.

“That particular word, it’s subjective, how do you measure it, and when you have that kind of vague wording, it can lead to conflict, because what is reasonable; you may have one concept of it, and I may have another, and then we get into dispute,” said Jowett.

He also noted that he didn’t see much by way of conflict resolution in the agreement.

“Having read through this document a number of times, I’d like to suggest a different name for this: ”terms of surrender”, because that’s how it reads.”

He also spoke to the secrecy surrounding the process.

“One of the problems I have with the process being used that things were done in secret is they can undermine the integrity of the council as a whole,” he said. “It can lead to suspicion, it can lead to mistrust, because when people don’t trust other people on one particular issue that mistrust can carry onto other issues.”

Speaking also to the process council have chosen to use, he said, “It can re-define the relationship between the people you serve and yourselves. They need to trust you because you are supposed to know,” he said, where he wanted to know the “good reasons” of those councillors who supported the settlement agreement.

“Tell us your side, enough of this secrecy,” he said. “I would like to request those of you who supported this, tell us why, give us a chance to consider your arguments.”

Comments from the audience came in the form of indicating how the settlement agreement is illegal, the serious issues with how Picton Terminals operates, how a draft is a draft, and the traffic burden on County Road 49 (with one calling it an “embarrassment of a highway”), with another indicating how the public “deserve a public consultation on this matter”.

Picton resident and business owner Penny Morris spoke to the threat to the drinking water, the cliff face, and direct neighbours of Picton Terminals, as well as the vague language in the agreement, the selling of County rock (without compensation), and health concerns among them.

“The potential settlement is a potentially massive expansion of a company who has not been a good neighbour, not respected laws, nor bylaws, and has not been good custodians of the environment”, said Morris.

Trevor Crowe, with Reynolds Farms, spoke on behalf of some of the farmers in the County, where he said the settlement agreement seems to strike a balance between the concerns of the citizens, the needs of the municipality, and the needs of Picton Terminals.

“For us as a family farm, and many other young farmers in the County, this is an exciting opportunity and I don’t want to see that kyboshed or tied-up in legalities,” said Crowe. “My point is to get this all and get the settlement done, and get provincial approval on the re-zoning.”

“I would like to see it made a grain terminal for the benefit of our grain farmers.”

He noted the nearest port is Prescott which is 180 kilometres away.

“We spend over $100,000 a year on trucking in fuel, that is a lot of emissions; shipping by boat is 10 times more efficient, and it is something that will benefit all the farmers, especially with better pricing, get their grains to market, more accessible, at a better price.”

The meeting wrapped-up with a report from the office of the integrity commissioner regarding code of conduct complaints regarding Picton Terminals litigation, specifically as it relates to a complaint filed pursuant to the council code of conduct.

In a brief summary, integrity commissioner Robert Swayze, noted he was asked by four members of council to undertake an investigation, which included an IT search. He said his role is to enforce the council code of conduct which prohibits council from disclosing discussions in closed session (he did remind that all information regarding Picton Terminals matter is now public – but wasn’t at the time).

“I wasn’t able to come up with any member of council, or any staff, that disclosed any confidential information,” said Swayze, who noted the strong message in his report.

“I want to make a strong recommendation and advice to council, if you are into litigation, it’s very important that the legal advice and the discussion be completely confidential,” he said, “My strong recommendation is that if you are dealing with litigation in closed session, don’t say anything, whether it’s known or not.”

He said because there is no specific information given, he didn’t recommend any sanctions against any member of council. “But I am really opposed to anybody who says anything about litigation that’s coming out of closed.”

Mayor Ferguson said the expectation of everybody around the horseshoe is when they are in- camera talking about confidential information, exposing, talking about that information contradicts the procedural bylaw and is not allowed.

Councillor Phil St-Jean asked if it also applies to members of council who are not in attendance in a closed meeting, asking if they are excluded from any conversations that occur in a closed meeting that they are not in attendance.

Swayze said he would prefer staff (not another councillor) notify the person who was not in attendance.

“I would not criticize staff for bringing a councillor up to date on a closed meeting that he or she did not attend,” where Swayze clarified it would be inappropriate for councillors to talk to councillors.

“If its litigation discussed in-camera, there shouldn’t be any discussion by any member of council that comes out of that meeting, that’s as strong as I can put it,” he said. “I didn’t recommend any sanctions because I didn’t have anybody that was guilty.”

Councillor John Hirsch who was cited in Swayze’s report as an example, asked why he shouldn’t have given an interview to local media, despite Swayze indicating in his report, “He is entitled to disagree publicly, and did not contravene the code, the procedural bylaw or the media relations policy”.

“Nevertheless, you indicated that I shouldn’t have given this interview, and I am curious what is the reason for that would be?” asked Hirsch.

Swayze said he didn’t impose sanctions against Hirsch for what he said, but said he disagrees with his decision to do the interview.

“It’s litigation; you are benefitting possibly the other side of the litigation and you’ve got to keep absolutely everything confidential as far as I am concerned,” added Swayze. “I am not going to recommend sanctions against somebody who discusses common knowledge, but it doesn’t help the County at all by that statement you made.”

Swayze indicated his investigation has now terminated, adding “I reject all of the comments I received that the County should not make a ‘secret deal’.“