Developer sues Anglican diocese for $9M

Claims church reneged on agreement to sell St. John’s property

Published on February 18, 2014

A St. John’s developer was all set to proceed with a 90-unit subdivision situated on more than 16 acres of land east of Portugal Cove Road.

But there’s a catch — the party that allegedly sold the land is claiming there is not an agreement of purchase or sale in place.

Powder House Hill Investments Ltd. is suing the Anglican Church’s Diocesan Synod of Eastern Newfoundland and Labrador for $9 million as a result, claiming that figure represents the value of a lost business opportunity. A statement of claim was filed in the Supreme Court of Newfoundland and Labra­dor earlier this month.

According to that document, an appraisal of the property set its value at $100,000 per acre. The company sent the church an offer to purchase the land through its lawyer in April 2008. Several conditions were attached to that offer. The company needed to successfully rezone the land, obtain the necessary approvals from the City of St. John’s and complete an environmental report and survey.

A letter received by Powder House in September 2008 said the Glebe Committee of the Anglican Cathedral had given its approval for the sale, subject to Diocesan Synod approval of other terms and conditions — one of which required the payment of a $10,000 deposit to be applied to the purchase price. The letter said a counter offer would be made following the completion of the survey and appraisal.

Shortly thereafter, the deposit was paid — the statement of claim said the church said it still has it. Since then, Powder House has reportedly worked with three levels of government in relation to the property as well as environmental engineers, civil engineers, surveyors, lawyers, planners, contractors and other professionals.

In October 2011, a lawyer for the church sent a letter to Powder House requesting confirmation the company wanted to purchase the land for $1.656 million, and an updated survey and a summary of the development plan.

Powder House sent a letter in response addressing those issues, to which the Diocesan Synod confirmed its receipt. The Diocesan Synod lawyer said it was waiting for further instructions from the church.

Work continued on the development. An engineering report was completed in 2012 and sent to the Diocesan Synod. The Department of Environment and Conservation agreed to issue a permit the following summer to allow the company to develop a residential development on the land.

Powder House attempted to set a closing date for the land purchase, but initially received no response from the Diocesan Synod. Counsel for Powder House wrote a second letter and received a response stating the Diocesan Synod believed there was no agreement of purchase and sale in place. The company contends in the statement of claim that amounts to a breach of contract.

The Telegram attempted to contact Powder House Hill Investments owner Bill Clarke and officials with the Diocesan Synod of Eastern Newfoundland and Labrador on Monday, but neither could be reached for comment.

 

arobinson@thetelegram.com

Twitter: @TeleAndrew