MULGRAVE: The Strait of Canso Superport Corporation has filed a law suit against the Town of Mulgrave over a sewer bill they claim is discriminatory, made in bad faith, made for an improper purpose, and is illegal.
The claim, which was filed in Halifax Supreme Court on Nov. 2, 2021, and only mentioned during the June 6 regular council meeting when associates of Grant Thornton advised council while they were presenting council’s 2022-23 consolidated financial statements, with money set aside for their legal proceedings.
The Superport owns and operates the Mulgrave Marine Terminal in the Port of Canso, a deep-water port for large shipping vessels. The terminal facility is approximately 15.6 aces and consists of lands, buildings, and a public wharf.
Director of Communications with the Nova Scotia Judiciary, Jennifer Stairs advised only three documents have been filed in Supreme Court so far; the Notice of Action, the Notice of Defence with Counterclaim, and the Notice of Defence to Counterclaim.
“At this stage, there are no scheduled court dates in this matter,” Stairs told The Reporter in an email.
According to the court documents provided by the Nova Scotia Judiciary, the Superport claims they have been being taxed on a tax-exempt portion of their assessment, which comprises approximately 2.1 acres along the public wharf.
They go on to suggest in 2006, the town enacted the Sewer Charges Bylaw to defray the costs of the municipal sewer system to residents and businesses. In 2016, the town notified them of their intention to levy the sewer charges against the wharf portion of the lands.
“Prior to 2016, the town’s annual tax bills showed the taxable and tax-exempt assessments separately. The town’s amended 2016 property tax invoice shows the sewer levy charged against the total assessment of lands,” Superport’s Notice of Action reads. “The town’s sudden and unprecedented imposition of the sewer charge to the wharf portion was part of a broader effort by the town to generate additional municipal revenue.”
The Superport registered its objection to the purported charge against the wharf portion immediately upon being notified.
Subsequently by a letter dated Feb. 1, 2021, the town notified the Superport that 2019 and 2020 property tax arrears exceeded $150,000 and threated tax sale proceedings failing payment of the amount within 14 days. Again they wrote to the town reiterating its objection to remittance of the sewer levy in respect to the wharf portion of the lands.
“The impugned levy is, in substance, a tax on a tax-exempt assessment rather than a regulatory charge,” the Notice of Action said.
The Superport suggests the amount of the town’s impugned levy, consisting of approximately $21,000 in additional municipal property taxes per year, is arbitrary and bears no relation to the cost of operating the sewer service, which constitutes an illegal and invalid charge.
Along with a declaration that the wharf portion of the lands is not subject to application of the sewer charge, the Superport is seeking damages and costs.
In their Notice of Defence and Counterclaim, the town denied the majority of the Statement of Claim and noted that the charge is not a tax but a charge that is expressly authorized under section 81 of the Municipal Government Act.
“The town denies that the charge is illegal, invalid, discriminatory, made in bad faith or made for an improper purpose,” the Town of Mulgrave said. “The town specifically denies that it is estopped from collecting the charge and says that the doctrine of estoppel is inapplicable.”
The town requested this action be dismissed with costs as they are charging the Superport for sewer charges pursuant to their Sewer Charges Bylaw.
“Contrary to the Sewer Charges Bylaw, the plaintiff refuses to pay the charges that apply to the wharf portion of the property,” the town’s counterclaim read. “The town claims an order for judgement against the plaintiff for $232,904.”