Fredericton Exhibition sues city over alleged interference in property use
Fredericton Exhibition says city violated sections of Landlord and Tenant Act
Fredericton Exhibition Ltd. is suing the City of Fredericton over alleged violations of the Landlord and Tenant Act.
The exhibition is seeking at least $8,252 in damages it says occurred when the city didn't consent to a collateral mortgage and stifled subleases with potential tenants.
The suit was filed in the Court of Queen's Bench on March 19.
Mike Vokey, the executive director of the exhibition, said the city hasn't been living up to its obligations under the act.
"Both parties have obligations," said Vokey.
"The tenant has obligations, in our case to look after the property and run the exhibition. … The city, they have obligations to provide. We feel we're doing our very best to live up to our obligations of the agreement and the city is not providing, living up to their end of the agreement."
No one from city hall would speak about the lawsuit, but the city did send a one-line statement.
"We have not been served with any legal documents at this point in time and are unable to comment any further on a matter that may end up before the courts."
Mortgages and subleases
The claims against the city refer to three separate decisions.
The organization claims the city "unreasonably withheld" consent to a collateral mortgage between the exhibition and the Royal Bank of Canada. With a collateral mortgage, a lender can lend more money when the value of the property increases without the need to refinance.
The claim also alleges the city unreasonably withheld consent for the exhibition to extend its sublease with William's Seafood Ltd., which owns a restaurant on the grounds, to Dec. 31, 2031, when the current lease between the city and exhibition ends.
Finally, the claim alleges the city unreasonably withheld consent for the exhibition to lease the second floor of the former Winners Lounge to boxer Brandon Brewer to build a gym.
The allegations have not been tested in court.
In addition to the $8,252 in damages, the exhibition is also asking the court to order the city to allow it to move forward with the mortgage and the subleases.
Plans don't include exhibition
Much of the subtext of the conflict between city hall and the exhibition has to do with the city's view that the land should be used for something other than the exhibition.
The city would like to use the land for residential development.
"That land ... is valuable to the residents of Fredericton for many reasons," Mayor Mike O'Brien said in a 2017 interview with Information Morning Fredericton. "We're growing."
The exhibition's lease with the city lasts until the end of 2031, but in December, city council voted to start discussions to free the land up for development.
Door still open
While the suit has been filed, the matter won't proceed to the courtroom stage until mid-August, theoretically giving the city and the exhibition time to address some of their disagreements.
Vokey said the door is still open for discussions with the city.
"It should've been resolved by now and it certainly can be resolved without going to court," said Vokey.