Nova Scotia

Concerns about CBRM land deal dominate constructive dismissal trial

The concerns of former economic development manager John Whalley, who is suing the Cape Breton Regional Municipality, were echoed in court Thursday by the municipality's CAO.

CAO Marie Walsh tells court she too had concerns about McKeil agreement, shared them with Mayor Cecil Clarke

John Whalley alleges his demotion was effectively a firing. (Wendy Martin/CBC)

The Cape Breton Regional Municipality's top administrator told a Sydney, N.S., courtroom Thursday she had numerous concerns about a controversial port development deal with McKeil Marine Ltd. in 2015.

CAO Marie Walsh was the final witness at the Nova Scotia Supreme Court trial dealing with the constructive dismissal lawsuit launched against the CBRM by its former economic development manager of 18 years.

John Whalley alleges he was stripped of his duties overseeing port development after he raised concerns about the McKeil deal and refused to recommend it to council. He resigned in May 2015 and is seeking severance.

Walsh was the CBRM's chief financial officer at the time. She testified she also raised concerns about deal, which saw the municipality buy harbour property from one company for $1.2 million and lease it to McKeil, a supplier of tugs and other marine equipment.

Among them, she said the CBRM would lease the land to McKeil but not charge property tax. She also said the terms of the lease were for less than market value.

McKeil Marine Ltd. is a supplier of tugs. (Gary Mansfield/CBC)

Walsh testified she told CBRM officials, including Mayor Cecil Clarke and then-CAO Michael Merritt, that she could not recommend the deal because she believed it provided a benefit for a private company, and thus violated the Municipal Government Act.

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Walsh said CBRM officials, including Merritt, subsequently met with the Department of Municipal Affairs, and the deal was later approved by council.

Whalley's lawyer, Blair Mitchell, asked Walsh to examine a copy of the McKeil agreement, which appears to be signed by the mayor and dated April 7, 2015 — more than two months before council formally ratified it.

Walsh said she was not aware the mayor had signed the document prior to the council discussion on the matter. But she said it would not be legally binding without council approval.

CBRM Mayor Cecil Clarke is running for the PC Party leadership. (Michael Gorman/CBC)

Following a cabinet meeting in Halifax on Thursday, Municipal Affairs Minister Chuck Porter was asked about Clarke's actions and whether he had any concerns with testimony and evidence revealed in court this week. Porter refused to comment, citing the ongoing court case.

"We do not want to influence, in any way, shape or form, what the outcome will be," he said.

Porter said he wasn't aware of his department receiving any complaints about Clarke's conduct.

Clarke, who is running for the leadership of the Nova Scotia PC Party, could not be reached for comment on Thursday.

The trial is being held in Nova Scotia Supreme Court in Sydney. (Robert Short/CBC)

In court, as Mitchell pursued further questions about the McKeil deal, the CBRM's lawyer appeared to lose patience.

Tony Mozvik said the questioning was "getting into the weeds" and that he couldn't see how a contract signed following Whalley's resignation applied in the case.   

"It's just an attempt to embarrass people," Mozvik told the court.

Mitchell argued Whalley's reassignment away from port duties on May 28, 2015, was designed to prevent him from raising his concerns about the deal with council.

On a personal note, Walsh testified that she "thought the world" of Whalley and that he was one of the municipality's best employees.

Lawyers for both sides will make their final submissions in the case on Friday.