Government protected provincial interests in revoking resort deal: premier

Gary Kean
Published on August 22, 2014
Premier Tom Marshall answers questions during a break in provincial cabinet meetings held in Corner Brook on Thursday, Aug. 21, 2014.
Gary Kean

Premier Tom Marshall says he doesn’t believe the lawsuit launched by the current owners of Humber Valley Resort will taint his political legacy.

Marshall will be leaving politics in September, but the legal action currently before the Supreme Court of Newfoundland and Labrador won’t likely be resolved before that.

The numbered company that took ownership of the resort in March 2010 is suing the province for $170 million. Its claim is that the province defied a Supreme Court order for a stay of proceedings involving any dealings involving the former owners of the resort as they went through the creditor protection process that ultimately ended in bankruptcy in 2008.

The allegation involves the province taking back expansion properties committed to the resort’s future development. The province took back the parcels of land just days before bankruptcy was declared because the former resort owners had defaulted on lease payments, as per the agreement in place.

The new owners, 61839 Newfoundland and Labrador Limited, also allege the province had no right to amend land grants involving parcels of Crown land used to establish the initial stages of the resort’s development. The replacement grants were issued after 61839 took ownership of the bankrupted resort and contained amendments concerning usage of the land.

When asked about the lawsuit during a press conference in Corner Brook Thursday, the premier said he had to be careful about discussing a matter still before the courts.

What he did say was that the province had an agreement in place, not unlike agreements for royalties on natural resources such as oil and minerals, to sell the land and get a six per cent royalty from the lots sold by the resort.

When the owners defaulted, Marshall said the agreement was broken and government took back what he said was owned by the people of the province.

“We protected the interests of the province,” said Marshall, noting the allegations made by the new owners have yet to be proven in a court of law.