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Judge grants Corner Brook Pulp and Paper stay of proceedings in Deer Lake Canal lawsuit

Deer Lake resident Richard Dewey speaks with NDP Leader Lorraine Michael about the alleged seeping of water from Deer Lake canal that is flooding area properties and homes.
In this Western Star file photo, Deer Lake resident Richard Dewey speaks with NDP Leader Lorraine Michael about the alleged seeping of water from Deer Lake canal that is flooding area properties and homes.

Corner Brook Pulp and Paper has been successful in its application to have proceedings stayed in a court case related to water seepage issues along the Deer Lake Canal.

The paper company, its parent company Kruger Inc. and subsidiary Deer Lake Power, along with the Town of Deer Lake and the provincial government, are defendants in the class-action lawsuit launched by a group of property owners who claim flooding has caused damage to their homes near the canal.

The canal is part of the infrastructure built for the hydroelectricity plant in Deer Lake that has been providing power to the Corner Brook mill since it began operations in 1925.

The legal action commenced in May 2015.

In December 2016, Corner Brook Pulp and Paper argued in court that there are century-old agreements between the company and the Government of Newfoundland and Labrador, and legislation dating back to the 1920s, which outline how disputes between the company and third parties are to be settled.

The company argued the mechanisms in place include settling disputes such as the issues these property owners have through arbitration, rather than litigation.

Litigation would still be available to those third parties if they were not satisfied with the arbitration results, but there should be arbitration first, according to the legal interpretation of the company's lawyers.

The plaintiffs had argued that arbitration could involve hearings for 350 or more individual cases. The plaintiffs also wanted the application to be heard as part of the class-action lawsuit and not prior to the lawsuit's certification by the courts.

Justice David Hurley, who heard the arguments in the Supreme Court of Newfoundland and Labrador, recently released his decision to grant the stay of proceedings, provided the matter is referred to mandatory arbitration.

The application for the stay of proceedings was opposed not only by the plaintiffs, but also the Town of Deer Lake and the provincial government. Neither Kruger, nor Deer Lake Power, made any arguments on the matter.

The court was also told that Deer Lake Power Company Limited is a corporate entity that is actually no longer in existence.

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