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HomeMy WebLinkAboutPD-258-91 THE CORPORATION OF THE TOWN OF NEWCASTLE DN: LIZA.GPA REPORT Meeting: council File # Date: Monday, November 18 , 1991 Res. # Report#: PD-258-91 File #: By-Law# Subject: SUBDIVISION AGREEMENT LIZA DEVELOPMENT 18T-89013 621182 ONTARIO LIMITED Recommendations: It is respectfully recommended to Council the following: 1. THAT Report PD-258-91 be received; and 2 . THAT staff be authorized to proceed to finalize the subdivision agreement with Liza Developments (621182 Ontario Limited) as per the recommendations from the Town's solicitor attached to this report. BACKGROUND Attached is a letter dated November 15, 1991, from the Town's solicitor. The letter is self-explanatory. Due to the urgency of this matter, a special council meeting is required to deal with this matter. Respectfully submitted, Recommended for presentation to the Committee /2 Lawrence E. Kotseff _Direc of Planning Chief Administrative and Development Officer FW*ld *Attach 18 November 1991 nos 11 room o nn R S hibley Righton Barristers & Solicitors RICHARD E.SHIBLEY,Q.C. RUPERT F.RIGHTON,Q.C. HAROLD H.ELLIOTT,Q.C. Tel.:(416)363-9381 DENNIS C.HEFFERON DONALD K.ROBINSON,Q.C. RICHARD E.AN KA,Q.C. BARRY S.WORTZMAN,Q.C. LESLIE S.MASON DEZ WINDISCHMANN JOHN P.BELL MICHAEL FITZPATRICK,Q.C. GEORGE CORN Fax.:(416)365-1717 PETER H.SMITH BRIAN M.CAMPBELL V.ROSS MORRISON P.JOHN PITCHER ALAN L.BROMSTEIN JOHN C.SPEARN MICHAEL C.BIRLEY PETER C.WILLIAMS RICHARD A.B.DEVENNEY MICHAEL L.PATERSON J.PAUL WEARING PAUL E.McINNIS BERNARD MCGARVA PETER G.NEILSON CLIFFORD I.COLE JONATHAN H,FLANDERS CHARLES SIMCO THOMAS A.STEFANIK BARBARA R.C.DOHERTY WILLIAM L.NORTHCOTE JAMES ROSSITER Box 32 - 401 Bay Street HELDER M.TRAVASSOS PETER M.WHALEN PETER V. RAYTEK J.JAY RUDOLPH CYNTHIA J.GUNN MARTIN J.HENDERSON Toronto,Canada NICHOLAS T.MACOS WARREN S.RAPOPORT RICHARD E.COLES CHRISTOPHER B.LOBS MARTIN PETERS ALEXANDER P.TORGOV SEAN M.FORAN CHARLES M.GASTLE PHILIP P. HEALEY M5H 2Z1 R.PETER A.MACDONALD DONALD A,McNEILL SHEILA M.QUIGLEY CHARLES G.T.WIESE TIMOTHY J.HILL J.PAUL R.HOWARD WADE D.JAMIESON LEONARD D.RODNESS NETANUS T.RUTHERFORD THOMAS R.WHITBY SANDRA E.DAWE LINDA J.GODEL JANIS E.INGRAM CHRISTINE M.SILVERSIDES SALVATORE J.P.FRISINA JOHN D.HISCOCK OSCAR J.SALA THOMAS McRAE Suite 1800 MICHAEL GORDON(1969-1991) The Simpson Tower COUNSEL MARTIN L.O'BRIEN,Q.C. BARRY D.LIPSON,Q.C. November 15, 1991 Mr. Franklin Wu Acting Town Administrator Town of Newcastle 40 Temperance Street Bowmanville, Ontario L1C 3A6 Dear Mr. Wu: Re: Proposed Subdivision Agreement between 621182 Ontario Limited and Others and The Town of Newcastle 621182 Ontario Limited is the owner of the lands within draft Plan of Subdivision 18T- 89013. (Liza Development Corp.) By By-law 89-130 passed on July 24, 1989, the Council authorized the making of a Subdivision Agreement to satisfy one of the conditions of the Region of Durham's approval of draft Plan of Subdivision 18T-89013. Title to the land in question is encumbered by certain mortgages including a mortgage in favour of Mr. Herbert Farncombe Gibson. Unfortunately, Mr. Gibson passed away earlier this week. I am advised by his solicitor, Mr. Erwin Hamilton, that Mr. Gibson's son is the executor of his estate. However, you will understand, that letters probate have not been applied for or issued as yet. Mr. Hamilton expects a delay of at least three weeks in the issuance of letters probate. Until they are issued, the executor of the late Mr. Gibson's estate who I am advised is his son,will not be in a position to execute documents on behalf of the estate. With regard to the execution of Subdivision Agreements, the standard practice of the Town is to require all persons who have an interest in the lands which are the subject of the draft plan of subdivision in question to execute the Subdivision Agreement before it is executed by the Mayor and Clerk on behalf of the Town. The standard form Subdivision Agreement Shibley Righton - 2 - contains a postponement provision under which each mortgagee agrees to postpone his right to the land to the rights of the Town under the Subdivision Agreement. This practice ensures that the Town's rights under the Agreement are superior to those of all owners of interest in the lands in question. You will recall that if a municipality has not passed a development charge by-law, the Development Charges Act, 1989 establishes a sunset date of November 23, 1991 for a by- law or resolution providing for the payment of charges related to development that was in effect on the date on which the Act came into force. Subdivision Agreements executed on or before that date continue unaffected by this sunset provision. The above Subdivision Agreement contains certain provisions that reflect the policies of Council previously adopted by by-law or resolution with respect to' such matters as development levies, and contributions for certain services. Because of the sunset provision just mentioned the Agreement could not be executed after November 23, 1991. However, as is indicated above, it simply is not possible in the circumstances for the executor of the late Mr. Gibson's estate to obtain authority to execute the Subdivision Agreement in question on or before November 23, 1991. I have examined the mortgage in favour of the late Mr. Gibson of the land to which draft Plan of Subdivision 18T-89013 applies. I have also discussed the situation with the late Mr. Gibson's solicitor, Mr. Erwin Hamilton. Mr. Hamilton advises that the mortgage is in good standing and permits the pre-payment before its maturity date of July 15, 1992 of part or all of the principal remaining unpaid. Mr. Hamilton has also advised me that he believes that prior to his death, the late Mr. Gibson was prepared to execute the necessary Subdivision Agreement. Further, Mr. Hamilton has no reason to believe when letters probate have been issued, the executor of Mr. Gibson's estate will not execute necessary documentation to postpone the Gibson mortgage to the rights of the Town under the Subdivision Agreement in question. In the urgent circumstances presented, I recommend that Council authorize the execution of the Subdivision Agreement after it has been executed by all other parties to it with the exception of the late Mr. Gibson provided that: (1) The Owner of the lands deposits with the Town's Treasurer an unconditional and irrevocable letter of credit issued by a bank and in a form satisfactory to the Treasurer in an amount which is sufficient in the opinion of the Treasurer to discharge the Gibson mortgage. (2) The Owner provide the Town's Solicitor with a written undertaking satisfactory to the Town's Solicitor under which the Owner undertakes that it will not register or permit or suffer any other person to register a final plan of subdivision against the title to the lands until either the Shibley Righton - 3 - Gibson mortgage is fully discharged and notice thereof is given to the Town, or an agreement containing terms satisfactory to the Town's Solicitor to postpone the rights of the mortgagee under the Gibson mortgage to the rights of the Town under the Subdivision Agreement is delivered to the Town and deposited against the title to the lands in question. .The undertaking will also provide that forthwith after receiving notice of any default under the Gibson mortgage, the Owner will deliver a copy of that notice to the Town. Finally, the Owner will be required to acknowledge in the undertaking that at any time the Town may draw upon the letter of credit in question, discharge the Gibson mortgage on behalf of the late Mr. Gibson's estate and repay any balance remaining to the Owner. I will be present at the meeting of Council to consider this matter and will provide any further information that may be necessary. I am also enclosing herewith a draft by-law to amend By-law 89-130. Yours truly, J 4 Dennis Hefferoll DH/ms Enclosure THE CORPORATION OF THE TOWN OF NEWCASTLE BY-LAW 91-_ Being a by-law to amend By-law 89-130 WHEREAS By-law 89-130 authorized the execution of a Subdivision Agreement between the Town,612282 Ontario Limited and certain other parties including the late Mr.Herbert Farncombe Gibson, one of the mortgagees of the lands to which the Agreement would apply; WHEREAS the Subdivision Agreement authorized by By-law 89-130 would apply in respect of the lands to which draft Plan of Subdivision 18T-89013 applies and would be made to satisfy a condition of approval of such draft Plan; WHEREAS the late Mr.Gibson died before the Subdivision Agreement could be executed by him and letters probate have not yet been issued to the executor of his estate; WHEREAS the Town's Solicitor,Mr.Dennis Hefferon has advised that it is urgent that the Subdivision Agreement be executed on or before November 23, 1991 because of the provisions of the Development Charges Act, 1989 and that the authority granted by By- law 89-130 requires amendment; WHEREAS Council has considered the communication from the Town's Solicitor, Mr, Dennis Hefferon dated November 15, 1991 dealing with this matter which is contained in Appendix "A" attached to and forming part of this By-law; NOW THEREFORE the Council of The Corporation of the Town of Newcastle enacts as follows: 1. THAT notwithstanding By-law 89-130, a Subdivision Agreement dealing with the lands to which draft Plan of Subdivision 18T-89013 applies may be executed on behalf of the Town if the owner of such lands and all other necessary parties with the exception of the late Mr. Herbert Famcombe Gibson have executed the Agreement, provided that the conditions set out in the letter from Mr. Dennis Hefferon to Mr.Franklin Wu dated November 15, 1991 and contained in Appendix attached to and forming part of this By-law are satisfied. 2. THAT subject to paragraph 1 of this By-law, the Mayor and Clerk are authorized to execute the Subdivision Agreement referred to in paragraph 1 on behalf of The Corporation of the Town of Newcastle. i BY-LAW read a first time this 18th day of November, 1991. BY-LAW read a second time this 18th day of November, 1991. BY-LAW read a third time and finally passed this 18th day of November, '1991. THE CORPORATION OF THE TOWN OF NEWCASTLE MAYOR CLERK