From today's Star
KERRY GILLESPIE
CITY HALL BUREAU
A start-up airline has filed a long-threatened $500 million lawsuit against the City of Toronto, specifically alleging that Mayor David Miller "abused his powers of public office."
"I was quite shocked at the personal nature of the allegations," Miller told reporters after reading the 17-page statement of claim filed yesterday by Regional Airlines Holdings Inc. (REGCO.)
Miller campaigned on a promise to stop a 122-metre-long bridge to the island airport that would allow the number of daily flights to increase from five to 55.
At a December meeting, councillors voted with Miller 28-16 to reverse a previous council decision allowing a bridge.
The lawsuit alleges Miller "threatened councillors with a failure to appoint them to key council committees and other posts if they voted against his wishes."
It also alleges that Miller advised city staff their jobs were "dependent upon" council scuttling the bridge deal. The allegations have not been proved in court.
Miller dismissed any suggestion that he abused power.
The suit also alleges Miller was partially motivated "by a desire to reward the plaintiff's competitor airline, Air Canada, for a letter ... disclosed to the media at a critical time in the election campaign."
During the mayoral campaign, an Air Canada Jazz letter about its interest in flying jets (currently not allowed) out of the airport was leaked, fuelling fears that if a bridge were built jets would soon follow.
Miller may have been shocked by the personal nature of some of the allegations in the lawsuit but wasn't at a loss for words over any of it.
"It's absurd, it's outrageous, it's nonsense, it's unbelievable, it's ridiculous. Does anybody have a thesaurus? There must be some other words to describe it. It's ludicrous," Miller said about the entire lawsuit.
"I think it shows that this private business person is trying to hold the residents of Toronto to ransom.
"To claim $500 million for an airline that only exists on paper is just patently absurd," Miller said.
Robert Deluce, president and CEO of REGCO, counters that his company moved forward with contracts and spent money hiring staff specifically because of council's approval of the bridge in November, 2002, and again last June.
"Attempting to cancel the agreement and delay construction of the bridge, the city has breached its legal obligations to REGCO and is therefore liable for damages," Deluce said in an interview.
The lawsuit seeks $505 million in damages, plus court costs and GST, as well as a declaration that the city is bound by its original bridge approval.
The island airport is governed by a tripartite agreement between the city, the federal government and the Toronto Port Authority, which manages the airport.
After the city voted to kill the bridge, the federal government said it would support the city's decision.
The port authority also suspended construction of the bridge, and indicated it might change its position if the city or the federal government paid the $6 million to $7 million it has spent in planning for the bridge and a further $30 million to upgrade the existing ferry.
But as of yesterday, Deluce said his company was still in discussions with those groups and felt it had a strong lawsuit only against the city. "Depending how those discussions go with the port authority and the federal government, it is possible that additional parties would be named," Deluce said.
Yesterday, officials from the port authority and Ottawa kept their heads down.
Spokespeople for both the Toronto Port Authority and federal Transport Minister Tony Valeri said they had no comment on the lawsuit as it was before the courts and a matter between the city and the airline.
Few councillors were surprised by the suit.
"It was to be expected," said Councillor Doug Holyday, who was one of the loudest critics of reversing council's approval.
"I certainly believe they have incurred some costs over our dealings," Holyday (Ward 3, Etobicoke Centre) said.
More than $500 million worth?
"Lots of times people sue for a lot more than they ever expect to get, and I think that probably would be the case here as well," Holyday said.
Councillor Denzil Minnan-Wong said he will ask city staff to report on the merits of the lawsuit and how much it will cost to fight it at a meeting tomorrow of the administration committee.
"This is David Miller's lawsuit because he, in fact, promised the taxpayers of the city of Toronto, that we wouldn't be on the hook on this. ... Any costs, David Miller has to take full responsibility for, from this day forward," said Minnan-Wong (Ward 34, Don Valley East).
Councillor Brian Ashton, chair of the economic development committee, wasn't overly concerned about the lawsuit. "You can buy a lawsuit for a couple of bucks, it doesn't mean it will be successful," said Ashton (Ward 36, Scarborough Southwest).
KERRY GILLESPIE
CITY HALL BUREAU
A start-up airline has filed a long-threatened $500 million lawsuit against the City of Toronto, specifically alleging that Mayor David Miller "abused his powers of public office."
"I was quite shocked at the personal nature of the allegations," Miller told reporters after reading the 17-page statement of claim filed yesterday by Regional Airlines Holdings Inc. (REGCO.)
Miller campaigned on a promise to stop a 122-metre-long bridge to the island airport that would allow the number of daily flights to increase from five to 55.
At a December meeting, councillors voted with Miller 28-16 to reverse a previous council decision allowing a bridge.
The lawsuit alleges Miller "threatened councillors with a failure to appoint them to key council committees and other posts if they voted against his wishes."
It also alleges that Miller advised city staff their jobs were "dependent upon" council scuttling the bridge deal. The allegations have not been proved in court.
Miller dismissed any suggestion that he abused power.
The suit also alleges Miller was partially motivated "by a desire to reward the plaintiff's competitor airline, Air Canada, for a letter ... disclosed to the media at a critical time in the election campaign."
During the mayoral campaign, an Air Canada Jazz letter about its interest in flying jets (currently not allowed) out of the airport was leaked, fuelling fears that if a bridge were built jets would soon follow.
Miller may have been shocked by the personal nature of some of the allegations in the lawsuit but wasn't at a loss for words over any of it.
"It's absurd, it's outrageous, it's nonsense, it's unbelievable, it's ridiculous. Does anybody have a thesaurus? There must be some other words to describe it. It's ludicrous," Miller said about the entire lawsuit.
"I think it shows that this private business person is trying to hold the residents of Toronto to ransom.
"To claim $500 million for an airline that only exists on paper is just patently absurd," Miller said.
Robert Deluce, president and CEO of REGCO, counters that his company moved forward with contracts and spent money hiring staff specifically because of council's approval of the bridge in November, 2002, and again last June.
"Attempting to cancel the agreement and delay construction of the bridge, the city has breached its legal obligations to REGCO and is therefore liable for damages," Deluce said in an interview.
The lawsuit seeks $505 million in damages, plus court costs and GST, as well as a declaration that the city is bound by its original bridge approval.
The island airport is governed by a tripartite agreement between the city, the federal government and the Toronto Port Authority, which manages the airport.
After the city voted to kill the bridge, the federal government said it would support the city's decision.
The port authority also suspended construction of the bridge, and indicated it might change its position if the city or the federal government paid the $6 million to $7 million it has spent in planning for the bridge and a further $30 million to upgrade the existing ferry.
But as of yesterday, Deluce said his company was still in discussions with those groups and felt it had a strong lawsuit only against the city. "Depending how those discussions go with the port authority and the federal government, it is possible that additional parties would be named," Deluce said.
Yesterday, officials from the port authority and Ottawa kept their heads down.
Spokespeople for both the Toronto Port Authority and federal Transport Minister Tony Valeri said they had no comment on the lawsuit as it was before the courts and a matter between the city and the airline.
Few councillors were surprised by the suit.
"It was to be expected," said Councillor Doug Holyday, who was one of the loudest critics of reversing council's approval.
"I certainly believe they have incurred some costs over our dealings," Holyday (Ward 3, Etobicoke Centre) said.
More than $500 million worth?
"Lots of times people sue for a lot more than they ever expect to get, and I think that probably would be the case here as well," Holyday said.
Councillor Denzil Minnan-Wong said he will ask city staff to report on the merits of the lawsuit and how much it will cost to fight it at a meeting tomorrow of the administration committee.
"This is David Miller's lawsuit because he, in fact, promised the taxpayers of the city of Toronto, that we wouldn't be on the hook on this. ... Any costs, David Miller has to take full responsibility for, from this day forward," said Minnan-Wong (Ward 34, Don Valley East).
Councillor Brian Ashton, chair of the economic development committee, wasn't overly concerned about the lawsuit. "You can buy a lawsuit for a couple of bucks, it doesn't mean it will be successful," said Ashton (Ward 36, Scarborough Southwest).
