A property developer who had been approved by the Town of Winnipeg Beach for a 44-lot subdivision is taking the town to court, alleging it delayed his development, caused him significant financial losses and damaged his reputation.
Vince Dery of Arnes-based VRD Property Developments Inc. filed a statement of claim in Manitoba Court of King’s Bench a few weeks ago, alleging his Lakewood Estates residential subdivision near the intersection of Lake Avenue and Strollway Street on the west side of town suffered “excessive” delays.
Dery’s statement of claim says the town approved the project in February of 2019 and that it’s in breach of a 2019 development agreement and liable for misfeasance in public office as it encouraged him to pursue the development based on that agreement.
Dery told the Express last week that the loss of sales from the lots, which were conditional on the completion of the subdivision, is estimated to be around $764,000. But he also incurred other financial losses associated with the development. Buyers walked away because the town “couldn’t get it together.”
“The court will ultimately decide a ballpark figure for the losses. The $764,000 represents just the lots that had been sold,” said Dery. “And there are all my other expenses and lost income over about four and a half years. On multiple occasions we paid costs for the exact same thing, such as legal and engineering fees, because a new CAO [chief administrative officer] would come in and start the process all over again. I dealt with eight CAOs since 2019.”
In addition to his financial losses, Dery said his reputation as a developer took a hit because he wasn’t able to “deliver” the lots to people who had paid a deposit then pulled out. Their deposits were refunded in full.
“Because this has been extended and extended and extended with the town not meeting the timeframes, a lot of buyers became frustrated and left,” said Dery. “And then interest rates started rising and inflation hit so it killed the development when the town didn’t honour their development agreement and their letter of credit.”
In February 2019, town council at the time had passed a resolution approving Dery’s subdivision with a number of conditions, including that he enter into a development agreement. An agreement was later prepared indicating Dery was to provide a $10,000 letter of credit.
But the town subsequently changed the amount of that credit letter numerous times, he said. At different times he was asked for $309,000, $400,000 and $1 million. Then in December 2022 the town informSed him it would require a credit letter in the amount of $623,385.
That constituted a “breach of the express term” outlined in the 2019 development agreement, according to the claim.
Dery was given a final deadline of April 4, 2023, to sign the agreement but with the $623,000 credit letter – an amount exceeding his costs – and he said he felt obliged to sign it as he would have to start the entire approval process over again from the beginning. He would also have to pay all the costs associated with that.
Although the 2019 development agreement was not signed in 2019, the statement of claim alleges the parties were “ad idem with respect to the essential terms of the agreement and proceeded with the project on the basis of the terms” of that agreement. Ad idem is a legal phrase to describe the agreement of parties to the same thing.
“My lawyer, Dave Hill [of Hill Sokalski Walsh LLP], says the [2023] contract is void because the original 2019 development agreement would stand regardless of employee turnover at the town,” said Dery. “A continuous body of government should honour the first original agreement for a $10,000 letter of credit.”
The Express reached out to the Town of Winnipeg Beach for comment, but it did not respond by deadline.
