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Region, city to meet over transit lawsuit

The Region of Durham and the City of Oshawa have agreed to meet to discuss the ongoing lawsuit between the two over unfunded liabilities leftover from when the city transferred its transit service to the region. A recent report detailed that the region alone has spent more than $722,000 in legal fees since the case was first filed in 2011.

By Graeme McNaughton/The Oshawa Express

Representatives from both the Region of Durham and the City of Oshawa have agreed to meet over a lawsuit between the two over millions of dollars left over from amalgamating the region’s transit agencies that has lasted for years.

During this month’s meeting of committee of the whole, Regional Chair Roger Anderson and Mayor John Henry indicated that they – along with Gary Cubitt, the region’s chief administrative officer, and Jag Sharma, Oshawa’s city manager – to meet “without prejudice” in regards to the legal matter between the two.

A meeting without prejudice means that, should a resolution not be reached, that whatever is said or revealed cannot be used in a court hearing or other legal arena.

The revelation came during a debate between councillors in regards to a report citing how much Durham has racked up in legal costs since the case involving unfounded liabilities after Oshawa’s transit agency to the region was first filed in 2011.

According to the report, first revealed in the March 17 council information package and again on the April committee of the whole agenda, the region has spent more than $722,000 in legal costs. The city received a similar report detailing its legal costs at a closed session of council in December.

Councillors expressed their concern for both the length of the suit, as well as the costs incurred thus far, and that something needs to change before it ends up in court.

“These ideas were brought forward to the city council of Oshawa, and the mayor and council of the day refused. Hence, we have tried through different avenues to renegotiate, to do what we can, and that refusal still persists at this point in time,” says Councillor Nester Pidwerbecki.

“I think the problem we have is Oshawa says ‘No, we’re not liable for those debts.’ Pickering and Ajax said we are, and they paid theirs. I don’t know how we’re going to unwind this unless we get back to the table again.”

Councillor John Aker adds that the longer the case drags on, the more it’s going to cost taxpayers.

“There is going to come a point…where we’re going to embarrass us, ourselves. When the $722,000 becomes $1.1 million or $1.3 million or $1.5 million, the citizens are really going to wonder what is going on,” he says.

“At some point, it’s got to move out of the lawyers’ hands, and maybe the chair and CAO of the region and the mayor and the city manager have to come up with some potential solutions and potential options.”

While he has agreed to meet with Oshawa’s mayor, the regional chair says that an opportunity was presented for both sides to enter mediation last year, but that the city turned it down.

“You’re not only paying your share of this legal bill, you’re paying 100 per cent of your legal bill. What you could have done was accept mediation last June, and we wouldn’t have spent all this money,” he said following comments from Councillor John Neal on Oshawa taxpayers being left to pay two bills when the lawsuit is all said and done.

“We could’ve, maybe, mediated it, but you haven’t done that. Maybe you should ask your council, your legal team, what you’re doing. Our position here is pretty clear.”

In March 2011, Durham launched an $8.9-million lawsuit against Oshawa, “seeking relief under the terms of a 2004 bylaw that transferred responsibility for Oshawa’s public transit system to Durham,” according to a 2013 Court of Appeals decision which turned down the city’s request to have the case dismissed.

The $8.9 million is from unfounded liabilities, such as pensions and benefits, left over from when the city transferred transit responsibilities to the region.
In a 2009 council resolution, the City of Oshawa stated that it was not responsible for these payments.