Trio files defence in biodigester suit UPDATE

By Mike Williscraft

The Town of Grimsby et al filed its reply to the defence submitted to the courts in the $18 million civil action regarding the Sobie Road biodigester project.

In the suit filed in July in Ontario Superior Court by the Town of Grimsby, Niagara Power Inc. (NPI), Grimsby Energy Inc. (GEI), Grimsby Hydro Inc. (GHI), and 1938427 Ontario Inc. (HoldCo.2), three claims were made citing former Mayor Bob Bentley, James Detenbeck and Joe Panetta as defendants.

The claims, in part, allege Bentley, Detenbeck and Panetta were negligent, breached their duty of care and breached their fiduciary duty through their dealings regarding a “failed waste-to-energy project”.

In an Oct. 31 filing, the trio defended their position, largely, claiming their processes were open to the Town and shareholders (town council) and their actions were approved by the appropriate hydro board and council. The defence filing went so far as to suggest the civil action was launched in bad faith and the matter should be dismissed with costs.

In its reply, the plaintiff submitted more detail to refute information offered by the defence.

None of the claims made in the civil action have been proven in court.

In the reply, on the issue of negligence and breach of their duty of care, the plaintiffs allege the hiring of Detenbeck and Panetta in “the roles they performed in the design, cost forecasting, engineering, construction management, testing, operation and maintenance of a complex one-of-a-kind gas plant” exemplified this.

“None of the Defendants had any, or any adequate experience, in such matters.”

“…As a result of the negligence of the Defendants in appointing Detenbeck and Panetta to those roles, under the direction and control of the Defendants the biodigester project went more than 300% over budget and the Plaintiffs lost millions of dollars.”

While there are many points of detail in the reply, such as noting Bentley was named to boards of directors as Robert N. Bentley and not as mayor or ex officio, there were many points on what are considered to be the major points of the civil claim.

One point the defendants claimed was that they had hired all necessary professionals throughout the process.

In the reply, the document notes, “…as Directors of GEI, they had knowledge of written recommendations of the biodigester supplier, Novatech GmbH of Wolpertshausen, Germany, that a Canadian engineering and construction firm be engaged, and refused to follow that recommendation, making the decision to refuse to do so without bringing the question of whether or not to do so to the board of directors of GEI or to the Town,” as an example of this not being done.

Another example, the reply claims was the failure to ensure “a site plan was completed by engineering professionals before construction commenced, or at all, and their failure to do so led directly to ponding, flooding, equipment damage, and drainage issues that added costs that otherwise would have been avoided, contributing to the damages suffered by the Plaintiffs.”

Another major point surrounds disclosure to the Town of Grimsby and council, which is the shareholder of the hydro operations.
The reply states that the defendants claim that all actions were authorized by the Town “is simply not true.”

The reply claims information which was provided to the Town was made difficult to access, was incomplete or “was deliberately misleading.”

As an example, a July 2018 verbal update to council is cited when “at a time when the project was failing” council was promised dividends were pending. None were forthcoming.

“Indeed, the Defendants, in the Statement of Defence, continue to contend that the project investment would have been recovered. This is simply not true; it would never have been recovered.”

Now, a judge will consider the merits of the case to determine if it will proceed.

The reply to defence document can be read at:

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