When it comes to the ongoing servicing agreement dispute between Adelaide Metcalfe township and Strathroy-Caradoc, the hits just keep on coming. A lawsuit totaling $5.2 million has been initiated by Strathroy Fuels a business in the area against the two municipalities. Strathroy Fuels claims that its aspirations to establish a gas station, car wash, and restaurant along the Centre Road corridor have been derailed due to the actions of Strathroy-Caradoc and Adelaide Metcalfe, which allegedly include Strathroy’s refusal to connect its new, larger water main to the municipal water supply.
This business is pursuing $5 million in damages for purported negligence, breach of contract, and other legal grievances, along with an additional $200,000 in punitive damages aimed at penalizing the defendants or deterring similar conduct in the future. The lawsuit was filed in a London court on January 10th.
The lawsuit from Strathroy Fuels marks the latest development in an enduring conflict between the two municipalities over sewer and water provisions to a commercial thoroughfare situated just beyond Strathroy’s borders—an issue that recently led to a $50 million lawsuit by Adelaide Metcalfe against its neighbor.
Previously, the two municipalities had an agreement to jointly manage water and sewer services along a commercial route on Centre Road in Adelaide Metcalfe, located just outside Strathroy. Adelaide Metcalfe lacks its own sewer or water infrastructure to serve the business district.
According to Strathroy Fuels’ statement of claim, the business owns a strip mall and gas station at 9 Second St., situated along Adelaide Metcalfe’s commercial corridor. This area is serviced by a one-inch water pipe connected to Strathroy-Caradoc’s water system. The lawsuit alleges that in 2019, Adelaide Metcalfe approved a site plan from the previous owner of the parcel, which stipulated the replacement of the one-inch pipe with a two-inch one. The larger pipe was intended to accommodate the water needs of a restaurant, car wash, gas station, and other establishments, as per the lawsuit’s assertions.
After purchasing the property in March 2020, Strathroy Fuels entered into leases with businesses and secured funding agreements with lenders in anticipation of the expanded water service. However, when the business approached Adelaide Metcalfe to proceed with connecting the newly constructed water mains to the municipal water supply, it was directed to Strathroy-Caradoc, which allegedly denied the request, as per the lawsuit.
The statement of claim alleges that Strathroy is of the opinion that it has no legal obligation to continue supplying water to the Adelaide Metcalfe commercial district after the expiration of the long-standing service agreement, although it has continued to provide water service to existing customers. Nonetheless, Strathroy-Caradoc purportedly refuses to permit any new connections to its water supply in the service area, according to the lawsuit. Moreover, despite the ongoing dispute between the municipalities, Adelaide Metcalfe supposedly secured new water connections for three other properties in the commercial district in July 2022, with Strathroy Fuels inexplicably excluded, despite assurances from Adelaide Metcalfe that it was advocating on its behalf to Strathroy-Caradoc.
The lawsuit contends that only two units at 9 Second St., comprising a restaurant and a store, are currently operational due to insufficient water supply. The remaining units, housing the car wash, gas station, and another restaurant, allegedly cannot operate because the existing one-inch pipe does not deliver adequate water supply to the property for those activities.
It’s important to note that statements of claim, like statements of defense filed in response, contain allegations that have yet to be tested in court.
Recently, myFM did report that Strathroy-Caradoc was also facing a $50 million lawsuit from Adelaide Metcalfe about the same servicing agreement dispute.
Written by: C. Soares