By Cecilia Nasmith
Risk legal action over a perceived breach of contract with the ATL company or risk a multi-million-dollar liability suit over injury at the inflatable water playground it planned to set up at the beach – a tough choice was debated by Cobourg councillors at this week's committee-of-the-whole meeting.
In the end, council voted to sever ties with the company and forego the water park entirely.
Councillors were given a legal opinion they were asked not to discuss publicly, as well as a presentation from Cobourg resident John Hill with his own legal opinion – that potential legal trouble over cancelling the contract should not be a concern since no contract technically exists.
Councillors also had a 40-page report from director of community services Dean Hustwick that set out three options.
One would be to proceed with the water playground, but Hill pointed out that the insurance ATL carries would not cover every situation. For example, someone suffering an injury after sneaking onto the attraction without paying admission would not be protected by their coverage and could conceivably sue the town.
The town might also terminate the agreement with ATL and negotiate a compensation arrangement in consideration of the $40,000 or so in expenses they incurred in contemplation of setting up the Cobourg water playground.
Thirdly, terminate the agreement and prepare for potential litigation.
“I'm not satisfied there's an existing contract to back away from,” Hill said.
“ATL has not paid its performance deposit, and an agreement was never executed.”
In light of this, he said, ATL's outlay in advance of setting up the water playground was something they undertook without due diligence.
On the other hand, if Cobourg is found to have even 1% of the liability in case of injury, it could end up out of pocket for the whole cost.
Asked his opinion on which course of action was the greater risk – legal action for cancelling an agreement or legal action on liability grounds – Hill had no answer.
“My crystal ball is no better than yours,” he said.
“This is a delicate one – no matter what we do, there's a risk on both sides,” Mayor John Henderson said.
Henderson said that the 1% rule is a constant worry he hears at Association of Municipalities of Ontario conferences and events.
Treasurer Ian Davey agreed. If the town has $25-million in liability coverage and a claim is less than that, Davey said, it's entirely likely Cobourg would have to pay the entire amount.
Although she had not supported the water park as a citizen, Councillor Nicole Beatty found that, as a councillor, she could not support the motion to sever ties with the company because of the risk of legal action.
Councillor Aaron Burchat said he had supported it as a councillor last year, and figured the town was obligated to continue its association with ATL.
Hustwick's report contained case studies of a number of other water parks for comparison purposes, and Councillor Emily Chorley selected one near Chicago to research deeper. Her research included Trip Advisor reviews, which were mixed. Complaints included having to wait while the park was closed due to high winds. It also contained one person's complaint that her daughter had broken her leg there within five minutes.
The waiver they require from users is quite graphic, Chorley said, warning of potential head, brain and spinal injuries and possible death.
“This is not the usual level of risk,” she declared.
“This is a new council, and there are issues at play that include whether we have the infrastructure to support additional crowds at our beach. Do we have the washrooms? Do we have the change facilities?
“Through the election, I met many people – and pretty much every discussion I had about this, I didn't sense a strong desire for a floating playground.”
The motion before council reiterated that there had been no contract or security deposit in the dealings with ATL. Given the inherent risks of serious injury and possibly death, as well as the possibility that the ATL company's insurance would not cover it, ATL will be notified that there will be no water playground as there is no site agreement.
Beatty, Burchat and Counillor Brian Davey voted against the motion.