Court orders Nova Scotia to enter mediated talks with Northern Pulp

A British Columbia Supreme Court justice has ordered the Nova Scotia government to enter mediated talks with the owners of the mothballed Northern Pulp mill.

Justice Shelley Fitzpatrick released her decision Friday afternoon after hearing a full day of arguments Thursday, which included vehement opposition to mediation on the part of the province.

The press secretary for Premier Tim Houston said the province is "disappointed" in the decision and considering options for next steps.

Northern Pulp asked for a court-appointed mediator earlier this year, arguing in its application that mediation would be quicker and cheaper than following through with the $450-million lawsuit it filed against the province.

N.S. has 'no interest' in mediated negotiation

A lawyer representing the province said mediation isn't needed because the province is not liable for the losses and damages the owners of the mill claim.

Robert Grant said the Boat Harbour Act provides a "complete defence" to Northern Pulp's claim.

"The province does not consider it to be in the public interest to contribute anything to the plaintiffs to settle this litigation. It has no interest in mediating. The potential benefits of mediation at this time are low," Grant told the court.

He said Nova Scotia would be "dragged" into the process as an unwilling partner.

He argued the mill's owners should be focused on the ongoing environmental assessment for a proposed overhaul to the mill — a process that is likely to take at least two more years.

"There is no urgency in proceeding with mediation," Grant said.

No defence filed in lawsuit

Lance Williams, one of the lawyers representing Northern Pulp, accused the province of dragging its feet on the question of settling the company's claims in court. 

The government has not yet submitted a defence in the lawsuit Northern Pulp filed last December. The company expressed its intent to file two months before that.

"At this point, the province is the architect of its own barrier to negotiation," Williams told the court.

Fitzpatrick asked Grant why the province had not yet filed its defence, to which he said the delay was "not inordinate" given the complexity of the case.  

A spokesperson for Northern Pulp said the lawsuit will be stayed while mediation is ongoing.

Cost of mediation

Northern Pulp has estimated the mediation process would cost $930,000 and take seven months. 

While the company argued that amount is likely much smaller than the cost of a lawsuit, the province called it a "significant cost."

Given the company is under creditor protection, its spending has to be approved by the court. Last fall, the court green-lit $450,000 to cover initial litigation expenses. The latest report from the court-appointed monitor in the creditor protection proceedings says $270,000 of that has been spent so far.

Northern Pulp will have to ask the court permission to spend what's needed on mediation at a hearing later this month.

The mediator, chosen by Northern Pulp, will be Thomas Cromwell, a retired justice with the Supreme Court of Canada. Any settlement reached will be binding for all parties.