Court filing alleges secret soil deal

The cloak and dagger delivery of envelopes filled with seemingly legitimate legal documents, allegations of backroom deals for secret profit-sharing, and fraud – it sounds more like a mystery novel but it’s just the latest in the Shawnigan Lake contaminated soil saga.

The Shawnigan Residents Association (SRA) has applied to the B.C. Supreme Court for an immediate stop to work at South Island Aggregates’ controversial soil treatment facility.

The court application, filed on July 9, follows the delivery of an envelope to the Shawnigan Watershed office by an unknown informant.

In it were documents explaining a complex deal between the companies working to establish the facility, which aims to treat five million tonnes of dirty dirt over the next 50 years.

Based on that information, the Residents Association now alleges that South Island Aggregates and Cobble Hill Holdings made a pact with Active Earth, the engineers hired to do environmental risk assessment on the project, to share profits over the 50-year lifespan of the operation through two numbered companies.

"It is a sophisticated legal agreement that was appears (sic) to have been drafted by lawyers," said the notice of application filed by the SRA. "The signatures appear to be those of the signing individuals when compared to other documents that have been disclosed."

The Residents Association doesn’t know who delivered the document but is confident enough in the information the documents contain to push ahead with the legal challenge.

"The document appears authentic on its face," said the application. "Assuming it is authentic, the profit-sharing agreement was undoubtedly concealed because it places the engineers from Active Earth in a direct conflict of interest, whereby they were relied upon by the ministry and the board for scientific objectivity, but had a direct financial interest in the project and are in fact principals of the true applicant company."

This most recent information, assuming it is indeed genuine, according to the SRA, constitutes "a fraud upon the ministry and a fraud upon the board in concealing its existence."

"All were deceived," said the application. "The permit application and supporting materials were a sham."

Not so, said South Island Aggregates/Cobble Hill Holdings owner Mike Kelly.

He said Cobble Hill Holdings agreed in February 2013 to use South Island Aggregates to carry out reclamation efforts on the site, under the guidance of their existing professional engineers Active Earth but just four months later they pulled the plug on the deal.

"It was decided internally due to various reasons, as a protection to CHHL and the community, it would be best to award the operation of the reclamation to a completely arms length operator and not carry out the works on an in-house basis," he said.

They now use South Island Resource Management Ltd.

"As for the documents that were stolen from our offices that were before the court… it is simply a copy of a two-and-ahalf-year-old abandoned agreement between the directors of CHH and our engineers that was never followed through with, even to this day," Kelly said.

CHH, SIA and Active Earth have nothing to hide, according to Kelly, and have directed their lawyers to agree to be cross examined by the SRA legal council, but on one condition: "that SRA can post sufficient funds to pay our costs associated with the costly expenses of a court proceeding of this nature should they fail to obtain a judicial review."

He said his camp feels it’s a fair approach "due to the time, effort and money that this has been costing us to defend, what we feel are non-scientific, frivolous lawsuits based on politics and fear mongering."

Residents Association President Calvin Cook maintains it’s prudent for his group to follow up on the new information because the safety of the drinking water of more than 12,000 people remains at stake.

Cook said before school let out, he spoke to a class of fourth-graders and he found himself struggling to look for answers to their seemingly simple questions. "That’s the one question I can’t answer," he said. "Who thinks this is a good idea? Does this make sense to put it at the headwaters of a designated community watershed? What it comes down to is follow the money," he said. "It raises so many red flags to me as a lay person. I mean wow."

Active Earth engineer Matt Pye declined to comment.