A Peterborough neighbourhood association has accepted a settlement requiring that it pay $22,500 to the City of Peterborough and Brock Mission within 60 days, concluding a lengthy legal process that dates back to the spring.
The decision by Northcrest Neighbours for Fair Process (NNFP) to accept the settlement follows its announcement last Wednesday (December 10) that it dropped its legal challenge against the City of Peterborough’s use of strong mayor powers to expedite Brock Mission’s six-storey, 52-unit transitional housing complex planned for a site at 738 Chemong Road adjacent to Cameron House, a women’s shelter also operated by Brock Mission.
The road to this point began back on February 3 when Peterborough Mayor Jeff Leal issued a statement confirming he would, in deference to a request from Brock Mission, use his strong mayor powers to amend the City’s zoning by-law to allow the project to proceed as well as exempt the project from existing site plan requirements — a process that ensures development projects comply with municipal policies and minimize negative impacts on the environment and surrounding community.
Mayor Leal stayed true to that vow on February 24 at a city council meeting, when he brought forward a motion to use his strong mayor powers to expedite the project. While seven of 11 council members voted against the motion, councillors Gary Baldwin, Kevin Duguay, and Lesley Parnell, along with the mayor, voted in favour. While a majority of council voted against the motion, just one third of council (including the mayor) must be in support for a strong mayor powers motion to pass.
All who spoke at that meeting, including 15 public delegations, were forbidden from addressing the use of strong mayor powers and could speak only to the proposed zoning by-law amendment. In addition, the rules of procedure that govern council meetings were suspended in accordance with legislation as it pertains to strong mayor powers.
In the aftermath of that meeting, NNFP was formed to represent some 100 residents of the Teacher’s College and Brookdale neighbourhoods in Northcrest Ward. NNFP later announced its intention to legally challenge Mayor Leal’s use of strong mayor powers, claiming in a statement that the proposed Brock Mission project was being “rushed through without proper oversight, transparency or consultation.”
Since day one, NNFP has been clear that it supports transitional housing. However, it argued that the Brock Mission project doesn’t qualify as “housing” under provincial rules governing the use of strong mayor powers.
NNFP also expressed serious concerns with the proposed project’s close proximity to Cameron House, maintaining that the placement of a large co-ed transitional facility beside a women’s shelter poses a safety issue and trauma-informed-care concerns for the women at Cameron House.
In order to file a court application and retain legal counsel, NNFP created a separate incorporated entity. As NNFP chair, Sarah McNeilly agreed to be the sole director and member of Northcrest Neighbours for Fair Process Ltd. named in the subsequent proceedings.
In response to NNFP’s legal challenge, the City of Peterborough filed a notice of motion in late May requesting security of court-related costs in the amount of $10,000. The motion argued that NNFP is a shell corporation without operations and no assets to pay the costs of the respondent (the City).
City solicitor Scott Seabrooke further argued that NNFP was incorporated solely for the purpose of insulating McNeilly from being exposed personally to a cost award, further maintaining his belief that “the applicant will try to avoid paying any order for costs.”
Following a summer that saw Brock Mission added as a respondent to the legal challenge and NNFP raise more than $13,000 for its legal costs via GoFundMe campaign, the City filed a second motion seeking $30,000 from NNFP Inc. for security of costs — triple what was originally requested.
Fast forward to November 20 when Ontario Superior Court Justice Susan Woodley, having earlier heard arguments from NNFP, the City of Peterborough and Brock Mission, issued a ruling that supported the City’s motion for $30,000 in security costs. Justice Woodley added NNFP, lacking the ability to pay potential legal costs, would be required to demonstrate a strong likelihood of success of its case based on the merits — a threshold she concluded NNFP could not meet.
Justice Woodley further noted that the Municipal Act contains an immunity cause for decisions made using strong mayor powers if a decision was made legally and in good faith, and observed that Mayor Leal exercised his legal authority and acted in good faith when invoking strong mayor powers.
In the end, all this considered, Justice Woodley ruled the interests of justice would be served by requiring NNFP to post $30,000 in security within 30 days of the order, and also allowed the respondents to seek additional security costs from NNFP as the case proceeds and costs increase.
On December 10, NNFP announced it was dropping its challenge, noting the outcome to date “reflects a broader democratic failure: a tax-funded municipal corporation using its legal might to overwhelm citizens with limited means.”
In simpler terms, David met Goliath, and this time Goliath prevailed.
In a media release issued on Wednesday (December 17), NNFP confirmed the $22,500 settlement figure was arrived at following 10 weeks of discussions between NNFP, the City of Peterborough and its chief building official, and Brock Mission.
NNFP said those discussions began immediately after the October 1 hearing, where Brock Mission’s lawyer Philip Cranell informed the court that the organization had, that very morning, received a conditional offer of $20 million in funding from the Canadian Mortgage and Housing Corporation (CMHC) to build the Chemong Road project.
According to NNFP, that public disclosure “marked a turning point” in the group’s legal challenge as the project suddenly had potential funding attached to it.
“We were shocked,” said NNFP chair Sarah McNeilly in the release, adding that it had been unclear before then whether the project was financially viable at all.
“Once we learned that Brock Mission had access to $20 million, we immediately stepped aside. While my neighbours and I have serious concerns with the planning process, proposed location, and program model for McNabb House, we would never want to jeopardize a charity’s ability to access that level of support.”
According to NNFP, two days after the October 1 hearing it offered to withdraw its legal challenge entirely, with no costs to any party, but that offer “went unanswered” and the matter remained “open and unresolved” for the next seven weeks — despite the fact that Brock Mission had a “shovel-ready” deadline of December 31 in connection with $250,000 in funding the City had provided to Brock Mission in February to cover project costs associated with site planning and building permit processes.
“This lack of resolution and closure should never have gone this far,” said Deborah Berrill, a member of NNFP’s executive committee. “Her Honour made it clear at the hearing that she would be ruling in the City’s favour and encouraged all parties to settle. We tried to do exactly that. I don’t understand why the City and Brock Mission chose to prolong the matter, especially when they could have spent the last 10 weeks getting shovel-ready.”
When Justice Woodley issued her November 20 ruling and ordered NNFP to post $30,000 security for costs, NNFP was financially unable to continue its legal challenge. Security for costs is a court-required deposit and it must be paid for a case to proceed.
However, even if NNFP decided to end its challenge immediately, the judge’s ruling stated that the City and Brock Mission were entitled not only to the costs of their motion, but the $30,000 security for costs, subject to any offer to settle.
After the ruling, the City and Brock Mission responded jointly with a settlement demand requiring $30,000 in costs, to be split between the two parties, payable by both NNFP’s incorporated entity and personally by its sole director, Sarah McNeilly, within 60 days.
Counsel for both the City and Brock Mission indicated that if a settlement with NNFP wasn’t reached by December 10, they would ask the court “to pierce the corporate veil” — a rare legal move that would make McNeilly personally liable for NNFP Inc.’s debts — and pursue close to $100,000 in costs, with $40,000 to $60,000 of that to the City and $20,000 plus HST to Brock Mission.
According to NNFP, it subsequently offered $17,000 to end the matter outright, noting it could immediately pay $8,000 (representing the remainder of NNFP’s pooled funds). The City and Brock Mission counter-offered with a $25,000 settlement demand. After NNFP again offered $17,000, the City responded that it would only accept that amount to resolve the $30,000 security for costs motion, not the entire costs of their motion, which would leave NNFP on the hook for substantially higher legal costs.
With the December 10 settlement deadline approaching, NNFP came back with an offer of $20,000 to conclude the matter, to which the City countered with a demand for $22,500. NNFP says it accepted that offer to protect its members and volunteers from further financial risk.
“The City and Brock Mission had already won,” said McNeilly in her statement. “Justice Woodley made that clear at the hearing, well in advance of her written decision. Yet instead of ending the matter, they pursued personal costs against me and our neighbourhood group — even after Brock Mission announced a $20 million funding offer and while facing their own year-end deadline. The facts speak for themselves.”
“This sends a very clear and chilling message to citizens: if you challenge your local government, they will make you pay,” she added. “What happened to us is punitive. It is meant to discourage ordinary people from ever questioning how decisions are made. That is profoundly undemocratic.”
In an exclusive interview with kawarthaNOW, McNeilly maintains the group’s legal challenge was launched solely in response to Mayor Leal’s use of strong mayor powers, not in protest of the development of transitional housing.
“The good fight we’ve been fighting has always been about democracy — about regular people, citizens, having a voice and using that voice,” she says. “To say that we (NNFP) are anti-housing is demonstrably untrue. This has always been about us saying ‘Whoa, shouldn’t we have a conversation here?’ This (the use of strong mayor power) is a decree.”
As for the settlement itself, McNeilly says it’s “the lesser of many evils. It could have been way worse.”
That, however, doesn’t lessen the pain of having to come up with the money, and relatively quickly to boot.
“I’m hoping my neighbours will help me with that but, at the end of the day, I’m on the hook,” she says. “We’re very much just regular people. The main demographic of our neighbourhood group is pensioners, mostly single women; folks who work in the caring professions, which is not that lucrative.”
McNeilly notes that NNFP met on Tuesday night (December 16) to discuss the settlement and the need for an emergency fundraising campaign to meet the 60-day deadline to pay $22,500 to the City and Brock Mission.
As for people who have expressed concern that NNFP’s legal challenge has required municipal tax dollars, McNeilly argues “those resources never needed to be used in the first place.”
“From the get-go, all we wanted was for Mayor Leal to rescind his strong mayor powers (for the Brock Mission project) and bring the by-laws back to council for a proper vote where majority rules. It still could have passed, but at least it would have been fair.”
“This could have been over quickly. The City extended the process, making it far more expensive for us (NNFP) and for taxpayers. They used all of these tactics — filing motions and such. We never asked them to do that. Frankly, it’s the City that has drained resources — I suspect to bleed us out.”
“We never thought we would challenge in court, but it was literally our only option. Traditionally, planning decisions would be appealed before the Ontario Land Tribunal, but that’s no longer an option for regular citizens. Now only hospitals and airports and major institutions can do that. This (going to court) was our option to try and have a say.”
McNeilly says her “fatal mistake” was identifying herself to the City as the person leading the legal challenge prior to NNFP being incorporated, which she says resulted in the City’s claim that she had set up a shell corporation to protect herself from legal liability and its initial demand for a $10,000 security deposit.
“The entire crux of the City’s argument was that one person, Sarah McNeilly, is running the show. It’s all her. There aren’t a hundred neighbours working with her in a neighbourhood association.”
While the settlement brings an end to NNFP’s legal challenge, McNeilly notes “there are other ways to fight City Hall.”
“We have a crucial election coming up,” she points out, referring to the municipal election in October 2026. “I hope that people will use their voice.”
McNeilly, who is a two-time breast cancer survivor, admits NNFP’s legal challenge “has certainly taken its toll on me.”
“Finally reaching a settlement is very much bad news for us, but there’s a strange relief that comes from it. I compare it to being diagnosed with cancer. It’s an anguished relief. Anyone who has live through the hell of waiting for pathology results will know exactly what I’m talking about.”
“These last 10 weeks have felt like that purgatory,” she says of the settlement negotiation process. “The uncertainty, the waiting, the inertia, the stagnation — it’s maddening. So, even though this is not the result we wanted, there’s a strange relief because, at the very least, now we can make a plan. Now we can find some way to survive it.”
kawarthaNOW has reached out to the City of Peterborough for a comment on the settlement agreement, but did not receive a response by deadline. This story will be updated if or when the City responds.
