Judge dismisses injunction over sale of Ben Eoin golf course

A Nova Scotia Supreme Court judge has denied what he called a "frivolous and vexatious" injunction on the sale of The Lakes at Ben Eoin golf course near Sydney, N.S.

A group of investors called Ben Eoin Development had offered to buy the financially troubled golf course, but directors of the Cape Breton Ski Clubnext door objected.

The golf course board of directors had voted against the proposed sale in December, but 97 per cent voted in favour when the offer was presented again in February.

After the second vote, the ski club said it had the right of first refusal on the sale and it had planned to make an offer for the golf course.

Four-day hearing

The ski club filed for an injunction on the sale, sparking nearly four days of testimony in Nova Scotia Supreme Court in May.

On Friday, Justice Frank Edwards issued his ruling, dismissing the injunction.

He said a memorandum of understanding between the neighbouring operations that contained the ski hill's right of first refusal had been replaced by a comprehensive lease agreement that did not include that right.

Edwards said the ski club's leaders knew the memorandum had never been recorded on the land or the lease, and it had known of the pending sale for about six months.

"For questionable tactical reasons, the ski club leadership unfairly delayed disclosure of the (right of first refusal)," he said.

"That is not conduct the court should be seen to condone."

No one from the parties involved was available for interviews immediately after the ruling.

'Definitely a good day'

But Rodney Colbourne, president of Ben Eoin Development, said he was pleased with the decision.

"It's definitely a good day for us," he said.

Ben Eoin Development's purchase of the golf course is a cashless deal. Under its terms, the new owners would assume the course's assets and debts.

In exchange, directors would continue to receive discounted memberships.

In court documents, it was revealed the golf course was facing a crushing debt. It owed $3.5 million to the Atlantic Canada Opportunities Agency, it had a $1.1 million mortgage and had almost $300,000 in outstanding bills.

In addition, the golf course was facing large capital expenditures on expensive equipment replacement and repairs.

Edwards said the golf course, which opened in 2009, "was precarious from the start. By 2018, the golfclub was in serious financial trouble.

"It had only been able to stay afloat by means of several cash calls from the shareholders."

Ben Eoin Development also owns The Birches hotel on the other side of the ski hill, the land under the nearby Ben Eoin Marinaand a proposed residential subdivision on the other side of the golf course.