Refinery proponent deceived us, company tells court

A St. John's company hoping to launch Newfoundland and Labrador's second oil refinery is accused in court of trying to deceive an engineering company that is claiming more than $20 million in unpaid bills.

BAE Newplan Group, a subsidiary of Montreal-based engineering giant SNC-Lavalin, filed a statement of claim Wednesday in Newfoundland Supreme Court against Altius Minerals Corp. and others.

BAE Newplan alleges that Altius knew a year ago that its financing for the proposed megaproject in southern Newfoundland had run dry.

Nonetheless, the suit alleges, Altius led BAE Newplan to believe that the proposed refinery was in good financial health.

Altius — which denies the suit's allegations — is a part-owner of Newfoundland and Labrador Refining Corp., which the Newfoundland Supreme Court put under creditor protection last June.

SNC-Lavalin petitioned in June to have Newfoundland and Labrador Refining declared bankrupt.

NLRC is aiming to build an oil refinery in Placentia Bay and has been working since the June court order to find new investors.

The lawsuit argues that Altius knew a year ago that it lacked the primary financing to launch the refinery, but did not inform the engineering company.

Investors pulled out

BAE Newplan's suit claims that by October 2007, three European investors — including Scottish billionaire Harry Dobson — "had decided to no longer fund their proportionate share" of the refinery's expenses, unknown to the engineering firm.

BAE Newplan's lawyers argue that Altius and its investors committed a "tort of deceit" by withholding critical information.

The suit alleges that BAE Newplan was told "there was no risk NLRC would be unable to meet the project budgetary needs, cash-flow requirements and payment obligations" for completing its work.

In its statement of claim, BAE Newplan seeks damages, interest and court costs over bills totalling just under $20.6 million. The work relates to engineering and environmental work done for the proposed refinery.

"Altius considers the claim against it to be without foundation and intends to fully and vigorously defend the allegations set forth in the statement of claim," president Brian Dalton said in a statement Friday.

Altius has a stake of 39.6 per cent in Newfoundland and Labrador Refining.

If successful, the refinery would be the second in Newfoundland and Labrador to move into production.

A refinery at Come By Chance, also in Placentia Bay, is owned by North Atlantic Refining.