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Thursday, March 24, 2011

Peter Kelly's failure of will

The Halifax mayor is executor of his friend Mary Thibeault's estate, but more than six years after her death her elderly heirs are still waiting for her estate to be settled; an heir himself, he may have violated city council's conflict of interest rule.

Posted By on Thu, Mar 24, 2011 at 4:00 AM

Ninety-one-year-old Mary Thibeault died in her mobile home in St. Petersburg, Florida, on December 7, 2004. A former motel manager, Thibeault was evidently frugal. She had saved about a half-million dollars in cash, which she had squirrelled away in bank accounts, and had acquired two tiny properties---one in her native Halifax, one in Florida---worth a few thousand dollars each.

In her will, Thibeault had directed that the executor of her estate, "my friend Peter Kelly," sell the property, pay her debts and funeral expenses and distribute the remaining funds to 18 heirs---relatives, friends, charities.

Two months before Thibeault's death, Kelly was re-elected as mayor of Halifax Regional Municipality, and was therefore heading a billion-dollar corporation. Comparatively, the inheritances weren't a lot of money---most heirs, including Kelly himself, were to get five percent of the estate, about $25,000 each, and the Canadian National Institute for the Blind and the Salvation Army would get 10 percent, about $50,000 each---but the money would no doubt be welcomed by Thibeault's mostly elderly heirs, themselves in their sunset years, and by the always cash-starved charities.

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Kelly was in contact with Floridian authorities and arranged for Thibeault's body to be transported back to Nova Scotia, and she was then interred in Gates of Heaven Cemetery in Sackville. On March 24, 2005, Kelly swore to a Grant of Probate giving him control of Thibeault's wealth, and the following week he paid $6,429 in opening taxes on the $505,000 estate.


A lot was going on in City Hall in 2005. Kelly was presiding over the writing of the new regional plan, a massive document that would regulate where and when billions of dollars in future development would occur. And even with the election behind him, Kelly seemed to be in permanent campaign mode, attending every church dinner and charity fish fry he could find; reporters noted that Kelly came to the office early in the morning and attended events well into the evening, every day of the week. He was a busy man.

Kelly was apparently so busy that he had no time at all to administer Mary Thibeault's estate. The Probate Act requires executors to file an accounting of the estate ---which lists what money and property Thibeault had at her death---with the court within 90 days, a deadline that Kelly failed to meet. On June 30, 2005, deputy registrar of probate Pat Pozdnekoff notified Kelly that he was in violation of the act and had 30 days to comply. Kelly failed to meet that deadline as well, and so on August 10, 2005, Pozdnekoff issued an court order requiring Kelly to file the accounting. Finally, on August 19, 2005, Kelly sent in the accounting. It was sworn before Wayne Anstey, a lawyer who was also second in command in the city bureaucracy, and who is central to the concert loan scandal now embroiling City Hall.

What was supposed to happen next was this: Kelly was to sell the properties and divvy the cash up between Thibeault's heirs. But five long years had passed since Thibeault's death and Kelly failed to settle the estate.

In 2006 the regional plan was adopted and Kelly presided over the Rolling Stones' celebration on the Common; in 2007, the mayor was heavily involved in promoting Halifax's bid to host the Commonwealth Games; in 2008 there was another election, which Kelly won handily, and in 2009 the sewage plant broke. Through the half-decade, Kelly presided over city budgets totalling about $6 billion. But he didn't dispense a dime of Mary Thibeault's money to her aging relatives.

"My sister Mary Ellen Thibeault died December, 2004," wrote Patricia Richardson in a hand-written letter to Sharron Atton, the registrar of the probate court, on September, 10, 2009. "To date her estate hasn't been settled. I would appreciate any information regarding this matter."

Atton then wrote to Kelly, telling him he was again in violation of the Probate Act, in that he had not filed the appropriate paperwork with the court and had not advertised the estate settlement in the Royal Gazette, as required.

Soon after, some of the other heirs hired Halifax attorney Lloyd Robbins to get action on the estate.

"Let alone Peter Kelly's blatant disregard for fulfilling the duties of an Executor, his arrogance towards all of us beneficiaries really angers me," wrote Thibeault's cousin Elizabeth Herrit in a May 2010 letter to Robbins, who filed the letter with the court.

In the letter, Herrit says that Kelly paid out "some" money to the heirs in September and October of 2009---Herrit called it "HUSH money"---but that the estate was still open.

According to Herrit's letter, Herrit contacted Claude Carter, a man living in the mobile home park in St. Petersburg where Thibeault had resided, and pressed him for information on Thibeault's mobile home. "Here is the email I received from him ver batim (sic)," wrote Herrit. "'Elizabeth: This sounds like the home I wanted to buy in 2006 but could not get a response from the executor in Halifax. My offer would have been US$10,000, since there was no furniture in the house.'"

Herrit says in the letter that she then reached Joyce, the manager of the mobile home park. "I explained why it was so important for me to find out what I could regarding Mary's mobile home. Joyce apologized and told me 'I am sorry, but it was sold. Finally Mrs. Clarke was about to gain possession.' I assured her I wasn't after Mrs. Clarke for anything and explained that the Executor of Mary's Estate had not done his duties. She replied, 'Oh, that's THAT Mayor guy. We tried everything to reach him. We sent many, many letters and he never, ever responded. We also tried phoning the numbers we had for him and left all kinds of messages but he never returned a call. Mrs. Clarke let it go as far as she could and the rent was in the 'thousands of dollars' that was not paid. She finally had to go and have Mary's mobile home declared as 'Abandoned' so she could gain possession of it. Actually, it was only sold this year finally. . . I am sorry.'"


Thibeault's property in Halifax sits outside Bedford in the scrub land between Kearney Lake and Washmill Lake. It is a small tract, just 7,500 square feet assessed at $3,500, in a failed development from the 1930s that contains about 50 similarly sized parcels but very few buildings.

All of these properties, including Thibeault's, are presently not developable ---there are no water or sewer services in the area, and the lots are too small for septic systems. But the area was identified in the regional plan as part of the Bedford West development zone, and since 2006 city council has been approving policies for the entire Bedford West area---including the "sub area 11" which contains Thibeault's property ---that will ultimately bring water and sewers to the area and make future developments possible.

Herrit said that she visited Thibeault's property in July, 2009, and met a fellow named Chester Saulnier, who owned another of the tiny parcels.

"Chester informed me that for the last five years at least and significantly in the last year, people were trying to buy the land," wrote Herrit in the letter to her lawyer. "I asked who and his reply was: 'Well, first of all from the city. . . HRM. . . And shortly after that the Armoyan Group I think was their name. They even showed up here in suits and fancy leather dress shoes to go through the mud and all. I told them they'd never get through with those on but one of 'em went with me anyway. The city made all kinds of promises to us if we'd sell the land to them but me and the others refused to sell. They want that land there for a road leading down to the back to a place they say they want to build a big development back there. They would start with the townhouses and then single dwellings. . . Then a school and a nature trail. . . A whole bunch of other stuff too.'"

The Armoyan Group is a development company controlled by the Armoyan family. Another Armoyan-controlled company is Armco, which is owner of a very large piece of property on the other side of Washmill Lake from Thibeault's property (see map on page 4). The Armco property stretches over about 150 acres in a southwesterly direction all the way to Fox Lake, which sits way back in the proposed Birch Cove Lakes---Blue Mountain Wilderness Park. Two years ago, Armco was one of four development companies that attempted to get some of the property they own in the proposed park boundaries approved for residential development.

City staff opposed the companies' attempt to get regulatory approval for development of their lands in the proposed wilderness park boundaries, but last summer mayor Kelly spoke publicly in support of development of the land. The committee charged with reviewing the matter initially sided with the developers, but in August 2010, after an outcry from environmentalists, in the end recommended against development. With a unanimous vote, the full city council agreed with that recommendation at a November 16, 2010 meeting presided over by Peter Kelly.

The regulatory changes made to sub area 11, and the proposed (but ultimately defeated) regulatory changes that would have made development possible on the Armco property, may or may not have affected the value of Thibeault's land. Even if there was an increase in value, it likely wouldn't have amounted to much for Kelly: As an heir, he will receive just five percent of the sale value of the property, so even if the property skyrocketed to triple its value, Kelly would personally gain just $350.

Still, city government rules are clear about identifying potential conflicts of interest. Halifax council's conflict of interest policy states that "no member of council...shall engage in any business transaction or have a financial or personal interest, direct or indirect, which is incompatible with the proper discharge of their official duties or would impair, or reasonably give the perception of impairing, their independence of judgement or action in the performance of their duties." When such a situation arises, councillors are to declare the conflict and remove themselves from the debate.

Despite that rule, Kelly has continued to preside over council debates related to policies that will affect Thibeault's property, and he has not declared a conflict of interest.


A few weeks after her July, 2009 visit to Thibeault's property, said Herrit in the letter, Kelly had left a message on her phone: "Hello Elizabeth. This is Peter Kelly calling. Please call me at 490-4010." Herrit said she attempted to call Kelly back "a minimum of eight times a day" through August 6, but he was always in meetings.

Herrit said that eight months later, on Good Friday, April 2, 2010, she happened upon Kelly by chance, when he was helping out with Fish Friday, a charity event at John's Lunch restaurant in Dartmouth. "Peter walked by so I said, 'Hello Peter,' but he totally ignored me; he acted like he did not recognize me," wrote Herrit.

Persevering, Herrit managed to talk with Kelly.

"I'm just waiting on the lawyers," said Kelly, according to Herrit's letter. "It's all there you know. . . Just waiting for the lawyers to sign things off."

Herrit's letter was filed into the court record. Kelly has not filed any document with the court to dispute the allegations contained in her letter.

Four months later, on August 10, 2010, the probate court was notified that Kelly had hired Halifax attorney Harry Thompson "to proceed with due diligence and process the various steps as per the requirements of the Probate Act." On September 1, 2010, Thompson placed a notice in the Royal Gazette advertising Thibeault's estate. The required six-month advertising period was fulfilled earlier this month, with publication in the March 2, 2011 Gazette.

Asked about the Thibeault estate March 22, after this Tuesday's council meeting, Kelly declined to comment. "That's a personal matter," he said. Did he break conflict of interest rules by presiding over discussion related to regulating Thibeault's property in sub area 11? "I'll talk to my solicitor and get back to you," he replied.

Wednesday morning, Kelly called back to explain Thibeault's property. "That land is being donated to the municipality for parkland, so that's why you caught me off-guard [the previous night]," he said. "When I spoke to the lawyer, it's in the process of being done, so there's no---it's going to go to the municipality as parkland. It's going to them. It was always the intent to go to them in memory of [Mary Thibeault] and that's in the process of being done."

Wouldn't such a donation have to be approved by all the other heirs?

"It would come out of my portion, as I understand it," answered Kelly.

"That was already planned," said Kelly of the parkland donation. "It's already in the process of being worked on, and will be going to them as was the intent."

When did it become the intent?

"That was a year or two ago, but it hasn't gone because the estate's not closed yet, so it's not yet done."

The Coast contacted officials in the city's planning and real estate departments, but none were aware of a possible donation of Thibeault's land. "A donation would first have to be reviewed by the planners," said Peter Stickings, manager of real estate "and then approved by city council."

As of Wednesday, Mary Thibeault's estate had still not been settled. She has been dead for six years and three months.

Tim Bousquet is news editor at The Coast.

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