Nova Scotia's highest court has sided with a developer in a battle over the disposal of a surplus school building in Halifax.

Jono Developments appealed a lower court ruling over the sale of St. Patrick's-Alexandra. The city had sold the school to Jono, but community groups took the city's decision to court.

The Nova Scotia Supreme Court sided with the community groups. But in a decision released Thursday by the Nova Scotia Court of Appeal, two judges say the city acted properly in its initial sale to Jono.

A spokeswoman for the city says the legal department is now assessing today's decision. Tiffany Chase says lawyers will hold an in-camera session with city councillors on Oct. 21, and then council will decide what to do.

Community groups opposed sale

The Halifax Regional School Board declared the school surplus in 2008 and closed it in 2011. The Halifax Regional Municipality took possession of it and sold it to Jono Developments for $3 million.

Several community groups working as the North Central Community Council Association learned about a city policy passed in 2000 outlining how to dispose of schools. The policy had never been used.

Several community groups challenged the move in court and a judge struck down the deal in September 2012. Jono Developments appealed that ruling. The Court of Appeals ruled with Jono Developments.

It said Halifax had satisfied its duty of fairness. The judges found ample evidence to support HRM's price for the site, which it said was not under market value.

Finally, the motions judge did not err in awarding partial costs against the appellant. However, in light of the appeal being overturned, the costs award was nullified, the ruling says.

The community association wanted to turn the old building into a site for affordable housing and a community hub. In the short term, it would act as an incubator for non-profits and arts groups.

The group is made up of the MicMac Native Friendship Centre, the North End Community Health Association and the Richard Preston Centre for Excellence.