Prompted by an e-mail about the legend, we found that this story is backed up in Barabara Smith's book Ontario Ghost Stories.
The hospital started off as a private palace named Victoria Hall for Judge John Glass Malloch. The story goes that some of the building materials sent to the hospital were late in delivery and, at first, the judge said that he would delay payment but, when the time came, he refused to pay for them at all even though they had finally been delivered and used in the construction of the home.
The man responsible for the materials, being very non-plussed and realising that suing a magistrate would probably not be a prudent move, cursed the judge and the entire Malloch family.
The curse was, as long as the building was for their personal use, the judge and his family would suffer but, if the building was turned into something that would benefit the community, all would be well.
True to the curse, the family all suffered ill health and premature deaths until, after forty years, there were no descendants to claim the house and the home was left to the community to serve as a hospital.
Even though the curse's "terms" have been met, there are still reports of the apparitions of the unfortunate Malloch family seen in the hospital especially in a second story window looking very much as they would in their final moments... deathly ill... but, no one has ever been harmed by the spirits who some feel are still cursed in death.