Businessmen sue province over broken lease

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This article was published 03/07/2019 (2608 days ago), so information in it may no longer be current.

The owners of a West End property are suing the provincial government over its interference into a long-term lease agreement with the First Nations of Southern Manitoba Child and Family Service Authority.

Building owner Peter Ginakes and partner Ken Cranwell are suing the province for $6.1 million. In a statement of claim filed Wednesday, they allege the province pursued a plan to force the businessmen to terminate the 20-year lease agreement, calling it “a course of conduct that was motivated by spite, malice, duplicity and bad faith.”

The lease for the property at 800 Adele Ave. was signed in 2008. A 2016 audit commissioned by the Southern First Nations of Care to examine the lease its predecessor signed found the former NDP government signed off on the lease despite several red flags, including its length, the fact the contract was sole-sourced and the absence of an opt-out clause.

In May, the province introduced Bill 32, which would have cancelled the lease agreement and prevented the building owners from suing the government as a result of the action. The bill died on the order paper before the legislature closed for the summer recess.

“It’s an extraordinary power that the province is trying to exercise,” said Dave Hill, the lawyer for Ginakes and Cranwell.

The government is proceeding on the assumption that “somehow my clients put one over on the previous government, which is totally untrue,” Hil said.

Defendants named in the lawsuit include Premier Brian Pallister, Finance Minister Scott Fielding and Scott Sinclair, deputy minister of Crown services.

The lawsuit alleges Sinclair arranged a meeting with Ginakes and Cranwell on Feb. 26 during which Sinclair said if they did not sign an agreement terminating the lease, the government would terminate it through legislation.

At that time, the CFS authority was no longer using the building and it had been sublet to Marymound. The lawsuit alleges the government directed the “sub-tenant” to move out of the building, “causing the sub-tenant to remove the children in its care out of the property in a precipitous manner, leaving the property in a state of significant disrepair and causing distress to the children themselves.”

The lawsuit alleges the province was motivated by “malice, spite, and revenge” against Ginakes after he secured a contract from the former NDP government to supply Tiger Dams during the 2011 flood.

When introducing Bill 32 last May, Fielding said the building was never suited for child care. He said the untendered building lease and its terms “were not in the public interest.”

Fielding was not made available for comment Wednesday. In an email, he said attempts to renegotiate the building lease “have not worked.”

“As such, government’s only option to protect taxpayers at this point, after exhausting all other options, is to legislate the end of the lease,” Fielding said.

“We are focused on helping kids in care and making sure public dollars are going where they should be — for the care of children.”

— With files from Larry Kusch

dean.pritchard@freepress.mb.ca