City adds to list of defendants in police HQ lawsuit
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The city has added more names to its lawsuit over the controversial Winnipeg Police Service headquarters construction project, prompting at least two of them to file counterclaims of their own.
In documents filed earlier this month in Manitoba Court of King’s Bench, the City of Winnipeg added another 12 companies and four individuals to the now-three-year-old lawsuit claiming Caspian Construction and others conspired to inflate the cost of the project for their own financial benefit.
The latest additions include John and Mabel Garcea (who own several companies being sued under the Garcea Group banner, including S & J Construction, Granite Concrete Services, Tuscany Construction and Strada Construction); Peter (Pietro) Giannuzzi Sr. (president of G & G Interiors); and 6820540 Manitoba Ltd. (a holding company owned by Peter Giannuzzi Jr.).
In Jan. 6 court documents, however, the Garcea Group and 6820540 not only deny the claims (in separate statements of defence) but have filed counterclaims against other people and companies named in the lawsuit, including the City of Winnipeg.
According to the filing, the Garcea Group denies it “participated in any fraud, embezzlement, misappropriation and/or defalcation,” and says the company didn’t get “any property and/or services by false pretenses and/or fraudulent representation.”
It is asking the court to dismiss the claims against it, and order the city to reimburse the company for its legal costs because of the “unfounded allegations.”
The city decided more than a decade ago to buy the former Canada Post office building and sorting centre on Smith Street and renovate it for use as the police headquarters.
The project was originally slated to cost $137.1 million, but through the years costs ballooned. By the time it was completed, the price tag was $210 million.
The building has since needed several deficiencies corrected, which were blamed on construction.
After no charges were laid following an RCMP investigation — and with the provincial government not launching a public inquiry — the city launched a lawsuit against Caspian Construction and several sub-contractors in January 2020.
Last year, Manitoba Court of King’s Bench Chief Justice Glenn Joyal ruled Phil Sheegl, the city’s chief administrative officer from 2011 to 2013, took a bribe in connection with the project.
Sheegl appealed, arguing earlier this month in the Court of Appeal that Joyal had erred in the decision. The court reserved its decision.
In the recent filing, the Garceas are also asking for the other companies and individuals being sued to pay any damages the city may be awarded from the Garcea Group, because “such losses and damages were caused or contributed to by the Caspian defendants.”
It’s similar to what lawyers for 68250540 are asking the courts for.
“The city has repeatedly alleged in the claim that (the company) engaged in fraudulent and other similarly dishonest conduct,” says the statement of defence filed on behalf of 6820540.
“(The company) states that the city knows these allegations to be false or, at the very least, that the city is making such allegations with reckless disregard to their truth. (The company) states that the allegations are so serious and unfounded as to merit an award of solicitor-client costs in its favour.”
The city has claimed Giannuzzi Jr., who was also a Caspian employee and on-site project manager, received two payments of $500,000 from Mountain Construction (a company controlled by Caspian owner Armik Babakhanians) as part of the scheme.
In the court documents, Giannuzzi Jr. says the funds were actually connected to his employment pay package.
When he was hired in 2009, Giannuzzi Jr. was to get an annual salary of $200,000, as well as a percentage of profits of projects he brought in, ones he worked on and shares in the company, the filing says.
When he left Caspian in 2013, because of “the toxic work environment” and “failing to live up to its promises regarding salary payments, project profits and ownership shares, he was still owed more than $1.6 million, the documents say.
Caspian agreed to pay $1 million in two $500,000 payments to the numbered holding company he set up for tax-planning purposes, with the first payment in January 2014 and the second in April 2015, the statement of defence says, denying Mountain paid any money to the holding company.
Joe Aiello, lawyer for 6820540, said Thursday he could not comment on the matter.
While Giannuzzi Sr. has not filed a counterclaim, he is also seeking compensation from the city.
In a statement of defence, Giannuzzi Sr. and G & G Interiors claim the lawsuit “discloses no reasonable cause of action against these defendants and they expressly reserve the right to continue to maintain that position.” They ask the courts to dismiss the action against them and order the city to pay court costs.
None of the allegations have been proven in court. No trial date has been set.
Kevin Rollason is one of the more versatile reporters at the Winnipeg Free Press. Whether it is covering city hall, the law courts, or general reporting, Rollason can be counted on to not only answer the 5 Ws — Who, What, When, Where and Why — but to do it in an interesting and accessible way for readers.