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The City of Winnipeg has won the legal battle for access to seized documents as it tries to establish a paper trail in an alleged $24-million fraud involving the construction of the downtown police headquarters.
Manitoba Court of Queen's Bench Chief Justice Glenn Joyal released his ruling on Friday. He determined the city must be given "immediate access to any financial, accounting or banking documentation seized by the RCMP" from Caspian Construction and 26 other defendants named in the city's lawsuit. The suit was launched in January as part of the city's battle to get to the bottom of what happened with the troubled construction project.
A five-year RCMP investigation into fraud allegations involving the HQ project ended in December, with no charges being laid after Manitoba's prosecution service found there was no reasonable likelihood of conviction.
In June, the city argued in court that it was entitled to the seized documents, which include Caspian's invoices and accounting practices, correspondence with subcontractors, design development submissions, meeting minutes and change orders.
In his 84-page decision, Joyal ruled it would be unfair to make the city continue its legal fight without seeing the documents.
Joyal disagreed with the defendants' arguments that the city's request to access the documents should be denied. They argued relevant documents would be provided as part of the usual discovery process in the civil-law dispute, adding some of the documents were irrelevant or protected by lawyer-client privilege.
Joyal noted the legal process has revealed "still unchallenged" evidence of $24-million worth of fraudulent, fabricated invoices submitted to the city for the HQ construction.
The city claims it paid $24 million based on fake invoices, for work was never done, and is trying to determine where the money went.
On Friday, a city spokesman expressed support for the judge's decision.
"We are pleased with Chief Justice Joyal’s decision to grant the city access to the documents seized by the RCMP from Caspian Construction. Once we have had the opportunity to receive and review the documents, we will determine our next steps," David Driedger wrote in an email to the Free Press.
The city's lawyer, Michael Finlayson, deferred questions to the city's corporate communications department. Caspian's lawyer, Jeffrey Baigrie, could not be reached for comment Friday.
The city claims Caspian and its president, Armik Babakhanians, office manager Pamela Anderson, Mountain Construction president Paul LaMontagne and Ottawa-based GRC Architects, as well as other contractors and consultants, were involved in a scheme to defraud the City of Winnipeg with fake invoices and secret commissions and kickbacks during the construction of the police headquarters in the former Canada Post building on Graham Avenue from 2011 to 2014.
The project was initially budgeted at $135 million, but cost $214 million by the time it was completed.
Former Winnipeg chief administrative officer Phil Sheegl is named as a defendant in the city's claim. Reached by the Free Press Friday, his lawyer, Robert Tapper, said there's no evidence Sheegl participated in a fraud scheme or took a bribe. Tapper successfully argued to sever the legal proceedings against Sheegl, separating the case from the main allegations contained in the city's lawsuit.
The next court date is Sept. 11, after which Tapper is expected to seek permission from the court to question two RCMP officers who were involved in the criminal investigation.
Katie May reports on courts, crime and justice for the Free Press.
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