Judge urged to break up Caspian lawsuit

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This article was published 08/06/2020 (2125 days ago), so information in it may no longer be current.

A construction company at the centre of a court fight over construction of the downtown police headquarters is asking a judge to strike down chunks of a City of Winnipeg lawsuit, arguing it unfairly lumps together more than two dozen defendants without detailing the specific allegations against them.

“Essentially, the city is alleging 27 defendants did exactly the same thing, in exactly the same way, at exactly the same time,” Caspian Construction lawyer Jeff Baigrie told Queen’s Bench Justice Glenn Joyal on Monday. “It’s impossible.”

In a lawsuit filed in January, the city alleges Caspian, “in concert” with other defendants, including former city CAO Phil Sheegl, conspired and “schemed” to inflate the cost of the construction project.

The city budgeted $135 million to convert the former Canada Post office and mail-sorting plant into its new downtown headquarters. By the time the project was completed, the cost had soared to $214 million.

The lawsuit — filed a month after a five-year RCMP investigation ended with no charges — alleges the scheme to defraud the city, by filing fraudulent or inflated quotes, was concocted before the request for proposal for the project was even issued.

Other named defendants in the lawsuit include Caspian president Armik Babakhanians, office manager Pamela Anderson, Mountain Construction president Paul LaMontagne, and Ottawa-based GRC Architects.

Baigrie said the scope of the allegations, spanning five years, demands there be “specificity” to the allegations against each individual accused.

“Each defendant is entitled to know the particular case he, she or it must meet,” Baigrie said. “We say a pleading that invites, as this one does, a blanket denial by a defendant, is bad.”

In a case that the city alleges involves “not just hundreds, but thousands” of invoices, the city has not shared the suspect invoices with the various defendants, Baigre said.

“Surely, given that the city says this is emphatically the case, they might be able to muster 20 or 50 examples of these hundreds and thousands of invoices,” he said. “If they did that, at least one would get a sense of the who, what, when, why and how.”

Sheegl’s lawyer, Robert Tapper, urged Joyal to strike his client from the lawsuit, arguing his involvement ended with signing Caspian to the project.

“It’s an embarrassing abuse of process,” Tapper said. Sheegl “had nothing whatsoever to do with the performance of the contract.”

The city alleges in July 2011, shortly after Sheegl awarded the contract to Caspian, Caspian paid $200,000 to Mountain, which then paid the same amount to Sheegl or his company, with another $327,000 paid by Babakhanians to either Sheegl or his company.

Failing striking the claims against Sheegl from the lawsuit, Tapper asked that the bribery and kickback allegations against him be severed and tried separately.

“This (lawsuit) puts him in a position where he will be bankrupt while he waits to hear a tidbit of information against him,” Tapper said. “He will have to spend a fortune to defend himself against something he had nothing to do with.”

Joyal will deliver his decision on the motions Tuesday.

dean.pritchard@freepress.mb.ca