As sexual assault allegations continue to mount against Peter Nygard, a legal fight over the Winnipeg clothing magnate’s unpaid bills returned to a Winnipeg courtroom Tuesday.
At issue is a 2018 decision by a California arbitrator awarding public relations firm Sitrick Group LLC $1.7 million for unpaid services.
According to court documents, Nygard retained the firm in September 2014 to aid in his ongoing legal war with Bahamian neighbour and hedge-fund billionaire Louis Bacon.
Sitrick served Nygard with a demand for arbitration in May 2017, alleging he had failed to pay for all the services Sitrick provided. According to a contract agreement included in court documents, Sitrick charged between US$195 and US$957 an hour for its services.
Nygard argued at arbitration Sitrick overbilled him and that he didn’t get the "bang for his buck" he expected.
Arbitrator Jonathan Cannon found that Nygard "was slow paying the bills, and many times the amounts he paid didn’t match the invoices sent."
When Nygard thought a bill was too high, he sent it to his accounting department for review, using a system he called AQC, or account quality control. Under the system, products that didn’t meet the company’s requirements were returned and the amount invoiced was not paid.
"Mr. Nygard admitted this is very subjective when applied to a service contract," Cannon said.
The hours Sitrick spent on the account "were extensive and necessary because of the tenacious defence put up by (Nygard)," Cannon said.
Under terms of their contract, either Sitrick or Nygard could terminate the agreement with 48 hours notice.
Nygard never exercised the option, and instead "tried to unilaterally amend the agreement through the use of the AQC procedures," Cannon said.
"The contract specifically provides that it can only be amended by a writing agreed to by both parties," he said. "If (Nygard) didn’t like the agreement, he could have cancelled it."
In July, Sitrick lawyers in Winnipeg filed an application in Court of Queen’s Bench for an order that the arbitration award be enforced.
Nygard was ordered by the court to attend a meeting with Sitrick’s lawyers in Winnipeg on Dec. 13, but didn’t show up, according to court documents.
In court Tuesday, Nygard lawyer Richard Good argued Nygard was never properly served notice of Sitrick’s motion, saying Tuesday’s hearing was effectively his first appearance on the matter.
Nygard did not attend the hearing.
Good said a new law firm, yet to be determined, will be representing Nygard on the motion moving forward.
The motion was adjourned Tuesday for both parties to prepare and file affidavits. A new court date has not been set.
Process servers in both California and Winnipeg filed affidavits suggesting Nygard purposely attempted to evade service.
In an affidavit filed Jan. 3, process server Liana Borisov said she attended a weekend party at Nygard’s Marina Del Rey home on Nov. 10, posing as an invited guest. Borisov said she had "dressed provocatively," as had other women in attendance, and was allowed to enter Nygard’s home unquestioned by security staff.
Once inside, Borisov was greeted by a woman checking in guests who asked if she was one of the "new girls."
The woman told Borisov that Nygard "was upstairs, preparing himself, and would be down soon."
"Other provocatively dressed females were waiting. I also noticed a large picture hanging on the wall of Peter Nygard," Borisov said.
When Borisov told the woman she was there to serve Nygard with court documents, she was introduced to an unidentified male who said he would take the documents.
"I then handed him the papers and he escorted me to the door," Borisov said.
In other affidavits, process servers described being unable to personally serve Nygard with court documents in Winnipeg and at his Falcon Lake vacation home, despite being told he was present.
Someone once said a journalist is just a reporter in a good suit. Dean Pritchard doesn’t own a good suit. But he knows a good lawsuit.
Updated on Wednesday, March 4, 2020 at 9:54 AM CST: Clarifies nature of allegations