Lawsuit against Manitoba government over terminated lease on facility for children in care dismissed

The lawsuit filed in 2019 by Peter Ginakes and others over the premature termination of a 20-year lease for a home for at-risk kids in care was dismissed late February of this year by a Court of Queen's Bench justice.

Lawsuit sought damages for termination of lease at 800 Adele Ave.

A lawsuit over the Manitoba government's decision to terminate a 20-year lease at 800 Adele Ave. has been dismissed. (CBC)

The Manitoba government has successfully applied a rarely used legislative power to get a $7.4-million lawsuit filed against the province dismissed. 

The lawsuit filed in 2019 by Peter Ginakes and others over the premature termination of a 20-year lease for a home for at-risk kids was dismissed this February by a Court of Queen's Bench justice.

This comes after the province created legislation in 2019 that not only got them out of the lease at 800 Adele Ave., but also prohibited any legal action from being taken in response — a power that legal experts say governments have but rarely use. 

Justice Theodor Bock's decision pointed directly to the legislation as to why he was dismissing all legal actions.

"The Government used its extraordinary power to enact legislation … which expresses in clear and unambiguous terms that the action is deemed to have been dismissed," he said in his Feb. 25 decision.

The lawyer for Ginakes said the fact the government was able to legislate their way into breaching a contract should be concerning for all Manitobans who get into business with the government.

"When you have [a contract with] the government of Manitoba … and you find it can be just be dismissed ... was quite a surprise and a concern," said Dave Hill, senior partner with Hill Sokalski Walsh.

"You would think that having a lease with the government, or at least a lease backed by the government and funded by the government, would be a good asset, a good security."

800 Adele controversy

The lawsuit was completely dismissed after a series of motions, appearances and appeals related to the government's introduction of the legislation.

The 800 Adele Ave. deal has been shrouded in controversy for years after a 2016 audit noted several irregularities, including the original untendered lease cost being twice the market rate.

The lease was between the numbered company listed as owning a property at 800 Adele Ave. and the Southern First Nations Network of Care. The 18,000-square-foot facility.had been sub-leased out for use by Marymound to house at-risk youth.

The Southern Authority oversees 10 child and family services agencies and is funded by the province, and Ginakes and Ken Cranwill (a fellow shareholder) were landlords of the Adele property, located just south of Notre Dame Avenue off Arlington Street. 

Lawyers representing the then-NDP government approved the Adele building lease that was signed in 2008.

The authority had been paying $500,000 a year to lease the building, which had been converted into an emergency placement for children in care. 

Cranwill and Ginakes claim in the lawsuit that the actions of the Progressive Conservative government are out of "spite and revenge" for Ginakes' role in the Tiger Dams controversy involving the previous NDP government.

Peter Ginakes claims in the 2019 lawsuit that the Tories are motivated by 'malice, spite and revenge' for his role in the Tiger Dams controversy. (Chief Peguis Investment Corp.)

In 2014, the government attempted to buy $5 million in flood-fighting Tiger Dams with an untendered contract.

Ginakes represented the company behind the contract and was a friend of and campaign contributor to then-infrastructure minister Steve Ashton.

An ombudsman report subsequently found the government did not have sufficient reason to try to purchase the equipment.

Lawyer will appeal decision

Named in the 2019 lawsuit was the Manitoba government, then-premier Brian Pallister,and then-finance minister Scott Fielding.

They claim the premier and minister "began to pursue and continued to pursue a course of conduct that was motivated by spite, malice, duplicity and bad faith and that was designed to harm the plaintiffs' economic interests," the lawsuit states

The lawsuit also sued Pallister and Fielding for defamation after it alleged both made defamatory comments about the 800 Adele Ave. deal.

Watch a report on the underutilized facility from 2016:

Southern Authority leased building for $500K a year, sits partly empty

6 years ago
Duration 1:31
A building leased by the Southern Chiefs Organization for half a million dollars a year has been sitting half empty since 2014.

It also listed hundreds of thousands of dollars in expenses related to building maintenance and lease payments it had hoped to recoup from the Manitoba government — that claim was also dismissed.

Cranwill has previously alleged the government evicted children in the middle of the night months before they announced they were breaking the lease. 

Cranwill said in a prepared statement that they will appeal the decision and are "always open to discussing this matter with the government in an effort to come to a resolution."

Hill said he was surprised that Bock dismissed the defamation part of the lawsuit, which is something he hopes an appeal court takes a second look at.

Hill said his clients are prepared to take this all the way to the Supreme Court of Canada, if possible.

Governments rarely legislate away rights: expert

A constitutional law expert says though it is rare to see a government "legislate away" someone's right to sue, it is well within their power.

"The government does have the power to legislate away private rights that an individual would have," said defence lawyer Andrew Furgiuele.

"These are cases of public policy where the government has to be allowed to act."

Andrew Furgiuele is a Toronto criminal lawyer who also lectures in criminal procedure in the faculty of law at the University of Toronto. He says governments can use their powers to legislate away someone's right to sue. (Submitted by Andrew Furgiuele)

Furgiuele said there have been previous tests on this power and the courts have sided with government in those instances. 

"The court, quite frankly, made clear that they expect this to happen very rarely," he said.

"If governments start every legislative session breaching contracts and then legislating things away, I would expect you would see the courts soften the strictness of the language."

Jon Lovlin, a spokesperson for the justice minister, declined to comment on the court's decision. 

With files from Bryce Hoye and Ian Froese