Former Winnipeg CAO Phil Sheegl appeals court ruling ordering him to pay $1.1M to City of Winnipeg

Phil Sheegl, Winnipeg's former chief administrative officer, is appealing a decision by Manitoba Court of Queen's Bench Chief Justice Glenn Joyal, which directed him to pay more than $1million in damages to the city.

Sheegl's filings call the judge's decision 'clearly wrong' and 'an injustice'

Phil Sheegl, Winnipeg's former CAO, is appealing a decision made by Manitoba Court of Queen's Bench that found he took a $327,200 bribe from a contractor hired by the city to build the Winnipeg Police Service's headquarters. (CBC)

Phil Sheegl, Winnipeg's former chief administrative officer, is appealing a decision by Manitoba Court of Queen's Bench Chief Justice Glenn Joyal, which ordered him to pay more than $1 million to the city.

In the appeal filed in court on Monday, Sheegl's lawyer Robert Tapper wrote that the judge's decision "is clearly wrong and amounts to an injustice."

In January 2020, the city filed a lawsuit against Sheegl, Armik Babakhanians, the owner of Caspian Construction, and numerous others who worked on the police headquarters project. The city claimed they conspired to defraud it of millions of dollars in the construction of the downtown building.

This March, Joyal found Sheegl received a bribe and breached his duty as a senior city official in 2011, when he accepted $327,200 payment from Babakhanians. 

In the appeal, Tapper wrote that the judge erred in finding the allegations in the plaintiff's claim were made "on a balance of probabilities." 

Sheegl received $200,000, the first part of the $327,200, days after Caspian was awarded a contract to build the Winnipeg Police Service's headquarters, a project which ended up costing taxpayers $214 million.

Sheegl split the money with former Winnipeg mayor Sam Katz, Sheegl's friend and co-owner of a parcel of undeveloped land in Tartesso, Ariz., which is at the centre of this case.

Sheegl said Babakhanians paid him and Katz for interest in the Tartesso land.

Joyal rejected that claim. 

Sam Katz, Phil Sheegl and Caspian Construction owner Armik Babakhanians say they were engaged in a real estate deal while Katz was Winnipeg's mayor and Sheegl was the city's CAO. (CBC,

In a judgment dated May 4, Joyal ordered Sheegl to pay the city approximately $1.1 million.

That included the $327,200 bribe plus $50,000 in interest, the $250,000 severance payment Sheegl received from the city, plus nearly $32,000 in interest.

It also included $100,000 in punitive damages and almost $333,000 worth of costs incurred by the city while it pursued the court case.

The Sheegl appeal also stated the judge erred by relying exclusively on affidavits written by Winnipeg's current CAO, Michael Jack, "who had no knowledge whatsoever of the facts" in the lawsuit "and whose evidence was exclusively improper hearsay, double or greater hearsay, opinion, and conclusions at law."

Sheegl's lawyer argues there was a trust agreement between Sheegl and Babakhanians that guarantees Babakhanians's principal investment in the land and "therefore cannot constitute a secret commission or bribe."

In his decision, Joyal found Sheegl had a contractual duty to abide by the city's code of conduct, which forbids employees from receiving financial favours from people involved in a business relationship with the city.

Sheegl's appeal also addressed that finding.

"The learned judge erred in finding that there was a substantial risk that Mr. Sheegl's duties as CAO could conflict with his personal interests," wrote Tapper. 

He also wrote that Joyal made a mistake in finding that the Tartesso land deal constituted a "reward, advantage or benefit of any kind" under the city's code of conduct.

Tapper wrote that the court's decision was wrong because the judge failed to consider that all the decisions made in relation to the police headquarters were made by "extensive layers of committees," comprised of city personnel, and that Sheegl "had no ability to provide Caspian the procurement advantages vaguely alleged by the plaintiff."

Tapper also said that the judge failed to consider that the $327,200 payment is consistent with the terms of the "trust agreement, a fact that was expressly acknowledged by the RCMP within the criminal investigation."

The RCMP investigated allegations of fraud in the police headquarters construction project for five years. The case was closed in December 2019 with no charges laid.

During that investigation, the Mounties were granted a number of judicial authorizations to search bank accounts including Sheegl and Katz's.

In 2016 court filings, police alleged Sheegl accepted a bribe "for showing favour to Armik Babakhanians with relation to the Winnipeg Police Service headquarters construction project." 

But in 2017, the RCMP alleged Sheegl "did commit a breach of trust in connection with the duties of his office."

Sheegl was CAO from May 2011 to October 2013.

In an emailed statement, the City of Winnipeg said it is aware of the appeal and will oppose it.


Caroline Barghout

Investigative Reporter, CBC Manitoba I-Team

Caroline began her career co-hosting an internet radio talk show in Toronto and then worked at various stations in Oshawa, Sudbury and Toronto before landing in Winnipeg in 2007. Since joining CBC Manitoba as a reporter in 2013, she has won an award for her work on crowded jails and her investigation into Tina Fontaine's death led to changes in the child welfare system. Email:

With files from Bartley Kives