Manitoba

City's legal department says it needs another $1.2M to fight legal case over Winnipeg police HQ project

The bill for the legal fight against former city of Winnipeg CAO Phil Sheegl and others is rising quickly, with a request for nearly $1.2 million in extra funds heading to city council's executive policy committee.
The City of Winnipeg's director of legal services says not approving a request for additional funding would 'effectively end' the city's efforts to see 'recovery and accountability' in connection with the downtown Winnipeg police headquarter project. (Tyson Koschik/CBC)

The City of Winnipeg's pursuit of lawsuits against its former chief administrative officer and contractors who worked on the police headquarters building is getting more expensive.

The city's legal service department is asking members of city council's executive policy committee to approve an extra $1.2 million for fees for external legal counsel and forensic accounting services.

If the recommendation — which will be considered by the committee at its meeting next Tuesday — is approved, the total bill for fees in fighting the case will exceed $4 million. 

The city launched legal action in January 2020 against former CAO Phil Sheegl, Caspian Construction  — the primary contractor on the downtown Winnipeg police headquarters — and a number other companies and consultants, alleging a scheme of fraud, embezzlement and kickbacks in connection with the project.

The total project cost to renovate the former Canada Post building was set in 2009 at $135 million but ended up being closer to $214 million by the time the Winnipeg Police Service took over in the summer of 2016.

In its request to EPC, the legal department says it needs the extra funds to "enable the legal services department to continue to engage the legal and expert forensic resources required for the conduct of the court actions."

The city has engaged law firm Marr Finlayson Pollock LLP and accountancy firm Deloitte LLP to do the work.

The legal department says it has "identified a significant number of transactions and matters that appear to be consistent with the allegations of fraud, conversion, fraudulent and/or negligent misrepresentation, deceit, conspiracy, unjust enrichment, negligence and breach of contract made by the city in its claim."

The department alleges documents from an extensive RCMP investigation into the police HQ project and from the parties named in the court actions substantiate those claims.

The RCMP investigation into the police HQ construction project concluded in December 2019, after five years. No charges were laid.

Thousands of documents, correspondence and electronic data seized from Caspian Construction form part of the forensic audit being done by legal and accountant firms hired by the city. (Brett Purdy/CBC)

None of the allegations against any of the defendants in the city's legal action have been proven in court.

The city's legal and accounting teams say they sifted through 1.8 million documents in their preliminary work on the case.

After winning a motion to obtain the documents and electronic data seized by RCMP from Caspian's corporate offices in December 2016, the city says it received a 10-terabyte hard drive from the RCMP containing a copy of thousands of documents.

The request for more funds would allow a forensic analysis through that mountain of data, the legal department says. 

"The analysis of the RCMP data is critical to the prosecution of the city's claim," wrote Doug Brown, the city's director of legal services. 

Brown concluded the request for funds to EPC with a caution that not getting the money could put the city's case in jeopardy. 

"A decision not to provide the resources necessary to continue the court actions is not recommended as it would render useless the progress made to date," he wrote.

That, he said, would "effectively end the opportunity for the city to seek recovery and accountability as to what occurred during the WPS headquarters project."

The City of Winnipeg's legal department says it needs another $1.2M to fight case

9 months ago
Duration 1:58
The City of Winnipeg's pursuit of lawsuits against its former chief administrative officer and contractors who worked on the police headquarters building is getting more expensive. The city's legal service department is asking members of city council's executive policy committee to approve an extra $1.2 million for fees for external legal counsel and forensic accounting services.

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