Lawyers argue Ottawa Hospital shouldn't owe contractor involved in alleged fraud conspiracy

The Ottawa Hospital filed its defence to a $1.5 million claim by DRS Construction arguing bills and contracts obtained through "conspiracy, collusion and/or fraud."

The Ottawa Hospital filed its defence to a claim by DRS Construction claiming $1.5M in unpaid bills

Ottawa Hospital lawsuit filed in January names five contractors, including DRS Construction. (CBC)

The Ottawa hospital wants the court to dismiss a claim from one of its former contractors worth $1.5 million dollars in allegedly unpaid bills and contracts, claiming they were "procured through conspiracy, collusion and/or fraud."

DRS Construction filed the lawsuit in December against the hospital, a month before the hospital filed its own lawsuit, containing a number of explosive allegations against DRS as well as four other contractors and two hospital employees.

The DRS claim suggested the hospital had negotiated to repay a number of old invoices dating back to 2010. It also claimed the hospital had signed off on a contract to do small jobs until 2018. The company claims it had to lay off a handful of employees because beginning last Fall, the hospital refused to pay its bills or honour its contract. 

This week the hospital filed its statement of defence to the DRS suit, using the claims made in its January statement of claim. 

The hospital's lawsuit suggested DRS and four other contractors as well as two employees were involved in a kickback scheme to defraud the hospital, claiming the employees would get lavish trips and services such as free or cheap work on their own homes in return for rigged bids and contracts to favour the five companies.

Specifically, the hospital claims that any negotiation for old bills — which it calls "stale bills" in its defence — "was procured through conspiracy, collusion and/or fraud."

The January claim alleges DRS and its owner Gerry Dubé worked with Ottawa Hospital capital project manager Frank Medwenitsch in an extortion scheme against hospital employee Brock Marshall to get close to $500,000 in old invoices paid out. 

None of the claims have been proven in court. 

The hospital also denies signing off on a contract to do small jobs; and if an agreement was reached by the hospital with DRS, the claim states the small jobs contract was "procured through fraud," and breached the hospital's policies and "is therefore void."

The eight page defence concludes that DRS should not be entitled to any alleged damages caused by unpaid bills and cancelled projects, "given the egregious conduct" outlined in the hospital's own claim. 

The Ottawa Hospital has motioned the court to have the two suits combined, with the DRS suit considered the counter suit. Lawyers for DRS are fighting that motion.