Former city CAO to be tried separately in police HQ lawsuit

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This article was published 09/06/2020 (1661 days ago), so information in it may no longer be current.

FORMER City of Winnipeg chief administrative officer Phil Sheegl will be tried separately from 26 other defendants in a lawsuit over construction of the downtown police headquarters, a judge ruled Tuesday.

Queen’s Bench Justice Glenn Joyal granted a motion by Sheegl’s lawyer, Robert Tapper, to sever the case.

In a lawsuit filed in January, the city alleges contractor Caspian Construction, “in concert” with other defendants, including Sheegl, conspired and “schemed” to inflate the cost of the construction project for their own benefit.

At a hearing Monday, Tapper argued the allegations involving Sheegl are separate from the allegations that form the substance of the city’s lawsuit.

The city alleges in July 2011, shortly after Sheegl awarded the contract to Caspian, the company paid $200,000 to co-defendant Mountain Construction, which then paid the same amount to Sheegl or his company, with another $327,000 paid by Caspian president Armik Babakhanians to either Sheegl or his company.

The city budgeted $135 million to convert the former Canada Post office and mail-sorting plant into its new downtown police headquarters. By the time the project was completed, the cost had soared to $214 million.

Any involvement Sheegl had with the project ended when he signed Caspian to the contract, Tapper said.

“This (lawsuit) puts him in a position where he will be bankrupt while he waits to hear a tidbit of information against him,” Tapper said. “He will have to spend a fortune to defend himself against something he had nothing to do with.”

Joyal said depending on future disclosure in the case, it remains open to the city to return Sheegl to the original lawsuit. Joyal dismissed a motion by Caspian and other defendants to strike them from the lawsuit on the grounds it unfairly lumped them together with no details of the individual allegations against them.

The city filed its lawsuit after a five-year RCMP investigation ended with no charges. The case returns to court June 15.

dean.pritchard@freepress.mb.ca