Judge says Brampton failed to act ‘reasonably’ in $28.5M lawsuit

The City of Brampton has been ordered to pay $418,000 for a failed strategy in a $28.5M lawsuit against it.

Thestar.com
July 10, 2017
By San Grewal

In a pre-trial ruling for a lawsuit that could cost Brampton taxpayers millions of dollars, a judge says the city has “failed to act reasonably,” has caused “unexplained delay” and has incurred costs for a motion to dismiss the case even when its strategy was “doomed to failure.”

The recent ruling orders the City of Brampton to pay $418,000 in legal and other costs for its own failed motion, after abandoning its attempt to get the case thrown out. It is the latest setback for the city in the $28.5 million lawsuit filed against it by a local builder disqualified from bidding on a half-billion dollar downtown redevelopment project in 2010.

In awarding costs to Inzola Group Ltd., Ontario Superior Court Justice Peter Daley stated in his June 20 decision that, “The interests of the administration of justice were certainly not met as a result of the unexplained delay in the bringing of the summary judgment motion” to have the lawsuit dismissed.

Daley said “no reasonable explanation has been offered by the defendant as to why it waited four-and-a-half years from the commencement of this action to bring the summary judgment motion, and this delay ultimately pushed the scheduling of the trial of this action out an additional year.”

Asked to respond to the Superior Court decision, City of Brampton spokesperson Erin O’Hoski said in an email Thursday, “The city is moving as quickly as possible towards trial, which has been scheduled for eight weeks commencing May 7, 2018, at which all of the relevant evidence will be considered by the court.”

The city did not respond to Daley’s finding that it offered “no reasonable explanation” as to why it waited four-and-a-half years to file its failed dismissal motion.

Daley also pointed out that the city was late in disclosing more than 4,500 documents requested by the plaintiff after filing its lawsuit.

Inzola’s statement of claim alleges that it was unfairly disqualified from the downtown project’s bidding process because senior staff and former mayor Susan Fennell were biased against the company. The city denies all the lawsuit’s allegations.

After the dismissal motion was filed last year, Inzola deposed former Brampton chief administrative officer John Corbett, who had served on the selection committee for the development deal under his role prior to getting the CAO job.

He testified that Fennell had a “preferred” bidder for the deal and that the selection committee was biased against Inzola.

Daley wrote in his cost decision that the city’s lawyers “accepted” that Corbett’s evidence for the motion “seriously impugned the credibility of other senior city staff.”

Daley added that the city’s strategy to get the case thrown out was “doomed to failure” because of Corbett’s evidence. He said the city offered “no evidence… as to the reasons for the decision to abandon” its dismissal motion, but that Corbett’s testimony appeared to “be problematic for the defendant in terms of achieving any success on this summary judgment motion.”

Daley stated that the plaintiff, while arguing for its costs to fight the failed motion, suggested that when the city launched its strategy both the city and its legal counsel should have known the position of Brampton’s former CAO, who was directly involved in the selection process for the development project.

There are no allegations in the lawsuit against the winning bidder.

Daley wrote that the plaintiff argued that because of Corbett’s role and direct tie to the city, it should have known his position “long before this cross-examination in September 2016.”

Additional costs weren’t awarded for this, but the decision does include extra costs because the city didn’t abandon its motion right after Corbett’s testimony, instead choosing to allow two more months of cross-examinations, incurring more costs when it should have known “the motion should be abandoned,” Daley wrote.

Daley said, “I have concluded that the defendant acted unreasonably in pursuing the motion after the evidence from Mr. Corbett was clearly in the record in September 2016.”

When asked to respond to the court’s finding that it acted “unreasonably,” O’Hoski said, “Judge Daley found that the city was reasonable in filing the motion and did not act in bad faith when it withdrew.”

Asked who will pay the $418,000 awarded by the court, the city said those costs will be paid by “the city’s insurers and not by Brampton taxpayers.”

The city did not respond, however, when asked if it has guaranteed insurance to cover the $28.5 million being sought in the lawsuit if it loses at trial and additional legal costs over almost eight years by the time the trial concludes.

Some of the evidence brought forward to fight the abandoned motion was not known by city council, such as a 2011 agreement signed by Fennell authorizing the use of $480,000 of city funds, without council’s knowledge, to secure land on behalf of the eventual bid winner that the company needed for the downtown project. Fennell had said, during pretrial undertakings for the lawsuit that she did not learn about the $480,000 arrangement until 2014 when the rest of her council colleagues learned about it. When the 2011 agreement was filed with the court last year for the dismissal motion with Fennell’s signature on it, she told the Star she “does not recall reviewing” the content of the agreement with her signature on it.