Brampton staff misled council on land deal, lawsuit alleges
Court documents suggest staff falsely told council chosen developer Dominus had secured a site, then handed over $480,000 without authorization.

TheStar.com
Feb. 27, 2015
San Grewal

Brampton staff misled council ahead of a March 2011 vote to approve a massive downtown redevelopment project, setting off a chain of events that led to the loss of $480,000, according to allegations in a lawsuit against the city.

Staff had told council moments prior to the vote that a key parcel of land included in the proposal for the $500-million redevelopment project had already been secured by Dominus Construction, the company that staff were recommending for the project. Documents in the lawsuit suggest it had not been secured.

Months later, staff authorized payment of $480,000 in city funds to Dominus to enable it to secure an option on the land, without council’s knowledge, documents in the lawsuit allege.

The $480,000 was forfeited last October, when the option on the land expired.

The $28.5-million lawsuit by developer Inzola Group — which is arguing it was unfairly disqualified from bidding on the project — alleges that staff misled council in two ways regarding the land deal: First, before the vote to choose Dominus on March 28, 2011, former treasurer Mo Lewis told council the land had been secured by the developer, when it had not. Secondly, staff didn’t tell council about the $480,000 in public funds turned over to Dominus so it could hold the land. Councillors weren’t informed and never approved it.

Inzola, which was disqualified after questioning a secrecy agreement it had been asked to sign, argues in its statement of claim that city staff and former mayor Susan Fennell were biased in favour of Dominus and that the bid competition was unfair.

None of the allegations in the Inzola statement of claim have been tested in court.

The lawsuit does not make any allegations of wrongdoing by Dominus regarding the land deal. Dominus has stated it followed all the rules of the bid contract.

The city’s statement of defence filed in July 2013, well before Susan Fennell’s ouster in the October 2014 election, denies the allegations in the lawsuit, claiming that Inzola’s owner, John Cutruzzola, is “part of a faction who wish to remove the mayor from office by tarring her reputation.”

A council transcript included in the lawsuit documents shows that in March 2011, just before voting to select Dominus for the job, council asked if Dominus had secured the land. Former treasurer Lewis replied that the company had done so as part of its proposal for phase two of the project.

The transcript quotes Lewis as saying, in response to a question just before the vote: “…they have an option on the property — that is correct, I can tell you that.”

He went on: “… it’s incumbent on them to make sure that land is available when the city and them get into a position to start the construction phase.” The parcel, referred to as the First Choice lands, is a 17,000-square-foot section of a parking lot near Brampton’s city centre, just north of city hall.

A Jan. 30, 2015, affidavit responding to allegations in the lawsuit filed by Julian Patteson, Brampton’s chief of public services, acknowledges that, “The city paid the $480,000 to fund the option (to hold the parcel of land).”

Patteson was examined much earlier in the lawsuit discovery process. During pre-hearing testimony, on Sept. 19, 2012, he was asked by Inzola’s lawyer whether, during the March 2011 meeting to vote on the Dominus bid, council had been informed that the parcel of land had been secured.

“Yes, and the representative from Dominus was there,” he responded, according to the testimony documents, “the representative from Dominus was there with a signed offer at the March 28th, 2011 council meeting.”

Following Patteson’s examination, Inzola’s lawyers argued successfully for a court order requiring that the city release hundreds of documents that would help Inzola’s case, which the city had resisted doing.

One of the subsequently released documents was an email from a Dominus official to Brampton staff, including Patteson, sent just hours before the vote, that indicated Dominus had not, in fact, secured the parcel of land.

During a later examination on May 26 last year — after the email had come to light — Patteson was asked the same question again by Inzola’s lawyer. According to the court documents, he appeared to reverse his earlier position.

Lawyer: “The meeting was in the evening. And can I ask you to — so both — at this point in time, both you and Mr. Lewis, in fact all three of you, Mr. Lewis and Mr. Honeyborne (Brampton’s current treasurer) and I guess Ms. Oliveira (the project’s purchasing officer) as well, were aware that Dominus did not have the First Choice lands tied up at that point in time, correct?”
Patteson: “That’s right.”

When Patteson was asked why he didn’t correct information that he knew was “incorrect” before council voted, he stated, “I respond to council as they address me.”

Lewis did not respond to questions from the Star.

Patteson’s examinations also indicate that city staff unilaterally decided to fund the $480,000 needed to secure Dominus’s option on the land, without informing council.

In his April 30, 2014, examination, Patteson was asked if, to his knowledge, any council member was ever made aware that later in 2011, staff gave Dominius $480,000 in public funds for its option on the land.

His response: “No.”

Patteson did not respond to questions from the Star. A city spokesperson said staff could not comment as the matter is before the courts.

In his Jan. 30 affidavit, Patteson said the city, with council’s approval, had since entered an agreement to buy the land itself, with a closing date of Feb. 13.

In an earlier examination, Patteson said the price was set at $2 million. The purchase price did not include the $480,000 that was forfeited in October.

City of Brampton staff did not respond when asked to confirm whether or not the deal has closed.