CMT seeks to add former premier, others as defendants in $50M e-gaming suit

A $50-million lawsuit by Capital Markets Technologies against the P.E.I. government was in court Wednesday, with arguments presented on whether the company should be allowed to add more defendants to the statement of claim it submitted in March, 2017.

CMT is seeking damages over dealings with the provincial government regarding attempts to set up a financial service centre in the province to process online transactions. The company accuses government of "breach of its good faith performance of contract and failure to act honestly in the performance of its contractual obligations."

Arguments Wednesday were not around the specific merits of the claim, but rather about whether CMT should be allowed to amend its claim by adding new names.

Previous claim thrown out

A previous statement of claim submitted by CMT in 2015 was tossed out by Supreme Court Justice Gordon Campbell in 2016, who called it "a long, rambling narrative replete with irrelevant and immaterial facts, evidence, opinion, argument and speculation." Campbell, however, left the door open for CMT to file a new statement of claim.

Among the defendants the company wants to add to its new claim are former premier Robert Ghiz, deputy minister Neil Stewart, former deputy minister Melissa MacEachern, Tracey Cutcliffe, who had been a deputy minister but was working as a consultant in the time period in question, and lawyers Gary Scales and William Dow.

The lawyer for CMT, John McDonald, argued his client's case "changed dramatically" when P.E.I.'s auditor general filed her report on e-gaming in October 2016, and through the ensuing series of meetings of the province's standing committee on public accounts, which went through the report in detail.

Province seeking additional court costs

Lawyers representing the government have agreed to allow the amended statement of claim in exchange for payment from CMT of an additional $5,000 to cover legal costs. The lawyer representing private businessman Paul Jenkins, who is already named as a defendant in the suit, has also agreed to allow for the amendments.

But the lawyer representing three of the proposed new defendants is arguing the court should not allow his clients' names to be added. Gavin Tighe is representing Dow, Scales and Cutcliffe.

In a factum filed on behalf of his clients, Tighe argues the proposed, amended statement of claim "does not, on its face, disclose a legally sound cause of action against either Dow, Scales or Cutcliffe."

He said if the names are allowed to be added to the claim, CMT should be required to post a further $350,000 with the court against his clients' legal costs.

Already posted $732K

The company has already posted $732,098 with the court against a possible future ruling of costs in favour of government and Jenkins.

McDonald argued Scales was contracted to provide management services to the province's e-gaming committee, and as such is in possession of documents which will be critical to CMT's case. 

He said CMT wants to add Dow to its claim because he served as legal counsel to Innovation PEI during the time period in question. And McDonald said Cutcliffe had served as a consultant both to government and to CMT on the file.

CMT is also seeking to add Steven Dowling as a defendant to its claim. He's listed in the amended statement as a former lawyer with the P.E.I. Department of Justice. Documents referred to in court say Dowling is represented by his own legal counsel and has consented to allow the amended statement of claim.

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