Home Featured Manitoba court orders former City of Winnipeg CAO to repay secret payment in police HQ bribery case

Manitoba court orders former City of Winnipeg CAO to repay secret payment in police HQ bribery case

by HR Law Canada

The Court of King’s Bench of Manitoba has delivered a decisive judgment on a case involving allegations of bribery related to the redevelopment of the old Canada Post mail processing building into the new Winnipeg Police Service headquarters.

This ruling scrutinized the actions of P.S., the former chief administrative officer for the City of Winnipeg, who received clandestine payments totalling more than $300,000 CAD from A.B., a contractor managing the redevelopment project.

From 2011 to 2012, P.S. accepted two payments—one for $200,000 CAD and another for $127,200 USD—without disclosing them, despite his pivotal role and fiduciary duties in the project. The payments were made during a period of significant delays and budget overruns that eventually pushed project costs beyond $200 million, turning the redevelopment effort into a scandal that attracted a criminal corruption investigation by the RCMP named Project Dalton.

The civil court’s focus was on whether these payments constituted bribery, a determination separate from any criminal investigation outcomes.

“The heart of bribery is a secret payment that gives rise to a realistic prospect of a conflict of interest,” the judge noted in the ruling. Despite P.S.’s defense describing the payments as part of a real estate transaction in Arizona, the judge dismissed this explanation as “incredible” and “fictional,” given the lack of supporting documentation and the implausible nature of the transaction.

The judgment catalogued multiple instances where P.S. failed to provide “loyal, honest and disinterested advice” to the City, favoring A.B. and his companies, thereby breaching his fiduciary duty. The court found these acts of misconduct to be not only unethical but also legally reprehensible, warranting P.S. to repay the bribe money with interest, return his severance payment, and pay $100,000 in punitive damages. The court also ordered costs on a lawyer and client basis, underscoring the gravity of the misconduct involved.

For more information, see Winnipeg (City) v Sheegl, 2023 MBCA 63 (CanLII).

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