Company files new $50M lawsuit against P.E.I. government

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Capital Markets Technologies has filed a new statement of claim in P.E.I. Supreme Court seeking $50 million in damages over dealings with the provincial government regarding attempts to set up a financial service centre in the province to process online transactions.

In the new claim 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."

The allegations stem from a memorandum of understanding signed between government and a subsidiary of CMT in July of 2012. Efforts to set up a financial services centre in the province came in the wake of the province's failed attempt to establish itself as a regulator for online gambling, according to Auditor General Jane MacAdam's report on the subject.

The claim names a number of current and former government representatives, including former finance minister Wes Sheridan and Allan Campbell and Chris LeClair, both former chiefs of staff to Robert Ghiz, accusing them of conduct that was "unlawful and likely to injure the plaintiffs."

Contract breached, company says

In her report MacAdam detailed how that memorandum of understanding "was to set out the parameters for the parties to commence formal negotiations to establish a financial services platform in the province." She said the agreement included an exclusivity clause.

In its statement of claim CMT alleges Sheridan and LeClair breached the agreement by putting forward a proposal for another company to provide the intended services. CMT also alleges the province "hired a professional firm to set up meetings with potential clients, including clients of 7645686 [a CMT subsidiary] and used proprietary information that CMT … had shared with Innovation PEI."

In the claim the company also alleges an investigation into CMT by the Superintendent of Securities was based on false accusations and pursued by government "for the express purpose of providing an excuse for Innovation PEI to refrain from fulfilling the MOU."

Previous claim thrown out

None of the new allegations have been tested in court. A previous statement of claim submitted by CMT in 2015 was tossed out by Supreme Court Justice Gordon Campbell, who called it "a long, rambling narrative replete with irrelevant and immaterial facts, evidence, opinion, argument and speculation."

However, Campbell left the door open for CMT to file a new statement of claim.

The claim filed Wednesday also names Brad Mix and Cheryl Paynter, who are still employed by government, along with private Island businessman Paul Jenkins.

More names to be added

Before it could serve notice of the new claim, the company was required to provide a deposit of $732,098 to the court as security against future costs.

Jonathan Coady, a lawyer representing the P.E.I. government told CBC News in an email "there is no legal merit to this claim," and said government would be filing a full defence.

Kenneth Godfrey, a lawyer representing businessman Paul Jenkins, echoed that statement, telling CBC News "we believe that this claim has no more legal merit than the plaintiffs' first claim and look forward to answering it fully in court."

On March 10 CMT provided the required 90-day notice that it intends to add more names to its list of defendants, including former premier Robert Ghiz. The company says it will file an amended statement of claim once that 90-day period has expired.

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