Company behind e-gaming suit wants $1M in security returned

The lawyer representing a company suing the P.E.I. government for $50 million argued Tuesday his client's chances of success have risen so sharply, the company should be refunded the moneyit gave the court as security against costs in the event it loses.

Capital Markets Technologies (CMT) is seeking damages over dealings with the provincial government regarding attempts to set up a financial service centre 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."

CMT's lawyer John McDonald quoted the Bob Dylan song The Times They Are a-Changin to describe how much his clients' prospects of success have improved since an earlier suit was tossed out of P.E.I. Supreme Court in Feb. 2016 by Justice Gordon Campbell.

In his decision turfing the original statement of claim which he calledan abuse of the court process Campbell said the company would be allowed to refile, but only after posting security against a possible award of costs.

Strength of case not considered, lawyer argues

The company has posted more than a million dollars, including $300,000 posted in June as security against costs for three new defendants not originally named in the suit: William Dow, Gary Scales and Tracey Cutcliffe.

But on Tuesday McDonald argued the April 2018 ruling that awardedsecurity for those three new defendantsdid not consider the strength of his client's case, and said if it had, no security would be required.

Tuesday's hearing was for CMT's appeal of that April 2018 ruling on the $300,000 in security for Dow, Scales and Cutcliffe. McDonald said he also planned tofile another motion seeking the return of an additional $700,000 in security posted against costs for the P.E.I. government and another defendant,businessman Paul Jenkins.

There isno date set yet for when the trial itself might go ahead.

750 pages of documents, and counting

In explaining why he believes his client's case is stronger than it was when the initial suit was filed in April of 2015, McDonald went point-by-point through the auditor general's special report on e-gaming, which wasn't completed until the following year.

He also asked the court to accept50 pages of fresh evidence to add to the more than 700 pages of documents put forward by CMT so far. The new documents includeemailsfrom government figures which McDonald argued bolsterhis client's claim that government was in discussions with a second company during the period it had signed an exclusivity agreement with CMT.

The lawyer representing Dow, Cutcliffe and Scales,Gavin Tighe, said CMT had put forward no evidence to support its case that the company should not be required to post security, and argued the fact it has already paid showed that the financial requirement was not a barrier preventing the company from seeking justice.

He also arguedJustice Campbell made the right decisionin requiring the company to post security as a condition to relaunching its suit.

"This is round two of the case," he told the court, saying it couldn't ignore "the fact that there was already a round one."

Government lawyer Jonathan Coady was present for the hearing, but as the motion did not deal with security for his clients, his comments were brief.

Chief Justice David Jenkins said the court would deliver its decision sometime this fall.

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