CMT's $150M lawsuit against province sees partial victory in Appeal Court

The P.E.I. Court of Appeal has dismissed all claims against individuals in a statement of claim by Capital Markets Technologies (CMT), but agrees a trial on breach of contract by the government can go ahead.

CMT's claim had been dismissed in September 2019 in a summary judgment by the Supreme Court of P.E.I., which ruled there was no basis for a trial.

"In my assessment there is a genuine issue requiring a trial," Chief Justice David Jenkins wrote in the Court of Appeal ruling.

Trinity Bay Technologies, a subsidiary of CMT, had a memorandum of understanding (MOU)with the government in 2012to establish a financial services centre. 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.

CMT filed a statement of claim against the government for breach of contract in 2017, seeking tens of millionsin damages.

The suit went on to name 14 individuals and a private company as defendants, including former premier Robert Ghiz and former finance minister Wes Sheridan. It made allegations of misfeasance in public office as well as spoliation of that is, tampering with or destroying evidence.

Those two elements of the appeal were dismissed. That leaves the case as being solely against the P.E.I. government.

"All of the tort claims for misfeasance in public office and all the claims for spoliation, which together comprise all the claims against individual defendants, are removed," Jenkins wrote.

CMT attempted to introduce 107 documents as new evidence during the appeal, but the Court of Appeal ruled they could have been brought forward at the trial, and did not allow them.

Spent over a million dollars to get to this point with one goal to go to trial. Paul Maines, Capital Markets Technologies

The court also noted the MOU was strictly connected to the creation of a financial services centre, and not about the e-gaming initiative planned by the government and the Mi'kmaq Confederacy.

However Jenkinsdoes suggest, in hisdiscussion of the MOU, that it couldbe useful to consider,"How, if at all, did the defunct internet gaming venture relate or lead to a financial services platform?"

Breach of contract

The Court of Appeal accepted CMT's argument that the Supreme Court should have more carefully considered the definition of the term "financial services centre" in the MOU.

CMT claims the government breached exclusivity clauses in the contract by approaching competitors regarding providing the same services.

The plaintiffs' 26 examples of overlooked evidence do not provide any road sign pointing to a lurking error. Justice David Jenkins' written decision

"Key findings of fact depend on the term 'financial services centre' being properly construed," Jenkins wrote.

"The genuine issue [requiring a trial] is whether government by its interactions ... breached the exclusivity provision of the MOU. "

The president of CMT, Paul Maines,sees the decision as a victory overall.

"It's a win.There's no other way to look at it.We've spent five years with preliminary motions. Spent over a million dollars to get to this point with one goal to go to trial.

"We're going to trial."

Spoliation and misfeasance

But while the Court of Appeal sided with CMT on breach of contract, it took the part of individuals named in the suit on other matters.

In the spoliation claim, CMT claimed government officials had destroyed email evidence that related to the case.

All the people that are no longer in the action are allowed to be invited as witnesses, and they will be. Paul Maines, Capital Markets Technologies

Jenkins wrote spoliation requires that four things be proven.

• Destroyed evidence was relevant.
• Destruction was intentional.
• Litigation was ongoing or contemplated at time of destruction.
• It could be reasonably inferred that the evidence was destroyed to affect the outcome of the litigation.

The Supreme Court found that the plaintiff failed to provide sufficient evidence for any of these claims, and the appeal addressed only the first issue. Since failure on any one of them was fatal to the claim, the appeal was dismissed.

In his ruling, Jenkins gave a number of examples of the emails under scrutiny, including the deletion of Chris LeClair's email account following his resignation as Robert Ghiz's chief of staff.

"LeClair's resignation and Ghiz's direction [to delete the account] occurred in October 2011. Ghiz could not possibly have then foreseen there would be an MOU in July 2012 and later on in late 2014 a notice of claim for breach of contract."

On the question of misfeasance, CMT argued the Supreme Court overlooked evidence, and provided examples, but the Court of Appeal was unmoved.

"The plaintiffs' 26 examples of overlooked evidence do not provide any road sign pointing to a lurking error," Jenkins wrote.

However, Mainessaid legal involvement may not be over for those named in the suit.

"All we wanted to do is go to trial. All the people that are no longer in the action are allowed to be invited as witnesses, and they will be."

Jenkins recommended the name of the proceedings be changed, recognizing the government of Prince Edward Island as the sole defendant, and Trinity Bay Technologies as the plaintiff.

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