New evidence key in $150M e-gaming lawsuit appeal, CMT lawyers argue

A years-long legal battle broke new ground inP.E.I.'s Court of Appeal Tuesday, as the first hearing to be conducted by the court using video-conferencing.

Capital Markets Technologies is appealing a summary judgment from September2019 in which the P.E.I. Supreme Court dismissed the company's multi-million-dollar suit against the P.E.I. government. That was the second time the company's suit had been tossed out.

Arguments on whether that decision should be overturned were heard by Appeal Court justices via Zoom,with some lawyers from the five legal teams representing the 18 parties named in the suit appearing from off-island.

CMT's lawyer John McDonald argued government failed to disclose all "material and relevant documents" in the company's case before the Supreme Court and said if it had, it would have made a "dramatic difference" in the outcome.

CMT filed a statement of claim in March 2017 after a previous claim filed in 2015 had already been dismissed alleging government was in breach of contract regarding a plan to set up a financial service centre to process online transactions.

CMT applies to admitnew evidence

The allegations stemmed from a memorandum of understanding (MOU) 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 a failed attempt involving the P.E.I. government and the Mi'kmaq Confederacyto establish P.E.I. as a regulator for online gambling.

This is not negotiating in good faith,. John McDonald, lawyer for CMT

In addition to seekingthe September2019 decision be overturned, CMT has filed three separate motions with the Court of Appeal to allow new evidence to be put forward. That evidence stems from hundreds of pages of documents the company obtained through freedom-of-information requests.

On Tuesday,McDonald, characterized some of those documents as containing "gold-plated" evidence, which he said clearly show government was in breach of its 2012 agreement with Financial Markets Technologies, a subsidiary of CMT.

Not in good faith, company says

Those documents includeemails from government officials in which McDonald said the province wasnegotiating to have other companies provide the same services the province was discussing with CMT, at a time when the memorandum of understanding between the province and CMT was still in effect.

CMT has alleged that in doing so, government was in breach of the exclusivity terms of the MOU.

"This is not negotiating in good faith,"McDonald said Tuesday. "This is breaching the very contract that you signed."

CMT also said some of the documents the company obtained through freedom of information are "material, relevant documents" that government should have put forward as part of the disclosure of documents in the case.

Terms of agreement overstated: province

But the lawyer representing government, Jonathan Coady, said CMT had "widely overstated" the exclusivity terms in its MOU with the province, and said the company's claim it had uncovered"gold-plated" evidence in government emails was "sensational," meant to appeal to the public rather than sway the court.

Coady said some of the documents CMT obtained had already been provided through the court process but without information redacted as was the case with the freedom-of-information requests.

Other documents,Coady argued, would already have been in the company's possession including emails to and from CMT's president Paul Maines.

Coady also questioned the company's due diligence in filing freedom of information requests in 2019 and 2020 seeking evidence for a court challenge initially launched in 2015.

All sides presented their arguments around the admission of new evidence on Tuesday, and CMTalso presented its arguments as to why the decision by Justice Gordon Campbell to dismiss thecase should be overturned.

No issues requiring trial, previous court found

CMT argued Campbell failed to compel the province to put forward all relevant and material documents.

In its notice of appeal the company also saidCampbell was not able to consider new documents put forward by government's lawyer just one week before hisdecision was made public.

The other parties will speak to thesearguments on Wednesday.

In September2019, Campbell dismissed the most recent CMT suit, which sought $150 million in damages, concluding there were "no genuine issues requiring a trial" and finding the plaintiffs had "failed completely to substantiate their allegations."

If CMT is successful in its appeal, the Appeal Court could order the case head back to trial in P.E.I. Supreme Court. In the five years this case has been before the courts, it has never reached the trial stage.

A spokesperson for the province said its legal bill from 2015 to 2020 has so far amounted to $868,334, with $201,729 recovered in costs so far.

While Tuesday's hearing was the first case to be heard via tele-conference for the P.E.I. Court of Appeal, other Island courts have already been using technology to hear cases remotely.