Attempt to derail Wing lawsuit rejected

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Lawyers representing the Sagkeeng First Nation were not able to convince a Manitoba Court of Queen's Bench adjudicator to throw out huge chunks of a civil lawsuit filed against the band in connection with a failed early years school project.

Don Wing, proprietor of Ontario-based Wing Construction, claims he entered into a partnership with the band's education authority in 1997 to build the school. In his statement of claim, Wing said that, after a band council resolution was passed stating that financial approvals from the Department of Indian Affairs were in place for the project, his company spent close to $2 million completing the first phase of construction. When he submitted his bill, Wing discovered the financial approvals were, in fact, not in place. An independent financial review has set the amount of money the construction company owner is out of pocket at close to $3 million.

Wing, the project's architect and a contractor involved in the project are suing the band for their losses.

The decision of Master Carol Sharp was handed down on Aug. 1. The court appointed adjudicator had been presented with a motion by lawyers representing the band asking the court to strike down a section of the statement of claim or render summary judgement in the case. In asking for a summary judgement, the band's lawyers were arguing that no facts supporting the allegations made in the statement of claim had been put in front of the court and therefore, the court should dismiss the claim rather than proceed to trial.

Sagkeeng lawyers made several legal arguments. They said court rules prevent one partner from suing another in the name of the partnership. They also argued that since partners are all liable for wrongful or negligent acts committed by other partners, Wing could not sue a band with which he had entered into a partnership. They also claimed that there is no evidence that the band entered into a partnership with Wing and that Wing's claim that the band had misrepresented itself while inducing him to enter into a contract to build the school is also not supported by evidence.

Wing's lawyers argued that he "does not purport to sue the [band] as one of [his] partners, but rather seeks to prove the [band] liable for fraudulent or negligent misrepresentations."

Master Sharp, in her 12-page ruling, cited Geisel v Geisel, a 1990 Manitoba Court of Queen's Bench decision in addressing the question of whether one partner can sue another.

"Is there a logical reason in law in this day and age, when actions unheard of even 30 years ago are permitted every day under our jurisprudence, for taking a strictly technical approach and say a person cannot sue his partner, or a partnership in which he is involved, because he may be said technically to be suing himself? I think the answer to that question has to be no. . . . the common law is, as it ought to be, logical, rational, dynamic and in keeping with the times, and free of technicalities or concepts conceived to deny worthy litigants their day in court," Judge Ferg wrote in that case.

Sharp also quoted from another case as she cited the law in laying out her reasons for the decision. In that case, where one partner owned another company that was involved in actions that damaged his partnership, the judge ruled that partners cannot seek immunity for negligent or wrongful actions by hiding behind their partnership to avoid litigation.

"The defendants seek to set up a "Catch 22" which would prevent the plaintiff from any relief short of a dissolution and accounting. In the case of damage caused when a third party defaults on its obligations to the partnership, the damage is suffered by the partnership. But when the third party is the alter ego of one of two partners, the damage may be suffered solely by the other partner," the Supreme Court of Canada ruled in Herrington v Hamilton (City).

While the band denies that it was involved in a partnership with Wing to build theschool, saying a corporate body was designed that would have included the band but was never activated, the judge cited a band council resolution (or order-in-council) passed by Sagkeeng council in 1999 that dissolved the partnership.

"This begs the question as to why it was necessary to pass an order-in-council to dissolve it, if there was no partnership in existence," Sharp wrote.

The master ruled that the statement of claim was improperly worded. Instead of striking it down as the band had requested, the master gave the plaintiff 30 days to amend it. She also ruled that there is sufficient evidence to proceed to trial and refused to render a summary judgement.