P.E.I.'s infamous e-gaming lawsuit struck out

Ryan Ross
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Capital Markets Technologies lawyer John Findlay, left, enters the P.E.I. Supreme Court in November with CMT director Paul Maines.(file)

Paul Maines, CMT director, plans on filing new statement of claim and $1 million security to see suit go ahead

A P.E.I. Supreme Court judge has struck out a statement of claim in a lawsuit over the province’s failed e-gaming scheme.

Justice Gordon Campbell also ordered plaintiffs Capital Markets Technologies, Inc. (CMT) and 7645686 Canada Inc. to pay more than $1 million in security costs if they file a new claim.

In striking the entire claim, Campbell said the court’s processes are meant to get a result that is fair and just to all parties.

“This statement of claim constitutes an abuse of those processes of the court.”

RELATED: E-gaming legal bills amount to $3 million

RELATED: E-gaming law suit goes to its first day in P.E.I. court

The plaintiffs sued the provincial government, former finance minister Wes Sheridan, Steve MacLean, Cheryl Paynter and Brad Mix from Innovation P.E.I., and former chiefs of staff Chris LeClair and Allan Campbell, who both worked in the premier’s office.

The claim also named Paul Jenkins and Garth Jenkins as defendants.

The plaintiffs are suing for $25 million with allegations that included breach of contract and breach of confidentiality.

It all stemmed from the province’s failed plan to turn P.E.I. into an online gaming regulator.

In 2011-12, the province and the Mi’kmaq Confederacy of P.E.I. looked at using CMT’s technology as part of that initiative, but eventually scrapped the plan.

If it had proceeded, the province estimated it would bring in up to $85 million per year in tax and licensing revenues.

In his 36-page decision, Campbell wrote that he struck out 116 out of 283 paragraphs in the statement of claim for various reasons, including that some were irrelevant.

RELATED: Want to know more? Click here for our E-gaming 101 backgrounder

Campbell wrote that opinions or arguments were not to be included in a statement of claim and that many paragraphs didn’t comply with the rules of pleadings.

He also wrote that it’s not for the defendants or the court to pick through what’s left of the statement of claim to find what viable parts are left.

“I do not consider the claim as written to be capable of being ‘fixed’ by a series of amendments and deletions,” Campbell wrote.

Campbell’s decision nullified the statements of defence that had been filed, since there was no longer a claim for them to respond to.

The ruling does allow for the plaintiffs to file a new statement of claim, but they will have to pay a security of $1,032,250 for costs if they do.

That security would help offset some of the defendants’ costs if the claim is unsuccessful.

RELATED: For a timeline on the e-gaming file click here

Want to know more? Pick up a copy of The Guardian's print and e-edition tomorrow for extensive coverage on the e-gaming decision

Maines told the court CMT had no assets available to pay any security for costs.

But Campbell noted the plaintiffs didn’t provide financial statements, tax returns, bank records or other supporting documents to show they had little or no money to pay a security.

In his decision, Campbell noted various difficulties CMT faced over the years, including the company’s repeated dissolution in Florida and its shares being deregistered.

RELATED: Paul Maines says lawyers working on new statement of claim in e-gaming saga

Campbell wrote plaintiffs have a right to pursue their claims, but defendants also have a right to know they can recover some of their costs if they win.

Along with the security, Campbell also ordered costs in favour of the defendants.

All sides will make submissions at a later date on costs in the case so far.






Organizations: Capital Markets Technologies, Canada

Geographic location: Florida

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Recent comments

  • Kim Petrie
    February 07, 2016 - 17:15

    (please print my last comment, the one with my initials, and with my typos corrected).

  • Public Documents
    February 04, 2016 - 22:51

    The statement of claim and the statement of defense are available for anyone to read, I wonder if those on hearing crying conspiracy actually read the claims. Even Paul Maines wasn't surprised to hear their claim was thrown it. Sorry you are disappointed that the government won the first round, but it certainly isn't a conspiracy. If you can't read the documents yourself, at least send them to a smarter friend and ask their opinion before becoming the expert on here slandering Justice Campbell.

    • Blue like you
      February 05, 2016 - 07:37

      I agree with you. To some, everything is a conspiracy. I am sure the PEI Court of Appeal are in on this? Give me a break. This just cut the legs out of the tories, Red Like Me and all the other conspiracy theorists. I am not a lawyer but when I read the documents I shook my head. Slandering the courts now is pretty low. I am glad the judge called their bluff and now they have to put up their own money before they refile. I suspect this will fizzle away.

    • Regular Joe
      Regular Joe
      February 05, 2016 - 17:37

      Slander you say ,or get a smarter friend to explain it to you ..lol . Well It doesn't appear that there is anyone in P.E.I Government smart enough or honest enough to tell us were the $900,000 + Dollars went too or were it was spent and by who . Then again I guess that is all just a conspiracy too maybe . Guess it was nothing but a conspiracy that former senior Government officials were involved in this , have left taxpayers on the hook for this Loan that no one seems to own . Must be a conspiracy too that the same defendants , all seem to keep turning up when money and questionable loans appear or get written off ..lol . Some pretty big Conspiracies or coincidences for such a small Island involving these same names that keep reappearing ALOT don't you think , or is that just more conspiracy . It needs to have it's day in court to get to the bottom and have the whole truth come out and let the chips fall were they fall . Some one has to be accountable for this mess some were and it should not be the TAXPAYERS of this Island .

  • Laurent Beaulieu
    February 04, 2016 - 19:25

    The Judge did render his decision based on facts and the Law. Some anonymous pundits obviously think that slander against a sitting Justice equates to an opinion, sad to read such drivel in a newspaper.

  • Cory
    February 04, 2016 - 19:19

    Yet they will chase someone down from 5 years ago about a stolen powerade? It has become embarrassing to say I'm from PEI.

    February 04, 2016 - 16:14

    But Mr. Justice Gordon Campbell, a PEI Supreme Court judge with an extensive background in politics, said critics of the appointment system are missing an important point. A former provincial Liberal Party president and chairman of several election campaigns, Judge Campbell said that some critics cling to a "ridiculous" belief that politically active lawyers always keep one eye trained on a judgeship. Now who would ever say that Gordon?

  • AL
    February 04, 2016 - 15:55

    Well of course what else did you expect. Wouldn't you protect your crooked friends. That is the way it is done in the back rooms of Charlottetown.

  • Regular Joe
    Regular Joe
    February 04, 2016 - 15:31

    And the saga continues one had washing the other . Brings a Whole new meaning to the term thick as thieves .