Court orders Mulroney to pay $470,000 to Schreiber

An Ontariocourt has orderedBrian Mulroney to pay $470,000 to German-Canadian businessman Karlheinz Schreiber, who sued the former prime minister, alleging he didn't follow through on his business commitments.

The judgmentwas made automatically by the Ontario Superior Court of Justice after Mulroney failed to respond to the lawsuit.

The former prime minister's lawyers didn't file a defence because they believe the case should be argued in Quebec.

"The first I heard of it was when you notified me of it, and we're going to take immediate steps to have that judgment set aside," Mulroney's lawyer Kenneth Prehogan told the Canadian Press on Thursday.

"Mr. Mulroney has challenged the Ontario court's jurisdiction because the case has nothing to do with the province of Ontario."

Schreiber alleged that after the former prime minister retired from politics in 1993, he agreed to help Schreiber build a production facility for light armoured vehicles in Quebec, with a head office in Ottawa, and a pasta business in Ontario.

The lawsuit, filed in Ontario Superior Court, alleged Mulroney reneged on that agreement.

Schreiber alleged he gave Mulroney $300,000 in cash in 1993 and 1994 as an advance, but that he never received the services he paid for, according to a statement of claim.

The statement of claim alleges that Schreiber attempted, on numerous occasions, to outline what Mulroney owed him, "demanding the services to be performed by the defendant."

Schreiber allegedly made various attempts to collect his advance but Mulroney refused to pay back the money, the document claims.

Schreiber, who lives in Toronto and Ottawa, is currently fighting extradition to Germany on charges of bribery, fraud and tax evasion.