Owner of Winnipeg facility used for at-risk kids sues province, premier for $7.4M

Owners of a Winnipeg facility that housed at-risk youth are suing the premier and other ministers over attempts to terminate a building lease with the child-care organization that was renting the space.

Peter Ginakes, Ken Cranwill and a numbered company filed a lawsuit Wednesday against the Manitoba government, Premier Brian Pallister, Finance Minister Scott Fielding and Crown Services deputy minister Scott Sinclair seeking nearly $7.4 million in damages.

They claim the premier and ministers recently "began to pursue and continued to pursue a course of conduct that was motivated by spite, malice, duplicity and bad faith and that was designed to harm the plaintiffs' economic interests," the lawsuit states.

None of the allegations have been tested in court.

This spring, the province introduced legislation that would prematurely break a lease between the numbered company listed as owning a property at 800 Adele Avenue and the Southern First Nations Network of Care, which is also known as the Southern Authority.

The Southern Authority oversees 10 child and family services agencies and is funded by the province, and Ginakes and Cranwill are landlords of the Adele property, located just south of Notre Dame Avenue off Arlington Street. 

The authority signed a lease for the building in 2008 that was supposed to last from February 2009 to January 2029. The space opened in 2010 and was designed as a stabilization and emergency placement unit for at-risk youth.

Lease 'not justifiable'

But in May, the province moved to get out of the lease.

Pallister and Fielding both explained then that there were concerns over how the company secured the nearly $10-million lease agreement with the Southern Authority, as well as the condition of the building.

In one example, Fielding characterized the lease as an untendered rental agreement for a space "that was never appropriate for child care," and Pallister described the contract as "not justifiable."

The province also claimed a large office portion of the building had been vacant since 2013, the residential side was never fully occupied and the programming never lived up to the intended purpose of the facility.

'Spite and revenge'

The lawsuit challenges those claims and says the remarks from Fielding and the premier amount to defamation.

"The defendants made those comments knowing that they were false, as part of a course of conduct that was unlawful and that was actuated by malice," the lawsuit reads.

Far too often, the previous government entered into untendered contracts on questionable and inappropriate terms, as raised by the Auditor General on multiple occasions- Minister Scott Fielding

Ginakes and Cranwill claim the government had no legal authority to interfere.

The true source of the dispute, the lawsuit suggests, was the government targeting Ginakes out of "spite and revenge" for his role in obtaining a different contract from the former NDP government to purchase Tiger Dams to help with Lake Manitoba flood-fighting efforts in 2011.

Ginakes represented the company that was awarded the bid, and was a friend of and campaign contributor to then-infrastructure minister Steve Ashton.

An ombudsman report subsequently found the government "lacked sufficient justification" to issue the untendered $5-million contract for Tiger Dams.

Eviction in middle of night

Lawyers representing the then-NDP government approved the Adele building lease that was signed in 2008.

The lawsuit suggests the landlords and tenants have been on good terms ever since, as evidenced by the Manitoba government continuing to grant residential care licence renewals to the facility over the years.

But at a meeting between deputy minister Sinclair and the landlords at the end of February, he presented them with a document that would end the lease. Neither Ginakes and Cranwill nor the Southern Authority signed.

The lawsuit alleges that the document was an ultimatum to force the contract to an end or the parties would risk the possibility of the government passing legislative changes that would terminate the agreement and deprive the landlords of fair compensation.

It was around this time the province evicted a sub-tenant in the building and children in its care and required them not to tell the landlords or Southern Authority about the sudden departure, the lawsuit states.

The province is currently paying the $500,000 annual lease cost of the facility.

'Only option to protect taxpayers'

Cranwill and Ginakes's lawsuit lists hundreds of thousands of dollars in expenses related to building maintenance and lease payments it hopes to recoup from the Manitoba government.

Fielding said he stands by the government introducing legislation aimed at ending the lease.

"Far too often, the previous government entered into untendered contracts on questionable and inappropriate terms, as raised by the auditor general on multiple occasions," he said in a statement.

"As such, government's only option to protect taxpayers at this point, after exhausting all other options, is to legislate the end of the lease."