Cash-strapped Peguis First Nation takes companies to court over failed motel project, Zamboni repairs

Peguis First Nation and one of its economic development companies are suing a contractor who never built a proposed motel, casino and gas bar, as well as a mechanic who is accused of failing to deliver pricey Zamboni batteries, according to court documents. 

According to a statement of claim filed in Manitoba's Court of King's Bench at the end of September in connection with the motel project, Waasa Indigenous Services has not returned or provided an accounting for $1.4 million it received from Peguis Development Corporation in the spring of 2019.

In a separate statement of claim, the First Nation alleges RT Knight Industries has not reimbursed the $30,000 Peguis paid in 2021 for Zamboni batteries it never received.

The lawsuits are the latest attempt under current Peguis Chief Stan Bird to recoup funds spent during past administrations. Peguis First Nation is struggling financially, due in part to perennial flooding and the financial aftermath of high-interest loans.

2018 plan for on-reserve motel with indoor pool

The motel lawsuit says Waasa submitted proposals in 2018 to design and build two projects on Peguis First Nations's reserve: a gas bar and the Peguis Inn, a planned 20-room motel with attached casino and indoor pool.

In the spring of 2019, Waasa asked Peguis Development Corporation for funds to pre-pay outside suppliers in order to forestall construction delays. It issued invoices totalling $1.4 million that the development corporation paid on the understanding the funds would be used to pay for materials, according to the statement of claim.

In the fall of 2019, the development corporation and Waasa made changes to their business arrangement, agreeing that the $1.4 million would go toward progress payments disbursed after certain construction milestones were met on the $2.8-million gas bar and $3.7-million motel project, rather than pre-purchasing construction materials, according to court documents. 

The lawsuit says work on both projects stopped because of a breakdown in the business relationship in December 2019, and "Waasa had not produced or performed any design services of  value, and construction of the projects had not yet commenced."

The development corporation alleges Waasa falsely claimed that the $1.4 million was a progress payment. 

The statement of claim goes on to allege Waasa backed up its assertion by producing "falsely dated" revised invoices that "purport that PDC paid Waasa $1.4 million for 'design, engineering, geo-tech and architectural with full set of working drawings' as well as 'site inspections.'"

"Despite repeated requests from PDC, Waasa failed or refused to provide an accounting or supporting documentation to PDC with respect to the work it performed by Waasa on the projects, and the use and expenditure of the funds," reads the statement of claim. 

Neither of the projects were built, according to lawyer John Gailus, whose firm filed the lawsuit on behalf of the development corporation.

Waasa president Wayne Allary said he has not been served with the statement of claim so he could not comment. 

Gailus told CBC the statement of claim speaks for itself.  

No statement of defence has been filed and none of the allegations have been proven in court. 

Zamboni found missing pricey batteries: lawsuit

The other statement of claim, also filed in Manitoba's Court of King's Bench in September, says Peguis Multiplex Centre's new recreational director discovered one of its two Zambonis was missing shortly after he was hired in fall 2023. 

The ice cleaning machine — which was the community's main Zamboni and runs on electrical power — was located in an empty warehouse in Winnipeg, where it had been disassembled and was missing its batteries, according to the lawsuit.

Peguis is suing the now-dissolved RT Knight Industries, Alexander J Albert and other companies, after repeated requests for the return of the  $30,328.78 it paid in the summer of 2021 for the supply and installation of four Ice Bear brand batteries, according to court documents. 

Peguis claims the defendants were "unjustly enriched when they deposited the funds and did not carry out the repairs on the Zamboni," and that the machine was found to be in "worse shape" than when Albert took it, according to the lawsuit. 

Peguis First Nation's lawyer and Albert did not respond to a request for comment.

No statement of defence has been filed in that suit, and none of the allegations have been proven in court.