Judge erred in granting city summary judgment in bribery case, former Winnipeg CAO Phil Sheegl argues

Winnipeg's former chief administrative officer Phil Sheegl is arguing that a Manitoba judge erred by not calling for a trial before finding he took a $327,200 bribe during the Winnipeg police headquarters construction.

Sheegl says the case was too complex for a summary judgment — a decision made by a judge without a trial — according to a written court document filed Aug. 5 as part of his appeal of the decision.

"The evidence of the plaintiff is entirely circumstantial hearsay, which significantly complicates the analysis of the evidence," wrote Robert Tapper, Sheegl's lawyer in a document called factum of the appellants.

Sheegl claims the judge made a mistake by granting the city's request for a summary judgment and says the matter should have been referred to trial.

"Unlike direct evidence, circumstantial evidence involves a logical gap between the proven fact and the fact sought to be proved," wrote Tapper.

Sheegl had filed his own request for a summary judgment against the city, but his application was denied.

The police HQ project was the focus of a five-year RCMP investigation that ended in December 2019 with no charges laid. The following month the city sued Sheegl, contractor Armik Babakhanians and his company Caspian Construction, and several others who were involved in the construction of the building, claiming they conspired to inflate and overcharge for work on the $214-million project.

In June 2020, Sheegl convinced the court to sever his proceedings, together with his companies FSS and 2686814 Manitoba Ltd., "because 99 per cent of the city's case doesn't involve him," Tapper argued at the time.

In March of this year, Joyal ruled in favour of the City of Winnipeg, finding that Sheegl had accepted a bribe and breached his duty as a city officer when he took $327,200 from Babakhanians, which he later split with former Winnipeg mayor Sam Katz. 

In a judgment dated May 4, Joyal ordered Sheegl to pay the city approximately $1.1 million, which included the $327,000 bribe.

The city claimed Sheegl fabricated a land deal in Arizona with police headquarters contractor Babakhanians in order to cover up a $327,200 payment Babakhanians made to Sheegl.

Tapper argues in the factum that the judge's reliance on the city's email evidence, which he calls hearsay, should have been tested at trial, because the court's decision in the Sheegl case will impact the other defendants in the city's lawsuit.

"The emails highlight that it is in the interests of truth for the statements to be tested. This failure has resulted in significant prejudice to the defendants as well as the alleged 'co-conspirators' who have been encompassed in this finding," wrote Tapper.

He wrote that the entire purpose of severing the Sheegl case from the others is to "avoid Sheegl from being thrown into a case involving construction frauds (and hundreds of thousands of documents) totally irrelevant to this severed case," wrote Tapper.

"If the plaintiff wanted to link Sheegl to the alleged 'co-conspirators,' it ought to have made them subject to the severed case, a critical error ignored both by the plaintiff and the learned motion judge," he said.

The factum also says the judge erred in ordering Sheegl to return the $327,200 and the $250,000 severance he received from the city.

The City of Winnipeg's case against the remaining defendants has not been settled.

Sheegl was CAO from May 2011 to October 2013.