Towing company launches countersuit against City of Winnipeg over $1M in alleged fraudulent tows

A Winnipeg towing company is defending itself against a City of Winnipeg lawsuit that claims the firm charged more than $1 million for tows that never happened.

Tartan Towing says it acted honestly and in good faith when it billed the city for its towing services — and instead the city owes the company damages — in a statement of defence and counterclaim filed in Manitoba's Court of King's Bench on Oct. 17.

The city filed a lawsuit against Tartan in June, claiming a review found a number of invalid invoices filed by Tartan from 2016 to 2022 that totalled more than $1.1 million.

It had proposed a deal with Tartan, in which the company would repay $446,000 for the alleged fraudulent tows, but city council voted to reject it in March.

Winnipeg is seeking the repayment of $1,115,626, costs and special damages.

But Tartan has launched a countersuit against the city, denying the government's allegations and saying it didn't fulfil its contract obligations with the firm.

"As a result of the city's breaches of the contracts, Tartan has suffered damage," the statement of defence says.

Tartan claims the city demanded the $1.1 million be repaid in November 2022, despite "receiving, approving and reconciling the invoices." It also argues the city failed to pay more than $730,000 in towing services.

City at fault: Tartan

Tartan had three contracts to do courtesy tows of vehicles during residential snow-clearing parking bans starting in 2016.

The company was to be paid by the city for each tow, which Tartan was to track using a mobile app.

The statement of defence says it's the city's own fault if it suffered damages, because it failed to fulfil its contract obligations, supervise the program and monitor the invoicing process.

Tartan also says the city didn't bring up its complaint about the overpayment fast enough, since Tartan is only obligated to keep its records for two years.

"The lengthy passage of time, and in any event, over two years, resulted in spoilation of evidence, availability and recollection of witnesses, all of which causes severe prejudice to Tartan and its ability to defend this action," it claims.

It adds that the city didn't fairly look over an 18-month tender contract that Tartan submitted in December 2022, claiming the city applied "undisclosed bid evaluation criteria" when it decided not to award the contract to Tartan.

Neither Tartan's nor the city's allegations have been proven in court.

Tartan Towing charges city for tows that never happened

2 years ago

Duration 1:36

City officials negotiated a settlement with a Winnipeg towing company after it charged the city for tows that never happened. A new report says Tartan Towing over charged the city by more than $1M over six years. Now, the city is asking council to approve a settlement with the company to pay back less than half of that. Public works chair Janice Lukes says the city should go after the full amount.