P.E.I. Supreme Court tosses out $25M e-gaming lawsuit against province

The Supreme Court of P.E.I. has tossed out a $25-million e-gaming lawsuit against the provincial government and two P.E.I. businessmen put forward by Capital Markets Technologies Inc. and 7645686 Canada Inc.

But the court also left an opportunity for the company to start over — something the company says it plans to do.

In his decision, Supreme Court Justice Gordon Campbell called the statement of claim filed by CMT "a long, rambling narrative replete with irrelevant and immaterial facts, evidence, opinion, argument and speculation." He goes on to say the statement of claim constitutes an abuse of the processes of the court.

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Campbell states in his written decision that he does "not consider the claim as written to be capable of being 'fixed,'" however he grants the plaintiffs the opportunity "to start afresh and file a newly drafted statement of claim."

Campbell also says, "If the plaintiffs are incapable of succinctly stating the material facts of their claim without reliance on inappropriate or improper pleadings, their claim should not be allowed to proceed."

CMT president Paul Maines told CBC News on Thursday he doesn't consider the ruling a setback.

"He [Justice Campbell] gave us the guidelines of how he wants it resubmitted," Maines said. "And we will be resubmitting it very soon."

If CMT files a new statement of claim, Campbell has ruled the company must post $1,032,250 in securities against a possible award of future costs in favour of the defendants. He also awarded costs in the case so far to the three groups of defendants named by CMT: the P.E.I. government, and private businessmen Paul Jenkins and Garth Jenkins.

Jonathan Coady, the lawyer representing the P.E.I. government, said the ruling on security means taxpayers are protected — assuming the case is resubmitted, and the defendants are ultimately successful.

"Taxpayers are going to have an ability to recover the legal costs that we're incurring to defend... what we think is a claim that has absolutely no merit."

Company alleges breach of good faith

Capital Markets Technologies filed its suit in April of 2015, alleging the P.E.I. government acted in breach of good faith and failed to act honestly in its dealings with the company. The suit also named several representatives of government along with Paul Jenkins and Garth Jenkins.

CMT said it was involved in discussions with the province over e-gaming, something lawyers for the province denied in their statement of defence. The e-gaming initiative was abandoned in February 2012.

In July 2012, the province signed a memorandum of understanding with a numbered company — 7645686, known as Trinity Bay Technologies in the MOU — to develop a financial services centre. CMT said 7645686 is its wholly-owned subsidiary.

CMT bases its $25-million claim on the value it projects it could have created out of that agreement with government. CMT claims the MOU was not honoured.

The ruling filed Thursday in P.E.I. Supreme Court is based on a day of preliminary proceedings in the case held in November 2015.