The City of Winnipeg is seeking a court order to force a business to cease operating until it pays off a hefty tax bill.
However, city legal officials say the statement of claim was filed to meet a legal deadline and doesn’t cancel a grace period the company was granted just last month to work out a payment plan.
On Sept. 16, council’s finance committee granted London Limos owner Hardev Singh Sandhu up to 60 days to negotiate a repayment plan. That could avert a city order that Sandhu shut down his business until he pays more than $134,000 in taxes and penalties charged between 2018 and June 1.
But on Sept. 27, the city filed a legal challenge against the company and its owner, which seeks a court order to impose the rare, last-resort penalty of forcing the company to shut down due to outstanding taxes.
“The legal action taken by the city was required to be filed by the end of September to preserve the right to recover on the debt owing. The filing of the claim itself doesn’t interfere with the committee decision or prevent further discussions between the city and the business to resolve payment,” wrote city spokesman Kalen Qually, in an email. “A statement of claim can lead to a trial where the court will decide any outstanding issues in dispute between the parties.”
Qually did not specify if talks on a repayment plan are underway with the owner, though he indicated the legal claim could be withdrawn if circumstances change.
“The legal challenge wouldn’t be required if there was no debt owing,” he said.
On June 27, the city ordered London Limos to cease operations by July 12. The city says the unpaid taxes and penalties reached almost $145,000 by Sept. 1, including penalties.
Sandhu argues he was incorrectly charged as the sole renter of a 10,000-square-foot building at 1595 Erin St., while he occupied only about 1,000 sq. ft. of the space. He said other businesses use the same property.
During a brief interview Monday, the business owner said he expected discussions with city officials to continue.
“The finance committee gave us 60 days to negotiate with the taxation department, which we are doing right now,” said Sandhu. “The taxes were charged ten-fold for my business…. I am in touch with the city and I’m not sure where it’s going to go.”
In 2022, the city reassessed the property and decreased the area used by the business, which plays a role in tax rates, from 9,880 sq. ft. to 1,000 sq. ft, according to its legal document.
The city’s legal challenge asks the court to grant an injunction “strictly enjoining, restraining and prohibiting the defendants… from, directly or indirectly continuing to operate their business” for as long as the taxes are not paid.
The statement of claim also requests an order to authorize police or peace officers to take all steps needed to ensure the business ceases operations, which it notes could extend to padlocking doors or arresting people who contravene the order.
The city’s claim alleges London Limos was sent a series of tax bills it neither appealed nor paid between 2018 and 2024.
The suit seeks $134,470.76 from the defendant (the amount owed up to the June order), plus any further accrued taxes and court costs.
The city claims the business has not paid the tax bills or stopped operating since that point.
“Continued operations by the defendants, despite a failure to pay… taxes, poses serious risk of irreparable harm to the city, its residents, and the businesses of Winnipeg.… The city requires the teeth of the injunction to hold the defendants accountable for their wilful and ongoing unlawful conduct,” the document claims.
The deadline to file the statement of claim in this case was affected by recent changes to the provincial Limitations Act, said Qually.
Since taking effect in 2022, the act has set specific maximum time limits for when people can start certain court proceedings against others, which depend on when a claim is discovered.
By deadline, it was not immediately clear how much time that allowed the city to launch its specific legal challenge.
joyanne.pursaga@freepress.mb.ca
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Joyanne Pursaga
Reporter
Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.
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