The Manitoba government has been ordered to honour a $750,000 settlement connected to a terminated lease at a Winnipeg facility for at-risk kids.
The province agreed to the settlement with the landlords of 800 Adele Ave. on Oct. 30, 2023, following an arbitration meeting before a judge, a process known as judicially assisted dispute resolution.
The sole condition of the agreement — that it be approved by the provincial treasury board — was satisfied in February. However, one month later, a government lawyer involved in the arbitration sent an email to the landlords’ lawyer, Dave Hill, alleging the government had told him he did not have the authority to settle the matter.
Hill filed a court motion seeking payment of the settlement, which was heard Friday.
“In my view, this motion was unnecessary,” said Justice Shane Perlmutter. “The defendant should have honoured the settlement. The defendant’s conduct unnecessarily lengthened and complicated proceedings.”
Perlmutter ordered court costs against the government, which filed no affidavits and took no position at the hearing.
Perlmutter said it is important that agreements reached through the resolution process are understood to be binding.
“If in the present circumstances the court failed to enforce the settlement agreement… it is my view the legitimacy and credibility of the King’s Bench (resolution) model would suffer serious compromise, as would the principles of when an agreement becomes binding.”
Hill said he is “very pleased” with the decision.
“It gives you protection that when you reach a settlement on a lawsuit, it’s binding,” Hill said outside court.
A provincial government spokesperson declined to comment.
“We need to review the ruling,” the spokesperson said, in an email.
The settlement arose from a $6.1-million lawsuit filed by landlords Peter Ginakes and Ken Cranwill in July 2019 after the provincial government moved to break a $9.4-million, 20-year lease agreement between the owners and the First Nations of Southern Manitoba Child and Family Service Authority.
The lawsuit alleged a government official had told Ginakes and Cranwill if they didn’t sign an agreement to terminate the lease, the government would end it through legislation.
The finance minister at the time, Scott Fielding, described the lease as “an untendered agreement for the rental of a facility that was never appropriate for child care,” while then-premier Brian Pallister deemed it “not justifiable.”
A 2016 audit found the Adele Avenue lease had uncommon provisions, since it was not tendered, had an unusually long term and lacked an opt-out clause.
A judge dismissed the claim tied to the lease itself in 2022, but a claim seeking compensation for $1.5 million the landlords spent on repairs and upgrades to the building remained alive and was ultimately sent for arbitration.
dean.pritchard@freepress.mb.ca
Dean Pritchard
Courts reporter
Dean Pritchard is courts reporter for the Free Press. He has covered the justice system since 1999, working for the Brandon Sun and Winnipeg Sun before joining the Free Press in 2019. Read more about Dean.
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