Company suing government over e-gaming loses motion to reduce security figure

The P.E.I. Court of Appeal has ruled against a motion from Capital Markets Technologies to reduce the amount of security the company must post to proceed with its $50 million lawsuit against the provincial government.

In October, the company's lawyer John McDonald asked the Court of Appeal to overturn an order from the P.E.I. Supreme Court that the company post an additional $300,000 in security against costs for new defendants added to its statement of claim.

That's in addition to more than $700,000 in security the company had already been ordered to post. The company has already put forward all of the security.

While the court found $1 million in security "is really exceptional in this jurisdiction," it concluded the amount was justified given "the nature of the proceeding" and the "large magnitude of the claim."

CMT was also ordered to pay costs on the motion of $12,303.

AG's report 'obviously concerning'

On a key piece of evidence filed as part of the appeal, the P.E.I. auditor general's report on e-gaming, the court said the report was "obviously concerning in its findings about government and government-related actors being non-compliant with legislation, policies and controls, lack of due regard for transparency and accountability, absence of due diligence, non-disclosure of documents, and conflicts of interests."

However the court said the auditor general's report "does not find whether [the defendants'] actions were a wrongful exercise of their power in office. It does not find that those actions caused harm to the plaintiffs."

Capital Markets Technologies (CMT) is seeking damages over dealings with the provincial government regarding attempts to set up a financial service centre to process online transactions. The company accuses government of "breach of its good faith performance of contract and failure to act honestly in the performance of its contractual obligations."

Among the defendants named are former premier Robert Ghiz and former finance minister Wes Sheridan.

A previous statement of claim from the company was thrown out by Justice Gordon Campbell.

Four days have been set aside in April for arguments regardingmultiple motions from the defendants to dismiss the current suit.

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