Trial scheduled in Integrity Group lawsuit as City slogs through legal quagmires

By Dominic Abassi
September 17, 2018 - 2:34pm

The stack of legal documents involving the City of Nanaimo continues to grow.Dominic Abassi/NanaimoNewsNOW

NANAIMO — A five-day trial has been scheduled to settle a lawsuit filed by a human resources consulting firm, despite the fact the City already publicly agreed to pay at least a portion of the allegedly unpaid bill.

The City is scheduled to go to court in November 2019 to defend itself against a claim filed by Vancouver-based The Integrity Group, which alleged the City refused to pay a more than $52,000 bill for consulting work done in 2015.

In May 2015, mayor Bill McKay hired Integrity to act as a facilitator to deal with issues between himself, members of council and then-city manager Ted Swabey.

The civil claim, filed in January 2018, alleged McKay told Integrity's founder he had the authority to hire the firm and the invoices would be paid. McKay previously told NanaimoNewsNOW he initiated the work with Integrity.

After Council put the work on hold and reviewed the situation, the City issued a statement in February 2016 saying it would pay $20,000 "in accordance with a 2015 agreement with the Integrity Group providing team building support."

"The service provided by The Integrity Group has been completed. Overall, progress was made by Council, both as individual councillors and as a group," former chief administrative officer Tracy Samra said in the release.

However, in its counter filing to Integrity's lawsuit, the City claimed if any meetings, negotiations and discussions occurred, they involved the mayor and not the City.

"The defendant did not enter into a contract to hire the plaintiff...The mayor did not have the authority to bind the defendant."

None of the claims have been proven in court and Council could possibly direct legal counsel to settle the lawsuit before next year's trial.

The Integrity contract and its work was at the centre of one of this Council's most bitter public disputes.

An email written by McKay to Integrity, allegedly required as part of the consulting process, was leaked to the media and brought to the floor during a November 2016 council meeting. The email contained McKay's often harshly critical opinions of other councillors.

Councillors threatened to sue McKay over the email's contents, saying it validated their previous calls for his resignation.

The Integrity matter is one of several legal fronts the City is preparing to defend itself on.

Event centre consultant BBB Architects filed a claim seeking over $154,000 for work the City allegedly refused to pay. The City denied the claims in their entirety.

A real estate investment company is suing the City for alleged negligence in relation to the company's purchase of a downtown apartment building.

A lawsuit filed by former bylaw manager Rod Davidson is still active, as is a suit filed by a former assistant fire chief.

Meanwhile, there are two active claims against the City with the BC Human Rights Tribunal.

The City recently filed a response to claims by former chief financial officer Victor Mema and is not interested in pursuing a mediated settlement. The matter will either be dismissed or accepted by the Tribunal and taken to a hearing.

A mediated settlement between former chief operations officer Brad McRae was not reached during a recent session and the City is preparing a formal response to McRae's claims.

Human resources director John Van Horne said given the way the last several years played out, the glut of legal activity is not shocking. He said it's a balancing act between keeping legal fees reasonable and not inviting claims by setting a precedent of people leaving with large negotiated settlements.

"There comes a time when the City has to mount a vigorous defence against some types of allegations," Van Horne said.

The City spent nearly $900,000 on legal fees in 2017, 70 per cent over budget and nearly double the amount spent on legal matters in 2016.

'It was scary:' lightning bolt hits north Nanaimo house during fierce storm