Nunavut MLA’s company in legal battle with hamlet

A hamlet water truck, centre, winds through the streets of Cape Dorset in this October, 2010 file photo. The hamlet is locked in a bitter legal dispute with Polar Supplies, a company owned by South Baffin MLA Fred Schell. (PHOTO BY STEVE MONGEAU/APTN NATIONAL NEWS)

A company owned by South Baffin MLA Fred Schell is suing the Hamlet of Cape Dorset for alleged unpaid bills, breach of contract and unfair competition.

Polar Supplies, a company owned by Schell, but held in a blind trust since he became an MLA, is seeking nearly $500,000 in damages in two separate lawsuits, court documents show.

In two separate affidavits, Cheryl Constantineau, the general manager of Polar Supplies, states the hamlet undercut her company’s business by bidding on contracts and using municipal staff and equipment to do the jobs.

Polar Supplies claims it has lost income on numerous projects, including the removal of construction debris, construction work, road building, gravel hauling and the delivery of sealift crates.

“The hamlet, as a subsidized public body, has a clear advantage over local businesses and can easily outbid them on private contracts,” Constantineau stated in an affidavit filed July 5.

The company claims the hamlet also took part in “unlawful and willful targeting of the economic resources and assets” when it damaged a rock truck the hamlet contracted from Polar Supplies and then refused to repair or return the vehicle.

Polar Supplies also alleges the hamlet owes it more than $129,000 for completed work, and breached a $260,000 contract to build a road between Cape Dorset’s water fill station and sewage lagoon.

The company is also seeking an injunction barring the hamlet from bidding on contracts that Polar Supplies could do while the lawsuit proceeds to trial, arguing it will go out of business if it can’t bid on municipal contracts.

At a hearing on that motion in Iqaluit Dec. 15, the company’s lawyer, Steven Cooper, argued that the hamlet’s bidding on contracts violates the Hamlets Act, which requires municipal governments to get approval from the Minister of Community and Government Services before bidding on work that could be done by the private sector.

Cooper said the Hamlets Act should “be strictly construed against the hamlet” because it is a “creature” of the Government of Nunavut.

“We’re simply stating ‘follow the law,’” Cooper said.

But Sylvie Molgat, the hamlet’s lawyer, argued the hamlet never strayed outside of its municipal mandate by cleaning up construction waste and debris from a fire.

Granting the injunction before the case goes to trial, Molgat said would amount to a decision on the lawsuit itself.

Molgat also said revenue projections provided in an affidavit by Constantineau aren’t useful because Constantineau is not an accountant and numbers are simply “assertions.”

“Sayin’ so don’t make it so,” Molgat said. “Much, if not all, of Polar Supplies’ evidence is speculative.”

In the end, Justice Earl Johnson reserved decision on the motion.

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