Eight-year legal saga to end soon with decision in $28.5M lawsuit against the City expected in coming weeks
(This is the final in a series of articles The Pointer has published, detailing the trial in the Inzola Group’s lawsuit against the City of Brampton)
Four former city hall executives, once responsible for running Canada’s ninth largest municipality, took the witness stand in an Orangeville courtroom this past June to testify in a local builder’s $28.5-million lawsuit against the City of Brampton, which alleges misconduct by senior staff. Among them was the key accuser in the case, former chief administrative officer John Corbett.
After a nine-week trial and seven years of grinding through the legal system, taxpayers will soon learn whether a landmark $500-million development deal to revitalize Brampton’s ageing city centre was awarded unfairly by former bureaucrats, who gave contradicting evidence at trial. The Ontario Superior Court of Justice decision is expected in the coming weeks.
The man whose company constructed Brampton City Hall in the ‘80s, John Cutruzzola, launched the case in 2011 after Inzola Group, had been disqualified a year earlier from the bidding process to build a city hall extension and other projects designed to transform the city’s historic main street area.
The suit alleges that former senior staff and the mayor at the time, Susan Fennell, were biased against Inzola and did not want the company to succeed in a competition, which used a procurement process that had never been tried in Canada before and attracted only three bidders for one of the largest projects in Brampton’s history.
The City of Brampton and Fennell have denied the allegations in the lawsuit.
Two former Brampton executives, ex-city manager Deborah Dubenofsky and Julian Patteson, who was in charge of buildings and property, denied that any bias against Inzola entered into deliberations by senior staff who held closed-door meetings in 2010 and 2011 when the decision on a preferred bidder dominated the city’s business.
Mo Lewis, the former head of finance and city treasurer, testified that Dubenofsky and Patteson had conducted themselves unprofessionally toward Cutruzzola in closed-door meetings, but denied the central allegations in the lawsuit. Corbett provided damning testimony that directly contradicted the other three.
Documents entered as evidence by the plaintiff also suggest a different interpretation of some of the key testimony.
Brampton City Council eventually approved the choice of a developer made by senior staff, and successful bidder Dominus Construction built a $205-million city hall extension — the trial revealed this price was $95 million more than what Inzola had proposed in its disqualified bid, which the city tried unsuccessfully to prevent the company from ever revealing. (The project’s other two phases, including a downtown library, never went forward.)
There are no allegations in the lawsuit of any wrongdoing by Dominus, which has always maintained it followed all rules of the procurement process. Dominus principal Joseph Cordiano testified in court that the entire project was carried out following all of the contract rules.
The following is the key evidence presented at trial in the case.
The secretive $480,000 payment approved by senior staff without council’s knowledge
Prior to her retirement in December, former councillor Elaine Moore, during her testimony, was asked by Inzola’s lawyer if she was aware of a $480,000 payment that senior city staff made to Dominus in 2011 to secure land for its proposal, property the bidder was supposed to tie up without the city’s involvement in assembling the lands.
She was shown a staff report that was presented to council for its March 2011 meeting, when elected officials had to decide either to accept the staff recommendation to award the contract to Dominus or reject the staff pick, which would have scrapped the entire bid process.
“You assumed this report was accurate?” Inzola lawyer Stuart Svonkin asked her.
“Yes, it was very important to be accurate,” Moore replied.
Svonkin read her a section of the staff report that stated Dominus had secured a property needed to build a “very large new public library” that was a central part of the project the city wanted to build.
Moore testified this was very important because the securing of the land by Dominus “was a demonstration of its ability to deliver the library, phase-2 (of the project) and that the city would not help acquire the property.”
She was asked if, under the bid contract, the city was not to help acquire the property needed for the library.
“Council was very clear that we were not prepared to do that,” she responded.
She was then shown transcripts of the March 2011 council meeting, when staff were questioned about their report recommending Dominus right before council had to vote to approve the staff pick.
During the meeting Moore asked if the property for the library had been secured by Dominus, as was stated in the staff report.
Mo Lewis, the city’s treasurer at the time and chair of the staff committee tasked with picking one successful bidder, told Moore at the council meeting that the property was secured by Dominus. The transcript of the meeting was read back to Moore. “That is correct, I can tell you that,” Lewis responded during the meeting when Moore asked if Dominus had secured the land.
Moore testified that she learned much later that Dominus did not have the land secured at the time of the March 2011 council meeting, despite what Lewis told her and despite what was written in the staff report.
“Mr. Lewis told you something that wasn’t true?” Svonkin asked her.
“That’s correct,” Moore said, adding that she eventually learned what had happened through court documents for the lawsuit.
“I was very disappointed…I was kind of angry.”
Moore testified that the securing of the property by Dominus was a requirement of the bid contract by the city and that if she had known the company had not secured the land prior to the March 2011 council vote she would have asked for the entire process to be cancelled.
Moore was then shown an email, obtained by Inzola through the lawsuit, that was sent to the city, including to Lewis and Patteson the afternoon of the March 2011 council meeting, from Dominus, confirming ahead of the meeting that the company did not have the property secured.
“I found out about this email through the litigation,” she said.
Lewis was later questioned on the witness stand.
"Was your answer to councillor Moore (during the March 2011 meeting) correct?" Svonkin asked him.
"My answer to Moore was incorrect," Lewis replied. "I misspoke. I can't explain it."
Lewis testified that while he knew the land was not secured by Dominus at the time of the council meeting in March 2011, and when the staff report for the meeting was prepared, which said Domius had secured the land, he believed that the company would be able to eventually secure the land. Having it secured prior to the council decision to accept the staff recommendation was a condition that had been made clear to Lewis and other senior staff, the court heard.
Patteson was also questioned about the $480,000 payment.
He was asked by Inzola lawyer David Chernos about his earlier testimony in the case, shortly after the lawsuit was filed, when Patteson as the city's main witness for the discovery process, when each side in the case can try to get information to help their arguments, gave sworn testimony about his knowledge.
He had been asked early in the case to provide the city's records of the transaction to acquire the required lands for the library (which was never built), but at the end of May during the trial he testified that early in the case he "didn't turn my mind" to getting the records of the transaction to prove when it happened and who paid the money.
Chernos asked: "You said Dominus paid (in his early testimony for the case). "That was incorrect."
"No it wasn't," Patteson responded. "Dominus had transmitted the payment (to the property owner)."
After his initial testimony for the 2011 lawsuit months later when the discovery process began, Inzola continued to file motions to the court demanding documents that the city was required to turn over, but hadn't. Eventually Inzola, under court order, received a copy of the October 2011 "Nomination Agreement" between the City of Brampton and Dominus that showed the city had paid the $480,000 for the required land. Patteson eventually testified in the case, before trial, that he knew the city had provided the $480,000 for the land and that council was never told.
During the trial Patteson was pressed about his earlier testimony, asked why he never clarified on his own his earlier sworn statement that Dominus had paid the money, when he had been asked to explain who had funded the money to pay for the land to be secured, when he knew the city had paid for it.
"I didn't think it was my place," Patteson testified. "I was told I would have an opportunity to clarify."
Moore was shown an email from Fennell five days before the March 2011 council meeting. Fennell responded to Moore and other councillors concerned about the acquisition of the required property by Dominus. Fennell told them that she confirmed with staff that what they had written in their report to council for the meeting was correct. “I confirmed, that is the correct answer. Dominus has optioned the land to purchase. Their money,” Fennell wrote in the email to Moore and other councillors five days before they had to vote.
“Who paid?” Moore was asked by Svonkin.
“The City of Brampton,” she replied. She only learned that through the court documents years later, she said.
“Did staff ever tell you?”
“After the court documents came out, staff told us the city paid for the option fee.”
She was shown the “Nomination Agreement” signed by Fennell in October of 2011, months after Dominus was awarded the project, committing the city to pay $480,000 to Dominus so it could secure the land.
The agreement was eventually entered into the court record after the city was ordered by the court to turn over documents Inzola was seeking for its lawsuit.
“That’s how you learned?” Moore was asked.
“Yes, it is,” she replied.
She was shown the signing page for the agreement that committed the city to pay the $480,000 to secure the property, with Fennell’s signature.
Moore testified that she only learned about the entire transaction, the use of $480,000 without council’s approval, the misleading answers by Lewis and the inaccuracy of the staff report, through court documents for the lawsuit, long after the decision to award the project to Dominus.
Fennell has stated that she did not know what she was signing when she authorized the $480,000 payment to secure the property in October 2011, and told the court in a written statement that she only learned about the deal and the financial transaction when the rest of councillors did, long after the lawsuit was launched.
Grant Gibson, who also retired as a councillor in December, voted against the deal in the final 6 to 5 vote in August of 2011, when the contract conditions were agreed to.
He testified that he only found out about the $480,000 of taxpayer’s money that was handed over to Dominus without council’s knowledge by senior staff, through the court case, when evidence was later revealed that showed the secretive payment was made.
Gibson was asked by Chernos, what he would have done had he known about the $480,000 deal senior staff arranged with Dominus without getting approval from council.
“I would have asked for their resignation. I certainly wouldn’t have supported it,” Gibson replied.
The two key senior staffers, Julian Patteson and Mo Lewis, who authorized the transaction without council’s knowledge, are no longer with the city. Lewis resigned in 2013 and Patteson was let go in a reorganization of senior management in 2016.
Gibson, who raised the issue of whether or not the required property had been secured by Dominus prior to the 2011 vote to select the company for the deal, was asked by Chernos if Fennell had told him that the money to secure the property had come from Dominus.
“That’s right,” he replied.
“You didn’t learn the city paid the … $480,000 price until 2014, right?” Chernos asked.
The court was shown that the requisition filled out by senior staff for the $480,000 payment to eventually secure the land for Dominus included an explanation of what the money was for. Staff wrote on the city's official requisition, for its records used when reporting out its own financial disclosures to council and the public, that the $480,000 was for "labour" costs.
The cost of the city hall extension and other concerns raised by councillors
Three now-retired Brampton councillors raised concerns that the $205 million cost of Brampton’s city hall extension was far too much, that it was not set-back far enough from the street and that taxpayers had to cover millions of dollars for delays that should have been paid by the builder.
The builder’s admission of a $3 million over-charge in the construction cost, which the city later said was not a mistake and kept in the cost to taxpayers, was also highlighted during testimony by the three recently retired councillors.
During the trial, which was held in Orangeville’s Ontario Superior Court, retiring councillors who voted on the project in 2011, testified about concerns they had before and after the issue was brought to council for approval.
John Sprovieri, Grant Gibson and Elaine Moore revealed a number of problems they saw with the project.
Sprovieri testified about delays in the project, which was supposed to be ready for city staff to occupy in January of 2014. Despite a 13-month delay, and a completion date of February 12, 2015, the city started paying the annual $8.2 million in rent to the builder months earlier, in July of 2014, according to evidence presented in court.
“There was about $19 million worth of work still to be completed,” Sprovieri testified, explaining that he had asked senior city staff about what still needed to be done on the city hall expansion, after the deadline for delivery had passed.
“They provided a list of items that were supposed to have been completed.”
Sprovieri, who voted in favour of the project in 2011, but has been one of its harshest critics since, told the court he was surprised when he found out the city had begun paying the rent in 2014, even though the building was far from complete.
“The whole matter has gone from bad to worse,” he told the court. “I didn’t believe we should be paying rent when the work wasn’t even close to being completed.”
There are no allegations in the Inzola lawsuit against the builder, Dominus Construction, which won the contract to be the city’s 25-year partner in a proposed three-phase deal. Dominus has stated it followed all rules of the entire process for the project.
Only the first of Dominus’s proposed three phases was completed, the city hall expansion, which will cost the city $205 million over 25 years. A planned downtown library and other features in the remaining phases never moved forward, and in 2014, before the city hall extension was completed, Dominus sold its rights to the project to Fengate LP.
Sprovieri also testified that he learned Dominus had sent senior city staff a communication, after it submitted its original bid in 2010, that its $94 million construction price was incorrect and that staff needed to reduce this to $91 million because of a calculation error. The price was not reduced, and city staff testified during trial that their own calculation showed the $94 million figure was correct.
None of this was shared with council members before they voted to approve Dominus in 2011.
Gibson also testified that he thought the $205 million cost for the nine-storey city hall addition was far too high.
“I still to this day don’t completely understand the financials of it.”
The trial revealed that Inzola’s disqualified bid would have cost the city $110.2 million (including lease costs) for a slightly larger building than the one Dominus built for $205 million, including the cost of the lease.
Chernos asked Gibson if he tried to get the cost per square foot from staff before the final vote in August of 2011.
“Yes, I asked that question a number of times.”
“You never got any further explanation?”
“No, I didn’t.”
Moore also testified during trial, detailing efforts she made to understand what she believed to be an excessive price for the city hall extension.
“We wanted to know the details, no details were given (for the cost).”
Inzola lawyer Stuart Svonkin asked her is she ever received responses from staff about the details of the Dominus cost, before the final vote in 2011.
“No, we did not.”
The court was shown an email that Moore sent in 2011 to senior staff, which included Fennell.
The court heard that Moore could not make sense of the staff claim that Dominus’s $94 million construction cost worked out to $242 a square foot. Calculations provided by witnesses during trial said the $94 million construction cost for 126,000 square feet of usable administrative space and about 440 parking spots, which is what Dominus was required to deliver, works out to more than twice the square foot cost staff provided to council members in 2011.
“That math didn’t work for you.” Svonkin said to Moore. “Did you ever get a response?”
“No, I didn’t,” she replied.
Moore testified that she voted against the deal in 2011 because she did not have enough information about the costs and because of lingering questions about the property that was supposed to have been secured by Dominus — which council members learned three years later had been tied up with $480,000 paid by the city, on staff’s authorization.
Sprovieri testified that the finished building is too close to the street and does not meet the required set-back, which has resulted in the city hall extension being hit by trucks on multiple occasions.
He testified that when he questioned city staff about the building getting hit because it doesn’t meet required set-backs, they told him they had special “delegated authority” to allow the building’s construction so close to the street.
Svonkin asked Sprovieri if he accepted staff’s explanation, that they had the authority to allow the limited set-back, with little room for a sidewalk.
“No. I did research. Only Committee of Adjustment could give that (authority) and they hadn’t.
The city has maintained throughout the case that it followed all the rules for the project and that no bylaws, building codes or rules for the scope of the project were broken.
Sprovieri also addressed the issue of taxpayers paying rent twice to house city staff, after the 377-day delay in the completion of the city hall extension.
During his testimony he was asked if he was aware that not only were taxpayers paying rent to Dominus before the building was ready, but that the city had to pay additional rent to the property owner of the office building where staff had been working, because that lease had to be extended due to construction delays in the city hall expansion. Dominus, under the contract at the time, was supposed to pay penalty costs due to its delays, but the city excused the company of almost $1.5 million in penalties, after Fennell signed an agreement in 2014 to excuse the amount without council’s knowledge.
Sprovieri was asked by Svonkin if he addressed the delays, at the time.
He replied that he raised questions about the reason for the delays during a council committee meeting and was told by staff that a strike by elevator workers and an ice storm were the main causes.
“The elevator work hadn’t even begun yet and I couldn’t see how the ice storm caused the delay. That was never explained to us,” Sprovieri told the court.
When asked if he thought it was a waste of taxpayer dollars to be paying rent twice, to Dominus, even though the building was not yet ready, and to the company that owned the office space where staff had to remain because of the delay, Sprovieri was quick to respond.
“Big time. Yes.”
Former city manager Deborah Dubenofsky’s role
In June, Chernos rose to question a central figure in the case: Deborah Dubenofsky, who was overseeing an entire administration of about 2,700 staff when the massive deal became her top priority.
“You know that a key issue (in the lawsuit) is your involvement?” he asked, staring directly at her eyes.
“Yes,” she responded, just above a whisper.
“You made negative remarks about John Cutruzzola,” Chernos suggested to Dubenofsky, referring to meetings with senior staff when the selection process for the downtown deal was discussed before and after the final council decision in 2011. He asked if she recalled making such comments.
“I do not,” she answered.
Chernos pressed on. “If other members of the senior management team recall you making negative comments of Mr. Cutruzzola, they were wrong?”
“They would have to be,” she said, as Justice John Sproat of the Ontario Superior Court looked on.
The unflappable judge, who attentively wrote notes throughout the complex trial in May, June and September has handled some of Brampton’s largest cases since being appointed to the bench in 2003.
Days before Dubenofsky took the stand, the court heard the testimony of John Corbett, who replaced her as the city’s chief administrative officer in 2012, after council decided not to offer her another contract — the trial revealed that some members of council felt Dubenofsky was too close with Fennell. During her testimony, Dubenofsky called that characterization “unwarranted”.
Corbett, the plaintiff’s key witness, described Dubenofsky’s relationship with Fennell as being focused on “carrying out the mayor’s agenda, at times contrary to council’s wishes and without council’s knowledge” — an allegation Dubenofsky denied.
Corbett was asked about the views expressed by Dubenofsky toward Cutruzzola that he witnessed during closed-door meetings with senior managers.
He said her routine comments about Cutruzzola were “affronts to his character, personality and physical stature (Cutruzzola is slightly taller than five feet)…mimicking his personality as being egocentric, his stature, his Italian accent, his youth in Italy.” Corbett said such comments were “commonly expressed” by Dubenofsky.
Corbett testified that such comments in front of senior staff were made routinely by Dubenofsky and to a lesser extent by Julian Patteson, the former head of public services, who once ran the city’s buildings and property department, and Mo Lewis, the former treasurer and head of finance. All three denied his allegations.
During his cross-examination, Adam Stephens, one of the lawyers representing the city, suggested Corbett has a “personal animus” toward Dubenofsky because she tried to fire him, prior to council’s decision to hire Corbett for her job.
Corbett denied the assertion. “That’s part of the territory,” he replied. “No. I’m a big boy. I’ve been in senior positions most of my adult career. I hold no grudges or animosity. You’re hired to be fired, just as you said,” Corbett stated, referring to a comment Stephens had made earlier.
“Through their pre-disposition toward Mr. Cutruzzola’s personality, in my view, it would be impossible for them to be objective,” Corbett testified, describing the behaviour of Dubenofsky, Patteson and Lewis. “It would be impossible for Mr. Cutruzzola’s proposal to be dealt with fairly.”
Patteson was vice-chair of the selection committee and Lewis was chair. They, along with four other members of the committee, including Corbett, were the only people allowed to evaluate the full bids and were supposed to independently make a recommendation for one preferred respondent to council. Dubenofsky was not on the committee. Council was told by senior staff that under the particular procurement process being used — a method they selected that had never before been tried in Canada — the city’s elected officials were not allowed to see the bids (Inzola challenged this claim by staff, arguing during trial that the procurement contract has no such rule that prevented council from seeing the bid proposals).
Dubenofsky was not supposed to see the bids and was not to have any involvement in the decision-making process, other than to manage reporting and timelines for council so it remained informed of key milestones. All four of them no longer work for the city.
Another central issue in the litigation is the role played by Dubenofsky, who was only supposed to handle agenda management for the procurement, not decision-making to determine which bidder would get the deal.
Corbett testified that her actions went “far beyond” agenda management, alleging that she controlled much of the decision-making process and was heavily involved in the re-drafting of reports that provided direction and recommendations to council, even though she was supposed to play no such role.
For a pre-trial motion in 2016, Dubenofsky testified under oath that she only dealt with the final versions of such reports, to ensure brevity.
Chernos read her 2016 transcript back to her, then presented the court with documents, obtained from the city after it was compelled to produce them, that appear to contradict her original testimony.
“You said: ‘I would see the very final, last draft, the very last draft, that’s correct’. But that’s not correct, is it?”, his voice growing louder.
“No, it is not,” Dubenofsky responded, her voice cracking as she admitted to providing misleading testimony under oath.
“Your evidence was not true.”
“I concede, there were inaccurate statements,” she said, her face turning light red. “I was incorrect.”
Chernos continued his aggressive line of questioning.
He said her admission that she had dealt with early versions of the reports, “is directly contradictory to what you testified to in 2016, isn’t it?”
“Yes,” she responded.
Chernos repeated her evidence from 2016, showing more documents the city was compelled to produce under court order that contradict what she had originally testified to. Dubenofsky repeatedly responded that she was “incorrect”, eventually stating that in 2016 she had relied on a “faulty” memory.
Chernos then took Dubenofsky to her 2016 testimony regarding the role she played in handling what were supposed to be the independent reports of external “fairness advisor” James McKellar, who was hired by council members to report directly to them about his oversight of the selection committee, to ensure the procurement process was carried out fairly by senior staff.
The trial heard that McKellar was the same person Patteson had originally recommended the city hire to help design a procurement process for the deal, called “competitive dialogue”, that had never been used in Canada before and which he promotes around the world. Patteson testified that he had met McKellar years earlier, through conferences and organizations related to municipal real estate.
Inzola’s lawyers probed whether the overlap of McKellar’s roles—between design of the process and accountability for how it was carried out—represented a possible conflict of interest. The lawyers questioned how he could properly hold accountable his own recommended method (which the city paid him to help create) and the staff using his method, who had selected him for both roles.
Dozens of documents entered as evidence by the plaintiff, after the city through pre-trial motions was ordered by the court to produce, suggest staff were heavily involved in the drafting and re-drafting of McKellar’s reports, which were supposed to go directly from him to council.
Chernos repeated the words Dubenofsky said under oath in 2016, regarding the independent fairness advisor’s reports that were supposed to go directly to council without the involvement of the very staff McKellar was supposed to be overseeing: “You didn’t have to involve yourself at all — no review of drafts (of McKellar’s reports) even final drafts.” Chernos stated that those were Dubenofsky’s words, reading from her 2016 transcript. “That testimony you gave was also untrue, wasn’t it?" He again repeated her 2016 testimony. When Dubenofsky had said, under oath, that she had “no involvement” in drafting what were supposed to be the fairness advisor’s independent reports to council, “You weren’t correct,” Chernos put to her.
“Yes, it was incorrect,” Dubenofsky replied.
The decision to disqualify Inzola from the bidding competition in 2010, which Dubenofsky was not supposed to be involved with, is another central issue in the lawsuit.
“I asked you about this in 2016,” Chernos said to Dubenofsky, continuing on the same course. He presented more city documents produced under court order for the litigation.
Dubenofsky, according to the transcript of her 2016 testimony, had said she “found out when the public found out” about one of the issues that led to Inzola’s disqualification, Chernos repeated. “No more involvement than the public—that was your evidence, correct? That was just flatly untrue, wasn’t it?”
“It was incorrect,” Dubenofsky replied.
Documents entered as evidence suggest, contrary to her 2016 testimony, that she was aware of the disqualification issue from the beginning and directed staff to keep her closely informed.
The documents do not indicate Dubenofsky was responsible for making decisions regarding what led to the disqualification, or the ultimate decision to remove Inzola from the competition.
Corbett had earlier testified that he witnessed Dubenofsky, in meetings with the Senior Management Team, express her desire that Inzola be disqualified.
“That was Deborah Dubenofsky’s desired outcome,” Corbett stated. “Everyone in that troika (Dubenofsky, Patteson and Lewis) shared the same view and opinion.” All three denied the allegation.
He testified that though Dubenofsky was not allowed to have any influence over decision making to award the historic downtown deal, he witnessed her directing much of the decision-making process.
For the same 2016 pre-trial motion in the case, a written statement of Corbett’s evidence was provided, which he said, under oath during his deposition for the motion, is accurate. In it, Corbett states, “notwithstanding that she was not on the Steering (selection) Committee, Ms. Dubenofsky was involved in virtually every important aspect of the (downtown) RFP process and had input and influence over every significant decision made by the Steering Committee…Together with Messrs. Patteson and Lewis, she was involved in directing virtually every aspect of the process…including the disqualification of Inzola.”
Dubenofsky denied the allegations, testifying that her role and actions did not go beyond “agenda management” for the process. Patteson denied the allegations. Lewis denied Dubenofsky was involved in decision-making.
Corbett testified that he witnessed Dubenofsky directing members of the selection committee as to which bidder should be awarded the deal.
“It was understood from Deborah Dubenofsky’s dialogue that it was very critical that Dominus would become the preferred vendor for that project,” Corbett said.
The court was shown city documents, including a draft report by the selection committee that indicates Dubenofsky knew Dominus would be selected by senior staff seven weeks before the recommendation went to council for a vote. Emails also presented in court suggest she worked with Fennell, prior to the council decision, to garner support for the Dominus recommendation.
In his written statement for the pre-trial motion, Corbett describes what he alleges to have witnessed, that “Dubenofsky was carrying out a political agenda on behalf of Mayor Fennell. It was clear to me (and I believe to the other senior members of City staff) that Mayor Fennell favoured a result in the (downtown) RFP process that did not involve Inzola...and ideally saw the project being awarded to Dominus. From my observations of her involvement, Ms. Dubenofsky furthered that objective.”
Fennell, who testified in June, has always denied Corbett’s allegations.
Dubenofsky also denied them. She, Patteson and Lewis denied the allegation that they wanted Inzola to be disqualified. The city maintains that it carried out a fair, impartial procurement process. Dubenofsky denied the characterization of her relationship with Fennell and testified that she never gave direction to select Dominus.
Fennell also denied any bias against Inzola and any favouritism toward Dominus, which was awarded the contract in the summer of 2011.
The role of Julian Patteson
Julian Patteson has been the principal witness for the municipality since the lawsuit was launched in July of 2011, providing sworn testimony and affidavits, representing the city’s defence throughout the pre-trial discovery process, when each side is allowed to probe the other for evidence to help their case.
During his chief examination, Corbett continued to provide damning evidence against the city’s case, describing one meeting when Patteson got down on his knees, to mock Cutruzzola’s short stature while mimicking his Italian accent. Patteson denied the allegation.
During the trial, Patteson was asked by Stephens about the main allegation in the lawsuit: that he and other senior staff were biased against Cutruzzola.
“I have no bias toward Mr. Cutruzzola,” Patteson testified.
During cross-examination, Chernos put to Patteson that he, Dubenofsky and Lewis ridiculed the builder while he was in competition for the downtown deal. Patteson denied the allegation.
Chernos showed him a copy of an email he sent to Dubenofsky, obtained through the lawsuit. In it, Cutruzzola’s upbringing in Italy is mocked by Patteson, who wrote to the city manager: “I ran through the village.”
“Yes, I thought it was fun poking fun at him,” Patteson responded.
Were the negative comments made behind Cutruzzola’s back, Chernos asked.
“Yes, he wasn’t there,” Patteson replied, saying it was just “good natured ribbing”.
“Ribbing you do in public, you did it behind his back,” Chernos said. “You knew that if you said these things in public you could not be seen as objective in the (selection process).”
“No, that’s not right,” Patteson quickly replied, shaking his head.
When Lewis took the stand days later he was cross-examined by Stuart Svonkin, one of Inzola’s lawyers.
“At Senior Management Team (meetings) people made negative comments about John Cutruzzola?” Lewis was asked.
“Yes,” he replied.
“Was Deborah Dubenofsky one who made negative comments?”
Lewis testified that Dubenofsky and Patteson, in closed door meetings with senior staff during the period when they had to decide on a preferred bidder, disparaged Cutruzzola, made fun of his “ego” and mocked stories he had told about his childhood in Italy.
He was asked if he made any negative comments about Cutruzzola during the meetings.
Lewis said he had expressed frustration about dealing with Cutruzzola during the procurement process. “We are human.”
During his examination by Chernos, Corbett was shown a portion of the original draft for minutes of a selection committee meeting held three days after the March 28, 2011 vote by council to provisionally accept the committee’s recommendation to award the contract to Dominus.
Inzola obtained the original minutes through the lawsuit. A section of the minutes was later removed and no longer appears. It states, “council sent a message to the community that Inzola is not the big guy in this town anymore.”
Corbett was asked if he recalled who made the statement at the March 31, 2011 meeting of the selection committee, days after council approved Dominus as the preferred bidder.
“Yes, I do,” he testified. “Mr. Mo Lewis.”
The court was shown that the draft minutes with the comment included were originally circulated for review and approval to senior staff who had attended the selection committee meeting. At that time, which was prior to the filing of the Inzola lawsuit, no revisions were requested.
After the lawsuit was filed in July of 2011, the following month Lewis sent an email to the minute-taker, Sandra McCullough. The email was entered as evidence in the case. It states, “Sandra: In these minutes, you need to delete the sentences re the debrief of the March 28th(council) meeting, that says ‘Council sent as (sic) message to the community that Inzola is not the big guy in this town anymore.”
Chernos asked if Corbett had ever seen the email from Lewis instructing that the minutes be altered, telling the court, “the city, in fact, produced a copy of these minutes for this litigation with the comment by Mr. Lewis gone.”
Corbett testified that he had not seen the email before.
“Were you involved in removing those comments?”, Chernos asked.
“No, not whatsoever,” Corbett answered.
McCullough provided a pre-trial written undertaking for the case, stating that if words appeared in original versions of the selection committee meeting minutes, they must have been said.
Stephens asked if Patteson recalled seeing the draft of the minutes with the comment about Inzola not being the “big guy in this town anymore”, made days after council accepted the selection committee’s decision to partner with Dominus.
“Yes,” Patteson replied.
What was your reaction, Stephens asked.
“That amendments were required,” Patteson replied. He testified that he told the minute-taker, “I didn’t hear this, it’s not professional. It should be removed.”
Under cross-examination, Chernos pressed Patteson about the comment made in the meeting, according to the original minutes, reminding him that McCullough stated, the words in minutes she took, were said.
“I don’t recall anyone saying that or anything like that,” Patteson testified.
Chernos continued the same line of questioning.
“I’m putting to you that Mo Lewis said those words.”
“I don’t recall anyone saying those words,” Patteson responded.
When the minutes were first circulated for review to Patteson, Lewis and other senior staff, prior to the filing of the lawsuit, there is no record, before the court, of a request to correct the minutes.
Lewis took the witness stand after Patteson. He was shown the original minutes of the March 31, 2011 selection committee meeting and asked by Stephens about the comment that Inzola was not the “big guy in this town anymore”.
“That statement was made by me,” Lewis testified, as people in the courtroom gasped.
He was asked about his email to McCullough, five months after the meeting, and after the lawsuit was filed, instructing her to remove the comment from the official minutes.
The comment was “not intended as part of our day-to-day minuted-items,” Lewis explained. He testified that the comment was made to “instill confidence” in staff that council had made a decision and that the committee could move forward with its work.
In June, lawyer Stuart Svonkin, representing Inzola, showed the court minutes of senior staff meetings held to discuss the project, including a dozen sets of minutes which appeared to have been altered sometime before and/or after the lawsuit was filed.
Svonkin cross-examined Lewis, who chaired a group of six senior staffers who sat on the selection committee (known as the Evaluation Steering Committee) for the deal. Patteson, who had been the head of buildings and properties for the city, served as vice chair of the committee, whose members, under the rules of the process, were the only people allowed to see the full bids.
There is no record in the litigation that Lewis, Patteson or any other staff member advised McCullough about the March 31st minutes, at that time or shortly after the meeting, that the minutes needed to be amended when they were originally circulated for review and approval.
“You didn’t tell her in May or June to remove (the comment about Inzola not being the ‘big guy’ in this town anymore),” Svonkin said. “You told her to remove it in August. August 31st, you tell her to remove the comments.”
“Yes,” Lewis replied.
In an email written on Aug. 31, 2011, to McCullough, shown earlier in court, Lewis directed her to go back into the minutes and remove the comment. This was more than a month after the lawsuit was filed.
“In between that period (from May 24 to Aug. 31) this lawsuit was commenced. You know that.”
“Yes,” Lewis said.
“You were told to gather up all the documents (that might be asked to be produced for the litigation).”
“You were told not to destroy or alter documents.”
“Stands to reason,” Lewis replied.
“Seven weeks after this litigation (was commenced) you asked for the minutes to be altered.”
“This wasn’t the only time that staff instructed meeting minutes to be altered after this litigation, correct?”
“I don’t recall,” Lewis answered.
Svonkin then took Lewis through another 12 sets of minutes provided to Inzola for the litigation that, according to documentary evidence shown to the court by Inzola, appear to have been altered at some point.
Some of the comments removed from minutes originally showed that selection committee meeting summaries had been shared with Dubenofsky, who was not supposed to have any decision-making role in the process.
She testified that she played no decision-making role, and was only kept abreast of timing issues so that she could report to council on key milestones that were being reached in the process.
Corbett, who was on the selection committee (and in 2012 replaced Dubenofsky as the city’s top bureaucrat) testified that Dubenofsky’s role went far beyond that. He testified that she controlled the decision-making process to make sure Fennell’s preferred bidder, Dominus, got the contract, not Inzola. Dubenofsky and Fennell denied the allegation.
Adam Stephens, a lawyer representing the City of Brampton, suggested to Corbett that he has a “personal animus” toward Dubenofsky because she tried to fire him before he eventually replaced her. Corbett denied the allegation.
Lewis was taken through the altered selection committee minutes, with references to briefings with Dubenofsky removed.
“Can’t explain,” he said.
Lewis was taken through approximately a dozen sets of minutes that appear to have been altered. The original minutes for one of the selection committee meetings refer to a comment by one of the senior staffers that, after Inzola had been disqualified, if the selection process failed it would “benefit Inzola” because the company could re-submit its bid in a brand new process. Those words were later removed from the minutes.
Lewis acknowledged, after being shown all the original minutes and the altered versions of them, that they had been changed. But he could not explain why or who had ordered them to be altered.
Then Svonkin took Lewis to minutes for a May 2010 selection committee meeting, when issues surrounding Inzola’s subsequent disqualification were dealt with. In August 2011, 15 months after that meeting and a month after the lawsuit was filed, a new version of those minutes was circulated, with comments added that did not appear in the original version. (It’s unclear exactly when the minutes were altered). Those added words appear to mitigate the lawsuit’s allegation that Inzola was unfairly disqualified.
The added sentences, which Svonkin read to Lewis, state that Inzola’s concerns about the City’s demands for a non-disclosure agreement were being considered and that the City was providing “every reasonable opportunity” to allow Inzola to remain in the bid competition. No such words appeared in the original version of the May 2010 minutes, taken shortly before the disqualification.
“I’m going to suggest those words were added to support the city’s position in the litigation,” Svonkin said.
“I can’t speak to that,” Lewis replied.
The next day, during the re-direct portion of Lewis’s examination, Stephens criticized Svonkin for suggesting the minutes were altered only after the lawsuit was filed that July. Other than altering the minutes to delete the comment about Inzola not being the “big guy” in this town anymore, which emails show was at the direction of Lewis, on Aug. 31, 2011, there was no evidence to establish exactly when the other sets of minutes were altered. (The city did not challenge the assertion that they’d been altered.)
Stephens argued that emails show some of the changes to minutes were requested long before the lawsuit was filed.
Inzola’s lawyers presented evidence during trial that suggests the city anticipated the company might take legal action, around the time of its disqualification in the summer of 2010.
“You recall that (Svonkin) put to you that those minutes were altered as a result of this litigation,” Stephens asked Lewis.
Svonkin objected, stating that he gave no “exact date” as to when the minutes were actually altered, other than those Lewis directed to be changed in August. He said Lewis was asked about the timing and was shown that at least one set of the altered minutes was circulated for review in August 2011.
“The clear inference was that, as a result of the litigation, the minutes were changed,” Stephens argued.
“The clear inference was that there was severe wrongdoing done by the city to deceive the court.”
The allegation of bias against Inzola
During the trial, Inzola’s lawyers argued that the central allegation of bias against the company by senior city staff and Fennell, is supported within the city’s own 2013 statement of defence and the subsequent actions of officials who directed the city’s strategy in the case.
Two months before the trial began, the city removed from its filed statement of defence damning allegations accusing Cutruzzola, without any supporting evidence, of political influence and corruption. These allegations had remained on the public record for more than four years, despite repeated pre-trial requests by Inzola to either provide any evidence to substantiate the claims, or remove them.
Prior to withdrawing the allegations, the city’s filed statement of defence accused Cutruzzola of a range of unsubstantiated behaviour, claiming he was used to doing business in questionable ways.
Chernos pressed Patteson, during his cross-examination, about how the damaging allegations came about.
“Were you involved with instructing outside counsel for this litigation?” Chernos asked, referring to the lawyers who have represented the city.
“I don’t know who it was?”
“You were the main witness in discovery, you swore affidavits and you don’t know who gave instruction to outside legal counsel (for the allegations in the 2013 statement of defence).”
Chernos, who appeared to lose his patience, made it clear that the unsubstantiated accusations were being taken very seriously by his client.
“Inzola asked (during the discovery process) for how the allegations were reached. The city said there were no facts to back up those allegations. They were not withdrawn until five years later, March this year.” Chernos waited for a response, looking directly at Patteson, who cast his head down and remained silent.
Chernos continued. “Who instructed outside counsel to make these claims and then refuse to withdraw them even though they could provide no evidence to back the claims?”
Chernos demanded Patteson respond.
Stephens, the lawyer representing the city, who was not one of the lawyers representing the municipality when its hurtful allegations against Cutruzzola were made in 2013, interjected.
“The witness answered, he didn’t know.”
The City of Brampton's main arguments
The City of Brampton fired back against Inzola’s evidence during its closing argument in the Orangeville courtroom this past September.
In their final submissions, lawyers for the city argued that Inzola’s own actions in 2011 were responsible for its disqualification from the bidding process for the $500-million development deal. They painted the key witness for Inzola as a disgruntled former employee and argued the company’s lawyers had failed to prove that any staff members were biased against Inzola in the procurement process.
Adam Stephens, one of the lawyers representing the city, stated during his closing argument that the city’s decision to disqualify Inzola was “fair and reasonable” following a “robust and thoughtful” Request for Proposals (RFP) process. He said Inzola’s disqualification came as a result of its own actions and violations of the RFP process, which essentially amounted to shooting themselves in the foot.
“The evidence reveals they only have themselves to blame,” Stephens said.
Inzola lawyer David Chernos had explained in the company’s final submissions the previous day that Inzola’s disqualification stemmed from a disagreement over the scope of the confidentiality agreement associated with the RFP. Inzola feared that the broad and all-encompassing agreement, issued after the RFP process had begun, would prevent Brampton councillors from seeing any final reports and proposals—then, or ever.
Chernos argued that when Inzola attempted to get answers to its questions about the confidentiality agreement, the city provided no answers.
Stephens said this was not the case. He said the confidentiality clause was standard industry practice for such RFPs, and it would not be normal practice to negotiate with respondents about the process rules. Nevertheless, Stephens said, the city was not as close-minded as Chernos asserted, but instead attempted to answer Inzola’s questions.
Stephens said senior staff discussed the scope of the agreement, reached out to hired experts for assistance, and did the best they could to respond to Inzola’s request for information.
Chernos argued that staff did not want to provide the answers, simply because the question was coming from Inzola, a respondent they did not want to see succeed.
Stephens argued the opposite. “They weren’t looking to get rid of Inzola at all. They were looking for ways to keep Inzola in,” Stephens said. “They all desired that Inzola stay in the process.”
When Inzola didn’t get the answers it wanted, Cutruzzola took things a step further and attempted to appear before city council to speak about his concerns, Stephens said. When that request was denied, Cutruzzola went to the press and was quoted in a Brampton Guardian article being critical of the RFP process.
It was this series of events, Stephens argued, that led to Inzola’s rightful disqualification from the process.
He said it breached the RFP’s communications protocol in several ways. First, the RFP stipulates that prospective bidders have only one point of contact at the city: the purchasing department. Inzola, Stephens argued, violated this rule by speaking with the clerk (through a voicemail) in an attempt to delegate before council. Second, he spoke to the press about the process, despite what Stephens described as multiple warnings from city officials.
“(Inzola) steadfastly refused to follow the RFP process,” Stephens said. “The problem was that the city made decisions and Inzola refused to follow them.”
These points are the city’s key defence against Inzola’s claim that the company was wrongfully disqualified.
Stephens said the City also had to keep in mind other respondents to the RFP, who might have become skeptical and reluctant to work with Brampton if Inzola continued to complain and denounce the process.
Inzola knew these actions were in violation of the process but persisted, Stephens said.
“Inzola did what it did with its eyes wide open,” he said. “It adopted a high-stakes approach.”
Inzola’s lawyers have said the city’s allegations amount to nothing more than minor breaches, compared to violations by other respondents that were ignored.
Chernos said in his final submissions that successful bidder Dominus had not, as required in the RFP, independently secured nearby property to be used in the development. Evidence revealed during the trial showed the city later assisted Dominus with the $480,000 needed to acquire an option on the property.
Chernos asserted Dominus’s suggestion that it had previously secured the property was a “material breach” of the terms, and that Inzola’s alleged transgressions paled in comparison.
Dominus is not named in the lawsuit and has said that it followed all the rules in the process.
Stephens took issue with the argument, noting that “it doesn’t hold together,” as the issue with Dominus and the George Street lands did not arise until nine months after Inzola was already disqualified.
“The situations are not comparable,” Stephens said.
Moving on, Stephens shifted to the crux of Inzola’s argument, that the disqualification was fuelled by bias on the part of staff members who held negative perceptions of Cutruzzola and wanted the company out.
Stephens said those allegations weren’t proven. He attacked what he described as a conspiracy theory woven by Inzola involving former mayor Susan Fennell and senior staff members, including former city manager Deborah Dubenofsky, former treasurer Mo Lewis, former head of buildings and properties Julian Patteson, and the committee responsible for deciding which bidder should be recommended to city council.
Stephens argued that Inzola’s own final submissions hinted that the company realized it hadn’t been able to prove its main argument. He suggested the company had retreated from its original allegations of bias.
“There has been a shift in the plaintiff’s theory of the nature of the case,” he said.
Moving through the key witnesses in the case, Stephens said that none of their testimony amounted to evidence of bias, and accused Inzola’s lawyers of “cherry picking” comments from the extensive case documentation to suggest that such bias was present.
Instead, their comments are evidence of simple human emotions, he said. Lewis, Patteson and other senior staff members simply became frustrated by a bidder who continued to criticize their hard work.
“Human reaction to criticism does not amount to bias,” Stephens said.
Claims that senior staff mocked and made fun of Cutruzzola were also not surprising, he said, as colleagues will often joke with one another, especially given that they were dealing with comments from Cutruzzola that were “aggressive, critical, unkind, and unfair.”
“It’s natural that there would be a response to that,” Stephens added.
He asserted there was no motivation by these staff members to eliminate Inzola from the RFP process, as they were all dedicated civil servants with “big jobs.”
Stephens briefly noted that Fennell’s testimony was also “entirely devoid of any evidence” of bias.
He addressed a particularly intriguing piece of evidence, which he claimed had been put on a pedestal throughout the trial as a “smoking gun” in the case: the minutes of a selection committee meeting in March 2011, during which Lewis stated that by selecting Dominus for the project “council sent a message to the community that Inzola is not the big guy in this town anymore.”
During the trial it was noted that the line originally appeared in the draft minutes but was later removed at Lewis’s request.
Lewis had admitted in his testimony to making the comment, but said it was to “instil confidence” in staff that council had made a decision and the committee could now move forward on a set path.
“This comment is hardly surprising and does not amount to bias,” Stephens said.
Much of the support for the bias allegations came from the testimony of former chief administrative officer John Corbett, who had served on the selection committee. In his testimony he said that, knowing the predisposition of key senior staff, it would be “impossible” for them to be objective.
Stephens attempted to paint Corbett as a disgruntled former employee who had the chance to raise his concerns during his time as the city’s top bureaucrat, but failed to do so, and was now coming back five years after being let go.
Stephens argued that Corbett’s evidence fell “far short” of proving any bias, labelling it as “general and non-specific” and saying the former CAO had a faulty memory.
Earlier in the trial, Stephens had suggested during cross-examination that Corbett had a “personal animus” against former city manager Dubenofsky, who had tried to fire him, and whom he later replaced as top bureaucrat. It was an allegation Corbett steadfastly denied.
“No, I’m a big boy. I’ve been in senior positions most of my adult career. I hold no grudges or animosity,” he said at the time.
The final portion of Stephens’ submission involved the issue of damages, which he asserted should be zero. He asked for the case to be dismissed with costs.
He took issue with Inzola’s arguments for awarding “expectation” damages—meaning Inzola would be awarded the approximate dollar value the company would have received from its investment if it had been awarded the project.
Originally, Inzola presented five proposals for the project, none of which had entered the “competitive dialogue” phase before Inzola was disqualified.
For that reason, Stephens said, there is no way to determine how successful Inzola would have been with the project, or indeed if it would have been awarded the project at all.
Stephens suggested the city may actually have done Inzola a favour by disqualifying it, as expert analysis commissioned by Brampton’s lawyers suggested the company would have lost a lot of money of its early proposals.
“The bottom line is … Inzola would have lost millions,” Stephens said.
Attempting to put a dollar figure on what Inzola might have made from any project is an “entirely speculative and ultimately futile exercise,” he said. “It’s just an endless series of unanswerable questions.”
Chernos, given a brief opportunity to respond, immediately went on the attack against the zero damages argument.
He noted that there is a “tried and true” method for determining damages of this nature, which involves considering a company’s track record with similar projects. Chernos also suggested that the court could look at the profits made by Dominus, which are at least 10 percent.
When the lawyers concluded, Justice John Sproat, a calm, quiet presence in the courtroom throughout the trial, thanked both sides for their work throughout the legal proceeding.
Sproat suggested he may be able to complete his analysis by November, but that if he was unable to deliver a decision that month, the parties would have to wait until early in the new year.
“Everyone’s given me a lot to think about,” he said.
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