The battle of the QC's

By David Broadland, January 2013

Will a couple of letters from high-powered lawyers awaken City of Victoria councillors to their duty to protect the public interest?

On December 19, 2011, senior engineers from MMM Group—the company providing the City of Victoria with project management on the Johnson Street Bridge project—met with City engineers in Victoria. A document obtained by Focus through an FOI shows that at that meeting MMM Group engineers expressed “concerns regarding the City’s approach to FOI requests.” City engineers present asked MMM to “send a letter to the City” addressing MMM’s concerns.

Recently, through a subsequent FOI request, Focus obtained a letter sent shortly after the above meeting to the City from MMM’s lawyer John Singleton, QC, in which those concerns were elaborated. Mr Singleton made MMM’s displeasure clear. He stated that agreements made with the City required that they not divulge confidential information without MMM’s “prior written approval,” and went on to say, “It is our understanding that MMM Group has not been consulted by the City with respect to any of the information or documentation disclosed by the City to third parties before its disclosure....”

Singleton pointed out that the City “must refuse to disclose” any information that would reveal “trade secrets,” “commercial or financial information,” “or information supplied implicitly or explicitly in confidence.”

MMM’s lawyer went on to say, “The information already disclosed by the City has quite possibly caused irreparable harm to MMM reason of it being either financially sensitive or personal to the employee or employees in question.”

Singleton finished his letter by saying “In order to avoid the prospect of a recurrence of these transgressions, we are asking on behalf of MMM Group that before responding to any future requests for information or documentation relating to this Project...the City first consult with Mr Joost Meyboom of MMM Group to determine whether MMM Group objects to disclosure of any of the information in question.”

A letter from City Solicitor Tom Zworski to Singleton in response, also obtained by FOI, shows the City partially stood up to MMM and Singleton, reminding them of their contractual obligation to spell out what “confidential information” they didn’t want divulged. But here’s what the City failed to tell MMM’s lawyer: “We aren’t required by law to broadly consult with you ‘before responding to any future requests for information or documentation relating to this Project.’ So shove off.”

Tellingly, the very next FOI filed by Focus that involved MMM took the City five months to complete. The Freedom of Information and Protection of Privacy Act encourages them to fulfil such a request in 30 working days.

And in between, the City took the unprecedented action of filing a Section 43 application under the Act that allowed the City, without it having to provide any supportive evidence, to stop responding to Focus’ FOI requests. The City withdrew its application a day before it would have been required by the Office of the Information and Privacy Commissioner to provide evidence to a formal hearing.

(In claiming that limited resources to respond to FOI requests compelled them to act, the City forgot to mention the cumulative impact of a 46 percent increase in salary over 5 years for the head of the FOI office. See page 4.)

It wouldn’t be the first time the City has appeared to protect the corporate interests of MMM at the expense of the public interest. William Pearce, QC, a former senior litigation lawyer for the provincial Ministry of the Attorney General, has been zeroing in on another example. Pearce has years of experience litigating around major construction projects involving public funds and recently stated his concerns about the bridge project to City council. In a letter, Pearce warned the mayor and councillors: “When the decision was made to hold a referendum, MMM Group was asked to provide cost figures for the rehabilitation and replacement options. MMM’s base construction cost figures for the rehabilitation of the existing bridge structures amounted to $36.5 million as compared to Delcan’s base costs of $17.9 million, representing an increase of $18.6 million. No reason was ever provided to explain the increase in rehabilitation costs of over 100 percent. MMM’s estimate for rehabilitation costs should not have been used in the referendum. MMM had a financial interest in the outcome of the referendum. It is a clear case of conflict of interest. If Delcan’s unbiased, undisputed rehabilitation costs had been utilized, the rehabilitation costs that were presented to the electorate would have been $18.6 million less.”

Pearce believes MMM was in a conflict of interest because it had an existing contract to build a new bridge and had a “built-in interest to preserve that contract. If they lost the referendum, they’d lose the work.”

In 2009, MMM and the City had signed a deal in which MMM would get $3.3 million for doing preliminary design and engineering, procurement and project management for a  bridge with rail on it that was going to be finished by March, 2011.

Yet the City allowed them to oversee the cost-estimating process for both rehabilitation and a new bridge.

The value of MMM’s “built-in interest to preserve that contract” is only now becoming clear. On November 19 the City announced it had “a new contract agreement with MMM.” City spokesperson Katie Josephson wrote, “MMM Group has been the primary engineering consultant since 2009 and will continue to provide all professional engineering services through to the completion of the project.” Josephson put the value of the new contract at $9.1 million. Records obtained from the City through FOI requests show MMM had been paid about $5 million before the new contract was announced. The City has yet to release details of the new contract, but it appears MMM’s total take from the project will now amount to roughly $14 million.

This, too, appears to be a case where the City has acted to protect MMM’s interests at the expense of the public interest.

Pearce’s letter offered councillors a way of rectifying the situation: “If council is satisfied that the results of the referendum are unreliable...council is at liberty to disregard the referendum by reason of section 83 (2) of the Community Charter which makes it clear that the results of the referendum are not binding on council. It is respectfully submitted that council should push the pause button and reconsider the rehabilitation option before approving an unnecessary expenditure of taxpayer money on a new bridge.”

Pearce’s letter to council also observes that the removal of the railway bridge opens up an unexpected opportunity that hadn’t previously been recognized. It’s now possible to cantilever a bicycle/pedestrian trailway off the north side of the very robust highway bridge, which Pearce suggests would cost in the neighborhood of $3 million.

With the cost of a rehabilitation greatly reduced now that the railway bridge is gone, and with the addition of a cantilevered bicycle/pedestrian trailway, Pearce calculates “taxpayers could save up to $67.7 million if council were to change its mind and adopt the rehabilitation option. Council does not have to await a decision of the court that the [referendum-approved] loan authorization bylaw is invalid.”

In an interview conducted before Christmas, Pearce told Ross Crockford, director of the watchdog group, “The party’s over, guys—you can’t just build new things because they’re nice to have. The taxpayers are going to be furious when they find out about these facts. The City has a duty to reconsider this whole thing right now.”

But members of the pro-replacement majority on council—Chris Coleman, Dean Fortin, Charlayne Thornton Joe, Pam Madoff and Marianne Alto—have all sleep-walked through the entire bridge nightmare so far, and there’s little reason to hope that either Pearce’s or Singleton’s letters will wake any of them up.

David Broadland is the publisher of Focus.