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Lawyer: ‘That's a matter for the Bermuda Government to comment on'

The lawyer representing former Premier Ewart Brown and current Deputy Premier Derrick Burgess won't say who's paying the bill for their ongoing defamation lawsuit presently winding its way through the Canadian courts.

Charles Scott had just wrapped up about three hours of legal sparring over the relevance and inclusion of statements of defence filed on March 22 by lawyers representing Toronto architect Sam Spagnuolo.

As he left the Ontario Superior Court of Justice, civil division, in Toronto, Mr Scott was asked that given the Bermuda Government announced it was no longer paying Dr Brown and Burgess' legal fees, who was footing the bill.

“That's a matter for the Bermuda Government to comment on,” he said, before disappearing down a hallway.

Dr Brown and Mr Burgess are suing Mr Spagnuolo and another architect, Lawrence Brady, for $2 million each for alleged defamation of character.

The case hit the headlines in January 2012 when Auditor General Heather Jacobs Matthews condemned Government for spending more than $31,000 of taxpayers' money on legal fees for Dr Brown and Mr Burgess in relation to the case.

She said it was contrary to Financial Instructions rules for the public purse to fund the politicians' private legal action. Government terminated the agreement to pay the legal fees in September 2011.

The Royal Gazette first broke news of the court case in April 2011, reporting how the politicians were accusing Mr Spagnuolo, who worked on the new court and police station building on Victoria Street, Hamilton, of creating false copies of cheques to make it look like they were taking kickbacks.

They allege that Mr Spagnuolo then conspired with Bermudian architect Mr Brady to “tip off” the Auditor General in order to create a public scandal about the cheques.

Mr Brady is Government's chief architect, and also the brother-in-law of this newspaper's editor, Bill Zuill.

Mr Spagnuolo is lead architect with Canadian firm Carruthers Shaw and Partners [CS&P], the original firm hired to work on the building in Hamilton. He was also the “payment certifier”, who oversaw all claims for payment in relation to the project.

Both architects strenuously deny the allegations against them.

The defamation case is still pending before the court in Canada.

In a preliminary hearing this week, Mr Scott argued before Judge Thomas Lederer that much of the defence case, as laid out in the most recent filing, was irrelevant, meant to embarrass the plaintiffs' action and would impose prohibitive costs to the plaintiffs in the subsequent discovery and trial phase.

He also argued the most recent filing appeared to signify a shift in defence strategy by advancing the notion that someone at the troubled project site, other than Mr Spagnuolo, had motive to create the fake cheques. That, he observed, “was a whole new theory”.

Mr Scott said the plaintiffs did not dispute that the building of the Hamilton Police Station suffered from poor project management and workmanship and that the relationship between principal contractor Landmark Lisgar Contractors and Mr Spagnuolo's firm, CS&P, was acrimonious from day one.

But defence demands to provide documentary evidence detailing a litany of problems at the work site was “another attempt to gratuitously sideswipe this claim” by imposing a heavy burden on the plaintiffs to provide every document and file related to the construction of the police station, Mr Scott argued.

Mr Scott told Mr Justice Lederer that key to Dr Brown and Mr Burgess' action was evidence that the false cheques were created on December 11, 2008, in Toronto, and transferred electronically to Mr Brady in Bermuda on December 12.

All the “side issues” being raised by the defence, he argued, have nothing to do with the creation of the false files.

Mr Scott told Mr Justice Lederer that the plaintiffs would be providing detailed forensic evidence as to how the bogus cheques came to be.

Sarah Shody, appearing for Mr Spagnuolo, said the cloud of acrimony hanging over the Hamilton work site goes to the heart of the defence.

She argued those portions of the new statement of facts detail a litany of disputes between Landmark Lisgar and CS&P.

Ms Shody told Mr Justice Lederer that by June 2008, indications of misconduct and poor management by the contractor had reached such a point that CS&P was refusing to sign off on expenses.

She told the court that the whole project had been mismanaged from the start and that decisions taken by the architects resulted in Landmark Lisgar having to redo portions of the project, at their own expense.

“CS&P had got in (Landmark Lisgar's) way,” she told Mr Justice Lederer. All signs point to Landmark Lisgar misconduct and it was in that context that Spagnuolo claims to have received the fake cheques in June of 2008, she added.

The cheques were part of a whole package of 'draws' submitted by Landmark Lisgar that contained inappropriate and duplicate expense claims. CS&P dismissed those claims outright, she told the court.

Ms Shody argued her client was an individual facing a multimillion-dollar lawsuit and that the interest of fairness was paramount; the documentary evidence sought by the defence underpins Mr Spagnuolo's narrative, she said.

“Landmark Lisgar's work on the project was not being approved by CS&P, and that's the core of the conflict,” argued Ms Shody. “Mr Spagnuolo should not be restricted in putting the facts he feels he needs to defend himself.”

Mr Justice Lederer reserved his decision on what evidence would move forward to the discovery and trial phase of the court action. His decision is expected within a couple of months.

Premier Dr. Ewart Brown (left) along with Derrick Burgess

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Published March 30, 2012 at 2:00 am (Updated March 30, 2012 at 9:11 am)

Lawyer: ‘That's a matter for the Bermuda Government to comment on'

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