Made no attempt to prove allegations swirling around immigrant investor fund
The provincial government won’t pursue legal action against a contractor that was “unjustly enriched” in dealings with a provincial Crown corporation, the Newfoundland Government Fund Ltd. (NGF), because the case was not strong enough, the government stated.
Bonne Bay Health Centre
The Department of Justice said in a statement Thursday morning the decision not to pursue the government’s allegations coincided with a complaint filed over the lack of prosecution, and an ultimate dismissal by a Supreme Court justice.
As reported earlier this week by The Telegram, the civil case began in June 2007, with the filing of a statement of claim. That filing alleged that Christopher Hickman and Marco Services were “unjustly enriched” through contracts for the construction of the Bonne Bay Health Centre and a K-12 school in Lawn.
Hickman was referred to in the filing as president and “directing mind” of construction company Marco Services. He was also identified as the president and “directing mind” of two companies — School Leasing Services and Hospital Leasing Services.
The NGF — an immigrant investor fund meant to offer venture capital for local companies — granted two loans in the entirety of its existence. One went to School Leasing Services and the other to Hospital Leasing Services.
The companies were awarded contracts to build the school and a hospital, and subsequently lease the buildings for public use.
As loan money was transferred, according to the statement of claim from the drawn out and now defunct legal case, money was moved from the Services companies to Marco. The latter company had been hired by the Services companies to construct the buildings.
“The direct impact and effect of the second contract was to provide Hickman a means to siphon off money which was intended and expected by NGF to flow to it in repayment of and in service of its loan to School Leasing Services,” the government claimed in 2007.
The case went back and forth, developing for almost two years, before activity on the case — including the filing of affidavits and other documents, and pre-trial skirmishes — came to a halt in 2009.
But then the case went silent, with no activity to 2012.
Ultimately, there was a motion from lawyers for Hickman and Marco to dismiss “for want of prosecution.” The motion was granted.
“In this matter, litigation was commenced and a statement of claim was filed against Hickman and Marco as both Hospital Leasing Services and School Leasing Services were insolvent or bankrupt at the time,” a statement provided from the Department Justice states in response to questions.
“However, once further information was gathered and research was completed on the file, it was reassessed and we determined that the case was not strong enough to pursue. Therefore the Department of Justice made a decision not to proceed. In the meantime, the defendants brought forward a successful application to have the matter struck.”
That essentially marked the end of the NGF. The investor fund managed by government bureaucrats and held over $16 million in investment capital to spur new business, invested $14.1 million at a loss and sparked a failed, follow-up legal challenge.
The rest of the funds, uninvested and leaving would-be immigrants without visa credits as a result, were never invested. The money, and immigrant accounts, were transferred to a new federal program in 2008.