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Toronto Star July 27 2000, - by Tony Van Alphen, Business Reporter
Ontario Realty Corp.'s right to sue questioned
Gabriele Group, Tri-Spade demand court-ordered inquiry into April raid. A Vaughan construction company and a small contractor will go to court tomorrow in a bid to quash major fraud allegations by the Ontario government's real estate arm.
The Gabriele Group and Tri-Spade say Ontario Realty Corp., which manages the government's real estate holdings, has no legal right to sue them because it doesn't own the properties in alleged questionable dealings.
If the Superior Court of Justice doesn't dismiss the lawsuit, Gabriele and Tri-Spade want it to strike out major portions of the claim or stay proceedings because the ORC failed to provide any sufficient evidence supporting the allegations.
They also want a court ordered inquiry into damages they suffered as a result of an April search and seizure.
In the claim, ORC alleges fraud and breach of trust against 24 parties. They include several Gabriele companies and their principals Pierino, Frank and Antonio Gabriele.
Tri-Spade and former Ontario Realty employees Vince Catalfo, Ross Farewell and Kent Banting are also named, as are Oshawa consultant Sirman Associates and its three principals: Ivan Sirman, Cynthia Stiles and Robert Allan.
The government agency alleges bid rigging, fraudulent invoicing and kickbacks in connection with ``suspicious'' land deals and consulting and clean-up contracts.
None of the allegations have been proven in court.
In their motions, Gabriele and Tri-Spade said the Crown, not ORC, owns the properties.
They added the Crown entered into land deals and clean-up contracts so ORC could not suffer damages.
The Attorney General for Ontario must institute the claim, they said.
In its motion, Tri-Spade referred to ORC president Tony Miele' s testimony acknowledging the agency ``owned no assets, including any land.''
If ORC owns no assets, it means the agency's basis for the search order ``is worthless,'' Tri-Spade says in its motion.
The Gabriele Group says it has reviewed ORC files that ``largely resolve'' the agency's allegations.
The firm noted that the agency did not disclose these files in an earlier affidavit outlining questionable dealings.
The ORC made fraudulent invoicing allegations for a clean-up contract in Mississauga.
A Gabriele company bought the land, and a related firm also got the clean-up contract and a discount on the real estate transaction. Among other allegations, the agency says the Gabriele companies received large reductions on deals after ORC had reached binding agreements with them.
ORC alleges Sirman Associates and Catalfo, the agency's former manager of institutional and environmental services, participated in bid-rigging on consulting and clean-up contracts for Markham-Pickering and West Duffins Creek properties last year.
In those cases, Sirman prepared several bids for the two contracts to create an appearance of competition, according to the claim. One of them was allegedly from Tri-Spade but the firm said it never prepared, authorized or submitted a bid.
Tri-Spade added it had no knowledge of the alleged bid until just before filing the lawsuit.
The firm has asked the court to dismiss the action against it and has countersued for trespassing, wrongful seizure of property and abuse of process.
ORC received the rare search order without the defendents getting an opportunity to make submissions.
Catalfo has already filed a notice in court arguing the search infringed the defendants' rights against self-incrimination and was unreasonable under the Charter of Rights and Freedoms.
Documents that accountants seized in the search from the Gabriele Group were to remain sealed under terms of a court order.
But the agency confirmed in a court filing that accountants opened the boxes to make an inventory list before sealing them again.
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