First Nation says it's not responsible for actions of ousted Sandy Bay CFS head: court docs

A south-central Manitoba First Nation says it had no idea the former head of its child welfare agency had claimed an area of the reserve's land was under his exclusive control when he ordered construction of a building.

In May, Winnipeg-based Contera Construction launched a lawsuit against Sandy Bay Ojibway First Nation, Richard De La Ronde, the former head of the First Nation's Child and Family Services agency, and De La Ronde's company Radka.

De La Ronde was fired in 2021 following allegations of financial irregularities at the child welfare agency. Radka was alleged to be involved.

Three years before his termination, De La Ronde entered into a contract worth $2.7 million with Contera, through his company, to build a new head office for the CFS agency, the construction company said in its original statement of claim.

The cost went up a few months later when changes were ordered.

In making the agreement, the construction company said it relied on De La Ronde's assertion that he maintained a legal interest in the land where the office would be built, their statement of claim said.

It says De La Ronde represented the land to Contera as being under his "exclusive control and authority" within Sandy Bay Ojibway First Nation, which is about 130 kilometres northwest of Winnipeg, on the western shore of Lake Manitoba, by virtue of a 20-year land lease.

Contera said in the statement of claim that it was owed $1.2 million before De La Ronde was fired and the child welfare agency ended the lease agreement.

However, the First Nation said it wasn't aware of De La Ronde's actions, and he "had no authority to transfer or make representations regarding the transfer of the land to Contera," said a statement of defence filed in October.

"Any damages caused to the plaintiff Contera is as a result of the actions and negligence of Contera," the statement of defence said.

The money that De La Ronde is accused of giving to Contera for construction of the building is being investigated through a forensic audit, which was commissioned by the Southern Chiefs' Organization in 2021, the statement of defence said.

A spokesperson for the organization told CBC News in an email on Thursday that the final audit isn't yet ready, and wouldn't give a time frame for its completion.

Joseph Fiorino, the lawyer representing De La Ronde and Radka, said the allegations against his client aren't true.

"Mr. De La Ronde looks forward to his opportunity in the legal process to tell the full story behind the conduct and people involved in this project, and will vigorously defend himself from all false accusations to the fullest extent," Fiorino said in an email on Wednesday.

First Nation files cross-claim

Meanwhile, the First Nation is filing a cross-claim against its fellow defendants, De La Ronde and his company Radka.

The First Nation alleges De La Ronde "had no authority to enter into any agreements with Contera that would bind or impact upon the rights" of the First Nation.

"Any agreements entered into between Radka, De La Ronde and Contera relating to the construction of the [Sandy Bay] CFS building were designed solely to profit and benefit those three parties and were not intended to benefit [Sandy Bay Ojibway First Nation] in any way," the statement of defence says.

Last year, De La Ronde's lawyer filed a motion to have De La Ronde's name removed from the original statement of claim filed by Contera, because it is "prejudicial, scandalous, frivolous and vexatious" to him.

They also moved to have paragraphs about De La Ronde misrepresenting his control over the land where the new building was under construction removed, saying the lawsuit didn't include the necessary information to support its claim of fraud.

The three parties are next in court in February to discuss striking De La Ronde's name from the suit.

Contera Construction's lawyer, Richard Beamish, declined to comment while the lawsuits are before the court.

None of the allegations have been proven in court.

Contera suing over another building

Contera is also suing Sandy Bay Ojibway First Nation over another incomplete construction project.

In a claim filed Oct. 25, 2022, Contera Construction seeks more than $2.4 million in damages and an order of occupancy for the Sandy Bay Multiplex.

The lawsuit says Contera was contracted by Sandy Bay Ojibway First Nation in 2018 for a base cost of over $4.6 million to build the multiplex, which would house a gas bar, convenience store and restaurant.

The claim says the First Nation had difficulty obtaining funding approval for the project, and there were delays resulting in cost overruns. It says there were also changes and expansions to the project that resulted in extra costs.

Contera alleges some of those costs still have not been paid. 

The lawsuit also alleges that the First Nation's claim that the building was being built on First Nation reserve land turned out not to be true.

The Rural Municipality of Alonsa placed a stop work order on the site in August 2022 because "the building had been constructed on land which forms part of the [rural municipality], and not, as had been claimed by [Sandy Bay Ojibway First Nation], on reserve land," the lawsuit says.

As a result, the project was subject to the federal goods and services tax, the claim says. 

Contera is seeking nearly $172,000 for the GST it was required to pay to the federal government. 

It says the multiplex project is over 90 per cent complete, but Contera has been unable to work on it since August because of the stop work order.

Sandy Bay filed a statement of defence, claiming that the building is actually mostly incomplete, and that Contera failed to obtain the necessary permits and approvals and should have known the site of the multiplex isn't on reserve lands.

The First Nation says the incomplete building has resulted in an ongoing loss of business.

These allegations haven't been proven in court.