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KINNGAIT/CAPE DORSET
Polar Supplies Ltd. is expecting a windfall in settlement from the Hamlet of Cape Dorset, following a Nunavut Court of Justice decision supporting the company's complaints of unfair competition from the municipal body.

The new Dorset Suites hotel being constructed by Huit Huit Tours. Nunavut's Community and Government Services department permitted the Hamlet of Cape Dorset to provide gravel services for the project, a decision that Polar Supplies Inc. has sued over, claiming unfair competition from the Hamlet. - photo courtesy of NCC Development Ltd.

In a written decision dated Nov. 17, Justice Sue Cooper quashed the Minister of Community and Government Services' decision to permit the hamlet to carry out a summertime gravel job that Polar Supplies could have done, for a competing Cape Dorset business.

"The hamlet, ultimately, we believe will end up owing my client a fair sum of money," said Steven Cooper, legal counsel for Polar Supplies. "Which represents the lost profits that my client has had to put up with as a result of the Hamlet using their subsidized equipment and employees to do work that is best done and properly done by companies such as Polar Supplies."

The company is owned by South Baffin MLA Fred Schell, and being held in a blind trust by Yellowknife lawyer Garth Wallbridge, while he is in office.

The work in question in the recent judgement was for Huit Huit Tours Ltd., which is currently expanding its hotel business with a $4-million project tentatively called Dorset Suites Annex, which will also be in competition with Polar Supplies' Cape Dorset hotel services.

After going to Polar Supplies in May to get a quote for hauling and spreading of gravel at the work site,

Huit Huit Tours owner Kristiina Alariaq also appealed to the hamlet to do the work, due to an ongoing lawsuit filed by Polar Supplies against Huit Huit.

Provisions under the Hamlets Act allow a municipal corporation to use municipal equipment, materials and labour to carry out private work in certain cases, and where it would result in competition with similar services provided by the private sector, the approval of a minister is required.

The hamlet wrote to the Department of Community and Government Services requesting approval to perform the work for Huit Huit, which was denied. Huit Huit being sued by Polar Supplies was not grounds to exempt the hamlet from competing with Polar Supplies, the decision said.

On June 24, in email correspondence directly to the deputy minister, Huit Huit asked for reconsideration of the decision, expressing lack of confidence that Polar Supplies would deliver gravel as required and citing several concerns including the ongoing litigation, and "unconscionable price" for the work when compared to Kudlik Construction and the Hamlet of Cape Dorset.

Three days later the order was granted by the Minister and the Hamlet began the gravel work for Huit Huit.

Following an appeal of the Minister's decision by Polar Supplies, Justice Cooper granted judicial review for several reasons, including the fact the request granted was not made by the hamlet, but by the company requesting the work.

Because the gravel work has already been done, Polar Supplies is currently determining how much profit it has lost in this case, Cooper said, which will be added to lost profit on "probably 10 or 15 other projects at least," that are part of a separate lawsuit filed in 2010 against the hamlet. In that case, the court recognized the hamlet was doing work that they should not be doing, Cooper said, but the judge was prepared to give the new senior administrative officer an opportunity to "fix things" before granting an injunction.

Olayuk Akesuk, Cape Dorset senior administrative officer, was not available for comment while out hunting when reached by News/North last week, and Alariaq declined to comment, in fear of further legal action by Polar Supplies.

Some Cape Dorset community members have criticized Polar Supplies for taking these matters to court but the company has no choice, Cooper said.

"A lot of this is about economic survival," he said of the company, which is currently in bankruptcy proceedings, working with its creditors to restructure its debt. "The problem of course is that it is getting tougher because less and less work is going to them and more and more work is going to the Hamlet.

"What these actions are--these various lawsuits that Polar Supplies has started--are reactions to the Hamlet doing work that has to be done by private enterprise.

"There's an ongoing problem with the Hamlet of Cape Dorset using public money for private purposes and of course that has an impact on the private companies that don't have access to the public coffer."

Polar Supplies is now planning to procedurally merge the lawsuits against the Hamlet into one, hoping to reach a settlement with the Hamlet's counsel outside court.

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