Legal dispute launched in Pan Am stadium project

A legal dispute launched by subcontractors involved in the construction of Hamilton’s Pan Am soccer stadium reveals serious problems with the business practices of foreign contractors undertaking major public projects in Ontario, according to firms involved in the action.

"We were told to either accept that they weren’t going to pay $130,000 of time they already previously signed off on and then we would be paid the rest of our change orders, or we could accept nothing and go through the legal process," alleges Sean Martin, Reimar Forming and Construction operations director.

Reimar filed a $130,000 property lien against Bouygues Building Canada Inc., the general contractor building a new $147.5 million soccer stadium in Hamilton for the Toronto 2015 Games.

Infrastructure Ontario (IO) awarded a contract to design, build and finance the 22,500-seat stadium to Ontario Sports Solutions in October 2012.

The stadium was scheduled to open in July 2014, but experienced delays. Reimar helped complete the stadium for a Hamilton Tiger Cats’ game against the Toronto Argonauts on Labour Day.

"We had our initial concrete package on the project, and then we stayed on to help facilitate the ongoing work to a much larger extent than our original contract," said Martin.

"So, we had carpenters and labourers on site daily doing whatever the general contractor had required of us to help move things along. We had between a dozen and 30 to 40 people on site at a time working entirely on a time and material cost plus basis."

Martin said communication and interaction with Mississauga-based Kenaidan Contracting Ltd. was very positive. The change orders were issued daily, after the approval of time sheets.

However, Reimar claims French-owned Bouygues Building Canada Inc. arbitrarily denied one of their change orders for overtime.

Brascon Stainless Steel Fabricators had a similar experience with Bouygues while fabricating and installing guard rails around the perimeter of the stadium.

The subcontractor is also taking legal action against Ontario Sports Solutions for a claim worth $133,000.

"They presented us with an arbitrary back charge list," alleges Scott MacKenzie, custom sales and installation vice-president.

"We attempted to negotiate that with them in fairness, and made them an offer for 75 cents on the dollar (Brascon gets 25 cents per dollar) on the back charge list, which they did not accept."

MacKenzie said there was little negotiation on the part of Bouygues, but another offer was made for about 99 cents.

"It just got to the point where we said ‘we just can’t go any further,’" he said.

"We just felt they were not being reasonable and that was not fair. So, we decided to put a lien on the project and let the courts deal with this later."

Brascon was paid in a timely manner, before this payment issue at the end of the contract.

Brascon also has a very good relationship with Kenaidan.

In terms of legal proceedings, MacKenzie said the lawyers are just getting into exchanging paperwork with regard to statement of claims and defence claims.

According to MacKenzie, other subtrades had work approved on the fly and then they would be offered cents on the dollar.

MacKenzie has serious concerns about the business practices of foreign contractors and IO’s procurement process for major public projects.

"It’s just not fair for these big contractors to come in and everybody is jumping through hoops to try and make this project happen for them and at the end of the day they renegotiate things," he said.

He questions the practice of awarding multi-million dollar contracts to foreign companies, when there are Canadian and Ontario companies that can do the work.

Martin agrees.

"It about handling yourself with integrity, which is the cornerstone of the construction industry in Ontario," he said. "When that falls apart, especially with a company that could pack up and leave and doesn’t have integrity as being paramount to their future, that scares us."

Four subcontractors including Clifford Masonry and Lancaster Group filed property liens worth more than $2 million in unpaid overtime and services against Ontario Sports Solutions. Clifford has the largest claim at more than $1 million.