Winnipeg Free Press - PRINT EDITION

Terminal legal woes

Contractor files lawsuit; WAA eyes countersuit

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Another multimillion-dollar volley has been fired in the escalating legal battle over cost overruns and delays in completing Winnipeg's $585-million airport redevelopment project.

The project's general contractor -- Ellis-Don Corp. -- has filed a civil suit in Manitoba Court of Queen's Bench against the Winnipeg Airports Authority Inc. in which it accuses the WAA of "negligent misrepresentation" in some of its tendering documents and seeks $10.8 million in specified damages as well as unspecified special damages, interest and court costs.

And it doesn't end there.

WAA CEO Barry Rempel said Monday the airports authority will be filing a statement of defence and a countersuit against Ellis-Don. Rempel wouldn't reveal what the WAA will be asking for in the countersuit, saying that will become clear when the suit is filed, likely early in the new year.

Even before the new lawsuit was filed, Ellis-Don and the WAA were embroiled in another legal spat over cost overruns associated with the excavation phase of the airport-terminal project.

That matter went to arbitration earlier this year and the WAA lost.

The two sides now have to come to an agreement on how much Ellis-Don is owed in that case -- a process Ellis-Don spokesman Steve Smith said Monday could take another couple of years to complete. Although the two sides haven't said what kind of damages Ellis-Don is seeking in that case, the judge who heard the WAA's unsuccessful appeal said it's "many millions of dollars."

The ongoing legal battles have taken some of the shine off the highly acclaimed airport terminal, which was designed by internationally renowned architect Pelli Clarke and opened late last month to rave reviews.

It's also been touted as the greenest airport terminal in Canada and one of the most energy-efficient buildings of its size in the world.

Even Rempel and Smith, who managed the construction project on behalf of Ellis-Don, said they couldn't be happier with the way the building turned out.

"I think it's one of the nicest airports in Canada," Smith said. "It's a beautiful facility."

Added Rempel: "It's a gorgeous building, a great building."

Rempel said airport officials aren't surprised by the Ellis-Don lawsuit and aren't particularly worried about it, either.

"When you have a project of this size, you always know there are going to be some disagreements. So we fully expected there would be some claims at the end of the project," Rempel said.

"It's got nothing to do with good company or bad company, good relationship or bad relationship," he added. "A claim is just a natural outcome of any major construction project."

He has said in past the WAA built contingency costs into the original budget to handle any unexpected expenses that might arise.

But he refused Monday to say how much is in the contingency fund.

A construction industry source said anyone familiar with the airport project also wouldn't be surprised to hear another lawsuit has been launched. He said there were signs early on it could be a contentious project, with problems surfacing even before the site excavation work was completed.

"I feel sorry for everybody involved," he added.

Smith said Ellis-Don filed the lawsuit -- details of which are in a 32-page court document -- because the WAA has refused to reimburse the company for the millions of dollars in unexpected costs it incurred in completing the project.

The lawsuit alleges most of the additional costs arose because of design changes the WAA made after the project was already underway and therefore are not the fault of the contractor.

Rempel refused to say what position the WAA will be taking in its statement of defence because the matter is now before the court.

Republished from the Winnipeg Free Press print edition November 22, 2011 A3

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