No end in sight for airport’s legal dispute

Hey there, time traveller!
This article was published 06/01/2016 (3597 days ago), so information in it may no longer be current.

EllisDon Corporation has been in business since 1951 and has built billions of dollars’ worth of projects, including the Rogers Centre in Toronto and the massive Dubai Waterfront development.

It’s currently involved in more than $9 billion worth of projects, including the Eglinton Crosstown LRT in Toronto.

It also built the $585-million terminal building at Winnipeg’s Richardson International Airport.

That striking building has been widely heralded, winning awards and accolades for design and operational excellence. It was included on the most recent list of the 10 most iconic airports in the world by Travel Channel and recently won a Premier’s Award for design excellence.

It’s also the project that has generated the longest running and most expensive series of legal disputes in EllisDon’s 64-year history.

Both sides insist there is no acrimony. But whereas one side says it’s just the normal course of business, the other says that’s not the case.

“It is absolutely the biggest and longest legal battle we have ever had the misfortune of being tied up with,” said Steve Smith, head of EllisDon’s Ottawa office. “This does not happen. This is not normal by any stretch of the imagination.”

The latest legal skirmish commenced late last month with the Winnipeg Airports Authority filing a claim against the Mississauga, Ont.-based contractor for $6.1 million worth of work the WAA says it had to do which should have been completed by EllisDon.

No one seems to be able to put a finger on the cause of the outbreak of civil suits other than it started almost immediately out of the gate.

EllisDon won the contract in early 2007 and started work on the site Feb. 14, 2007. In May of that year, EllisDon ran into soil-stabilization issues on the original excavation that caused 20 weeks of additional work. It also caused the first of a series of legal disputes likely still years from being resolved.

A Manitoba appeals court upheld an arbitrator’s ruling the WAA is responsible for that slope-stabilization issue and will likely be on the hook for several millions of dollars in additional construction costs.

Even though the additional work was done in 2007, the actual extent of the financial impact won’t be determined until next summer at the earliest.

“The legal costs are staggering to us and to the Winnipeg Airports Authority, I’m sure,” Smith said.

He wouldn’t go so far as to say the WAA is digging in its heels when it comes to negotiating a settlement, but suggested it is still not willing to accept responsibility.

“We have not been able to successfully navigate those waters with the airport authority,” said Smith.

Through the whole process, Barry Rempel, chief executive officer of the WAA, has continually taken the high road: “We are advised this is the process. We would not be entertaining this action if we weren’t confident our team had documented all that was required to ensure a strong case.”

Ron Hambley, president of the Winnipeg Construction Association, would not speak directly to the disputes at the airport but said, among other things, there has been an industry-wide issue about the declining quality of construction documents contractors are expected to use.

“This appears to be a national issue,” Hambley said, adding a way to mitigate some of the confusion is to use standard contract documents.

“This practice is widely accepted across the country, but there are many notables locally that will not do this,” Hambley said. “In our view, the standard contracts provide fair guidelines for dispute resolution, minimizes delays and establishes the cost of changes.”

It’s not hard to imagine surprises arise on any construction site, big or small. The WAA had top-notch, professional advice the whole way through and Rempel said the WAA is heeding that advice when it comes to legal recourse.

Since the building has had a successful commissioning and early operational run, it’s hard to imagine such extensive legal costs are necessary.

martin.cash@freepress.mb.ca