November 16, 2011

Lawsuit over BC Place roof steel heating up in court

RICHARD GILBERT

staff writer

A legal battle over the supply and installation of the steel cables for BC Place Stadium’s new roof is heating up between steel construction contractor Canam Group Inc. and a French based civil engineering firm.

Freyssinet Canada Ltee recently filed a $6.5 million lawsuit in B.C. Supreme Court against Structal- Heavy Steel Construction (Structal), a business unit of Canam Group Inc., as well as general contractor PCL Constructors Westcoast Inc. and site operator B.C. Pavilion Corporation (PAVCO ).

According to Freyssinet’s statement of claim, the two companies submitted a collaborative bid for improvement work at BC Place, which agreed upon the division of the scope of the work to be undertaken.

“Canam would be responsible for the supply and erection of the steel structure, Freyssinet would be responsible for the supply of the cables and the cable erection would be shared between Canam and Freyssinet,” said the court document.

“Freyssinet’s role in relation to the cable erection would include providing training and supervision to the workers erecting the cable and providing foremen for certain tasks.”

After Canam was awarded a $123 million contract by PCL to supply and erect the roofing steel structure and cable system for the project, Freyssinet and Canam negotiated a subcontract.

The scope of the PCL/Canam contract was broader than the subcontract, because the work included the supply and installation of the structural steel for the roof. The subcontract involved the engineering and fabrication of the structural steel cables, but did not address the installation of the cable.

PAVCO negotiated a $458 million fixed-price contract with PCL Constructors Canada Inc, the primary contractor on the project. Freyssinet began work in July 2010 and signed a $30 million dollar subcontract with Canam on Aug. 23, 2010, which was backdated to Nov. 20, 2009.

“However, the subcontract was signed without Canam and Freyssinet agreeing on the cost of the erection work budget,” said the court document.

Freyssinet claims Canam breached the terms of the subcontract shortly after work began, by carrying out a series of unilateral decisions that caused time delays and cost escalation on the erection of the cable.

For example, Freyssinet claims Canam deployed labour and equipment without their consent or knowledge, and interfered with the work of foremen.

The statement of claim said Canam “permitted rates from Montacier International, a company related to Canam, for labour for erection of the cable, which were higher than agreed upon.”

Freyssinet claims Canam “failed to keep accurate records of labour and equipment allocated to the erection of the cable, and instead wrongfully allocated labour and equipment costs used in the erection of the structural steel to the erection of the cable.”

It is also claimed that Canam announced in November 2010 that it would “follow an alternate method of erection of the cable, without consulting Freyssinet and without Freyssinet’s consent.”

Canam alleged that the cost of the erection of the cable was significantly over budget and is seeking compensation for damages from Freyssinet.

During the first quarter of 2011, Canam reported a liability in the amount of $34 million due mainly to cost overruns for the completion of the cables for the retractable roof at BC Place.

The quarterly financial statement reported a net loss of $39.7 million, for the first quarter ending March 26, 2011.

Freyssinet claims Canam wrongfully ceased payment for invoices and is demanding payment for outstanding invoices. The company also denies it owes Canam any amounts because there was no agreed upon budget.

The supply and erection of the cable was completed in May 2011. Freyssinet filed the lawsuit on Oct. 31, which alleges Canam Group was responsible for a breach of contract, breach of statutory trust and equitable fraud.

Both PAVCO and PCL were contacted and declined comment on the matter.

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