By John Shmuel
Ryerson has settled a lawsuit that could have cost the school a whopping $10 million.
In February of this year, Aecon Construction Group, Inc., the company that built Ryerson’s George Vari Engineering and Computing Centre, filed a statement of claim against the university for two sets of damages worth $5 million a piece.
The company alleged that Ryerson did not include the necessary information in the building contract, and that the school failed repeatedly to make decisions on time.
The claim was settled in June, according to Aecon’s VP of Corporate Affairs, Mitch Patten.
“The disputes outlined in the lawsuit have been settled between Aecon and Ryerson University,” he confirmed.
Ian Hamilton, director of Campus Planning and Facilities, said it’s common for lawsuits or contract disputes to occur after a building project has been completed at the university.
“Every project that we’ve had has ended in a settlement, though none have gone to litigation,” he said. “Unfortunately it seems to be a normal part of dealing with the construction industry. You have to make sure at the end of a project, everyone’s issues are addressed.”
Sheila McKinlay, a Toronto lawyer with 20 years’ experience in insurance and construction cases, corroborated Hamilton’s statement.
She added, however, that the size of any suits or settlements occurring after construction is sometimes a result of the owner’s handling of the project.
“If it’s keeping an eye on the project as it’s unfolding, a good owner will usually resolve disputes along the way,” she said.
She added that $10 million was a relatively sizeable sum for a project of this scale.
In May 2003, when construction of the $49-million engineering building was first announced, builders scheduled a completion date for June 30, 2004.
However, in court documents obtaned by the Eyeopener, Aecon claimed that delays resulting from poor planning and last-minute changes by Ryerson forced it to push back the projected date of completion.
Aecon alleged that Ryerson failed to pay additional costs the builder incurred after it accelerated work to meet Ryerson’s desired completion date.
This isn’t the first time that the building’s construction setbacks have come to light.
Last year its sprinkler system burst, flooding the fourth floor only a few days after it had been completed.
That resulted in a $102,000 insurance claim against Aecon by Ryerson’s insurance provider, the Canadian Universities Reciprocal Insurance Exchange (CURIE).
In February of 2007, while negotiations for a settlement were underway between Aecon and Ryerson, Aecon filed the $10 million claim, alleging any problems with the building arose from poor planning on Ryerson’s part.
But the claim was never served after all outstanding contract disputes were settled in June.
“We settled the disputes to a successful conclusion,” Hamilton said, “which resulted in us mutually releasing each other from all future claims.”
Neither Hamilton nor Patten were allowed to disclose the terms of the settlement, but Hamilton indicated it was significantly less than the claims filed in court.
“It was orders of magnitude less than what was [filed in the claim].”