Posted February 8, 2013
As the trial between the City of Guelph and its city hall contractor, Urbacon Buildings Group Corp drones on in Brampton, the multi-million dollar lawsuits testimony is increasingly becoming more revealing and complex.
It is not just one lawsuit, it’s five actions all rolled into one.
Number one is Urbacon’s claim for $19,164,181.71 for termination of contract in September 19, 2008 and the city’s counterclaim of $5,000,0000.
There is a separate suit against Aviva Insurance for recovery of a performance bond that was taken out when the project contract was awarded to Urbacon..
Architects Moriyama & Teshima are being sued by the city for $2 million.
Two actions brought by subcontractors including a payoff of $4,825,807,92 by the city to remove title liability. The city is suing for reimbursement from Urbacon.
How did this happen?
Evidence has shown that there were a number of change orders during construction that delayed the opening of the new city hall. Some of those orders came late in the construction cycle and were initiated by the architects. Others could have only come from city staff. This is where the waters muddy. It turns out that apparently council was not informed of these changes. Who authorized them?
When former Chief Administration Officer Hans Loewig closed down the contractor, ordering the company to remove workers and equipment, whom was he acting for? Did the Mayor and council know what was about to happen?
Did the city obtain a legal opinion of its action before firing Urbacon?
It is still too early to judge the outcome of this mess, as both sides will present more evidence. The trial was supposed to conclude before the end of this month but is now being scheduled into March.
Is former CAO Loewig going to be called to testify to his role in the action? As centerpiece of these lawsuits he should testify. Also is Mayor Farbridge going to testify as to her role in this termination?
The former Chief Financial Officer at the time, Margaret Neubaur, who was subsequently fired by Loewig, could provide testimony leading up to the reasons for terminating Urbacon.
My guess is that this will not be settled before judgment. That point has come and gone with the failure of a two-day mediation process in September 2012, aimed at settling the matter..
The bottom line is the taxpayers of Guelph have a potentially expensive settlement hanging over our collective heads. Our fate and responsibility will be in the hands of a judge once the trial is completed. That judgment will come sometime in the late summer or fall.
Whatever the outcome, taxpayers will be stuck with huge legal costs estimated to cost between $2,500 and $4,000 per week during trial, plus prep time and expenses. That does not count legal costs incurred since September 2008, the date of the termination.
Also, it does not include the cost of hiring two contractors to complete the new city hall and renovate the old city hall into a provincial courthouse.
The possibility exists that the judge finds for Urbacon. Then the legal costs of the trial and Urbacon’s counsel will be charged to the taxpayers.
Was this a case of political interference in a major construction project or a careless miscalculation of the fallout of such a decision?
What we do know is the buck stops at the desk of Mayor Farbridge.