BANFF – A group of contractors who helped complete a multi-million dollar renovation project at the Banff Centre will have to absorb $450,000 in losses as part of a negotiated settlement to solve a legal dispute between Bird Construction and the Banff Centre.
In a letter obtained by the Outlook, Bird Construction told contractors it reluctantly accepted a $1.3 million loss for cost overruns and missed deadlines related to the renovation of Lloyd Hall.
“Had we not brokered this agreement the legal process would have been lengthy and expensive, with an unpredictable outcome,” the letter states.
“Bird would have had to enter litigation against the Banff Centre, and you would have had to litigate against Bird.”
Despite accepting the loss, Bird remained steadfast that if the dispute had gone to court it would have likely won, but in the interest of reducing hardship and expediting payment to its contractors it opted to accept the loss.
The Banff Centre said it was disappointed to learn Bird did not pay the subcontractors to their satisfaction and reiterated its dispute was with Bird, not the subcontractors.
“The renovation of Lloyd Hall took much longer than originally planned. The project was delivered over seven months late by Bird Construction and, as a result, was completed significantly over the budget provided by Bird Construction,” wrote Rosemary Thompson, vice-president of marketing and communications for the Banff Centre.
“Banff Centre’s dispute with Bird Construction was over responsibility for this delay and the costs associated with it, as well as Banff Centre’s contractual obligation to pay certain other amounts billed by Bird Construction to Banff Centre.”
The simmering legal dispute first became public in the spring after Bird placed a $4.4 million lien against the Banff Centre for allegedly failing to pay it for renovating Lloyd Hall, a $20 million project completed in January.
Eleven subcontractors followed suit by placing separate liens against the property, including six contactors from the Bow Valley.
According to Thompson, the Banff Centre spent seven months negotiating an agreement with Bird and the settlement represents a reduction of just over two per cent of the amounts billed by Bird to the Banff Centre.
At least one contractor, who wished to remain anonymous out of concern it could hurt its relationship with Bird, said he lost tens of thousands of dollars including legal fees and interest.
“It’s a good chunk of my year’s salary. It hurts big time. Basically I worked that year, I don’t want to say for nothing, but almost.”
He slammed the Banff Centre for allegedly failing to pay Bird for work it had approved and vowed to never help renovate the Banff Centre again.
“It needs to be stressed that these were all 100 per cent approved change orders that they backed off on paying and they were fully aware of the timeline because they were the ones that dictated the timeline, not Bird.”
Adrianna Worman, a lawyer with Schuettlaw, which primarily focuses on construction law, described the settlement as a common resolution.
“At the end of the day, very few cases actually go to trial, especially with construction disputes,” said Worman, explaining it’s often not worth going to trial because of the amount of money and time it can take.
While Bird and the Banff Centre may have resolved their dispute, she said contractors who believe they are still owed money can make a claim against Bird if a resolution hasn’t already been reached, however in most cases that doesn’t happen.
“From what I’ve seen, usually the promise of future work and maintaining that relationship is a stronger incentive to just accept the payment that you’re offered,” said Worman.
Ron Remple, executive director for Bow Valley Builders and Developers Association (BOWDA), commended the contractors that decided to file liens and defended their workmanship.
“My understanding with the dispute is that it was not an issue with performance of the trades … they did their work,” wrote Remple.
“The issue was apparently between Banff Centre and Bird, and the trades got stuck in the middle. This obviously has significant financial impact on the trades since their payment was delayed and then they didn’t get full value for the work that they had done.”
Bird did not respond to an interview request.
