2010-05-05
Mystery Over Lakeshore Lions Arena Litigation
Twenty construction firms had to file legal action in order to get millions of dollars in outstanding bills for work on the new Lakeshore Lions arena that serves as home to the Toronto Maple Leafs' and Marlies' training facility.

Known as the MasterCard Centre for Hockey Excellence, the Kipling Ave. facility, owned by the city and operated by the Lakeshore Lions, began triggering a string of construction liens late last year from companies claiming their invoices went unpaid after they completed their work.

The outstanding bills were settled in February.

But questions remain about the financial problems that triggered the crush of litigation against a high-profile list of defendants that include the city, the Lakeshore Lions and Maple Leaf Sports and Entertainment.

"A project of this stature dealing with organizations with the reputations they have, this isn't something you'd expect to see," said David Zurawel, vice-president of policy and government relations with the Council of Ontario Construction Associations.

"Some smaller (construction) companies could be operating on lines of credit for day-to-day cash flow. Normally, you wouldn't worry about getting paid by such large institutions."

Beverly Chapin, the lawyer for Lakeshore Lions Arena, declined comment on the litigation.

Bob Harris, president of the arena, also declined comment, saying he'd spoken with several other parties involved in the litigation who had agreed not to respond to the Star's interview requests.

The publicly owned rink is the first to be built in Toronto in two decades.

Doug McDonald, manager of business services for the city's Parks, Forestry and Recreation Division, said the city provided a loan guarantee to the Lakeshore Lions but was not responsible for paying construction firms.

"There must have been some financial difficulties," said Keith Juriansz, a Toronto lawyer representing two of the subcontracted companies that registered liens against the project. "Obviously, you don't like to see liens on high-profile projects."

One of his clients, Willsens Fine Cabinetry Ltd., alleged in a December statement of claim that more than $46,000 in millwork and carpentry it completed on the project was unpaid.

His other client, Selyans Flooring, claimed more than $140,000 in unpaid bills in a December statement of claim.

Both companies have agreed to accept a portion of their unpaid bills, Juriansz said.

The 24,480-square-metre (272,000-square-foot), four-pad facility was announced in 2008 as a $33.6 million project funded by the Lakeshore Lions "through private equity and fundraising efforts."

The Maple Leafs and Marlies invested $5.5 million for a 2,700-square-metre (30,000-sq.-ft.) training space for exercise facilities, medical and physiotherapy rooms, the release said.

MLSE was named in 14 of the legal claims, totalling more than $5.3 million in unpaid bills, before the debts were settled in February.

"This was an issue that was between Lakeshore Lions and (project contractor) Giffels (Corporation)," said MLSE spokesperson Rajani Kamath. "We were one of many tenants caught in the middle."

But among the liens specifically naming MLSE was a claim of more than $700,000 in unpaid work by Giffels.

In May of last year, MLSE hired contractor Giffels Corporation to complete improvements to the rink worth nearly $3 million, according to a statement of claim.

"Giffels has completed its obligations under the contract and invoiced MLSE accordingly," says a statement of claim filed in December. "Although MLSE has paid some of the amounts invoiced, the sum of $738,236.35 remains due and payable to Giffels."

The matter has been settled, said Giffels general counsel Colin Soule.

MLSE would not elaborate on the reasons why the payments weren't made until after litigation commenced.

Marando Painting Ltd., which was contracted to paint the arena, had more than $50,000 owing, said a November statement of claim.

The company received 97 per cent of the outstanding bill in a February settlement, says the company's lawyer Ernest Singer.

"I don't know if the job went over budget but I think that (Lakeshore) Lions Club didn't get the funds that they thought they were going to get," he said. "I think they were in a jam about where they were going to get all the money to do this."

Sprint-Insight Inc. signed a $5.9 million deal in 2007 to supply "mechanical systems" to the arena. In a statement of claim filed in November, it claimed $1.9 million was "due and owing" for its work.

More than $200,000 in sheet metal and aluminum duct work provided by Tam-Kal Ltd. was unpaid, according to the company's October statement of claim.

Bramdoor and Hardware Ltd. claimed an outstanding bill of more than $100,000 in court documents.

Superior Sprinkler Company Ltd. alleged it couldn't collect $94,951 for its work installing automatic fire sprinkler systems at the arena, says a statement of claim filed in December.

"The plaintiff has demanded payment of this outstanding amount, however, the defendants have failed to or refused to, and continue to refuse to pay the outstanding amount," the statement reads.

The debts in each case have been settled.






Source: Cribb, R.,'Mystery over Lakeshore Lions arena litigation' The Toronto Star (May 5, 2010).
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