DCN ARCHIVES

June 9, 2009

Legal Decision

B.C. court ruling could impact future construction

Change in construction method costs consortium $600,000

VANCOUVER

A B.C. Supreme Court ruling that awarded damages to a downtown Vancouver merchant for business disruption caused by a rapid transit line construction job will have ramifications for all public works projects, if upheld.

The court awarded $600,000 in damages to a maternity wear shop owner who claimed lost revenues as a result of four years of Canada Line construction in front of her business. Susan Heyes sued the City of Vancouver, provincial and federal governments, Canada Line Rapid Transit Inc, TransLink and InTransitBC, claiming the drop in business was caused by a decision to use a cut-and-cover construction method instead of a bored tunnel.

The method was used because it reduced cost by more than $400 million and had several advantages in terms of design, such as allowing stations to be closer to the surface.

“The reduction in cost was achieved by imposing an unacceptable burden on Hazel & Co,” said Justice Ian Pitfield in his ruling.

“A loss (of revenue) over four years resulting from the decline in sales and the reduction of approximately 50 per cent in gross profit caused solely by cut and cover construction, cannot be regarded as a tolerable or acceptable burden, which should be absorbed by Hazel & Co. as its contribution to the realization of a project of general public utility.”

“There is a serious concern about the impact of this decision on all public works, where people have a business that is adjacent or nearby the project,” said George Macintosh, the lawyer for the Canada Line partners.

“The social question is: Where does the cost lie at the end of the day?”

Any business nearby the work would argue the project budget should bear the cost. But, the farther you get away from the project, people are looking to the public purse to pay damages.

The cut and cover excavation of the street went down to a depth of six storeys, which blocked and redirected traffic.

It created dust, noise and a nuisance that drove people away from the businesses on Cambie Street, the court was told. Pitfield ruled that TransLink, Canada Line Rapid Transit and InTransitBC are jointly liable

The judge dismissed claims of negligence, misrepresentation and nuisance against the city of Vancouver, as well as the provincial and federal governments.

“From the ministry’s perspective, we will be analyzing the decision to see how it will affect the way we do business. It is too early to see if there are any implications right now,” said Jeff Knight, spokesperson for the B.C. Ministry of Transportation.

Macintosh thinks the ruling may make it necessary for governments to plan projects so that construction will minimize disruption, even if that proves the more costly option. Many are expecting the ruling to be appealed.

If upheld, the ruling will have significant ramifications for all public works projects because it challenges a fundamental and long-standing assumption that the benefits of constructing public projects outweigh any harmful consequences.

In the case of the Canada Line, an alternative to pre-cast tunnel sections was used, which involved the construction of forms in the trench for the tunnel floor, walls and roof, and the pouring of concrete in place.

Cut and cover construction is significantly less expensive than bored tunnel construction.

The consortium responsible for the construction of the Canada Line did not publicly disclose that the cut and cover method of construction would be used instead of a bored tunnel, the court found. In the early stages of planning, the general public was advised that the Canada Line would be located in a tunnel that would be bored or mined. There was no indication suggesting that a cut and cover method of tunnel construction would be employed on Cambie Street portion of the line.

The possibility of cut and cover construction was first raised by SNC-Lavalin/Serco in January 2004, when it responded to the Request for Proposals. But details were not released to the public because confidentiality agreements prevented disclosure of design proposals and cost estimates under consideration.

The TransLink board approved the proposal, based on a cut and cover trench in December, 2004 and made public the Environmental Assessment Office website. TransLink and Canada Line Rapid Transit LRT did not make a public announcement about the use of the cut and cover method.

Local media outlets first reported the change in construction methods a month later.

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