More than a year after the station entered service, Pioneer Village remains at the centre of a messy legal dispute that could see Toronto’s transit agency on the hook for hundreds of millions of dollars.
The principle players in building the station are blaming each other for delays to the project. Walsh Construction, the company that built the station, has sued the TTC and is seeking $218.8 million for alleged breach of contract, negligence and amounts owing. The TTC denies the claim and is countersuing Walsh for $22.4 million for delays it says the company is responsible for.
The transit agency has also filed suit against the consultants it hired to design the station, a firm called the Spadina Group Associates, alleging they breached their contract by supplying faulty plans. The consultants deny those claims.
The court documents related to the Pioneer Village litigation provide a rare glimpse into the mess that unfolded behind the scenes as the TTC attempted to complete its biggest expansion project in decades.
Keeping with agency policy, the TTC and its board only debate ongoing litigation behind closed doors. The result is that while the delays that beset the Spadina project are public knowledge, many details about what allegedly went wrong are not.
While issues that led to delays weren’t confined to Pioneer Village, according to John Parker, a former city councillor who sat on the TTC board between 2010 and 2014, the stop was a major source of concern.
In an interview this month, Parker recalled construction of the station was so troubled that for a time the TTC considered starting service on the extension but having trains bypass Pioneer Village station if it couldn’t be ready by opening day.
“There were some very tense meetings between TTC management and the contractor, and it was clear that things weren’t going to be completed according to the plan. Then the question became, what do we do about that?” he said.
Maria Augimeri, another former councillor and board member who was chair of the TTC for most of 2014, said the board was stunned to hear staff reports regarding delays at the station, adding: “I was nervous that it wasn’t going to open as the others would open.”
The TTC contracted out the construction of sections of the six-stop, 8.6-kilometre subway extension to different companies.
In 2011, Walsh, the Canadian subsidiary of a Chicago-based firm with more than a century of experience, landed the $165.9-million contract to build Pioneer Village, which would straddle Toronto’s northern border on Steeles Ave., between Keele and Jane Sts.
Walsh was supposed to have the station substantially complete by Nov. 5, 2014, but the company says it didn’t finish until June 15, 2017 — 953 days late.
According to a 2017 statement of claim Walsh filed in its lawsuit against the TTC, the company blames the delays on the transit agency, which it says provided “incomplete, inconsistent, unconstructable and unco-ordinated” designs for Pioneer Village.
Walsh claims the plans were so deficient they required more than 3,100 revisions over the course of construction, “many of which included multiple revisions” to the same design. The company alleges the TTC issued 445 changes to the station contract, but refused to fairly compensate Walsh for increased costs the company incurred in changing the scope of the work.
Walsh also alleges it was unable to complete some of its work on time because the TTC mismanaged the project and failed to ensure other contractors doing related jobs finished on schedule, preventing Walsh from accessing work sites.
In a statement of defence filed in January 2018, the TTC acknowledged responsibility for 411 days of delay and says it already paid Walsh for them. The agency argues Walsh should be prohibited from seeking further compensation for those delays.
In the statement, the TTC asserts “Walsh’s claims are baseless and without merit,” and alleges the company was “unprepared or unable to carry out the work in accordance with the contract” and “fell significantly behind schedule from the immediate outset.”
In one allegation outlined in its statement of claim, Walsh says that in 2014 the TTC changed the layout of the station’s bus terminal, which by that point was already under construction, forcing the company “to demolish and rework a significant amount of work previously performed.”
Walsh’s claim also says there were problems with the station’s $1.9-million public art installation, an interactive piece designed to allow passengers to write messages on a display above the platform using keypads below that the TTC commissioned from a German art studio.
Walsh, which was tasked with overseeing its construction, alleges the TTC didn’t provide the prototype of the piece until the fall of 2015, after the station was already supposed to be finished, and when the agency did, the prototype was incomplete.
Walsh claims says because of the changes requested by the TTC the artwork took more than six years to design and install.
A court decision issued earlier this year about what evidence should be admitted in the Pioneer Village case shows that Walsh cited another alleged problem with the station’s design: deficient waterproofing that led to “trainway leaking.”
Walsh asked the court to order the TTC to provide information about leaks at Finch West station, another new stop on the Spadina extension, which was designed by the same consultants as Pioneer Village, arguing it was relevant to the case. The court agreed.
Finch West is also the subject of multi-party litigation.
The transit agency denies Walsh’s allegations against it, and in its statement of defence counters that the construction company “performed its work negligently and in breach of the contract.”
The transit agency alleges Walsh didn’t properly co-ordinate its work and that of its subcontractors, didn’t conduct proper inspections or correct defective work in a timely manner, and failed to employ adequate construction methods and techniques.
The TTC denies breaching the contract or acting in bad faith, and has filed suit seeking $22.4 million in liquidated damages from Walsh, the maximum allowed under the station contract.
As of last year, the value of the TTC’s contract with Walsh to build Pioneer Village had increased to $223.8 million, from the original price of $165.9 million, as a result of what an agency spokesperson described as “various changes” to the deal including “additional contract scope.”
In its statement of claim, Walsh, to support its allegation the TTC provided it with deficient designs, points to the fact that the TTC itself has sued the consultants who drew up the plans for Pioneer Village.
According to the TTC’s claim against Spadina Group Associates (SGA), the group, which is comprised of three companies, breached the terms of their contract by, among other allegations, failing to provide designs that “were substantially free of errors,” were prepared with the necessary degree of skill, and conformed with building codes and the TTC design manual.
The TTC is seeking $10 million in damages from SGA. The contract to design the station was originally worth $15 million.
In statements of defence filed in 2018, the companies that formed SGA deny the TTC’s allegations against them and state they didn’t breach their contract and weren’t negligent in the performance of their duties. The companies state their designs weren’t deficient, and any errors they did contain were minor and typical of any major infrastructure project.
“We have a very positive and amicable relationship with the TTC and continue to work collaboratively with them on a number of projects in the city,” said two of the companies that made up SGA, the IBI Group and LEA Consulting, in separate but similar statements. Each said they “are working co-operatively to achieve a resolution in the matter.”
The third company, a firm called WSP Canada, declined to comment to the Star, saying it couldn’t discuss ongoing litigation. But in its 2018 statement of defence the company said it “performed its work on the project in a competent and prudent manner in accordance with the prevailing professional standards in the Province of Ontario.”
Asked whether it was unusual for the TTC to sue companies it has hired to design transit projects, agency spokesperson Susan Sperling said the organization “has, in the past, made claims against designers for alleged errors and omissions.”
“While the TTC always attempts to mutually resolve these issues/disputes prior to litigation unfortunately in some instances a resolution is not possible,” she said.
In the Pioneer Village case, Sperling said despite the ongoing litigation the companies that made up SGA “have continued to work to ensure completion of the station” and none of the three “were prohibited from bidding (on) further TTC work based on their work on the Pioneer Village Station project.”
Walsh has also not been prohibited from working on other TTC contracts.
In a statement to the Star, a spokesperson for the company said it “strongly stands behind the quality of its work and is vigorously pursuing a fair resolution of its claims for which Walsh and its subcontractors firmly are entitled.” The company said it performed its work “honourably” and “under extremely difficult conditions.”
While the TTC could be tied up in litigation over the Spadina project for years to come, it may be the last subway extension the transit agency oversees. The Ontario PC government has passed legislation allowing the province to take over new subway builds in Toronto, citing the TTC’s poor management of past projects as one of the reasons Queen’s Park needs to step in.
But Sperling argued the delays and ensuing legal battle over the Spadina extension shouldn’t be seen as proof that the TTC can’t handle major projects. “Claims are not an indicator of whether a project is properly managed,” she said, adding that “every large construction project comes with unique challenges” and “the fact that parties can have disagreements is part of the normal process.”
Ben Spurr is a Toronto-based reporter covering transportation. Reach him by email at firstname.lastname@example.org or follow him on Twitter: @BenSpurr