The Toronto and Region Conservation Authority (TRCA) is facing a $32-million lawsuit from the contractor that built its acclaimed new administrative headquarters.
Billed as “one of the most sustainable and innovative structures in North America” at its official opening ceremony in April, the four-storey mass timber building was also marked out as a highlight of Toronto’s annual Doors Open event on May 25.
But in between those two occasions, Eastern Construction Limited — the contractor selected to lead the building project — filed for a lien on the property, following up with a statement of claim seeking $32.3 million for “breach of contract and/or as the unpaid price or value of the labour, construction, services, materials and work supplied by Eastern” for the project.
Eastern’s statement of claim, filed with the Ontario Superior Court of Justice in Toronto, blames TRCA for the late delivery of the project, alleging that “TRCA’s breach of contract and negligence also resulted in substantial delay,” pushing back completion from its originally planned date in December 2021 to March 21, 2025.
“Despite challenging construction conditions, extensive delays caused by events and circumstances that were either the responsibility of TRCA or otherwise beyond Eastern’s responsibility and control, Eastern constructed the Project in accordance with the Contract terms, resulting in a finished product that is a source of pride for both TRCA and Eastern,” the claim reads. “Notwithstanding both the end result and Eastern’s fulfillment of its contractual obligations, TRCA has refused to grant Eastern the compensation and scheduling adjustments to which Eastern is entitled under the Contract or otherwise at law.”
None of the allegations in the claim have been proven in court.
Eastern’s lawyer Howard Krupat — a partner with DLA Piper’s Toronto office — declined to comment, while TRCA provided an emailed statement saying they were aware of the claim.
“As we are actively involved in this legal matter, we are unable to provide comment at this time,” the statement continued.
After just a few months in operation, the TRCA building — located at 5 Shoreham Drive near the York University campus in the north end of the city — has already collected a string of accolades for its environmental credentials, including recognition from the Carbon Leadership Forum and the Canadian Green Building Awards.
In addition to its green roof and smart solar shading, TRCA highlights the building’s mass timber construction and wood-first design prioritizing wood as the construction material of choice for stairwells, elevator cores, and other structural components, as well as an open-loop geothermal system that improves heating efficiency compared to traditional closed-loop systems. Altogether, TRCA estimates that the reduction in carbon emissions associated with the building is equivalent to taking 240 cars off the road for a year.
However, issues with some of the structure’s environmental features were cited in Eastern’s lawsuit. For example, the contractor’s claim alleges that “lengthy and protracted decision-making” over the selection of the open-loop geothermal system “delayed key elements of the Work, including the start of the mechanical room.” Eastern claims a suitable subcontractor was in place in 2019, but that TRCA took until May 2022 to finally settle on its preferred system, while the necessary change order and negotiations were not resolved until May 2023.
According to board meeting minutes, TRCA initially approved a $65-million budget for the administrative building construction project back in 2015. The new building sits on the same site as its old headquarters, which had been built in the 1970s and had been long outgrown by TRCA’s staff, which currently number around 350.
After budget approval, TRCA then hired a team of architects to design the building before Eastern signed on to the project under a CCDC 5B Construction Management Contract in November 2017. In April 2024, the TRCA board approved an extra $9 million to fund the completion of the project, noting the impact that Covid-19 had imposed on costs across the construction sector.
Eastern’s claim alleges that the project got off to a bad start when TRCA was slow to obtain an early works permit, delaying the installation of rammed aggregate piers. In addition, the contractor alleges that the project was characterized by repeated and continual modifications to the design of critical path work, claiming that the contract entitles it to time adjustments for Covid-related supply-chain and shut-down delays.
Jiwan Thapar, CEO of JTE Claims Consultants, is frequently retained as an expert witness in construction disputes and says innovative building projects typically require a greater emphasis on due diligence in the pre-construction phase.
“When the contractor is on site, it’s very expensive to make major changes,” says Thapar.
“Very often, the owner wants to be creative, but they don’t understand how that creativity is going to unfold when you have 100 men on site with equipment, machinery and tools, all waiting for direction,” he adds, noting that it is still too early to draw conclusions about what happened in the TRCA case. “We’ve only got allegations from one side, so we will see what the other side has to say.”
