The development appears near complete: pedestrian passage on the waterfront is restored, including those infamous stairs, and the new hotel and restaurants are open.
It’s a 450,000 square foot complex consisting of offices, a hotel, residential tower, shops, restaurants, open public space and a “rising pier art installation building” called “Rise Again.”
But in the court system, Queen’s Marque is anything but a done deal, with the developer, a contractor, and a number of subcontractors fighting over metal panelling, glass and millions in unpaid bills.
Gamma Windows & Wall is suing Queen’s Marque, claiming it’s refused to pay up; Queen’s Marque is suing Gamma, claiming it missed all its deadlines on the project; and another company, Guildfords, is suing Gamma, claiming Gamma didn’t pay for its subcontracted work. None of the claims by any company has been tested in court.
The dispute with Montreal-based Gamma has been going on since 2020, when Queen’s Marque first alleged breaches of contract and negligence on Gamma’s part, leading to project delays, along with “overpayment, additional costs, additional fees paid to the Construction Manager, claims made by other trades, losses from delay, additional site management costs, additional financing costs, [and] loss of opportunity.”
Armour Construction Ltd., Scott McCrea’s development company, hired Gamma in 2018 on a $19.1-million contract for curtain walls and metal panelling to be installed by September 2019. The relationship between the two companies was strained throughout, heading to mediation processes on multiple occasions, and then to the courts.
At the end of 2021, Gamma believed its work to be substantially complete, but Bird Construction Group, leading the construction, provided a list of deficiencies. Queen’s Marque alleged that the metal panelling for the “Rise Again” building was not on site, but Gamma said it was. In February 2022, Gamma terminated its contract because Queen’s Marque wouldn’t certify its substantial performance and it wouldn’t pay the final instalments owed.
At about the same time, Apex Industries, contracted for framing, doors, and hardware, filed a lien for about $650,000, as noted in a Morning File in March. That matter has since been settled.
But Gamma filed a lien too, seeking $3.6 million.
Then in May, Guildfords filed a lien claiming Gamma owed about $850,000 for its work, namely “installation of glazing, cladding, including muntz panels, and the fabrication and installation of trims,” and “installation of perforated panels.”
The dispute has heated up in the past month, as lawyers for all the various iterations of Queen’s Marque — Armour Construction Ltd., Queen’s Marque Ltd., Queen’s Marque Developments Ltd., Queen’s Marque South Ltd., Queen’s Marque North Ltd., and The Residences at Queen’s Marque Ltd. — have buried Gamma in statements of claim, seven in total.
Gamma “improperly” registered its lien for an amount the company “knew was exaggerated,” Stewart McKelvey lawyer William Ryan wrote. Ryan alleges Gamma knew all along it would miss its deadlines.
“Despite this knowledge, Gamma’s leadership intentionally failed to disclose these facts and made deceitful statements and misrepresentations to Mr. McCrea, in his capacity as CEO of Armour, regarding Project completion and timeliness of Gamma’s work, upon which Armour relied ultimately to its detriment,” Ryan wrote.
“Throughout the Project, Armour continued to advise Gamma of the critical deadlines for occupancy of various portions of the Project and the impacts of missing the deadlines on financing and other agreements with hotel, tenants and residents. Gamma continued to deceive and misrepresent to Armour that Contract schedule milestones could be achieved.”
The delays meant Armour lost its tenants, leading the company to make a big investment. All the restaurants at Queen’s Marque, like Drift and Café Lunette, have the same owner — O&B Hospitality Group. Based on the statement of claim, Armour had to buy a stake in that company to secure it as a tenant.
“Certain occupancy dates were achieved during the early stages of the COVID-19 pandemic, at a period of economic downturn in the food and beverage and retail sectors. This interfered with lease agreements already in place, in some cases leading to termination of said agreements, and with lease agreements which were being negotiated during the construction of the Project, causing a loss of tenants,” Ryan wrote.
“In order to mitigate its losses and secure tenants for these spaces. Armour had to invest over $12 million to enter into a partnership with O&B Hospitality Group through Armour’s wholly owned subsidiary Freehand Capital Limited, to lease and operate 11 food and beverage outlets in the Project. This unplanned investment was required directly as a result of Gamma’s delays.”
Those some delays led to a late handover of the public space, including the stairs, to Develop Nova Scotia (now part of Build Nova Scotia), which Ryan claimed could harm Armour’s chances of securing future arrangements with the Crown corporation.
Likewise, Armour had to renegotiate its franchise agreement for the hotel, Muir, with Marriott three times, the company claims, potentially jeopardizing its ability to land future agreements. Armour has other hotel interests, like the renovated Delta in Burnside, also run by Marriott.
Armour claims Gamma had been paid in full throughout, yet it hadn’t been paying its subcontractors. That led to the aforementioned liens, and another one in June 2020 from Epic Glass Ltd., which Armour claims affected its financing for the project. Guildfords still hasn’t been paid either, Armour claims.
In a filing submitted by Armour’s in-house lawyer, Katherine Willyard, and Toronto lawyers Andrea Lee and Lena Wang of Glaholt Bowles, the company names Gamma and AIG Insurance.
That insurance company issued a $5-million construction bond on the contract between Gamma and Armour, essentially protecting Armour in the event Gamma didn’t complete its work on time. But when Armour applied to have AIG pay it out, the company said no, citing a “legitimate dispute” between Gamma and Armour.
Armour is seeking $8 million from Gamma and AIG, plus interest, and in its other filings, the company is seeking “damages in an amount continuing to be calculated and determined.”
Armours claim that it paid Gamma is important. First, each progress payment requires a notarized statement from Gamma that all subs were paid their share of previous Armour progress payments. Also it allows Gamma’s subs to file liens against Gama.
The Cdn Supreme Court previously ruled that contractors are not liable for payments to their subs until they get paid. Progress payments flow downhill. Without them cash dries up.
All for nought, building is an eyesore, an architectural mess.
Have you even been there?
Excellent article Zane.