News
1. Court Watch
Irving Shipbuilding
Maritime Associates International, Inc. (MAII), an American firm with offices in North Carolina, Florida, and British Columbia, is suing Irving Shipbuilding (ISI) for what it says is Irving’s “high handed” refusal to accept MAII’s work product.
At issue is the provision of water-tight doors and hatches for the six Arctic patrol boats being built by ISI. As designed, each of the six ships needs 98 doors/hatches and nine sliding doors. Each set of such doors is called a “Shipset.”
ISI put out a Request for Proposals for the doors, and MAII won the contract on July 14, 2014. The contract was subsequently amended three times in 2015. The total contract price was US$6,758,432, divided into six payments (one for each ship) of slightly more than US$1 million. “At the time, the Canadian dollar was very strong relative to the US dollar,” notes the lawsuit.
According to the lawsuit, MAII was to deliver Shipset 1 in March 2016, and for that MAII was to be paid US$1,123,072.
“MAII and its suppliers were ready and willing to comply with the projected delivery timetable, however ISI delayed in providing design drawings, delayed in approving revised engineering drawings and requested numerous changes in design between June 2014 and summer of 2016,” reads the lawsuit. “These delays and the change requests resulted in significant delays in the production schedule. This resulted in MAII incurring increased overhead costs and unanticipated supplier costs to accommodate the changes and carry the project costs for a longer than initially agreed period of time.”
Then, in August 2016, while the Shipset 1 doors were already under production at the factory of a Chinese subcontractor, ISI abruptly announced a two-month stop-work order. The Chinese company, Wuxi Halian Marine Fittings Ltd., said it had retooled its factory for the Canadian ship contract, and couldn’t use the factory for anything else while the door parts sat unfinished on the factory floor. Wuxi Halian therefore charged MAII an additional US$86,246.96 over the agreed-upon price.
(I wonder what percentage of the “Canadian built” ships are actually built in China…)
Despite the delay, MAII worked with ISI to accommodate design changes, and Shipset 1 was sent from China to Canada in November 2016 in two lots — one (the 98 door/hatches) delivered to a warehouse in Toronto close to ISI’s painting subcontractor, the second (the nine sliding doors) sent to an unnamed Halifax warehouse, waiting delivery to the waterfront shipyard.
“ISI acknowledged to MAII that changes and directions on work stoppage affected both the cost and delivery dates” under the contract, claims MAII. Therefore, the two companies came to a new negotiated agreement that was formalized in a February 1, 20i7 letter from ISI to MAII. That letter agreed to a a “supplementary payment” of US$171,393 from ISI to MAII for Shipset 1, and agreed to a new timetable for delivery of Shipsets 2 through 6, “upon receipt of a signed acknowledgement of the February 1, 2017 letter.”
“No time limit for response or expiry date was included in ISI’s February 1, 2017 proposal, though ISI did request that the components be available for pick up on February 8, 2017,” reads the lawsuit.
This is where things got really screwy, according to the lawsuit.
On February 4, 2017, which was a Saturday, “directors of MAII signed (before notaries) the acknowledgment requested by ISI in the February 1, 2017 letter, thereby accepting the terms. Unbeknownst to MAII management at that time, ISI had inexplicably sent a Notice of Default and revocation of its offer on the afternoon of Friday, February 3, 2017. ISI encountered transmission problems and failed in its attempts to fax the February 3, 2017 revocation/default letter. In fact, ISI never successfully faxed the letter, nor did it courier or mail a hard copy of the letter and therefore it was not served on MAII in compliance with the Agreement.”
MAII does say ISI sent an email copy of the revocation letter, but no one checked the company email on a Friday afternoon, and in any event, email wasn’t an agreed-upon method of notification in the agreement.
MAII says that Irving’s notification gave several reasons for revoking the contract, including failure to deliver the doors, failure to allow its books to be audited, and failure to give ISI access to the manufacturing plant in China. MAII rejected each of the claims.
Rather, says the lawsuit, “MAII further states that ISI terminated the agreement in retaliation for MAII’s requests for confirmed payment terms which differed from those proposed by ISI in January 2017 or alternatively, ISI sought to re-enter the market in hopes of securing lower pricing or different terms from a replacement subcontractor after all of the AOPS door/hatch design changes and issues had already been ironed out at MAII’s expense.”
Moreover, states the lawsuit: “As of February 3, 2017, the total price fixed under the Agreement (before supplementary payment) had increased by roughly $1.5 million CDN due to currency exchange rate fluctuation.”
ISI has simply “walked away” from the contract, refusing to pick up Shipset 1.
MAII wants the court to find that the February 1, 2017 letter is the official contract, and ISI must abide by it. Also, that ISI must pay all of MAII’s increased costs related to storage, etc., as well as “loss of profit” anticipated through the sales of Shipsets 2 through 6.
The claims in the lawsuit have not been tested in court, and ISI has yet to respond.
MAII has retained the services of Harry Thurlow, a lawyer with Cox & Palmer, so we know that at least some of the work related to the ship contract is actually carried out in Nova Scotia.
Shelburne School for Boys
Lawyer Mike Dull has filed yet another claim for a client who says he was sexually abused while at the Shelburne School for Boys.
Dull is representing dozens of men who are suing the province for abuse at the school and other provincial institutions.
In the latest claim, J.W. says he was placed in the school in 1990, when he was 12 years old, and lived there until 1994. During that time, he says, he “was subjected to mental, physical, and sexual abuse by the residents, agents, servants, and employees of the school.”
Hebron Hospitality
My pick for best sign from today’s picket at the Smiling Goat. pic.twitter.com/5bexZuhZnG
— Anarcats (@AdornoWasRight) March 31, 2018
Credit Union Atlantic has filed a $290,606 claim naming Hebron Hospitality Group, Inc. operating as Smiling Goat coffee shop, as well as a numbered company that is the guarantor to Hebron and Jagpreet Singh, who is the guarantor to the numbered company.
According to the Statement of Claim, on March 15, 2017, Hebron obtained two commercial loans from CUA — one for $265,000, the second for $34,920. As well, on that date Hebron obtained a $15,000 line of credit from CUA.
On June 111, 2017, Hebron obtained a third commercial loan from CUA, this one for $35,633.69.
All three loans were secured by Hebron’s “existing and after acquired assets and personal property,” and Jagpreet Singh signed a Guaranteed Agreement for the loans and line of credit.
According to the claim, the line of credit has been in default since April 6, 2018. The entire $15,000 is outstanding and $926.10 in interest has accrued as of February 6.
Additionally, all three loans have been in default since September 14, 2018. The first loan has $217,067.71 outstanding, with $5,848.25 in interest. The second loan has an outstanding balance of $20,140.29, with $550.42 in interest. The third loan has an outstanding balance of $30,251.08, with $822.15 in interest.
The claim hasn’t been tested in court.
2. Scud missile
“Nova Scotia taxpayers are likely to shell out tens of millions of dollars again this year to subsidize ferry service between Nova Scotia and Maine,” reports Jean Laroche for the CBC:
But, with a sailing season roughly four months away, the cabinet minister overseeing the file struggled to answer questions from reporters Thursday.
At one point in an almost 15-minute discussion about the service and its anticipated costs, Lloyd Hines even cast doubt whether the lease arrangement between Bay Ferries and the province remained valid. That’s because the original deal was to provide service between Yarmouth and Portland and not to Bar Harbor, the new port of call.
…
When a reporter challenged the minister that there was no guarantee of a deal, Hines offered an unusual bit of reassurance.
“You know, it kind of depends on how you define guarantee,” he said. “I mean we are very confident that this operation is going to go this year.”
“There is an element of uncertainty around what would happen if, I don’t know, whatever kind of SCUD missile came that that took the operation out,” said Hines smiling. “But at this point in time we’re quite confident that this is prudent expenditure of taxpayers’ money.”
Undoubtedly, soon we’ll be hearing that Nova Scotia Business, Inc. is extending $14 million in payroll rebates to Scud, Inc.
3. Scott Brison
The Bank of Montreal has hired former Liberal cabinet minister Scott Brison as its vice-chair of investment and corporate banking.
BMO says the longtime politician’s tenure in the federal government, his knowledge of global economic issues and private sector experience will be an asset for its capital markets division.
Brison will be based in Toronto and his primary responsibilities will include client coverage and business development.
He resigned from cabinet in January and stepped down as a member of parliament on Feb. 10 after representing the Nova Scotia riding of King-Hants for 22 years.
In announcing his departure from politics, Brison said he wanted to spend more time with his husband and their four-year-old twins.
Well, you know, it’s hard to make a decent living in Nova Scotia, so like many young people before him, Brison has to go to points west.
I’m really looking forward to Brison’s “Farewell to Nova Scotia” essay in The Coast.
Many commentators are rightly raising eyebrows at Brison’s departure from parliament, as it comes right in the middle of the trial of Vice-Admiral Mark Norman. Murray Brewster reports for the CBC:
[T]here’s been a steady drip of politically toxic allegations emerging from the case against Norman, the former vice chief of the defence staff charged with one count of breach of trust and accused by the Crown of leaking cabinet secrets.
His defence team has sought to drag Brison in because he was instrumental in the leak-prone cabinet meeting at the heart of the case. Norman is accused of leaking to the media the Liberal government’s decision at that meeting to put a plan to lease a supply ship for the navy on hold.
Norman’s lawyers alleged he tried to torpedo that $668 million leasing contract with the Davie shipyard in Levis, Que. on behalf of rival Irving Shipbuilding in his home province of Nova Scotia.
On Thursday, Brison denied — vehemently and more than once — that the case had anything to do with the timing of his decision to end his two decades in federal politics.
“Absolutely not. That’s a non-factor,” Brison told CBC News Network’s Power & Politics in a interview. “That’s a matter between the prosecution and Vice Admiral Norman. This is a family decision and my family comes first.”
Well, the family comes second. First BMO, second family, third president of Treasury Board…
Hey, wait… the president of the Treasury Board steps down and nearly immediately starts working for BMO?
Remarkably, I found only one lobbying contact between BMO and Brison when he was in office, and that dates way back to 2010, before he was appointed to the Treasury Board. Still, the optics of this are all wrong.
But I’m sure everything is above board here. Let’s all heave a sigh or a wish for Brison.
4. Taxi driver suspension upheld
“A cab driver accused of sexual assault won’t be allowed back on the job yet after he unsuccessfully appealed his automatic licence suspension,” reports Zane Woodford for StarMetro Halifax:
Seyed Abolghasem Sadat Lavasani, 74, was charged with sexual assault on Jan. 8. Halifax regional council’s appeals standing committee voted Thursday to deny Lavasani’s bid to have his licence reinstated pending his trial.
Government
No public meetings.
On campus
Dalhousie
Ada: A Self‑driving Laboratory for Accelerating Materials Discovery (Friday, 1:30pm, Room 226, Chemistry Building) — Curtis P Berlinguette from the University of British Columbia will speak.
The Darker Side of Imperial Belonging: The League of Coloured Peoples’ Social Activism in 1930s Britain (Friday, 3:30pm, Room 1170, Marion McCain Building) — Melissa Shaw from Queen’s University will speak.
Saint Mary’s
Saturday
Bangladeshi Night 2019 (Saturday, 6pm, McNally Main Theatre) — food and entertainment presented by the Bangladeshi Students’ Society. Tickets $30 at Loyola Tim Hortons.
Mount Saint Vincent
Classical Chinese poetry: Feel the beauty of Chinese language (Friday, 2pm, Keshen Goodman Library) — Tianyuan Yu will speak.
In the harbour
01:00: CSL Tacoma, bulker, arrives at National Gypsum from Delaware City
04:30: AlgoNorth, oil tanker, sails from Imperial Oil for sea
07:00: Skogafoss, container ship, arrives at Pier 42 from Argentia, Newfoundland
07:00: Nolhanava, ro-ro cargo, arrives at Pier 36 from Saint-Pierre
10:30: Skogafoss sails for Portland
11:00: YM Movement, container ship, arrives at Fairview Cove from Colombo, Sri Lank
16:00: Selasse, oil tanker, arrives at Berth TBD from Trois-Rivières
18:00: Oceanex Sanderling, ro-ro container, sails from Pier 41 for St. John’s
19:00: Atlantic Sea, ro-ro container, arrives at Fairview Cove from Norfolk
Footnotes
You don’t even want to know.
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Scott Brison was a banker when first elected to Parliament in 1997. He served in Parliament for 21 years.
Your position is that he should not be allowed to resume his former occupation upon leaving public office?
Parker, it sort of depends whether Brison’s duties include lobbying. Granted, Brison’s job title is a VP, but BMO says his “primary responsibilities will include client coverage and business development”. It’s not hard to imagine “client coverage” is merely another term for lobbying. It would be nice to know for sure, of course.
There is supposed to be a five-year “cooling off period” for ex-government officials after they leave their jobs and before they become lobbyists, although there are apparently a lot of loopholes, as “the five-year ban is only a ban on being a registered lobbyist, not on lobbying. Technical loopholes in the rules in the Lobbying Act and the Conflict of Interest Act allow the Prime Minister, Cabinet ministers, and senior government officials to be paid to lobby some federal government institutions the day after they leave office (and to lobby all government institutions one to two years after they leave).” https://democracywatch.ca/before-making-any-other-changes-make-the-5-year-ban-on-federal-lobbying-an-actual-ban-and-make-it-fair-and-strengthen-enforcement/
I was driving home from work when CBC Mainstreet played an excerpt of the interview when the Minister mentioned scud missiles. It struck me as an odd reference to use. Then after the clip, Mainstreet host Bob Murphy provided a deadpan definition of scud missiles, which made me laugh aloud because it slyly implied that this was a strange and out-of-place reference, and also implied that many listeners would be too young to understand the reference.
This is the same cabinet minister that said “safety” was the reason he would not allow municipalities to lower speed limits on roads within their jurisdiction.
I am not related to anyone in this story. Based on the facts described in the story ISI does not seem to have “clean hands” and really should pay for the shipsets ( including their storage costs) that MAII tried to deliver. I realize that Irving is the home boy. But they should not be let off because:
1) ISI ostensibly revoked its contract and the letter modifying the contract just 2 days after the letter was dated;
2) MAII signed the ISI letter 3 days after it was dated and issued by ISI, which is a reasonable time to accept the changes to a contract;
3) ISI never gave MAII notice of its revocation in the form that the parties had originally agreed upon in the contract;
4) ISI asked that the shipsets be delivered within a week of the date of its letter;
5)MAII did not receive the revocation in time to stop the shipping of the shipsets, which had already been fabricated and needed to be stored once they arrived;
6) The shipsets do not seem to be fungible goods that MAII can sell to some other buyer to mitigate the damages caused by ISI’s breach of the contract that ISI amended by its letter ( and MAII accepted the amended contract before ISI revoked the letter.)
The market of shipbuilders and their suppliers is relatively small and specialized. Having a reputation of trying to weasel out of contracts does not bode well for Irving in their future negotiations.
Apparently the Smiling Goat is now locked out of Bishop’s Landing. I feel bad for the two young guys who got wrapped up into the business with him.