Details emerge in Fort McMurray condo construction lawsuit
Journal of Commerce
by Richard Gilbert
04 April 2011

The owners of a condemned condominium in Fort McMurray, Alberta have released new details about a lawsuit filed in provincial court against the developers, consultants and municipal authorities involved in the construction of the project.
The owners of a condemned condominium in Fort McMurray, Alberta have released new details about a lawsuit filed in provincial court against the developers, consultants and municipal authorities involved in the construction of the project.

A recently released court document shows the corporation representing owners of units in the Penhorwood condominium are seeking $5.5 million in general and punitive damages from a number of defendants.

The amended statement of claim dated Feb. 10 argues that the apartments on Penhorwood Street have had ongoing structural problems since they were built in 2004.

“The foundation footings were placed too shallow, do not meet the requirements of the Alberta Building Code and are subject to frost heaving in the Fort McMurray climate,” said the statement of claim.

“Further, the compaction of the soil underneath the footings does not meet the geo-technical requirements of the developers’ own engineers.”

“The foundation was designed and built without control joints, and as such is highly susceptible to uncontrolled cracking,” it said.

The Penhorwood Place Condominium Corporation announced on March 23 that residents would not be allowed to ever enter any of the structures again, for any reason.

About 300 people were evacuated from the Penhorwood condominium in the late evening a couple of weeks earlier, after an engineering report detailed problems with buildings in the168-unit complex.

Fencing was put in place around seven condominium buildings and warning signs were prepared.

“The holes that were cut in the ceiling joist webs, to allow for the routing of mechanical and electrical service conduits, were too large and in the wrong direction, which detrimentally affects the structural integrity of the buildings,” said the statement.

Citing a long list of structural deficiencies, the condo owners claim the developers breached the terms of the purchase agreement and their statutory duties to the owners.

It is alleged they failed to design and construct the project in a manner that complies with the Alberta Building Code and directives issued by the Regional Municipality of Wood Buffalo (RMWB).

The first defendants named in the court document are linked through their participation and ownership in a number of registered corporations.

Collectively, defendant Gary Nissan, Evan Welbourn and David Marshall were the majority shareholders in 970365 Alberta Ltd., Prairie Communities Corporation and Dome Britannia Properties Inc.

It is alleged the developers breached their contractual obligation and warranty to repair any construction deficits within thirteen months of the possession date.

Other defendants in the case are key participants in the construction process, including architects (Archiasmo Architectural Works), quantity surveyors (Cuthbert Smith Consulting Inc.) and the engineers involved in geo-technical, structural, electrical and mechanical work (Earth Tech Canada Inc. and Kneppers Consultants Inc.).

The owners claim they did not discover the alleged breaches of contract and the extent of the deficiencies until engineering reports were commissioned and delivered in August 2005, March 2006 and November 2006.

Finally, the owners claim that the RMWB and its safety officers breached their statutory and common law duties, by failing to ensure the project met the specifications of the Alberta Building Code and the terms of the building permits.

The statement of claim alleges that the RMWB knew about the deficiencies, unsafe conditions and violations. However, it allowed construction to continue and people to occupy those units.


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