The B.C. Supreme Court decision in Heyes highlights the potential legal risks when an owner selects less expensive construction methods that result in significant disruption to neighbouring businesses.
Susan Heyes Inc. (“Hazel & Co.”) operated a small store along Cambie Street in Vancouver. She was informed that the Canada Line would be constructed using a bored tunnel which would have minimal impact on the street surface. She renewed a five-year lease. However, the proposal that was eventually selected required excavating a trench from the street surface to the depth of the tunnel floor, reducing construction costs by more than $400 million. Businesses were advised that the trench would not be open in any particular location for more than three months. In reality, the trench was open in some locations for up to eight months.
Hazel & Co. sued for damages for negligence, negligent misrepresentation and nuisance. The Court dismissed the claims for negligent misrepresentation and negligence, but awarded her $600,000 in damages for the lost profit it suffered due to nuisance.
The decision is currently under appeal to the B.C. Court of Appeal and there is also a separate class action lawsuit made up of other businesses in similar situations before the B.C. Supreme Court.
Reprinted with permission from Construction Business magazine, July/August 2010.
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