City required to chase after missed games money for Ticats
'If there is litigation surrounding this dispute, it could drag on for years,' lawyer says
The City of Hamilton won't be on the hook for damages owed to the Ticats for missed home games because of stadium delays. But they will have to be the legal muscle to get Bob Young the money he's owed.
And the process, according to one Hamilton legal expert, could take years. With four major parties and several separate contracts involved, it's a complicated question as to who owes what to whom and how they get their money.
There are muddied waters over a muddy construction site that could be as much as two months behind schedule.
Gowlings partner Louis Frapporti said that "almost without exception" contracts with damage payouts, like that between the city and the Ticats, draw out into lengthy litigation that can take years.
If there is litigation surrounding this dispute, it could drag on for years- Legal expert Louis Frapporti
At issue is a delayed stadium opening that has forced the Ticats to move at least a pair of home games to McMaster University's 6,000-seat facility. The building was supposed to be ready for July 1, but delays are forcing the team to play elsewhere, costing the Cats lost earnings.
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- New stadium won't be ready for first Ticats games
The stadium license agreement between the city and the Ticats had a clause in case the team couldn't play, which essentially said the team was owed $1 million in damages for each home game.
City must collect Ticats' money from builders
But the who and the how of the payment wasn't exactly clear. Ticats CEO Scott Mitchell declined to talk about the legal matter when news broke Monday that the stadium would be delayed. CBC Hamilton asked Frapporti to interpret the contract, available on the city's website.
Frapporti said the Ticats are owed "up to" $1 million per missed home game, and it's up to the city to collect from its sub-contractors, which in this instance is Infrastructure Ontario (IO) and construction conglomerate, Ontario Sports Solutions (OSS).
If the third party contractors don't pay up, the city won't owe the Ticats anything — as long as the city can show they made a "diligent" effort at getting the Ticats money, according to their licensing agreement.
"There may not be any dispute as between the team and the city, but the city will have to pursue its contractors and or others in relation to the delay," Frapporti said. "This agreement would seem to require the city to pursue those third parties."
Coun. Ferguson calls it a 'cascading' effect of contracts
But that doesn't take into account what contract the city has with IO, and what contract IO has with OSS and any contract OSS may have down the line.
Coun. Lloyd Ferguson of Ward 12 called it a "cascading" effect of contracts. He said it's unclear what could happen next without knowing private contracts that are down the line between IO, OSS and individual contractors.
"It depends what IO did. We don't have a contract with the builder," Ferguson said.
IO, meanwhile, has continuously said that taxpayers won't be on the hook for cost related to the missed games, passing the buck to OSS in a statement released Monday when the games were pushed back.
"Ontario taxpayers are not responsible for additional costs related to the completion of the project. The private company, Ontario Sports Solutions, is responsible for building the stadium and is accountable for delivering the project," read the statement from John McKendrick, executive vice-president of major projects at IO.
An additional complication is that should that $1 million figure not hold up, the figure owed becomes the amount of "provable damages" that the team can show it has suffered.
Legal expert: 'It could drag on for years'
That means that while the Ticats are owed money, there could be a lot of litigation before anyone deciphers who pays who, and how much.
Frapporti says figuring that out will stretch out the timeline of any payments to the Tiger-Cats.
"If there is litigation surrounding this dispute, it could drag on for years," Frapporti said.
There's one more wrinkle in the contract that Frapporti found: if the city collects more than $1 million per game from contractors, they can keep the surplus.
"Theoretically the city could recoup more than $1 million per game, and be entitled to keep that," Frapporti said. "The city may have its own damages."