Lawyers for Cambie Forming Ltd. and a group of Concord Pacific companies including its general contractor Centerville Construction Ltd. has won the right in B.C. Supreme Court to obtain financial documents and information from a group of subcontracting companies and former Cambie employees whom they allege conspired to overbill on contracts.
"Cambie alleges that Martin Lo and (Bernie) Baier conspired with their family members to set up various companies to profit from overcharging Cambie for work. It appears that there were 11 companies established to bill Cambie for work," said B.C. Supreme Court Master Leslie Muir in her reason for granting Cambie access to financial data in late January.
Cambie is the forming company of the Concord Pacific group and in the hearing was represented by lawyers Lisa Martz and Kyle Ferguson, who also represented Centerville, Concord Park Ave. GP Ltd., Concord Met 11 Nominiee Ltd. and 0754999 B.C. Ltd., as the companies are involved in a countersuit as defendants by the subcontractors.
The subcontracting companies were set up between 2010 and 2014. Some of the companies have since folded (known as the Cedar Wing companies) while others remained active (the Yellow Pine companies).
Lawyer Jonathan Williams, acting for the subcontracting companies, plus Carmen Ka Mei Chiu and Paul Lo, said his clients challenge the claims made.
"They have made a number of allegations and we refute everything they say," he said.
Baier is being represented by lawyer Nathan Lapper while Lo made no appearance in court.
Williams said the defendant companies and related individuals have also filed a counter claim against Cambie and the Concord Pacific companies. They allege non-payment of services.
Cambie has yet to prove its allegations and the subcontracting companies and former employees in their countersuit have yet to prove allegations against Cambie and the Concord companies.
At Cambie, according to court records, Baier served as the former manager. Lo was the former manager of accounting and Lionel Lau is a former administrator. Paul Lo is the brother of Martin Lo, the husband of Carmen Ka Mei Chiu and the president and a director of Firewood Construction Ltd. and Elk Ridge Construction Ltd.
Chiu is a former employee of Cambie and the president and a director of Yellow Pine Construction Ltd., South River Construction Ltd., Lower Mountain Construction Ltd. and Accuform Construction Ltd. (The companies are part of the Yellow Pine and Cedar Wing groups).
Williams said a trial date is slated for late 2017 or early 2018 if an out-of-court settlement does not emerge in the civil dispute.
Master Muir used evidence rendered in the examination for discovery process of three of the five key individuals (Martin and Paul Lo and Chiu) to determine that Cambie should be allowed access to documentation from the companies and information from individuals involved. A court master presides over civil chamber matters and makes decisions about pre-trial motions and procedural orders.
Cambie is alleging in its civil suit that Lo, Baier and Lau breached their fiduciary duties and employment agreements to Cambie by directing form work to the defendant companies.
"Cambie seeks an accounting of the profits of the corporate defendants," Muir said.
According to the judgement, Cambie is also claiming against Chiu and Paul Lo for inducing breach of contract and knowingly assisted in the breach of fiduciary duties by Martin Lo, Baier and Lau. It is also claiming for negligent or fraudulent misrepresentation for allegedly representing an arms-length arrangement from Martin Lo.
Cambie is further claiming the defendant companies breached their contracts with the forming company by failing to perform in a good and workmanlike manner and to remedy defects. The company alleges the defendants caused delays, overcharged and misused its resources and is seeking damages.
"Finally, there are claims of conspiracy, unjust enrichment and waiver of tort against all defendants," the reasons for judgement stated.
However, the defendants characterize the claims differently.
According to the reasons for judgement, they maintain that unless Cambie can prove it has suffered some damage from the corporate defendants performing the work, there is no proper claim and the true claim is that of the defendants, who are alleging they have not been paid for services carried out.
Muir, hearing the case, said Cambie's claim rested upon gaining access to three broad areas of information: the control and formation of the control of the defendant companies, the profits made by the defendants (companies and individuals) and the corporate defendants mark-up on labour rates billed to the forming company.
The record showed that Paul Lo, described as a gardener, set up nine companies which he maintained after an examination for discovery were set up to do billing. Chiu testified that she got cheques from the various companies, deposited them in bank accounts and then transferred funds to Yellow Pine Construction Ltd. The record also showed that the account of Yellow Pine was at the TD Bank in Richmond where Martin Lo had asked Baier to attend to set up a bank account.
Muir maintained that providing documents and information on the formation and control of the companies was relevant to material facts.
The master maintained that Cambie should be allowed to determine whether companies made profits and where the profits went in order to pursue its claim. Muir said, in reasons, there was evidence that also showed a third party forming company Limache Contracting Ltd. worked on Cambie projects but didn't bill Cambie directly but rather sent invoices to Cedar Wing Companies "which then marked up the amounts of the invoices by 40 per cent."
"There is also evidence that the accounting software used by Cambie, which was managed by Martin Lo, was set up to disguise the payments as payments to Limache," Muir reasoned.
Muir also ruled that documents relating to labour rates were "clearly relevant." She said Cambie brought evidence that a pay record for a semi-skilled labourer showed he was paid $21 per hour by Yellow Pine Construction Ltd. but was billed to Cambie at $29.40, while a carpenter's helper was paid $22 an hour but was billed to Cambie at $33 per hour.
Muir's judgement can be found by Googling Cambie Forming Ltd. v. Accuform Construction Ltd. 2017 BCSC 127.