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Already embroiled in a landmark Supreme Court of Canada case, the City of Greater Sudbury now has another construction dispute on its hands.

Road Surface Recycling Ltd. (RSR) of Ajax, Ont., a company specializing in Hot In-Place Recycling (HIR) of asphalt pavements, filed a claim with the Ontario Superior Court of Justice on Oct. 4 seeking $1 million in damages, interests and costs from the city resulting from an alleged breach of contract on a pilot project.

These damages include, “increased costs for additional core sampling and unspecified testing, lost profits due to project delays, reputational harm, legal fees and administrative costs incurred in attempts to resolve the disputed matters with the defendant.”

RSR’s allegations have not been proven in court. As the matter is currently before the courts, the City of Greater Sudbury declined to provide any further comment at this time.

In its filing, RSR explained HIR was popular 20 years ago or so and was brought back into focus when Ontario’s Ministry of Transportation (MTO) found that current methods of conventional paving were not lasting as long as initially thought.

“When the MTO realized that recycling with HIR was the most economical and longest-lasting technique, they wanted to start using it again. RSR brought the equipment back to Canada, including a custom-built equipment train,” the company says.

The City of Sudbury was introduced to RSR during a Federation of Northern Ontario Municipalities conference hosted by Sudbury in 2019. The city entered into a contract with RSR for a pilot project involving the HIR of asphalt pavements on three roads in Sudbury. The total value of the project was approximately $1 million with an additional $800,000 budgeted for potential extra work.

The pilot project aligned with the city’s Climate Environmental Emergency Plan (CEEP) goals, since RSR’s proprietary technology is intended to reduce greenhouse gas emissions and overall project costs.

RSR says the experimental nature of the pilot project was always understood and would require “flexibility to address unforeseen issues.”

However, RSR claims the City of Sudbury, “materially breached the contract by unilaterally increasing the scope and frequency of core sampling and testing beyond that specified in the contract.”

This sometimes took the form of unauthorized sampling methods, including the use of loonies and quarters instead of proper instruments, RSR claims. Sampling and testing was undertaken without change orders or compensation for resultant delays and increased costs, violating what RSR says are “the principles of co-operation and fairness that are fundamental to public procurement contracts.”

RSR alleges the city acted in a manner both unreasonable and contrary to the successful completion of the project, causing lost profits. It further claims the city’s “deliberate efforts to tarnish RSR’s reputation” has resulted in RSR being either excluded from, or unsuccessful on, bids for other projects in the Greater Sudbury area.

As it stands, the pilot project remains uncompleted, RSR principal Frank Crupi told the Daily Commercial News.

“It’s still sitting there as we left it July 11, 2023.”

John Bleasby is a freelance writer. Send comments and Legal Notes column ideas to editor@dailycommercialnews.com.