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West Terra Projects contractor sues client over B.C.’s Grace Islet project

Edmonton businessman Barry Slawsky hired West Terra Projects to build a house on Grace Islet, a small island just off Saltspring Island, B.C., in 2014, and sold the property to the province less than a year later.

John Lehmann/The Globe and Mail

A Victoria contractor hired to build a retirement home on a picturesque islet that was once an aboriginal burial site is suing his former client, saying he lost out on business by being tied to a project his client knew would never be completed.

David Yager, of West Terra Projects Inc., alleged in a lawsuit filed on Jan. 27. that his company was kept in the dark as the property owner, Edmonton businessman Barry Slawsky, negotiated with the B.C. government after controversy erupted over the building.

Instead, Mr. Yager claims that Mr. Slawsky continued to make changes to the original house design that steadily increased its value. His suit claims Mr. Slawsky did this in an effort to pressure the province into paying a higher settlement.

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"The defendant made change orders to the project, with the intention of increasing the budget of the project so that he could negotiate a higher sale price of the land to the provincial government," the statement of claim says.

The allegations have not been proved in court.

The lawsuit notes that Mr. Slawsky originally purchased Grace Islet, a small strip of land just off Saltspring Island, in 1990. At the time, although Grace Islet had been registered as an archeological site, it was zoned residential.

In the summer of 2006, kayakers discovered ancient human skeletal remains on Grace Islet, leading the province to commission an archeological impact assessment in 2010 that identified 15 rock features that may be burial cairns.

Still, Mr. Slawsky was able to obtain a building permit in 2011, and his lawyer noted that the provincial archeology branch approved the building plans, which were designed to protect the burial cairns.

Neither Mr. Slawsky nor his lawyer returned a request for comment Wednesday.

In May, 2014, Mr. Slawsky hired West Terra Projects to build his house. Mr. Yager and West Terra signed a contract for construction to begin in June and be completed within 10 months, at a cost of $1.1-million.

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Local aboriginal groups objected to the construction site, and the Capital Regional District pondered whether to expropriate it.

However, Mr. Yager's claim states that between June and September, Mr. Slawsky requested various changes to the original project. West Terra agreed to the changes but revised the budget to $1.39-million, a figure both parties agreed to, the claim states.

The lawsuit says Mr. Slawsky continued to request changes, and the budget was again revised in December, 2014, to $1.71-million. At this point, Mr. Slawsky terminated the contract, the claim states, and the reason given was that the revised budget had exceeded the original figure.

But Mr. Yager's lawsuit maintains that Mr. Slawsky started the project knowing it would not be completed.

"The defendant was dishonest when answering the plantiff's [enquiries] about whether the lands would be sold," the statement of claim reads.

In February, 2015, less than a year after construction started, the province finalized a deal with Mr. Slawsky, eventually purchasing the land for $5.45-million – including $850,000 for the land itself, which was then turned over to the Nature Conservancy of Canada, and an additional $4.6-million.

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In a statement, the province said the latter figure represented "costs incurred over the past two decades by the landowner" and "building contract and material costs for construction of a high-end house."

Mr. Yager's claim states that he and his company were assured throughout the process that despite controversy, the project would be completed.

"The lines of communication surrounding his deal with the government were not clearly or honestly portrayed to us," Mr. Yager said in an interview.

He is claiming $33,000 to make up for lost profits and lost opportunities.

The deal to purchase Grace Islet was put together by the province and the Nature Conservancy of Canada, which acquires land with important ecological value. The conservancy currently holds the title of the land and manages it co-operatively with local First Nations.

The remains of the project have been torn down.

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