A boat repair company in Richmond, B.C., has been ordered to pay more than $233,000, plus interest, for breaching its contract with owners of a former navy landing craft converted for use as a barge.
The Canadian-flagged Tyee Shepard was built as a Landing Craft Mechanized Mark 8, or LCM-8, in 1959. Versions of the amphibious warfare ships were first developed in the Second World War, and would go on to be used by the U.S. Navy and Army as a river boat and mechanized landing craft during the Vietnam War, as well as conflicts in Panama, Iraq and Somalia. Modified versions of the ship are also in service with the Australian military.
Now registered with Transport Canada, the owners of the Tyee Shepard approached Commodore’s Boats Ltd. in the summer of 2020 to make the 24-metre, 63,000-kilogram ship seaworthy before a federal inspection.
The owners—which included Tyee Pacific Marine Operations Ltd., a Mitchell Island-based company that delivers cargo throughout B.C.’s south coast—sought welding and painting work. David Kensall, CEO of Tyee Pacific, said the idea was to put the ship once designed to ferry tanks or up to 200 personnel into service alongside the Tyee Titan, a sister vessel.
Commodore surveyed the Tyee Shephard and began carrying out work shortly after receiving it. The owners of the Tyee paid for some of the work. But the company later alleged they failed to pay more than $88,000, an accumulation of three unpaid invoices for labour, materials and storage costs.
In a federal court decision released Friday, Justice Elizabeth Heneghan found Commodore had exceeded the estimated costs of the work and acknowledged defects in its work.
“Its offer to repair the deficiencies was conditional upon payment of the outstanding invoices,” wrote the judge in her ruling.
The owners of the ship were not prepared to make those payments. Considering the totality of the evidence, Heneghan found the ship’s owners reasonably withdrew the Tyee from the company’s possession after they determined it would be cheaper to start the repair process over again.
She denied Commodore’s claim and ordered the company to pay back the ship’s owners $233,234.30, plus interest—money the owners had already paid the ship repair company.
“In this case, the ‘wrongdoing’ is the result of a fundamental breach of contract,” Heneghan ruled.
In an interview, Tyee Pacific's owner said he was happy with the ruling.
“We’re happy with the justice system,” Kensall said. “We definitely feel vindicated.”
Brendan Burgess, the principal of Commodore's Boats, told BIV he’s leaving it up to his lawyers whether they will appeal the case.
“This isn’t something that ever happens to us. It’s not something we’re used to,” he said. “The vessel came to us with multiple holes in the bottom due to corrosion. … We spent three months replating the bottom of it.”
Burgess said the ship’s owners left the shipyard saying they were going to pay what they owed, and he took their word for it.
In court, the Tyee’s owners presented findings from a surveyor that work on the vessel had been poorly carried out. But Burgess said there were photographs in that report that showed old repairs his shipyard never did.
“I’m not saying our work was perfect. But we ultimately didn’t finish the job,” he said. “We never got a chance to finish it.”
“We got blamed with all of it. Now I’m having to pay back all of the money. It’s quite upsetting.”
Burgess says his shipyard has successfully built two RCMP boats and is in the process of retrofitting a Coast Guard vessel—all without complaints.
The court decision has left Burgess to wonder what the repercussions are for his company.
“I feel like this is not a good representation of what our company is doing,” he said.
