02/24/2014 05:30 EST | Updated 04/26/2014 05:59 EDT

Tradespeople, suppliers 'stiffed' in pet store expansion

A tradesman says he's furious that he hasn't been paid for thousands of dollars worth of work and materials by a contractor after renovating several Pet Valu stores in B.C.

“It’s financially ruined our family,” said Scott Payne, a drywaller from Port Alberni, B.C. “These stores are all up and running … and here we are, totally strapped.”

Payne and several others were working for Tim Keith, who was hired on contract by Pet Valu in 2012 to oversee major projects at 10 stores.

Payne and others claim Keith failed to pay them thousands of dollars for work and materials at two stores, in Richmond and Victoria, at the end of the project.

“He made his money ... and we are further behind now than when we started. So it’s completely pointless to even start working for this contractor,” said Payne, who said he is still owed more than $20,000.

Trail of bad debts

Keith previously owned his own contracting company, which went bankrupt in 2012. The company had racked up a pile of judgments, liens and debts, which, according to court records, reached a half a million dollars.

“I’ve spoke to quite a few people who he owes money to and who he has done the same thing to, as me,” said Payne. “He knows the system. He’s got it figured out.”

Another supplier, SuphieTekbulut of Four Seasons Flooring in Richmond, told Go Public, “I got stiffed from him – big time.

“He ordered flooring for two stores. I sent the invoice and he never responds. I phone him and I phone him and he never responds.”

Pet Valu hired Keith right after his company went bankrupt, apparently without knowing his background. It also didn’t require him to be bonded as a contractor, which could have protected tradespeople if they didn’t get paid.

“We severed ties with Mr. Keith [in 2013],” said a statement from Pet Valu. “Based on that experience, we have made changes to our team, and are improving our contractor selection process to include more robust reference checks and additional compensation safeguards for subcontractors.”

The pet store chain has 400 franchises in Canada and the U.S., including several Bosley’s locations in B.C.

Initially, the subtrades working under Keith were paid directly by Pet Valu. Then, with a handful of stores left to be done, it handed the responsibility for paying for labour and materials over to a company Keith was running. After that, Payne said, the cheques starting bouncing.

Got paid, 'disappeared'

“He saw the end of the job coming – and pulled the pin and kept all the money,” said Payne.

“He got paid [by Pet Valu] for the product, then disappeared,” said Richard Wilson, of Craftsman Woodworking, who estimated he is still owed $5,000 for supplies he gave to Keith but never got paid for.

“Tim came in with the credibility of being with a nationally respected brand [Pet Valu],” he said.

Keith ran some the pet store projects under a new company, McQuaig Construction, which is owned by his stepson, Kyle McQuaig. The 20-year-old said he owns the company in name only, to protect his stepfather from creditors.

“In hindsight, it was a bad idea. I wanted to help him out. He couldn’t have a company in his name,” said McQuaig. “I didn’t really know what I was doing.”

McQuaig said he is upset about being left legally responsible.

“A lot of people are owed money. I am owed a lot of money – and I am … out of luck,” said Payne. “I am not a fan [of Keith], because I am left with this.”

Records suggest Pet Valu paid Keith for the project, until he abandoned the job, near the end.

Payne and his wife have two small children and he is now working long hours, just to get out of the hole. He said he missed his little boy taking his first steps, for no good reason.

“I miss out on those memories and now we’re even further behind on all of our bills and interest. It’s horrible.”

His wife said they have had to draw from their children’s savings accounts to stay afloat.

“We have drained those accounts, as well as maxed out our credit card,” said Julia Payne. “On top of him having to be away from home to work so much … it makes it much more difficult to swallow when the money coming in isn't to benefit our family.”

Pointless to pursue

Payne said a lawyer told him going after Keith in court would be a waste of more money, because he has so many other creditors further up the line. Keith owns his own home, but there are several liens against it.

“Once it got down to our name – there would be nothing left,” said Payne.

Construction industry experts said when small subcontractors are often left holding the bag like this, they have little recourse if the general contractor wasn't bonded.

“It’s a risky business. It’s very risky. They are laying a lot of capital out on the line in advance of ever getting paid,” said Jamie O’Connor, an adjuster for BBCG Claim Services, a national company which settles claims from unpaid contractors on bonded projects. 

O’Connor said the firm he works for handles 100 files a year, all construction projects where tradesmen have not been paid. He said more workers likely go unpaid on smaller projects that aren’t bonded.

“The people who are out the money are good people – and they’ve taken somebody’s word for it.”

He said going to court is too expensive for most small operators and putting a lien (a legal claim) on a project only entitles them to pennies on a dollar.

Payne didn’t have a chance to put a lien on the Pet Valu projects, because, by the time he stopped believing Keith – that he was going to get paid – the 45-day deadline to register a lien had passed.

Industry estimates put the cost of unpaid wages and materials for the construction trades at $300 million a year in Canada. 

Pet Valu steps up 

Keith first told Go Public he didn’t pay his sub trades, because Pet Valu still owed him $35,000. 

He then said that wasn’t true and admitted Payne is owed up to $20,000. He said he needed to send more invoices to Pet Valu and “figure out what else is outstanding” before Payne could get paid.

“This is the best I can do to resolve this,” said Keith.

As a result of Go Public’s inquires, Pet Valu is now pledging to pay any outstanding invoices for tradesman who weren’t paid for work on its stores.

“Although we are not legally liable for work that was commissioned by Mr. Keith, our company is built on the spirit of community and partnership and we are committed to working with the affected subcontractors to compensate them for completed work in our stores,” said the company.

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