The owners of the historic Yonge Street building destroyed in a suspicious fire earlier this month failed to pay a $70,000 bill to shore up the structure after it partially collapsed last year, according to a lawsuit filed by the contractor.
In a statement of claim filed in Ontario Superior Court in November, Quantum Murray LP, a demolition and remediation company, says it is owed $69,091.18 for "emergency support and clean-up of a building which had collapsed" in April.
The lawsuit names Noori Lalani, the numbered company that owns the former Empress Hotel at 335 Yonge St. of which Mr. Lalani is a director, and the Lalani Group Inc. as defendants.
The allegations have not been proven in court. A lawyer for the defendants filed notice in December that they intended to oppose the suit, but no statement of defence was included in the court file.
Police are investigating whether arson was behind the massive Jan. 3 fire and have released a dark and grainy security video of a man with a backpack in a nearby alley before the building went up in flames.
The deteriorating building first made headlines in April with the sudden lunch-hour collapse of a brick wall that left a sidewalk covered in rubble and forced a stretch of Yonge Street to close.
The two incidents followed years of back-and-forth between the neglected 19th-century building's owners - who had applied for a demolition permit to reportedly make way for a condo tower - and city officials, who had labelled the building a heritage structure.
The lawsuit from Quantum Murray alleges the company was hired on April 16 by Mr. Lalani, who told them he was acting on behalf of the Lalani Group Inc. However, the lawsuit says, the Lalani Group as a corporation was no longer registered with the government in 2006.
"As such, the plaintiff pleads that Noori Lalani is personally liable for the costs of the clean-up, as the signatory on the contract as he knew that the Lalani Group did not have the capacity to enter into the contract," the lawsuit reads.
According to property records, the Lalani Group sold the property to a numbered company, 2160943 Ontario Ltd., in 2008 for $7-million. Corporate records list four men named Lalani, including Noori Lalani, as its directors.
The lawsuit alleges that the numbered company "has been unjustly enriched" by the work performed by Quantum Murray.
Attempts to reach the Lalanis through their lawyers and at listed phone numbers at homes north of Toronto and at a business address in Concord have been unsuccessful.
Earlier this month, their lawyer, Stephen Waqué - who would not identify his clients - issued a statement saying they pledged to work with the city and the community and that the fire had "complicated an already difficult and challenging situation."
A spokesperson for Quantum Murray could not be reached for comment before deadline.
It is not the first time the Lalanis have faced a lawsuit over allegedly unpaid bills connected to their run-down Yonge Street property. In 1997, a tenant, Adventure Electronics, sued Noorali Lalani - another director of the numbered company that now owns 335 Yonge St. - and the Lalani Group. The lawsuit alleged that pleas for repairs to a leaky roof were ignored.
The stereo retailer went ahead and had $3,717 worth of emergency repairs done to protect its merchandise from water damage, according to court documents, and demanded a rent abatement to cover its costs. It also produced a contractor's estimate that concluded the building's roof needed wholesale replacement, at a cost of $94,670.
In court documents, the Lalanis responded by accusing their tenants of owing them up to $490,000 in rent and other payments.
The case resulted in a court order, issued with "the consent of the parties," that required Adventure Electronics to remove "all debris, garbage, heavy iron, steel conveyors and heavy steel beams on the roof" of 335 Yonge.
It also ordered Noorali Lalani and the Lalani Group to repair the roof, consult Toronto's historical board and comply with a 1996 city inspectors' report demanding exterior repairs.
However, city officials confirmed Friday that building inspectors never conducted an assessment of the building's structural integrity, despite the long history of visible neglect to the exterior, as well as previous concerns about water damage.
No municipal inspection was conducted after the 1997 court order that the Lalanis fix the leaking roof, said city spokesperson Bruce Hawkins.
He added that in the past eight or nine years, inspectors did enter 335 Yonge to check that renovations on the ground floor - a retail space was being converted into an eatery - conformed to the Ontario Building Code.
But the building's structure had likely been compromised for years or even decades, according to an assessment by Paul Zucchi, a structural engineer for the MMM Group, hired by the Lalanis after the wall collapsed last April.
In a four-page report obtained by The Globe and Mail, Mr. Zucchi observed that when contractors removed a third-storey exterior masonry wall after the collapse, it "peeled away very easily, indicating the possibility of fracture in other parts of the building."
Mr. Zucchi's report also points to other potential structural problems, such as "severely bowed" exterior brick walls, and the removal of original ground floor masonry walls in the early 1970s to create open storefronts.
With the site almost clear, the question now is what happens next. Kristyn Wong-Tam, the local councillor, will be hosting a meeting on Jan. 26 with various interested parties, including Ryerson University - which has plans for a student centre across the road on the former Sam the Record Man site - the Lalanis, and local businesses.
With a report from Rick Cash. John Lorinc is a freelance writer.