Yukon sues construction company for $1.5M over Mayo water treatment plant upgrades

The Yukon government is suing a construction company for $1.5 million over what it claims was a botched upgrade to the Mayo water treatment plant.

The Department of Community Services, in a statement of claim filed in the Yukon Supreme Court on Nov. 16, alleges that the work done by Wildstone Construction and Engineering Ltd. had a number of "deficiencies," including tanks with "visible leaks and are not watertight."

The government is also seeking more than $1 million from Intact Insurance, an insurance company that served as a surety for the construction contract.

The claims have not been tested in court, and neither Wildstone nor Intact Insurance have filed a statement of defence.

CBC called Wildstone's Whitehorse office for comment but no one was available.

Lawsuit claims

According to the lawsuit, the Yukon government contracted Wildstone, which is headquartered in Penticton, B.C., to upgrade the Mayo water treatment plant in February 2017.

The contract was valued at $2,152,053.

However, Wildstone "did not perform the work to the contractual specifications and standard," the lawsuit alleges, and lists nine deficiencies including two leaking tanks that are "both sloped to one side of the tank foundation."

The government also claims that cathodic protection, which guards against rust, was not installed in either tank, nor was a gravel pad grade band or polyethylene roll that was supposed to be placed between the steel floor and the tanks' foundation.

The statement of claim says Wildstone was made aware of the issues via a notice in September, and that the Yukon government has declared the company to be in default under the construction contract.

That declaration should have triggered action on the part of Intact Insurance, according to the lawsuit.

Intact Insurance, as the surety of a performance bond, was obligated to either remedy the default, complete the work, find another company to complete the work, or pay out the bond amount to the Yukon government.

However, the company hasn't done any of that, the lawsuit alleges.

Both Wildstone and Intact Insurance's failure to meet their obligations "has caused Yukon to suffer loss," the statement of claim says.

The government is seeking $1.5 million in damages against Wildstoneand $1,035,697from Intact Insurance, plus interest and legal costs.

The case has not been scheduledyet to goto trial.