Court rejects Sidhu Trucking’s lien bid on shuttered zinc mine

Yukon’s Supreme Court rejected a lien filed by P.S. Sidhu Trucking Ltd. on Yukon Zinc’s Wolverine mine, arguing the trucking services Sidhu provided were not directly connected to zinc mining.

Yukon’s Supreme Court rejected a lien filed by P.S. Sidhu Trucking Ltd. on Yukon Zinc’s Wolverine mine, arguing the trucking services Sidhu provided were not directly connected to zinc mining.

The court ruled Sidhu’s operations didn’t meet the prerequisite for a lien on a mine: getting the ore out of the ground.

The company, the court found, didn’t qualify because it provided services after the mineral recovery stage.

Sidhu provided trucking services to Yukon Zinc from July, 2014 to January, 2015, hauling ore from the Wolverine mine to a port at Stewart, B.C.

When Yukon Zinc went into creditor protection in March, 2015, Sidhu said it was owed over $860,000.

Sidhu asked the Supreme Court to declare a miners lien against Yukon Zinc.

A lien is a way to secure a debt by being granted ownership of a debtor’s property. Miners liens are regulated by their own set of rules.

A miners lien would have given Sidhu priority over the mine’s other creditors.

But Sidhu’s services don’t fit the definition of a lien under the Yukon’s Miner Lien Act, Yukon Supreme Court Justice Leigh Gower ruled in his Aug. 30 decision.

Sidhu said its services were essential to the mine functioning. Yukon Zinc’s license provided a limit for the amount of concentrated ore it could keep on site. Sidhu was in charge of hauling the concentrate.

But the licence didn’t specify what would happen were the mine to exceed that limit, the judge ruled.

“In any event, Yukon Zinc submits that despite the stated stockpile capacity for the storage of zinc concentrate, it is apparent from the manner in which it departed from the provision in the plan … that the Yukon Government was not strictly enforcing all of the provisions of the plan,” Gower said.

The judge wasn’t convinced the mine would have to shut down without Sidhu’s trucking services.

The Miners Lien Act only refers to the actual extraction of ore from the ground, he ruled.

The act “is concerned with protecting those whose services and materials contribute to the ultimate recovery of minerals from the ground, from which the concentrate is extracted.”

Gower said “Sidhu did not bring materials to the mine.”

The goal of the lien legislation is to protect those who contribute to the actual extraction of minerals, he ruled.

Because liens are essentially creating a right for the creditors that didn’t exist before, the legislation must be interpreted strictly.

In March 2015 Yukon Zinc went into credit protection over a $646-million debt.

Creditors approved a plan that allowed the company to get rid of some of its debt, with those owed less than $5,000 paid in full, and those owed more than $5,000 receiving 11.5 cents on the dollar.

Yukon Zinc has previously disputed the amount owed to Sidhu, claiming it was only $688,000.

Paramjit Sidhu, owner of the trucking company, told the News Tuesday he had sold his debt claim and hadn’t heard of the judgment.

Under the creditor-approved plan, Sidhu would have received between $79,000 and $99,000.

The Wolverine mine has been in care and maintenance since it shut down in January, 2015.

-with files from Maura Forrest

Contact Pierre Chauvin at pierre.chauvin@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Crystal Schick/Yukon News file
Runners in the Yukon Arctic Ultra marathon race down the Yukon River near the Marwell industrial area in Whitehorse on Feb. 3, 2019.
Cold-weather exercise hard on the lungs

Amy Kenny Special to the Yukon News It might make you feel… Continue reading

Yukonomist Keith Halliday
YUKONOMIST: The Neapolitan election

Do you remember those old bricks of Neapolitan ice cream from birthday… Continue reading

Whitehorse City Hall (Joel Krahn/Yukon News file)
This week at city hall

A look at issues discussed by Whitehorse city council at its April 6 meeting.

Two people walk up the stairs past an advance polling sign at the Canda Games Centre on April 4. (Haley Ritchie/Yukon News)
April 12 is polling day: Here’s how to vote

If in doubt, electionsyukon.ca has an address-to-riding tool

Yukon Party leader Currie Dixon addressing media at a press conference on April 8. The territorial election is on April 12. (Haley Ritchie/Yukon News)
Getting to know Currie Dixon and the Yukon Party platform

A closer look at the party leader and promises on the campaign trail

lwtters
Today’s Mailbox: Rent freezes and the youth vote

Dear Editor, I read the article regarding the recommendations by the Yukon… Continue reading

Point-in-Time homeless count planned this month

Volunteers will count those in shelters, short-term housing and without shelter in a 24-hour period.

The Yukon’s new ATIPP Act came into effect on April 1. Yukoners can submit ATIPP requests online or at the Legislative Assembly building. (Gabrielle Plonka/Yukon News file)
New ATIPP Act in effect as of April 1

The changes promise increased government transparency

A new conservancy in northern B.C. is adjacent to Mount Edziza Provincial Park. (Courtesy BC Parks)
Ice Mountain Lands near Telegraph Creek, B.C., granted conservancy protection

The conservancy is the first step in a multi-year Tahltan Stewardship Initiative

Yukon RCMP reported a child pornography-related arrest on April 1. (Phil McLachlan/Black Press file)
Whitehorse man arrested on child pornography charges

The 43-year-old was charged with possession of child pornography and making child pornography

Team Yukon athletes wave flags at the 2012 Arctic Winter Games opening ceremony in Whitehorse. The postponed 2022 event in Wood Buffalo, Alta., has been rescheduled for Jan. 29 to Feb. 4, 2023. (Justin Kennedy/Yukon News file)
New dates set for Arctic Winter Games

Wood Buffalo, Alta. will host event Jan. 29 to Feb. 4, 2023

Victoria Gold Corp. has contributed $1 million to the First Nation of Na-cho Nyak Dun after six months of production at the Eagle Gold Mine. (Submitted/Victoria Gold Corp.)
Victoria Gold contributes $1 million to First Nation of Na-cho Nyak Dun

Victoria Gold signed a Comprehensive Cooperation and Benefits Agreement in 2011

Most Read