An Alberta heavy equipment rental company is suing a Yukon mining company for allegedly agreeing to buy two rock trucks for $150,000, using them for a season and then backing out of the deal.
The mining company, however, claims that the trucks were in far poorer condition than it was lead to believe.
365334 Alberta Limited, which operates as A1 Cats and is registered to do business in the Yukon, filed a lawsuit against Pishon Gold Resources Inc., also known as PGR, and British Columbia-based businessman Aimin Liao Feb. 16.
According to A1 Cats’ statement of claim, PGR and Liao agreed to purchase two D400D Caterpillar rock trucks from A1 Cats around June 28, 2017. The claim states that the “verbal terms of the sales” included that PGR or Liao would pay A1 Cats $150,000 plus GST for the rock trucks by Dec. 31, 2017, that the trucks were being sold “as is where is,” that there were no warranties on the trucks, that the truck would remain the property of A1 Cats until fully paid off and that interest would accrue at 24 per cent per month after Jan. 1, 2018, until the trucks were fully paid off.
PGR employees came to pick up the rock trucks on June 28, 2017, according to the statement, and Liao again agreed to the conditions of the sale in an email on Aug. 3, 2017.
PGR and Liao had “exclusive use” of the trucks from the time of pick-up until the end of the 2017 mining season, the statement continues, but, on Oct. 31, 2017, Liao contacted A1 Cats and “advised that he and PGR were not going to pay” for them.
A1 Cats attempted to retrieve the trucks in November 2017, the statement says, but by that time, the roads to the mine site were closed due to deep snow.
To date, PGR and Liao have not returned the trucks nor provided any payments, the claim alleges, and have been “unjustly enriched” by having them while A1 Cats, in turn, “has lost the use and rental income” from the rock trucks.
A1 Cats is seeking damages that would amount to the cost of the sale — $157,500, plus monthly 24 per cent interest calculated from Jan. 1, 2018, until the sum is paid in full — or, alternatively, the sum of a monthly rental rate of $18,000 per truck calculated from June 28, 2017, until the date of judgement. A1 Cats is also asking for an additional $21,945 for parts it says it supplied to PGR and Liao, which include a tire rim, a tire, a compressor and a box of cast iron welding rods.
As of Feb. 22, PGR and Liao have not filed a statement of defence. However, they’ve submitted an affidavit containing several exhibits including what appears to be a written statement by Liao.
In the statement, Liao wrote that three people picked up the trucks from A1 Cats on July 6, 2017, which were “supposed to be in Perfect (sic) working order.” While the three didn’t notice any issues during a quick safety walkaround, they noticed handling and braking issues with the trucks while driving them back to the PGR mine, the statement says, and an inspection the following morning revealed “serious problems” with the trucks that rendered them “unusable.”
The major issues, the statement claims, include a cracked A frame, leaking final drives and a worn out centre suspension, and although A1 Cats sent a mechanic over, the problems were not fixed “to the manufactures (sic) specifications.”
The exhibits also include an email dated Nov. 6 where Liao declines to buy the trucks due to the “numerous issues” PGR found with them and photos of four pages of handwritten notes documenting problems like an oil temperature indicator and RPM gauge not working and various oil leaks.
None of the allegations have been tested in court.
Contact Jackie Hong at jackie.hong@yukon-news.com