Hospital construction lawsuits pile up

Last week's report of a pending lawsuit against Dowland Contracting and the Yukon Hospital Corporation is not the first time both parties have been sued over unpaid work at the Dawson and Watson Lake hospital construction projects.

Last week’s report of a pending lawsuit against Dowland Contracting and the Yukon Hospital Corporation is not the first time both parties have been sued over unpaid work at the Dawson and Watson Lake hospital construction projects.

On Feb. 12, Dennis Smith Construction Ltd. filed a suit against Dowland and the hospital corporation in the Yukon Supreme Court, claiming more than $80,000 in unpaid work. The hospital corporation released a statement saying that Dowland is in default, and the problems could cause construction delays.

There are two other outstanding civil suits against Dowland from subcontractors. They haven’t been paid for their work and Dowland intentionally interfered with their progress on the Watson Lake and Dawson City hospital projects, the lawsuits allege. The hospital corporation is named as a defendant in those suits as well.

Edmonton-based Nelson Drywall Interiors was subcontracted by Dowland to provide interior and exterior drywall on both the Watson Lake and Dawson City hospital projects.

In July last year, Nelson filed a claim against Dowland alleging its contracts on both jobs were unjustly terminated. Court filings also claim that Dowland did not provide regular access to the work sites, attempted to hire Nelson employees and was slow on providing approvals and scheduling, all leading to delays on the project.

The suit alleges Nelson lost $854,599 in profit, $387,774 in unpaid work and $85,000 in additional service building work in Watson Lake.

On the Dawson City project, Nelson claims $464,864 in lost profit and $628,149 in unpaid work. It is also seeking an additional $1.1 million for lost work on a Fort McMurray job that the company says was jeopardized by the problems and delays with the Yukon projects.

In May of last year, Nelson also filed a lien on the Watson Lake hospital site for $387,774 and a $628,149 lien on the Dawson City site.

In total, Nelson is asking that Dowland pay more than $4 million in unpaid work, lost profits and interest. Nelson is facing smaller suits from its own subcontractors.

In August, Dowland countersued, alleging that Nelson was slow completing work, misrepresented the amount owing on invoices as well as its ability to perform the work required, and failed to perform the work in good faith.

Dowland also claims in the countersuit that it had to cover outstanding debts that Nelson owed its own subcontractors, totaling nearly $400,000.

On Nov. 29, 2012, Kelly Steele, the hospital corporation’s chief financial officer, filed an affidavit stating that the liens on the Dawson and Watson Lake projects were hampering the hospital corporation’s ability to fund completion of both hospitals.

On Dec. 19, the lawyer for the hospital corporation paid to the court $628,149 to cover the builders’ liens on both properties.

Another major Dowland project in B.C. is having trouble as well.

Dowland is the general contractor in charge of the Dasque Cluster hydroelectric project in Terrace, B.C. One of the subcontractors on that project, Vancouver-based Surespan Construction, sued the owners of the project, Veresen Inc. and Swift Power for more than $2 million.

The hospital corporation, Dowland, Swift Power, Veresen all declined to comment. Dennis Smith Construction and BC Hydro (which commissioned the Dasque Cluster project) could not be reached by press time.

Contact Jesse Winter at

jessew@yukon-news.com