Hospital corporation’s contractor quagmire grows

The Yukon Hospital Corporation and Dowland Contracting are facing the largest lawsuit yet over unpaid subcontractor work at the Watson Lake hospital project. On March 28, B.C.

The Yukon Hospital Corporation and Dowland Contracting are facing the largest lawsuit yet over unpaid subcontractor work at the Watson Lake hospital project.

On March 28, B.C. contractor RL 7 Mechanical filed a statement of claim in Yukon Supreme Court for $1.13 million plus interest, claiming that Dowland Contracting hasn’t paid for extra work completed at the site.

RL 7 was hired by Dowland as a subcontractor on the Watson Lake hospital project. The contract stated that RL 7 would be paid $4.1 million in total, and that work would be finished on March 30, 2012. But the project ran into delays, and RL 7 had to keep working on the site. It claims Dowland hasn’t paid for any of that extra work, which continued up until January 2013.

On Feb. 7, 2013 RL 7 filed a lien for $1.27 million. RL 7 also claims that the hospital corporation should have held back 10 per cent of its payments to Dowland, and has filed a lien against that holdback money.

The statement of claim also asks the court that, if the amount of the lien is not paid within one month of recovery of judgment, an order be made directing that the land, equipment, machinery and structures at the hospital project be sold and the profits credited against the lien.

Dowland is the general contractor hired by the hospital corporation to manage both the Watson Lake and Dawson City hospital projects – both of which are now over budget, behind schedule and facing a number of smaller lawsuits by subcontractors.

No statement of defence has yet been filed in the RL 7 case.

Meanwhile, Dowland is also facing lawsuits over a hydroelectric project in Terrace, B.C.

Dowland is the general contractor hired by Veresen, the owners of the Dasque-Middle run-of-river project. It is facing a lawsuit filed in mid-March by Terrace company Main Logging, which is claiming more than $110,000 in unpaid trucking work.

In defence, Dowland has said it is owed millions of dollars by Veresen, and it can’t pay its subcontractors until it is paid itself.

According to a March 6 memo that Dowland sent its subcontractors on the Dasque-Middle project, “Dowland has performed a significant amount of work for which we are owed payment by Veresen and, due to the owner’s unwillingness to compensate Dowland as per agreements, we have submitted several claims.”

Dowland also told its subcontractors that it was pursuing “all available avenues” to collect on the money Veresen owes, and promised an update by the end of March. That update hasn’t yet happened, but Dowland has also pulled its workers and equipment from the Terrace project.

The Dasque-Middle is a run-of-river project that would divert river water through turbines to generate electricity. It was slated to be finished last year.

In March, Canada’s auditor general released a report slamming the Yukon Hospital Corporation and the territorial government for doing a rushed job on both hospital replacement projects, and possibly wasting taxpayers’ money on facilities that it cannot prove are necessary.

Dowland has repeatedly refused to comment on either the Terrace or Yukon projects. The Yukon Hospital Corporation could not be reached for comment by press time.

Contact Jesse Winter at

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