Super-Save Propane is suing the Salvation Army, alleging that the organization failed to live up to its end of a five-year contract for fuel supply to what was formerly the Salvation Army Centre of Hope building in Whitehorse. (Joel Krahn/Yukon News file)

Whitehorse propane company sues Salvation Army over Centre of Hope contract

Super-Save is alleging that the Salvation Army owes it more than $300,000 in liquidated damages

A Whitehorse propane company is suing the Salvation Army, alleging that the organization failed to live up to its end of a five-year contract for fuel supply to what was formerly the Salvation Army Centre of Hope building in Whitehorse.

38274 Yukon Inc., better known as Super-Save Propane, filed a statement of claim to the Yukon Supreme Court on Aug. 26, seeking more than $300,000 from the Governing Council of the Salvation Army in Canada.

The Salvation Army had not filed a reply as of Sept. 3.

According to the lawsuit, Super-Save and the Salvation Army entered a five-year contract on Sept. 29, 2017, shortly before the Centre of Hope opened its doors.

The terms of the contract included Super-Save supplying a thousand-gallon storage tank, vaporizer and tank blanket for the property, the statement of claim says, while the Salvation Army agreed to purchase propane exclusively from Super-Save and to pay “liquidated damages” should it cancel the contract early.

The damages would be calculated based on the price of a litre of propane on the day the contract was cancelled multiplied by the average volume supplied per month, and multiplied again by the number of months left on the contract.

The Centre of Hope, an approximately $14-million building paid for by the territorial and federal governments, opened in October 2017.

However, on Dec. 20, 2018, the Yukon government announced that it would be taking over the building at the end of January 2019.

According to the statement of claim, the Yukon government told Super-Save to keep using the propane contract on Jan. 31 — the same day ownership of the building was transferred — “until further notice.”

The Yukon government also told Super-Save on Feb. 4 to send it invoices for propane delivery until further notice, the document alleges, but, on June 12, and “in breach” of the contract, removed Super-Save’s equipment from the property and stopped purchasing propane.

The lawsuit says that propane was about 60 cents a litre on that day, with an average monthly supply of just over 13,720 litres. With 39 months left on the contract, Super-Save is alleging the Salvation Army owes it $321,009.93 in liquidated damages.

“Despite demands for payment, the Salvation Army has refused and/or neglected to pay the liquidated damages claim,” the statement of claim says.

Super-Save is seeking the liquidated damages, or, in the alternative, damages for breach of contract, along with 24 per cent annual interest until the amount is paid off as well as “special costs.”

The case has not been tested in court yet.

Contact Jackie Hong at jackie.hong@yukon-news.com

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