A subcontractor that provided labour and materials during the construction of Yellowknife’s new $350 million hospital is seeking nearly $10 million in unpaid work from its general contractors, NNSL Media has learned.
Kelson Mechanical Inc. filed a statement of claim against Clark Builders and Bird Design Construction Inc, general contractors for the Stanton Renewal Project, in February.
In September 2015, the territorial government entered into a contract with Boreal Health Partnerships and its partners, paying Boreal $300 million to build the facility.
The new hospital, which opened in May of this year, was funded through a public-private partnership between the territorial government and private companies.
Boreal Health Partnerships, along with its multiple partners, are named in Kelson’s lawsuit, collectively as “Project Co,” as well.
Clark, Bird and their partners, known collectively as “BCSJV”, were brought on as contractors for the project.
In May 2016, according to court documents, Kelson entered into a subcontract with Clark and Bird to supply labour, materials, tools, equipment and mechanical work for the project.
As a result of either a breach of contract or negligence on the part of the defendants, Kelson claims it’s been left out of millions in unpaid earnings following the construction of the hospital.
The original subcontract for Kelson’s work was $50 million, according to its claim.
But after a series of changes in the scope of Kelson’s work requested by Bird and Clark, that price grew to $57,412,854, Kelson claims.
Kelson says it has only received $48,347,265 to date.
Because the company says it completed its work in accordance with the contract, it is seeking $9,065,589.33 for labour and services provided.
Kelson claims both Clark and Bird were aware that the changes to the scope of the work would result in the plaintiff incurring additional costs.
“Clark Builders and Bird and/or Boreal Health Partnership have refused and/or neglected to pay the amount which is due and owing to Kelson,” states Kelson’s claim.
Kelson says it’s entitled to a full compensation from the defendants. By refusing to pay up, Kelson says all defendants have effectively been “unjustly enriched” to the tune of almost $10 million due to the company’s work on the Stanton Renewal Project – work the company says “enhanced the value of lands and premises therein.”
Clark Builders, Bird and their partners, BCSJV, have since filed a statement of defence, denying “each and every” allegations leveled by Kelson, while filing a counterclaim against the mechanical company.
Clark and Bird say their subcontract with Kelson included a “firm price contract” of $50 million plus value added taxes.
“Kelson was not entitled to any increase in the subcontract price,” reads the statement of defence from BCSJV.
“BCSJV has paid all amounts due and owing to Kelson under the subcontract,” continues the statement.
Furthermore, Clark and Bird allege it was Kelson that breached its contract by failing to fulfill all obligations stipulated by the subcontract – a claim Kelson has rebutted in a response to the statement of defence.
The statement of defence maintains a change in the work of scope does not constitute a change under the subcontract. In its counterclaim, BCSJV is seeking general damages from Kelson as a result of “Kelson’s breaches of the subcontract.”
Filing its own statement of defence against Kelson’s claim, Boreal Health Partnerships and its partners want the claim tossed, saying Project Co was “at no time” in a business relationship or contract with Kelson.
The back and forth legal action, still winding its way through the civil courts, comes as a NWT judge recently awarded a drilling company almost $700,000 in unpaid work in a dispute with Clark Builders over remediation work at Yellowknife’s Giant Mine.