Construction company files $7.5M counterclaim over Carmacks arena project

·3 min read
Scott Design Build Inc. filed a statement of defence and counterclaim against the Yukon government in Yukon Supreme Court earlier this month. (Paul Tukker/CBC - image credit)
Scott Design Build Inc. filed a statement of defence and counterclaim against the Yukon government in Yukon Supreme Court earlier this month. (Paul Tukker/CBC - image credit)

A construction company the Yukon government has accused of leaving the Carmacks arena partially finished before abandoning the project is counter-suing for more than $7.5 million.

Scott Design Build Inc. filed a statement of defence and counterclaim against the Yukon government in Yukon Supreme Court on April 13, arguing that factors out of its control, like design issues, delayed the project.

The company also claims that it had always intended to finish the arena and was in the process of doing so when the Yukon government suddenly terminated its construction contract.

The filings follow a $17.3-million lawsuit the Yukon government launched in February against Scott Design Build as well as an insurance company holding a performance bond on the project.

In its statement of claim, the government alleges that Scott Design Build defaulted on the Carmacks arena construction contract, worth nearly $14.6 million, and claimed it failed to "perform the work as required by the contractual terms, specifications, and standards."

The government is seeking $10 million from the company as well as nearly $7.3 million from insurer Echelon Financial Holdings Inc., which the government alleges failed to remedy the construction situation or pay out the performance bond.

Neither the government's nor the contractor's allegations have yet been proven in court.

The arena was originally scheduled to be finished in November 2020.

–50 C temperatures, pandemic delayed work, company says

In its statement of defence, Scott Design Build lists a number of issues that pushed back the arena's completion date, including a column design that "was not constructable" and triggered a "review of the overall framing of the building" and redesign that took three months to complete. Other issues include the temperature dropping to –50 C in early 2020, "which put all site equipment out of commission as machinery was unable to start," and, in March that same year, the start of the COVID-19 pandemic.

A photo of the Carmacks arena in November 2019.
A photo of the Carmacks arena in November 2019. (Government of Yukon)

Scott Design Build claims that it returned to the construction site at the end of August 2020 and by October, had closed in and heated the building so tradespeople could work on the interior. However, the statement of defence says that many of the company's subcontractors "delivered claims for additional costs" incurred due to COVID-19 — claims the company says it asked the Yukon government to consider "to no avail."

"Yukon's failure to address the COVID delay claims resulted in a delayed return to the site by many trades that feared not receiving any compensation for the additional costs they had incurred," the statement alleges.

The company also claims it submitted a formal request to change the completion date on contract as well as a revised construction schedule indicating the project would be finished in August 2021. However, the statement of defence says Scott Design Build never heard back about that request. Instead, on Nov. 30, the government delivered a notice of default "without legal cause," and eventually a letter of contract termination on Dec. 15.

Scott Design Build alleges that the Yukon government breached the contract when it terminated it, "the result of which … have caused [the company] to have suffered financial harm for which it seeks compensation."

The counterclaim is seeking more than $1 million in unpaid work and holdback, $567,487.60 in COVID-19 and winter delay costs, and a loss profit of more than $5.9 million.