Company’s work on North End Sewage Treatment Plant wrongfully terminated, lawsuit against city claims

Posted on November 20, 2024 by Peggy

A Nova Scotia-based company suing the City of Winnipeg alleges it “interfered with, impacted and delayed” work on the North End Sewage Treatment Plant and left the company on the hook for nearly $100,000 in construction materials over two years ago.

Stark International, a transformer installation and repair company, is suing the city for allegedly breaching and wrongfully terminating a contract for work on the North End Sewage Treatment Plant, says a statement of claim filed at the Manitoba Court of King’s Bench on Nov. 12.

Stark says it was awarded a contract for repair work on ultraviolet transformer equipment at the sewage treatment plant at the end of March 2022.

However, the company claims that the city’s “untrue, inaccurate and misleading” representations of the work involved led to the improper and wrongful termination of the contract in November 2022, causing Stark to suffer damages, loss and costs.

“The city’s inability to provide clear and consistent specifications caused delay on the project and did not permit Stark the ability to proceed with certain portions of the work,” the lawsuit says.

The allegations have not been tested in court. No statements of defence have been filed, and a city spokesperson declined to comment on the lawsuit as the matter is before the courts.

The sewage treatment plant is the city’s oldest and largest facility of its kind, providing 70 per cent of Winnipeg’s wastewater treatment, the city says.

Stark says it started work on the repairs at the plant in May 2022, and the city shifted the completion date from August to September 2022 soon after.

The city did not provide Stark with design drawings of the transformers or the original materials used to construct them, the suit claims.

City ‘neglected and refused’ to pay

Stark told the city in October 2022 that it had spent a “significant amount of money” on custom materials for the project, which would be ready to move to the plant by the end of the month, the lawsuit says. However, the city granted Stark an extension after Hurricane Fiona hit Nova Scotia.

But in early November, Stark proposed holding the project’s completion to June 2023, as it told the city that cold weather and the removal of the roofing structure over the transformers could cause damage, according to the suit.

The city issued a stop work order to Stark by mid-November and refused a meeting with the company after it requested one, Stark claims.

The company issued an invoice for the custom materials it ordered for the project, but the city has “neglected and refused” to pay, the lawsuit claims.

Stark alleges that the city “immediately delayed” its work on the project, and that the design was not correctly verified or reviewed and needed further significant information before construction could start.

The city represented the work’s design in its tender as being “sufficiently finalized,” but Stark alleges that the city “erred in the design of the project and had omitted critical details within the contract documents” and was unable and unwilling to provide that information.

The company also claims that the contract administrator hired by the city was not “skilled, experienced, competent or unbiased.”

Alternatively, Stark claims that it is owed compensation for the work that it did on the sewage treatment plant, which directly benefited the city, and that the city was unjustly enriched to the company’s detriment, warranting an award of punitive damages.

Stark’s seeking nearly $95,000 for the materials it purchased, on top of court costs, interest and special and punitive damages.

The company did not respond to a request for comment prior to publication.