In a statement of claim, East Coast Mining Ltd. alleges Canada Fluorspar (N.L.) Inc. owes it $4.2 million. (Curtis Hicks/CBC)
A company looking to revive the fluorspar mining industry on Newfoundland’s Burin Peninsula is being sued for $4.2 million over allegations it didn’t pay a contractor, according to court documents.
But both plaintiff and defendant are downplaying the move.
East Coast Mining Ltd. filed a statement of claim at the Supreme Court of Newfoundland and Labrador in St. John’s against Canada Fluorspar (N.L.) Inc.
According to court documents dated Sept. 10, the company alleges it had an agreement with Canada Fluorspar (N.L.) Inc. to provide services like construction at the mining site, operation and maintenance of equipment, facilities, as well as consumables and personnel who would “drill, blast, haul and dump ore and waste at the mine, together with associated civil works.”
“ECM carried out the work further to the letter agreement,” said the statement of claim, filed by Stewart McKelvey lawyer Jonathan Dale.
In response to work going unpaid, the company filed a mechanic’s lien for $4,054,072 against Canada Fluorspar (N.L.) Inc. in June, it said.
“The full amount claimed of $4,222,913.33 has been invoiced, demanded, and remains unpaid,” said the statement.
It alleges Canada Fluorspar (N.L.) Inc. was “unjustly enriched” and had breached the letter of their agreement by not paying the company.
East Coast Mining turned to the courts, and is looking for the $4.2 million inclusive of HST, as well as the cost of court proceedings and any other relief the court deems fit.
‘Not hostile,’ says defendant
Willem Jacobs is the managing director of mining and energy for Toronto-based advisory firm Clariti. He was tasked with getting the St. Lawrence site back into production on behalf of its new owners, Singapore-based private equity group African Minerals Exploration & Development Funds.
Jacobs, the sole director of Canada Fluorspar (N.L.) Inc., denies the filed lawsuit — which CBC News has reviewed — and insists it’s a mechanic’s lien, which he said is normal practice in the mining sector.
“It in no way automatically means that that a company has been sued,” Jacobs wrote to CBC News.
Travis Payne, speaking as a lawyer who practices construction law with the firm Curtis Dawe, said a mechanic’s lien has to be registered within 30 days of work being completed or materials provided, and there is a 90 day window from work stopping to file the lawsuit.
However, the lien is dissolved if a claim in court isn’t filed, he said.
“Placing a lien on the property, while it’s not a lawsuit per se, it is still a way for a contractor or material provider to secure their interest,” Payne said. “In order to keep that lien in effect you have to file the action at Supreme Court.”
But, he said, it would still be considered a lawsuit, in that they are making an action at the courts, though it is mandated by the Mechanic’s Lien Act to preserve the lien.
Willem Jacobs denies East Coast Mining has filed a statement of claim in the Supreme Court of Newfoundland and Labrador. (Curtis Hicks/CBC)
Jacobs said East Coast Mining took the step to get a mechanic’s lien as “security” they’d be paid as Canada Fluorspar (N.L.) Inc. works to get mining activities going again. Jacobs also said East Coast Mining was obligated to file the lien due to legal time frames.
“At no point was CFI sued by ECM, and it was agreed between both parties that ECM shall not act on the lien registered,” Jacobs said in an email to CBC News.
“CFI plans to recommence mining activities within the next two weeks, and ECM will continue to be the mining contractor — the relationship between the parties has not changed at all.”
CBC News sent Jacobs the first page of the statement of claim, which he said he had already seen and called it “not hostile.”
East Coast Mining — a subsidiary of Ledcor — spokesperson Randy Daggitt said the lien is a “standard safeguard for outstanding amounts.”
“East Coast Mining remains committed to continued co-operation with CFI toward the successful start-up of the mine,” he wrote in an email to CBC News.
Ledcor spokesperson Katherine Coutinho added the suit was filed in order to protect the company’s security, and it was required.
“It’s standard procedure — despite what it may say or what may be inferred from it, we continue our collaboration with CFI in anticipation of a successful project,” Coutinho said.
Canada Fluorspar (N.L.) Inc. has yet to file a statement of defence.
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