North

Court overturns $67M Yukon sawmill settlement

The Federal Court of Appeal is taking away a settlement which was awarded to a failed Yukon sawmill two years ago.

The Federal Court of Appeal is taking away a $67 million settlement which was awarded to a failed Yukon sawmill.

The owners of the sawmill in Watson Lake said they would never have built a mill in the territory if they had not been guaranteed they’d be able to cut enough trees to fill it. South Yukon Forest Products claimed federal officials lied to them and promised they would have a long-term supply of wood.

Two years ago, a federal court judge awarded the owners of South Yukon Forest Products the damages because those promises were broken.

Now, three judges on the federal appeals court say the company should have known better than to believe promises made by government officials because those promises would have had to be honoured by politicians.

The judges said that while they don’t disagree with any of the findings of fact made by the first judge, they said it was unreasonable for the sawmill owners to believe assurances from bureaucrats which could be, and eventually were, overridden by politicians.

They allowed the appeal and dismissed the original claims by South Yukon Forest Products.

So far, neither the sawmill owners nor the Yukon government is commenting on the ruling.