In the matter of Desjardins Assurance générales inc. v. Imeubles Devler inc. rendered on May 9 of this year, the Court of Appeal overturned a Court of Quebec judgment and emphasized the importance of evaluating the liability of all parties in a chain of contracts under all applicable liability regimes, even in situations where the application of the legal warranty of article 2118 of the Civil Code of Quebec (“C.C.Q.”) is raised.
The Facts
In May of 2015, Mr. Thomas Andreo (“Andreo”) purchased a condominium in a building completed in 2014 by promoter and builder, Les Immeubles Devler Inc. (“Devler”). In September 2018, Andreo discovered water damage and retained experts who confirmed it was caused by a leaky air conditioning unit. He denounced this situation to Devler which, in turn, notified Lavalée-Dufour Inc. (“LD”), Devler’s subcontractor that installed the air conditioning unit in question. Devler and LD carried out an inspection a few weeks later.
Desjardins Assurances Générales inc. (“Desjardins”), insurer of Andreo and the Co-ownership, covered the repair and relocation costs assessed in an expert report obtained at the Co-ownership’s request. Desjardins, subrogated in the rights of its insured, and the Co-ownership instituted proceedings against Devler and LD.
The Judgment
At trial, Desjardins and the Co-ownership put emphasis on the 5-year legal warranty provided at article 2118 C.C.Q. which applies to construction defects resulting in “a loss of the work”. They also argued that Devler and LD were liable pursuant to legislation governing latent defects. In defence, LD argued that its liability could not be engaged as it had no legal connection with Andreo or the Co-ownership, further maintaining that it committed no fault. Devler was not represented and the trial proceeded against it by default.
In a judgment rendered on May 16, 2024, the Court of Quebec mentioned that “the Insured and the Co-ownership preponderantly established the existence of a construction defect” but concluded, on the other hand, that they had not established a “loss of the work” in the sense of article 2118 C.C.Q. and therefore dismissed the claim entirely. Desjardins and the Co-ownership appealed.
In a judgment of May 9, 2025, the Court of Appeal ruled in favour of the appellants and concluded that the trial judge should not have limited his analysis to article 2118 C.C.Q. Indeed, it is up to the parties to determine the object of their claim, and the courts cannot go beyond what is sought in the proceedings, but the lack of an analysis of civil liability and of vendor warranties required the Court of Appeal’s intervention.
As for LD, the Court of Appeal noted that a breach of contract would legally constitute a factual occurrence with respect to Desjardins’ insured, which is insufficient to engage its liability. The evidence adduced at trial, however, allowed for the conclusion that LD had not respected a standard of reasonable care and diligence in the execution of its contract. This therefore constituted an extracontractual fault that directly prejudiced Desjardins’ insured and engaged its liability accordingly.
With respect to Devler, the Court of Appeal ruled that the evidence at trial established the existence of a latent defect for which Delver should be held liable in its capacity as a professional vendor (articles 1726, 1729, 1733 and 1442 C.C.Q).
As LD and Devler were liable for the same damages pursuant to two different liability regimes, the Court of Appeal ordered them to pay damages on an in solidum basis.
Takeaway
When evaluating the liability of parties in a chain of contracts, it is important to consider each fault reproached under each applicable liability regime. Even in cases where a “loss of the work” would not have occurred in the sense of article 2118 C.C.Q., this does not exclude the application of other civil liability regimes.
