The Facts
In the context of a project for the construction of a ten-storey condo building, the excavation contractor subcontracts the design and installation of a Berlin-type retaining wall (the “Wall”) to Phénix Maritime inc. (“Phénix”) which, in turn, subcontracts the design to Les Investigations Marcel Leblanc inc. (“IML”). Problems arise that substantially delay the project, namely relating to the excavation work and the Wall’s construction.
The developer institutes proceedings claiming delays and extras from various parties involved in the project, including Phénix and IML. In a trial regarding three joined court files, the Superior Court is called to rule on a specific question to determine whether IML should be ordered to pay Phénix an amount of 100 539,06 $, representing the cost of reinforcement work on the Wall recommended by IML during the project.
In the conclusions of its proceedings, Phénix only seeks an order for IML to pay this amount to the extent it committed a design error. In the event the work resulted from unforeseen site conditions (as per IML’s arguments), Phénix excludes the possibility of an order for IML to pay damages.
At trial, the Superior Court determines that IML’s design of the Wall was compliant and respected industry standards. The Court nevertheless orders IML to pay the amount in question as the work was carried out at IML’s initiative, though the Court does not elaborate upon any fault in relation thereto. IML appeals.
The Court of Appeal’s Judgment
IML maintains that the trial judge’s ruling was ultra petita in that it went beyond what the parties requested. The Court of Appeal shared this view.
The evidence adduced at trial and the allegations in the proceedings in no manner raised the utility or necessity of the work to reinforce the Wall recommended by IML. The only conclusion sought by Phénix was an order against IML in the event of a design error. As the trial judge concluded that the design was compliant, the Court of appeal overturned the trial judgment emphasizing that, “it is up to the parties, not the Court, to institute proceedings and to determine the subject matter […] the Court cannot rule upon a request if it is has not been fully debated.” Accordingly, the absence of allegations and evidence regarding IML’s advisory duties and whether it was justified in recommending the work in question was fatal.
Takeaway
In multi-party construction litigation, taking a position can be complicated, especially when it comes to defending the rights of a party in a chain of subcontracts. The harmonization of defence arguments with conclusions in proceedings in warranty or with related files must be done with utmost care.
To properly do so, the Court of Appeal reminds us of the importance of properly circumscribing and nuancing the allegations of fault in legal proceedings. When professional liability is raised, the assessment of roles and responsibilities can indeed go beyond design errors and can extend to advisory duties and any act carried out during a project.
In the context of judicial proceedings, it is therefore important to retain qualified experts as early as possible to complete an analysis of all actions taken by the professionals. Any problem, or potential problem, identified by the experts, can then be adequately taken up in the proceedings to reflect each fault that may result from various professional obligations.
The Courts can only rule upon what the parties request and nothing ventured, nothing gained.
