Bulletins

63

The Pool Floats, the Claim Sinks

In the recent decision Piscines Élégance – Québec inc. v. Comtois, 2023 QCCS 4574, the Superior Court reiterates the rules governing a contractor’s obligation to inform his customer in the context of a fixed-price consumer contract for which hefty extras were billed.

Piscines Élégance – Québec Inc. (“Piscines“) is claiming from defendant Comtois (“Comtois“) the sum of $103,000, representing the balance of an invoice for $144,972 for work to repair damage caused to a swimming pool during the 2020-2021 winter season.

As Comtois was dissatisfied with the work performed and its cost, he filed a counterclaim against Piscines and its sole shareholder, Mr. Dominic Flamand (“Flamand“) for $36,253 representing the cost of correcting the work poorly performed by Piscines, $15,000 in punitive damages and $10,000 for troubles, stress and inconveniences.

The facts

In the summer of 2020, contractor Mini Excavation installed a fiberglass in-ground pool purchased in 2018 in the backyard of Comtois’ home. Around December 25, 2020, Comtois noticed that the concrete slabs surrounding the pool were damaged by frost.

In May 2021, Comtois mandates Piscines to determine the cause of the damage and to estimate the cost of repairs. On May 4, 2021, after a site visit, Piscines’ representative Flamand presented a repair estimate for $18,396, taxes included. This estimate included, amongst others, work to remove the existing pool, complete excavation, removal of contaminated stone and complete installation and upgrading of the pool.

Comtois entrusts Piscine with the work, which will take place from October 4 to 13, 2021. Piscines subcontracts the excavation work to Excava Plus, its regular subcontractor. On October 13, 2021, Flamand hands Comtois an invoice for $144,972 including taxes, including $79,900 before taxes for excavation work. This invoice is at the heart of the dispute between the parties.

The parties’ claims

Flamand explains at trial that the additional excavation work was required because the original pool was installed in the water and it was impossible to forseethese extras before digging. He insists that he had daily discussions with Comtois and his wife, Lucie Morin (“Morin“), indicating that the work would generate extras and that they asked him to continue, without ever indicating their disagreement or asking him to stop the work. Flamand admits that he did not have Comtois and Morin sign any contract for these extras because he could not estimate the costs in advance. Finally, Piscines argues that it is justified in claiming this sum, since the initial estimate included a clause providing for the possibility of additional charges.

For its part, Comtois argues that the parties are bound by a fixed-price consumer contract, and the extras clause in the estimate does not apply to a consumer, who cannot imagine having to pay such a high bill when the estimate indicates “excavation and complete installation”. He adds that Piscines had failed in its duty to inform on essential elements of the contract, and that Flamandcommitted fraud, since he kept the cost of the extras under wraps and obviously had a plan to overcharge.

For the reasons detailed below, the Court ruled in favour of Comtois.

Decision

The Court found that one contract had been concluded between the parties, since no quotation had been submitted for the extras, only one invoice had been produced, and the customer had never validly consented to the additional excavation work for the price claimed. In addition, the quote of $18,396, taxes included, qualifies as a lump-sum contract as defined by article 2109 of the Civil Code of Québec (“C.C.Q.”).

The contract also qualifies as a consumer contract under section 2 of the Consumer Protection Act (“CPA“), since it was entered into between a consumer and a merchant in the course of his or her activities, and had as its object a good or service.

The Court was of the opinion that Piscines could not claim the balance of its invoice amounting to $103,000 from Comtois, since the latter had flagrantly failed in its duty to inform and, secondly, Comtois had been the victim of fraud by Piscines and its subcontractor. Finally, Piscines was bound by the fixed-price contract for the price indicated in the estimate, and the evidence showed that the billing was unjustified due to a work method contrary to the rules of the trade and an exaggeration of costs.

The judgment concludes that Piscines was required to adequately inform Comtois of the cost of extras and modifications to the initial contract. Simply claiming that Piscines could not have known the cost of the extras does not relieve it of its fundamental obligation to inform its client, set out in article 2102 C.C.Q. and article 228 CPA. Moreover, Comtois and Morin were laymen when it came to pool repair and installation, as well as excavation.

As a customer, Comtois had a fundamental right to know the cost of the extras so that he could make an informed decision as to whether to continue with the pool repair contract. Piscines’ and Flamand’s silence concerning the extras constituted condemnable and wrongful conduct. The Court held that Comtois had not given valid consent to the extras, even though he had told Piscines to continue the work, since he was unaware of the costs involved.

As for the extra costs clause in the estimate, the Court states that it cannot be set up against Comtois, since this is a consumer contract and a clear breach of the merchant’s duty to inform and to act in good faith.

Furthermore, case law recognizes that soil conditions leading to price increases are generally at the contractor’s risk. Thus, the presence of clay and “tuff” under the Comtois pool could not be a reason for charging extras.

Finally, the judgment concluded that the evidence showed that Comtois had given his consent for extras up to a sum of $41,937.13, which had been paid to Piscines.

It appears from the evidence that Piscines decided to change the excavation method announced at the start of the work to a more expensive one, without any valid explanation, in order to mislead Comtois and extract money from him. The evidence also showed that Piscines had adopted this scheme with other customers, in order to defraud them and to overcharge.

In so doing, the Court concluded that Piscine had committed fraud by omission and reticence concerning the cost of extras, and had misrepresented the method of work.

The Court reiterated the principle that the shareholder and sole director of a company can be held liable for damages caused to a third party if he or she participated in an extra-contractual fault of the company and/or if there is bad faith and malicious intent on the part of the director.

In the present case, it was therefore concluded that Flamand, director and sole shareholder of Piscines, actively participated in the fault and fraud committed by Piscines, and engaged in malicious and fraudulent conduct in order to benefit Piscines with exaggerated revenues. In so doing, the Court held that Flamand and Piscines must be held jointly and severally liable to Comtois.

Piscines’ claim was dismissed, and Comtois’ counterclaim was allowed in part. Piscines and Flamand were ordered jointly and severally to pay Comtois the sum of $22,661.91, representing the cost of work to make the pool functional, $5,000 for the stress and inconvenience suffered by Comtois, and $15,000 as punitive damages.

63

Authors

Ariane Vanasse

Lawyer, Associate

Articles in the same category

Handling Of Claims By Insurers – Reminder Of A Few Principles

On February 12, 2024, the Court of Appeal rendered an interesting decision in a dispute between Société d’assurance Beneva Inc. (“Beneva”) and its insureds1. Origin of the dispute and judgment of the Superior Court The legal action was initially brought before the Superior Court by the insureds2, as a result of Beneva’s refusal to indemnify […]

Is Loss Of Enjoyment A Covered Loss?

The Court of Quebec recently ruled on this issue in Long BÉ Express Limited v. Service Routier ML Inc. and Intact Insurance Company. In the context of a “Wellington” Motion, Service Routier requested that its insurer take up its defence and assume its costs in the lawsuit brought by Long‑BÉ Express Limited. Service Routier offered […]

Even Judicial Discretion Has its Limits

On January 25, 2024, in the Liquidation de Groupe Dessau inc., the Superior Court of Québec rejected a settlement approval request in the context of the voluntary liquidation of several entities of the Dessau-Verreault-LVM Group (“Dessau“). This judgment addresses the limits of the discretionary powers of the court in voluntary liquidation matters. Overview of the […]

The Defect Was Well Hidden, but Is That Enough?

In Cvesper v. Melatti, the Court of Appeal reminds us of the importance of a timely notice to the vendor in cases of latent defects as tardiness or omission to do so may fatally impact the purchaser’s recourse The Facts Essentially, in May 1980, Appellant, Mrs. Cvesper, purchased a property consisting of a multi-unit building […]

Theft Is Not Negligence

In a recent decision, the Quebec Court of Appeal upheld the ruling of the Honourable Chantal Corriveau of the Superior Court that a party cannot benefit from the presumptions of liability in the Civil Code of Quebec when there is no contractual relation between the parties. In such cases, the rules of extra-contractual liability apply, […]

The « Appropriate Care » Provision in Disability Insurance: An Application Bearing Heavy Consequences for the Insured

In Desjardins Sécurité financière v. Hébert, the Court of Appeal reminds us of an essential condition often overlooked in order to claim disability insurance benefits: the obligation to be under the care of a medical team and to receive medical treatment, a contextualization of the obligation to mitigate one’s damages. The Court also considers the […]