What Is an Interruption of Prescription?

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By Hélène Maurice, from our Insurance Law Practice Group


October 4, 2021 — Ballard c. Ville de Gatineau, 2021 QCCS 3695, recently rendered by the Superior Court, deals with the effect of the recognition of a right by a defending party on extinctive prescription.

The parties’ arguments

The case originated from the issuance of two infraction notices given by the City of Gatineau following embankment work carried out on their property by the plaintiffs. The latter`s position was that the notices were invalid. The City subsequently decided not to prosecute the alleged violations. The plaintiffs reacted by filing proceedings against the City for the loss caused by the interruption of the work that had followed the issuance of the illegal notices.

The City argued that the notices were legitimate and that the decision to renounce prosecution was purely discretionary. As such, the plaintiffs failed to meet their burden to prove a fault having caused the damages claimed. Furthermore, the City argued that the plaintiffs’ claim was statute barred given the six-month prescription period provided in section 586 of the Cities and Towns Act.

The plaintiffs argued that the prescription had been interrupted when the City recognized the legitimacy of their claim. They held that by deciding not to prosecute, and by informing the plaintiffs of the steps to take to claim compensation, the City had recognized their right, thus interrupting prescription.

The prescription

Pursuant to article 2898 of the Civil Code of Québec, “[a]cknowledgement of a right, as well as renunciation of the benefit of the time elapsed, interrupts prescription.” The Court repeated the principles established by the Court of Appeal in Poirier c. Gravel, 2015 QCCA 1656. To validly conclude that prescription has been interrupted, the party that would benefit from it, the creditor, must demonstrate the debtor’s clear and unequivocal intention to recognize his right and, accordingly, relinquish the benefit of the time elapsed. As the Court stated, even an offer to settle, in and of itself, is not sufficient to interrupt prescription. Furthermore, the person who allegedly recognizes the opposing party’s right must have the capacity to bind the party on behalf of whom he purports to act.

In this case, although the City had explicitly stated its intention not to prosecute and had informed the plaintiffs of the procedure to claim damages, the Court concluded that these statements were not tantamount to an admission that the City had committed a fault, and were not a recognition of the plaintiffs’ alleged right to compensation.

Finally, even if there had been a clear intention on the part of the City’s spokesperson to acknowledge plaintiffs’ rights, she was not authorized to bind the City.

Therefore, as the prescription had not been interrupted, the Court concluded that the debt had been extinguished by prescription and dismissed the application without having to consider the City’s alleged fault or the plaintiffs’ damages.

The City of Gatineau was represented by Justin Beeby, partner in RSS’s Insurance Law Practice Group. Justin’s practice includes the defence of numerous cities and municipalities.

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Builders’ Risk Insurance: Is Demolition Work Covered?

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By Sarah Bouzo, from our Insurance Law Practice Group


September 17, 2021 — On June 7, 2021, the Superior Court dismissed the action in L’Unique assurances générales inc. c. Intact Compagnie d’assurance, 2021 QCCS 2916, in concluding that the Builder’s Risk issued in favor of Intact’s insured did not apply.

L’Unique (acting in continuance of suit for Groupe Ledor inc., Mutuelle d’assurance) insured Mr. Frédéric Boivin’s property located in Saint-Antoine-de-Tilly in virtue of a Homeowner’s policy.

Defendant Intact insured the activities of Les constructions Gagnon (1980) Inc. [Gagnon] as a contractor under an extended form Builder’s Risk policy.

The dispute between the parties related to the contents and interpretation of the policy issued by Intact favour to its insured.

The facts

On June 21, 2016, a fire broke out and Gagnon was hired by Ledor to carry out selective demolition work for the purpose of assessing the damage – but not to repair, rebuild, renovate, enlarge, or transform the building. In fact, its services were retained to allow the insurer to ascertain the condition of the premises to decide whether the building was a total loss and also to allow the claims adjuster to identify the cause and origin of the fire.

On July 4, a second fire broke out, but this time the building was a total loss. Only the sections of the building that existed before the Intact policy came into effect and before the demolition work was carried out by Gagnon were damaged.

Ledor indemnified its insured, Mr. Boivin, in excess of $500,000 and sought reimbursement from Intact for the indemnity paid.

Builder’s Risk Policy

Intact’s policy covered four situations, including the one applicable to this case, the “Global Worksite”. This coverage is described as follows: “Insured Property – building under construction including renovation, extension and transformation.”

The “Insured Property” is defined as “property […] under construction or installation and intended for the designated work […]. Non-recoverable materials and supplies necessary for said work are also covered […]” [All policy translations are ours]. Finally, the policy contained an exclusion for existing buildings, namely, “fixed structures that existed before the insurance took effect”.

Superior Court decision

The Court concluded that the policy did not cover the loss:

  • The Builder’s Risk policy covered Gagnon’s property to be incorporated into a building’s construction, renovation, extension or transformation and the materials necessary for this;
  • Given the nature of the policy and the terms used, such as “in the course of construction or installation”, “enter into the designated work”, “necessary for said work”, construction work was clearly required;
  • However, the work performed by Gagnon was demolition work and no material had been incorporated into the building;
  • The Plaintiff did not meet its burden of proof, which was to show that the damaged property met the description of the insured property.

Exclusion for existing structures

On the exclusion for fixed structures that existed before the insurance took effect, the Court reviewed a number of recent decisions from the common law provinces that dealt with this type of clause. The exclusion applied; furthermore, the parties admitted that the claim applied to the destruction of a structure that existed before the insurance took effect.

Thus, the Court accepted the position of the Defendant Intact that the Builder’s Risk policy did not apply in this case and dismissed the action.

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A Draft Regulation Significantly Changes the Duty to Defend in Quebec

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By Nick Krnjevic, from our Insurance Law Practice Group


September 10, 2021 — On September 8, 2021, the Quebec Minister of Finance published in Part 2 of the Official Gazette of Quebec a draft of the regulation [Draft Regulation] that specifies the categories of insurance contracts, and insured parties, that may derogate, in part, from the rules set out in articles 2500 and 2503 of the Civil Code of Quebec [CCQ].

Quebec has always been distinct in that the costs associated to the duty to defend are over and above the policy limits. The draft regulation will allow an insurer to deviate from this in certain circumstances.

Public order article 2500 CCQ mandates that a liability insurance policy’s limits must be used solely to pay the claims of injured third-parties (i.e. the claimants). Public order article 2503 CCQ mandates that a) the liability insurer must actively take up the defense of the insured in respect of covered claims, and b) the liability insurer must pay defense expense, interest and third-party costs in addition to policy limits.

The Draft Regulation enables a wide cross section of commercial entities (and their directors, officers and trustees) to obtain insurance that derogates, in part, from arts. 2500 and 2503 CCQ.

However, that derogation is subject to a significant constraint.

Per Section 8 of the Draft Regulation, policies that derogate from art. 2500 CCQ cannot erode more than 50% of their limits via payments made for purposes other than compensating injured third-parties (i.e. defense expense). This restriction does not apply if the insured is either found not liable, or is held liable for an amount that is less than 50% of limits. A further restriction applies to entities that are required by law to have a specified minimum amount of liability insurance (e.g. members of professional orders). That amount of indemnity cannot be eroded by other payments.

The official French version of the draft Regulation can be found here: http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=1&file=75542.pdf

An English version of the draft Regulation can be found here: http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=1&file=105247.pdf

The Exemptions

The entities that benefit from the different exemptions are generally summarized below. N.B.: some of the following descriptions of exempt entities are of a general nature. The legislative definitions referenced in the Draft Regulation should be consulted in order to determine the precise scope of each type of entity that benefits from an exemption.

Section 1 Exemption

Drug manufacturers, Cooperatif Desjardins investment fund entities, FTQ investment fund entities and CSN investment fund entities. The directors, officers, and trustees of these entities can obtain derogating insurance even if the entities do not subscribe to same.

Section 2 Exemption (applicable to entities that do not benefit from Exemption 1)

If their total coverage under all liability insurance contracts is at least $5M, the following entitles can obtain policies that derogate from the requirements of articles 2500 and 2503 CCQ: entities registered as “large businesses” (companies with more than $10M annual taxable sales, generally speaking), public issuers or their subsidiaries, entities registered as “foreign businesses”, and, finally, any otherwise non-exempt domestic companies that engage in any foreign business that generates income, but only for that foreign subset of their activities. The directors, officers, and trustees can obtain derogating insurance even if the entities do not subscribe to same.

Section 3 Exemption (applicable to entities that do not benefit from Exemptions 1 or 2)

Private seniors’ residences, providers of certain senior support services and/or certain similar services, and operators of residential and long-term care or rehab centres (generally speaking). The directors, officers, and trustees can obtain derogating insurance even if the entities do not subscribe to same.

Pension Committee Exception To Exemptions 1, 2 and 3

Directors, officers, and trustees who benefit from Exemptions 1, 2 and 3 are not exempt for activities they perform as members of pension committees. Such activities must be insured under policies that are in conformity with articles 2500 and 2503 CCQ.

Section 6 Exemption (applicable to entities that do not benefit from Exemptions 1, 2 or 3)

If an entity and/or its directors, officers, and trustees do not fall within Exemptions 1, 2, or 3, they can obtain policies that derogate from the requirements of articles 2500 and 2503 CCQ if the entity has a primary layer civil liability insurance policy that is in conformity with said articles.

Other Conditions Applicable to Derogating Policies

Per Section 7 of the Draft Regulation, policies that derogate from the first sentence of art. 2503 CCQ (which provides that the insurer must actively take up the defense of the insured) must provide the insured with the option of selecting defense counsel, after consulting with the insurer. These policies shall also stipulate that the insurer, who retains the right to participate in the defence, must be informed of case developments.

Public Comments

Per the introductory provisions of the Draft Regulation, persons wishing to comment on same are requested to submit written comments within a 45-day period to the Minister of Finance.

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A Snapshot of our Recent Activity — Business Law

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By Herbert Z. Pinchuk, Sharon G. Druker, Ad. E., and Jean-Pierre Sheppard, from our Business Law Practice Group


August 31, 2021 — It is my pleasure to write this introduction to our summer 2021 newsletter. The timing is pretty optimal since the firm, including our Commercial Litigation group, was on a roll for the first six months of the year. Our team has grown, with three new lawyers to respond to clients’ needs:

  • Médgine Gourdet, who has been with the firm since 2015, has been lead counsel in numerous litigation matters. She now focuses exclusively on commercial litigation cases.
  • Maryam d’Hellencourt, already has a most impressive record, having dealt with files raising numerous commercial law issues. A holder of degrees in both civil law and common law, in addition to a Master of International Law, she is very involved with Montréal’s business community.
  • Samuel St-Jean focuses his practice on construction, real estate, and business law. His knowledge of the construction industry results from years of experience that he acquired with a company active in that field.

Our Transactions Group added a new member as well:

  • Philippe Brassard, who was recently called to the Bar, had already made his mark as an articling student. An alumnus of the University of Montréal, he has a passion for the business world that clients have come to appreciate.

The past 18 months led us to concentrate our efforts on issues such as shareholders and partners’ disputes, real estate and contractual matters, including problems arising from non-competition and non-solicitation clauses and unfair competition issues. We are increasingly being asked for advice as soon as the first signs of potential disputes appear, as clients want to be prepared and well positioned for all possible eventualities.

Here is a brief summary of the Business Law Group’s activities during the initial part of 2021.

Jean-Pierre Sheppard
Partner, Head of the Commercial Litigation Group

M&As, Financing and Business Transactions

  • Acted for the owners of Volkswagen Vaudreuil and Laurentides in their cross-border acquisition of Hawkesbury Ford and the related Quebec and Ontario financing by VW Credit Canada, Inc., involving several entities in both cases. Sharon G. Druker, Ad. E., Philippe Brassard.
  • Acted for Trusource H2O Canada Inc., a drinking water systems company, in its acquisition by Quench Canada. Barry H. Shapiro, Sharon G. Druker.
  • Advised the shareholders of KLF Media Inc., a supplier of sourcing and fulfilment services to the premium and incentive industry, in the sale of all their shares to Incentive Concepts Inc. Geneviève Goulet, Sharon G. Druker, Philippe Brassard, Francis Gioia (student).
  • Advised Tactico TSF 10-20 Investment LP, a strategic venture capital investor, in several secured financings. Sharon G. Druker.
  • Assisted the sellers for the sale of the shares of a company in the personnel staffing and management services industry. RSS’s team enabled closing the deal in record time. Geneviève Goulet, Philippe Brassard.
  • Acted for out-of-province clients in the multi-million-dollar acquisition of shares and assets of a Quebec situs cross-border trucking company. Rhona Luger, Herbert Z. Pinchuk, Philippe Brassard, Adrien Tillet.
  • Assisted in the completion of various real estate development projects. Rhona Luger, Herbert Z. Pinchuk.
  • Assisted in the acquisition of a real estate management company servicing syndicates of condo owners. Geneviève Goulet, Philippe Brassard.
  • Representation of the sellers of an industrial cleaning supply enterprise. Herbert Z. Pinchuk, Sharon G. Druker.
  • Assisted a group of doctors for the acquisition of a clinic, advised on the structure implemented by their partner for the construction of a new building for the clinic, and drafted the shareholders agreement. Geneviève Goulet.

Tax, Estate Planning and High-Net-Worth Individuals

  • Advising on an unclaimed property matter with Revenu Québec involving payments to trust beneficiaries. Marilyn Piccini Roy, Ad. E., Lauren Flam, Martin Lord.
  • Advising and drafting situs wills, powers of attorney and protection mandates for several non-Quebec residents who own property in Quebec. Marilyn Piccini Roy.
  • Defending a claim to uphold the validity of a will executed by a testator after his protection mandate had been homologated or confirmed by the Court and the judgment was still in force. Marilyn Piccini Roy, Lauren Flam.
  • Defending a liquidator/trustee in a contestation regarding her professional and legal fees. Marilyn Piccini Roy, Lauren Flam.
  • Advised a US corporate trustee on debt liability for heirs under the succession law of Quebec. Marilyn Piccini Roy, Lauren Flam.
  • Rendering an opinion on the extent of an encroachment power in a trust. Marilyn Piccini Roy.
  • Defending the validity of beneficiary designations on annuities issued by our client. Marilyn Piccini Roy, Lauren Flam.
  • Challenged the discretion of a trustee to delay delivery of trust property to the beneficiary in a timely fashion. Claude-Armand Sheppard, Ad. E., Martin Côté, Marilyn Piccini Roy, Lauren Flam.
  • Advising clients in Switzerland and Sweden with respect to the settlement of the estates of their Quebec resident relatives. Marilyn Piccini Roy, Lauren Flam, Adrien Tillet.
  • Filed an application to the Superior Court for a safeguard order in a contentious estate and matrimonial property claim. Marilyn Piccini Roy, Lauren Flam, Carly Flam.
  • Representation of an internal franchisor regarding POS reporting and sales tax issues. Herbert Z. Pinchuk, Martin Lord.
  • Continued representation of the liquidators of a multi-million-dollar estate. Marilyn Piccini Roy, Herbert Z. Pinchuk, William Dion-Bernard, Martin Lord.

Real Estate and Leasing

  • Represented a real estate promoter in arbitration proceedings over a resiliation clause. Award rendered, ordering the payment of sums claimed. Annie Claude Beauchemin.
  • Application for cancellation of a construction hypothec. Annie Claude Beauchemin.
  • Negotiations with commercial tenants on behalf of landlords for the payment of rent during the pandemic. Geneviève Goulet.
  • Assisted a real estate developer in the acquisition and financing of land in Sainte-Eulalie, Quebec. Sharon G. Druker.
  • Acted for the landlord in the preparation of bid documentation for the construction and lease of SAQ premises. Rhona Luger.
  • Acted for the owner in the sale of a real estate development project. Rhona Luger.
  • Acting for an out-of-province corporation in the purchase of real estate in Quebec for the establishment of a large-scale warehousing facility. Rhona Luger.
  • Acted for the landlord in the preparation, negotiation, and finalization of multiple leases for shopping centre premises. Rhona Luger.
  • Acted for the landlord in the preparation, negotiation, and finalization of multiple industrial, office and warehouse leases. Rhona Luger.
  • Acted for the beneficiaries of an estate in the sale of a condominium complex. Rhona Luger.
  • Acted for the tenant in the preparation, negotiation, and finalization of the lease of single-tenant industrial premises. Rhona Luger.
  • Representation of a residential apartment complex owner in connection with a multi-dwelling fire resulting in significant damage and destruction. Herbert Z. Pinchuk.
  • Representation of the purchaser of the shares of the owner of a multi-building industrial complex. Herbert Z. Pinchuk.

Insolvency and Restructuring

  • Representation of the holder of a $12M claim in an application for the appointment of a receiver under s. 243 of the Bankruptcy and Insolvency Act. Annie Claude Beauchemin.

Labour and Employment

  • Defended a construction company against a liability claim by a worker having been injured in an industrial accident and already being paid a compensation by the Commission des normes, de l’équité, de la santé et de la sécurité du travail. Claim dismissed since the case is entirely within the jurisdiction of the government’s regime of worker compensation. Laurence Gauthier.
  • Challenge of a decision by the CNESST denying recognition of the death of a worker who overdosed on fentanyl that he acquired to ease lumbar pain as a work-related accident. Pierre E. Moreau, Normand Laurendeau.
  • Representing an employer in a challenge to the decision of a labour relations officer allowing the certification of an association of employees. Pierre E. Moreau.
  • Representation of two employers, a food processing company, and a student union, for the negotiation and completion of the renewal of collective agreements. Jean Denis Boucher.
  • Advising an interprovincial transportation company on federal employment legislation: labour standards applicable to the trucking industry, occupational health and safety, and human rights. Jean Denis Boucher.
  • Various mandates for an automobile financing company: opposing claims for worker compensation and psychological harassment; advising on and reviewing documents for a corporate reorganization; advising on employee discipline; review of policies to be adapted to Quebec. Jean Denis Boucher.
  • Opposing a claim for dismissal without a valid cause on behalf of a supplier of industrial and medical gas. Jean Denis Boucher.

General Litigation, Arbitration and Mediation

  • Defended two corporate officers against a personal claim for damages for contractual breach of internal services by the government. Jean-Pierre Sheppard.
  • Obtained injunction orders prohibiting a shareholder of a family corporation from contacting competitors and disclosing confidential information about the corporation’s operations and finances. Jean-Pierre Sheppard.
  • Advised a company in the “High Tech” industry that sought to resiliate a consulting contract given the consultant’s bad faith conduct and breach of trust. Jean-Pierre Sheppard.
  • Implemented measures to compel a former employee to cease harassing his former colleagues through technological means. Jean-Pierre Sheppard.
  • Obtained payment of sums owed to an advertising agency for services rendered. Despite the absence of a written contract and the defendant’s position that no mandate had been given, the defendant had used the proposed concepts and images in its advertising campaign. This implicitly confirmed an agreement. Jean-Pierre Sheppard.
  • Defending the seller of an immoveable against a claim based on alleged false declarations on his part. The buyer, who uses the building for the sale of automotive vehicles, claimed that the seller had falsely represented at the time of the sale that the City had agreed to redo the sidewalk along the building so that vehicles could access the property. Normand Laurendeau, Marianne Poliquin.
  • Representing a licensed insolvency trustee in major litigation between an owner, a general contractor, and numerous sub-contractors to recover amounts owing to a bankrupt sub-contractor. Annie Claude Beauchemin, Médgine Gourdet.
  • Represented an association of jurists as intervenor before both the Superior Court and the Court of Appeal in the challenge to the validity of the Act Respecting the Laicity of the State (Quebec), which prohibits persons occupying certain positions from wearing religious symbols. Theodore Goloff.
  • Defending the interests of the University of Montréal before the Superior Court of Quebec, the Court of Appeal of Quebec, and the Supreme Court of Canada in numerous cases, such as:
  • Dismissal at the preliminary stage of a $21-million claim for damages. Martin Côté, Gabriel Gibeau.
  • Successful opposition to an application for permission to appeal before the Supreme Court of Canada in the judicial review of the expulsion of a former student for disciplinary motives. Martin Côté, Gabriel Gibeau.
  • Dismissal at the preliminary stage of another multi-million dollar claim and successful application to have the plaintiff, an ex-student alleging to be the victim of discrimination, declared a vexatious litigant. Martin Côté, Gabriel Gibeau.

Reaching Out

  • Marilyn Piccini Roy published “La fiducie: Québec”, Revue internationale du patrimoine, #07 – March 2021, 79.
  • Present since 2017 in Chambers High Net Worth Guide, Marilyn was upgraded to a Band 1 rating.
  • William Dion-Bernard and Marilyn Piccini Roy were invited to speak at the 2021 STEP CANADA National Conference. William presented recent trust and estate jurisprudence from the civil law and Marilyn was the moderator and speaker on protective measures for an ageing population confronting mental incapacity.

Best Lawyers in Canada just released the list of lawyers who will appear in its 2022 edition. We are proud to note that 30 RSS lawyers will be featured in the directory, including Martin Côté, appearing for the first time as a Commercial and Corporate Litigation expert. Sharon G. Druker, who was listed for her skills in Corporate Law, now is also rated under Mergers and Acquisitions Law.

Finally, to reflect the firm’s involvement with the business community, RSS very recently had four papers published on LesAffaires.com:

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Quebec Court of Appeal Decision: Security Obligation of a Mountain Resort

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By Marc-Olivier Brouillette, from our Insurance Law Practice Group


August 27, 2021 — The Quebec Court of Appeal recently upheld a decision of the Superior Court in Ski Bromont.com c. Jauvin, 2021 QCCA 1070, condemning a mountain resort to pay a guest $152,579 following a fall from a chairlift after resort employees left a customer stranded.

A fun day of mountain biking at one of Quebec’s Eastern Townships’ resorts, Ski Bromont, came to a tragic end when guest Mr. Vincent Jauvin was faced with an unenviable decision; attempting to climb down from a chairlift perched nearly 10 metres above the ground or risk hypothermia by spending the night alone in his chariot in the sky.

At around 6:30 p.m. on August 7, 2014, Mr. Jauvin boarded a chairlift to have one final descent. On his way up the mountain, approximately 300 metres from the landing area, the chairlift came to an abrupt stop and an announcement on the resort’s PA system followed informing guests that the mountain was now closed for the day. Stranded without a cellphone, and with no help in sight, Mr. Jauvin decided to traverse the steel cable to a nearby tower where he could easily climb down to safety. Unfortunately, his grip gave way and he plummeted to the ground from a height of 10 meters. He sustained numerous injuries, which required three surgeries.

Superior Court Decision

The Superior Court (Jauvin c. Ski Bromont.com, 2019 QCCS 3984) analyzed the resort’s contractual obligations underlining that they include providing customers and users with proper facilities as well as chairlift services. In addition, the resort owes its customers an accessory obligation of security which requires the resort to use reasonable means, given the circumstances. In counterpart, customers are required to respect Ski Bromont’s code of conduct and safety.

The facts established that, while Ski Bromont explicitly stated that the trails were not patrolled and that users should not bike alone, a team of four patrollers regularly canvassed the trails. Contrary to the procedure in place for winter activities, a sweep of the mountain was not performed at the end of the day and there was no procedure in place to ensure that no customers are left behind after closing. The Superior Court concluded that despite the resort’s obligation of security being one of means, its obligation to ensure that they are not forgotten on the chairlift is one of result.

The Superior Court dismissed Defendant’s argument that Plaintiff’s attempt to climb down constituted a novus actus interveniens such that the causal link between the fault of the resort and the damages sustained was ruptured. The fault committed by Ski Bromont resulted in plaintiff being stranded in the chairlift and unexpectedly exposed to danger. His unsuccessful attempt to reach the pole was in continuum with the initial fault committed by the resort.

The Plaintiff was forced to assume an abnormal risk because of the resort’s fault, which sadly resulted in serious physical injuries. Plaintiff’s action therefore was granted.

Court of Appeal Decision

The majority of the Court of Appeal maintained the decision, adding that, even if Ski Bromont’s obligation was to be considered one of means, they failed to take all reasonable means, in the circumstances, to obtain the expected result.

Cellphones Now a Must?

It is interesting to note the comment made by the Court of Appeal dissenting judge who found that the Plaintiff committed a fault that contributed to the creation of the dangerous situation by not having a cellphone on hand which, would have enabled him to call for help. Accordingly, he would have reversed the trial judgment in part and reduced the condemnation against Ski Bromont to $114,434.

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Being Struck by a Bullet During a Police Car Chase: An Automobile Accident?

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By Eloïse Robichaud, from our Insurance Law Practice Group


August 20, 2021 — Since the adoption of the Automobile Insurance Act [Act], a lot has been written about its inherent concept of causation. Cohen c. Ville de Montréal, 2021 QCCS 1874, a recent decision of the Superior Court, provided an overview of the applicable principles.

On the night of June 15, 2017, Noam Cohen, a young man under psychiatric care for psychotic disorders, drove his vehicle while in a state of crisis and intoxication. At the request of his family and friends, the Montreal Police was called on the scene. The pursuit culminated by Mr. Cohen being struck by a bullet while his car was in motion as he tried to escape from the police. He died in the hospital later that night.

Mr. Cohen’s family filed a lawsuit for damages against the City of Montreal in Superior Court, accusing the police of using excessive force.

At the preliminary stage, the City filed a motion to dismiss the claim on the basis that the Superior Court did not have jurisdiction in that the damages resulted from the use of an automobile within the meaning of the Act, and that section 83.57 therefore applied:

Compensation under this title stands in lieu of all rights and remedies by reason of bodily injury and no action in that respect shall be admitted before any court of justice.

Subject to sections 83.63 and 83.64, where bodily injury was caused by an automobile, the benefits or pecuniary benefits provided for the compensation of such injury by the Act respecting industrial accidents and occupational diseases (chapter A-3.001), the Act to promote good citizenship (chapter C-20) or the Crime Victims Compensation Act (chapter I-6) stand in lieu of all rights and remedies by reason of such bodily injury and no action in that respect shall be admitted before any court of justice.

The City argued that according to the claim, there was a close link between the use of the automobile and the injury, and the Société de l’assurance automobile du Québec was the only entity competent to compensate the plaintiffs. The plaintiffs, on the other hand, argued that this was a fortuitous event, the vehicle being merely the place where the accident occurred and thus the Act did not apply.

At this stage, the Court had to determine whether the claimed injury was caused “by an automobile, by the use thereof or by the load carried in or on an automobile” [“damage caused by an automobile”, s 1 of the Act].

To answer the question, the Court discussed the background to the enactment of the Act and the objectives and principles of the regime, noting that the Act is to be given a broad and liberal interpretation. A sufficiently close connection between the presence of the automobile and the injury must exist.

The Court then analyzed decisions based on similar facts. It relied, amongst others, on the decision of the Court of Appeal in Québec (Société de l’assurance automobile) c. Benoit, 1999 CanLII 13598 QCCA, which it felt bound to follow under the rule of precedent.

In that case, a police officer was sued for inflicting gunshot wounds during a car chase. The officers had fired their weapons towards the pavement to deter offenders who were attempting to flee following a burglary. A bullet ricocheted and struck one of the offenders. The Court concluded that neither the driving, handling, operation, or presence of the car caused the injury and that the ricochet could have occurred in other circumstances. Consequently, the Act did not apply.

Here, the Superior Court concluded that the facts of the case did not support a dismissal of the action at the preliminary stage and that it was otherwise bound by Benoit.

The City presented a motion for leave to appeal, Ville de Montréal c. Cohen, 2021 QCCA 1128, which was dismissed on the grounds that section 83.57 of the Act, while it prohibits a court from awarding damages resulting from an automobile accident, does not take away the Superior Court’s jurisdiction to determine whether the injury claimed arose from such an accident. The Court of Appeal added that the Superior Court’s comments about being bound by the decision rendered in Benoit does not bind the judge hearing the case on its merits.

If this case proceeds to trial, it will be interesting to see what the Court concludes with respect to causation between the automobile and the injury.

To be followed.

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A Snapshot of Our Recent Activity — Insurance Law

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By Mariella De Stefano and Rachel Clément, from our Insurance Law Practice Group


August 13, 2021 — When drafting this introduction to our newsletter capping the first six months of 2021, I realized that, while we were adjusting our services to maintain RSS’s standards during the last year and a half, we went significantly beyond what used to be our “business as usual” mode.

Actually, our business is growing, and our dedicated Insurance Law Practice Group is more dynamic than ever. As we celebrate our 100-year anniversary, we reflect upon the fact that providing best-in-class service and delivering on our client promise have always been core values at RSS.

We recently appointed Maro Coric as our Chief Client Officer and he will be working with our Insurance Law Practice Group towards the goal of implementing an industry-specific strategy to ensure that our valued clients continue to be at the centre of everything that we do. Maro has outstanding insurance industry experience and looks forward to guiding us for many years to come.

We are excited about the success of our recent recruitment efforts that resulted in the addition of the following talented individuals who share our passion for excellence:

  • Emmanuelle Campeau has over a decade of experience as a litigator with respect to a broad range of civil and professional liability matters. She is also very skilled regarding tax litigation and is an accredited mediator.
  • Caroline Cassagnabère acts on behalf of insured parties with respect to professional liability, product liability, and latent defect matters. She also works with our Class Action team defending some of the highest-profile cases.
  • Emily Dikranian is a member of the Quebec and Ontario Bars who has solid experience regarding matters involving health law and particularly the defence of health professionals. She enjoys working on general civil and professional liability matters.
  • Hélène Maurice is passionate about litigation and is involved with complex bodily injury and construction defect matters. She represents insured parties including manufacturers and other businesses.
  • Nathan Hassan Omar interprets various insurance polices in the context of complex coverage matters. He has also worked on significant litigation files, including several Wellington applications.
  • Catherine Cloutier is a member of the Quebec and Ontario Bars who focuses her practice on insurance litigation, with an emphasis on commercial general liability (particularly bodily injury) and construction matters. Her experience as a nutritionist-dietician is beneficial for insurers who issue various types of specific errors and omissions insurance policies.

We also welcomed Wendy Landrigan-Pant to our growing team of paralegals who work in tandem with our lawyers to ensure that files are handled efficiently. Their work and expertise also enable us to remain one of Eastern Canada’s leading group of insurance law experts.

These new resources allowed us to focus on strengthening our forces regarding two areas of law with increasing significance: cyber risk, and class actions. Some of the cases referred to below have been handled by these newly structured groups.

Our Training Sessions Went Online

Those who have been monitoring our activities will recall that we used to conduct yearly in-person training sessions each spring. Due to Covid-19, we quickly pivoted to offer on-line (webinar) training, which helped us achieve even greater participation, and such training included:

Webinar training is now part of the continuing education tools offered by RSS. In addition, on June 16, 2021, we hosted a webinar titled Hidden Defects and Insurance Coverage, presented by Jean-François Lamoureux.

To ensure that you and your team are kept abreast of all upcoming activities, visit the subscriptions page on our website and sign up. By signing up, you will also receive newsletters according to your interests.

RSS was also present at the 2021 edition of the Journées de l’assurance de dommages, which is, as you probably know, a key event for the damage insurance industry in Quebec. On April 13 and 14, insurance specialists gathered for a string of online discussions and seminars.

Finally, the below details regarding our activities provide a glimpse of exactly how we are able to serve your best interests.

Mariella De Stefano, Partner, Co-chair, Insurance Law Practice Group

The Million-Dollar Circle

  • Defending a manufacturer of mechanical bulk materials handling equipment and systems against a claim for defects to a conveyor system ($22 million);
  • Defended individuals in relation to an over $1-million claim following the plaintiff’s fall during the course of painting work in the defendants’ house;
  • Defending a lawyer against a $2-million claim alleging that she failed in her obligation to provide advice regarding a contract that was not advantageous. Matter dismissed because RSS was able to prove that the opposing party caused the disastrous situation by lying to hide their fraudulent intent.

Class Actions

  • Defending a grocery chain against a class action by buyers of strawberries and juices allegedly contaminated with the hepatitis A virus;
  • Represented a maker of snowmobile parts in an application for permission to withdraw a class action based on the alleged premature deterioration of snowmobile tracks;
  • Filed an application for authorization to appeal before the Supreme Court of Canada against a class action for the refund of fees demanded by health professionals for treatments that should be covered by the government regime. RSS is defending an association of health professionals, and argues that the claim falls under the exclusive jurisdiction of Quebec’s Health Insurance Board;
  • Defending radiology clinics against a class action by persons who tried unsuccessfully to obtain appointments for ultrasonographic exams. Allowed by consent to settle.

Professional Liability

  • Defending an accountant in connection with a claim for the refund of taxes on a new rental apartment;
  • Defending a notary in connection with the unequal partition of proceeds from the sale of a building;
  • Representing a notary impleaded through an application for improbation of a deed that he drafted. Application dismissed, since the notary faithfully carried out instructions received;
  • Defending a notary in relation to an application for judicial declarations of servitudes, of surface rights and acquisition by prescription on neighboring properties of the plaintiff. RSS prevailed: the notary had not failed in his obligation of means; application otherwise baseless;
  • Defended a lawyer in relation to a claim alleging malpractice towards an employee who had sought legal assistance after having allegedly been dismissed without cause and subject to psychological harassment. Claim dismissed: any errors committed by the lawyer had no material impact on the plaintiff’s failed employment-related disputes;
  • Defending an accountant with respect to a claim put forward by a client who had been allegedly advised by the accountant to make a donation that was disallowed for charitable purposes;
  • Represented the notaries’ insurance fund in litigation over the liability of the buyers of a condo for unpaid condo fees;
  • Represented a notary that was released at the beginning of proceedings as RSS demonstrated that he had faithfully reproduced the parties’ declarations and that improbation was not required to prove that the deed was fraudulent;
  • Defended a notary sued for having allegedly acted as an accomplice of the defendants in a real estate fraud and having misrepresented some facts upon the conclusion of deeds on the property. The Court ruled that the plaintiff had taken part in the fraud and caused his own damages. The notary was unaware of any fraudulent element and was not responsible for the loss;
  • Defending a notary sued for having allegedly failed to faithfully express the intent of a testator in a will, thus depriving the plaintiff of the shares of a company in which he was a key employee;
  • Defending a notary against a claim for professional liability: by failing to publish a marriage contract, he allegedly deprived the plaintiff from exercising her rights on shares of companies launched by her late husband. Claim dismissed: by omitting the registration, the notary followed the husband’s instructions;
  • Representing a notary involved in a claim for payment of a $200,000 deposit related to a failed promise to acquire a building, Preliminary step: safeguard order;
  • Represented a notary involved in litigation arising from the disposition of a share in an immoveable despite a clause of first refusal binding the donees of the immoveable;
  • Defending a US law firm against a $2.5-million claim based on the firm’s alleged failure to institute collection proceedings. Debate on the jurisdiction of Canadian courts;
  • Defending a notary against a claim alleging that she had not adequately verified the capacity of the plaintiffs’ father when he sold his immovable.

Coverage Matters

  • Advised an insurer in relation to coverage regarding alleged errors by a professional who provided advice regarding a corporate re-organization which resulted in higher than anticipated tax implications;
  • Provided coverage advice in the employment context which included discrimination claims as well as the question of whether coverage is available regarding an employment practices claim put forward by an independent contractor;
  • Provided advice to an insurer under a commercial general liability insurance policy regarding property damage sustained to a major highway;
  • Provided coverage advice following ransomware incidents that impacted educational institutions and municipalities;
  • Provided advice regarding the percentage share of each insurer regarding a cyber matter where multiple insurance policies were issued;
  • Reviewed coverage regarding Business Interruption Loss sustained by a corporation whose operations were crippled in various locations across North America following a ransomware attack that encrypted several servers;
  • Provided coverage advice to an insurer under a directors and officers insurance policy regarding a class action filed against various financial institutions in relation to alleged improper kickbacks received from service providers;
  • Issued a coverage opinion regarding class action securities claims in relation to alleged misrepresentations contained in publicly disclosed documents;
  • Issuance of opinions on:
    • Coverage issues arising out of several multi-million dollar lawsuits filed in the United States by firefighters who allege exposure, over many years, to Per- and polyfluoroalkyl substances (PFAS) in various products manufactured by North American companies;
    • Coverage issues arising out of a class action complaint filed by present and former members of a Canadian national artistic swim team with respect to alleged multi-year abusive conduct;
    • Choice of law and coverage issues arising out of multi-decade institutional sexual abuse claims;
    • Choice of law and coverage issues arising out of multi-jurisdictional securities and products liability class actions;
    • Coverage issues arising out of ransomware claims;
    • Coverage issues arising out of complex construction project litigation.

A Wide Variety of Insurance Cases

  • Defended an insurer in relation to a claim for disability insurance benefits by a worker having voluntarily confined himself at the beginning of the pandemic;
  • Defended an insurer in relation to the theft of a leased luxury vehicle falling under a policy exclusion of coverage;
  • Defending a roofing company in relation to water infiltrations in a new building;
  • Represented the vendor of allegedly defective building materials in its action in sub-warranty, which was met with a defence based on a clause granting jurisdiction wrongly interpreted as an election of forum, and prescription. Defence dismissed: our client’s action in sub-warranty is allowed;
  • Defended an insurer against a claim arising from a construction defect that appeared gradually, thus raising the problem of the starting point of prescription;
  • Acting for the defence in a case arising from the loss of an eye by a participant in a game of piñata during a celebration;
  • Defended a municipality against an application to quash a minor derogation to its zoning, subdivision and construction by-laws allowed to validate the construction of a residence too close to the street;
  • Defending an insurer against a disability insurance claim from an orthopedic surgeon who alleges being totally disabled whereas he can still perform some of the acts relevant to his profession;
  • Defending a developer and contractor having developed a condominium project allegedly affected with construction and planning defects in the exterior of the buildings, air conditioning and access to buildings for maintenance;
  • Defending an air-conditioning company against a claim for damages allegedly caused by a leak in the water drainage pipe of an air-conditioning system installed by our client;
  • Defending a construction company against an application for an injunction to compel it to abide by certain standards related to the risk of activities conducted in the building (F1 or F2), considering a disagreement on the requirements dictated by contract;
  • Homologation in the civil domain of a judgment in a criminal matter ordering the payment of compensation;
  • Defending a plumbing company against a compensatory claim by insurers following an incorrect repair by an employee who was attempting to fix a faulty drain;
  • Defended an insurer against a claim under an emergency medical expenditures policy, following a repeat hospitalization, and raising the problem of a clause excluding coverage for “the same medical condition”;
  • Defended insurers against Wellington-type applications to declare the insured defendants’ right to select their lawyer; application dismissed, as this selection is the prerogative of the insurers.
  • Defended a construction company against a liability claim by a worker having been injured in an industrial accident and already being paid compensation by the Commission des normes, de l’équité, de la santé et de la sécurité du travail. Claim dismissed since the case is entirely within the jurisdiction of the government’s regime of worker compensation;
  • Application to compel the examination of the plaintiff and his spouse in person to facilitate the appreciation of their credibility, notwithstanding the health-related directives in force during the pandemic requiring videoconferencing: application allowed. Claim of $368,000 for a fire;
  • Defending an insurer against a claim by a third party whose property, a trailer, was damaged by the fault of the insurer who had leased it and had it in its possession;
  • Representing the insurer of a company having provided beams used in the construction of a building affected by flooring deflections;
  • Defended a municipality against claims arising from the infiltration of water having damaged a building and a vehicle. The infiltration was allegedly caused by water main breaks or clogged drainage wells.

Commitment to the Profession

Marcel-Olivier Nadeau, from our Saguenay office, was elected to the Board of the Bar of Quebec. He previously, held the position of bâtonnier of the Bar of Saguenay–Lac-Saint-Jean until May 7, 2021.

Posted in Publications |

You’re an Ontario Employer with Staff Working Outside Your Province? Severance Pay Could Be Costlier Than You Think

Posted on by FSP

By Theodore Goloff, from our Labour and Employment Law Group


August 11, 2021 — From time to time, judgments are rendered in other provinces in Canada which require our attention here in Quebec. The recent judgment by the Divisional Court of Ontario in Hawkes v. Max Aicher (North America) Limited, 2021 ONSC 4290 (Can LII), is one such case.

It is not at all peculiar to find companies operating through personnel who work from premises located outside the employer’s province. The pandemic, during which home offices proliferated, undoubtedly accentuated this phenomenon. The Ontario Employment Standards Act, 2000 [ESA] will apply if “the employee’s work is to be performed in Ontario and outside Ontario but the work performed outside Ontario is a continuation of work performed in Ontario” [para 3(1)(b) ESA].

It would seem that, given that paragraph, the impact of the ESA and its provisions over employees outside that province is fairly narrow. But is it?

The issue with respect to the severance obligations — obligations which are separate and additional to notice or pay in lieu thereof, covered by separate provisions of that statute — is another matter.

Whether or not a company is or is not subject to additional and distinct severance payments to employees terminated or laid off for a lengthy period of time, obligations which may run into rather serious coin may be dependent on the size of the employer’s payroll: this obligation may be triggered if “the employer has a payroll of $2.5 million or more” [para 64(1)(b) ESA]. But payroll where?

Paquette c. Quadraspec Inc., 2014 ONCS 2431 (CanLII) broke new ground and held that the employer’s total payroll across Canada (in that case, Ontario and Quebec) was to be taken into account in establishing the $2.5M dollar threshold. Paquette determined that Section 64 of the ESA that creates the obligation to pay severance in addition to notice pay:

[66] … does not provide for the Ontario legislature to regulate the “other provinces’ payrolls”. The legislature has competence to regulate the activities of employers who carry on business and hire personnel in Ontario. The requirements imposed upon employers by and in other jurisdictions are not the subject and scope of section 64.

[67] The Ontario legislature has the legislative authority to enact the mechanism that will be used in the application of an Act in Ontario: more precisely, it can decide which Ontario employers are required to pay severance pay. Under section 64, the rule depends on the size of the employer and its staff, or that of its payroll. The scope and application depend on “the total wages earned by all of the employer’s employees”. The text of the Act is clear. The scope corresponds to the wages paid by the employer both within and outside Ontario. There is no legal justification or jurisdiction to interpret these provisions in such a way to apply restrictions not found in the law. [Our translation]

It seemed then that the matter was closed. Paquette however was ignored by subsequent jurisprudence and life went comfortably on in Ontario for the next six or seven years. Only a company’s Ontario payroll was deemed pertinent — woops — until now.

All that changed this past June. In Hawkes, a three-Justice panel of the Ontario Superior Court of Justice overruled the Ontario Labour Relations Board and held that any interpretation restricting the threshold of $2.5 million dollar payroll to Ontario activities was illogical and therefore unreasonable. Indeed, what the Superior Court took into account was not only the employer’s Canadian payroll but indeed its worldwide payroll since the company was European-based.

This judgment has broad implications, not only in terms of severance but in terms of the reach of Ontario law with respect to divulging “necessary payroll information” [Hawkes, par 50]. Under Hawkes since the world payroll is determinative of the threshold of application of Section 64 of the ESA then clearly the Ontario Ministry of Labour has authority to order production of information regarding the company’s worldwide payroll, a curious result given what are, at first blush, constitutional limitations of enforcement of provincial laws beyond that provinces borders. We can report that this case has made sufficient waves among Ontario’s senior management labour counsel that consideration is being given not only to an appeal but to attempts to convince the Ontario government to amend the law.

In the interim, if you are an employer and you have branch operations in Ontario that would not otherwise pass the Section 64 threshold for severance pay given your limited Ontario payroll, you should be advised that unless Hawkes is overturned, the cost of terminating employees may be a lot higher than you might otherwise believe.

Posted in Publications |

The Impact of the New Pay Equity Act on Employers Under Federal Jurisdiction

Posted on by FSP

By Dimka Markova, from our Labour and Employment Law Group


August 4, 2021 — Although the Canadian Human Rights Act recognizes the right to pay equity, wage differences between men and women still exist. Such was the focus of the Pay Equity Act [the Act], adopted by the federal Parliament on December 13, 2018, and the accompanying Pay Equity Regulations, which will implement a proactive pay equity regime applicable to both public and private sector employers under federal jurisdiction and with at least 10 employees. As of August 31, 2021, when the Act becomes effective, employers will be held to a careful appraisal of their compensation practices and to award the pay increases required to compensate the differences between salaries paid to men and women for work of equal value.

The current regime of complaints under s 11 of the Canadian Human Rights Act will remain applicable to employers under federal jurisdiction with less than 10 employees.

Pay equity plan

At the core of this new regime is the pay equity plan that employers will have to establish and update periodically. The plan will allow finding and fixing gender-based compensation gaps for predominantly female job classes. Employers will have to establish a plan within three years of the date on which they became subject to the Act. Employers with 100 or more employees, or whose employees are totally or partially unionized, will have to establish a specially appointed pay equity committee. Employers with less than 100 employees, all non-unionized, may also voluntarily establish a pay equity committee, in which case the Pay Equity Commissioner will have to be notified. Ms. Karen Jensen, a member of the Canadian Human Rights Commission, has already been designated in anticipation of the coming into force of the Act.

Composition of the pay equity committee

A pay equity committee is composed of at least three members, at least two-thirds of whom must represent the employees to whom the pay equity plan relates; 50% or more of the members must be women. At least one member must be a representative of the employer. With unionized employees, each bargaining unit may designate one member to represent it. The committee must also include at least one member selected by the non-unionized employees.

Establishment and operation of the pay equity plan

To establish a pay equity plan, the employer, or the pay equity committee, if one has been appointed, must:

  1. Identify the various classes of positions in the workplace and determine for each one the dominating gender (male or female) if any, and the value of work for each category, under the criteria provided for in the Act;
  2. Calculate the compensation for each predominantly female or male class;
  3. Compare the compensation of both classes for work of equal value to reveal any difference in compensation between both classes.

Following this, employers must post their draft pay equity plan for a period of 60 days, to allow employees to make comments on the draft; those comments will have to be considered by the employer, or the pay equity committee, in the establishment of the final pay equity plan.

The final version will have to be posted within three years of the coming into force of the Act: employers will then have to increase the compensation of all predominantly female job classes that, according to the plan, receive compensation inferior to that paid to predominantly male classes. The increase will be payable on the day following the posting of the plan, at the latest. Note that certain employers will be allowed to phase in the increases for a period of three to five years if the increase represents more than 1% of their payroll.

In a unionized context, in the event of an inconsistency between the pay equity plan and the collective agreement, the plan will prevail. Increases that the employer will have to pay will be deemed to be incorporated into the collective agreement.

Update and maintenance of the pay equity plan

After its initial implementation, employers, or pay equity committees, will have to update the plans every five years, to compensate any discrepancy that could arise, ensuring that pay equity will persist. Updating the plan basically involves performing the same steps as the establishment of the initial plan every five years after that plan was established.

The few lines above provide a summary of a complex regime that could generate costly obligations for employers. As it will soon come into force, we recommend that all employers consult with a qualified advisor to help them ascertain whether the Act applies to them and prepare an adequate response.

Posted in Publications |

Gradual Damages and the Starting Point of Prescription

Posted on by FSP

By Emily Dikranian, from our Insurance Law Practice Group


July 7, 2021 — On May 20, 2021, the Court of Appeal, in the case of Ville de Mascouche c. Architectes Rivest-Jodoin & Associé, 2021 QCCA 859 affirmed the decision of the Superior Court (2019 QCCS 1996) which granted a motion to dismiss on the grounds of prescription.

The City of Mascouche [City] hired Anjalec Construction inc. [Anjalec] in 2007 to build two community centers according to the plans and specifications prepared by Les Architectes Rivest-Jodoin et Associé [Architects]. Every winter since 2009, the City experienced water infiltration in these buildings. The City retained an expert in 2011 to conduct a thorough inspection of the cause of the infiltration. The expert went on site four times and, in 2012, noted that it was abnormal to see rust on the metal structure since the roofs were new. Although the expert recommended making openings in the roofs to conclude on the source of the water infiltration the City did not proceed with these recommendations. In January 2013, Anjalec advised the City that it was unable to fix the problem, despite its attempts.

In March 2013 the City hired a third party to address the problem since the roof kept leaking: this attempt was unsuccessful. Finally, the City commissioned another expert in 2016 who concluded that the roofs needed to be completely redone. On May 3, 2016, the City filed an action against the Architects, Anjalec and their insurers. The defendants all argued that the claim was time-barred and should be dismissed due to abuse of proceedings in virtue of Article 51 of the Code of Civil Procedure, which reads:

The courts may, at any time, on an application and even on their own initiative, declare that a judicial application or a pleading is abusive.

Regardless of intent, the abuse of procedure may consist in a judicial application or pleading that is clearly unfounded, frivolous or intended to delay or in conduct that is vexatious or quarrelsome. It may also consist in a use of procedure that is excessive or unreasonable or that causes prejudice to another person, or attempts to defeat the ends of justice, particularly if it operates to restrict another person’s freedom of expression in public debate.

The Court reminded us that if an action is manifestly ill-founded, it must be dismissed. In this case, the defendants argued that the City admitted during discoveries being well aware of the facts as of 2009 and claimed that even if the damages were aggravated over the years, it should have sued well before 2016. The City pleaded only knowing of the cause of the infiltrations after receipt of the expert report in 2016. However, it amended its claim to allege that in May of 2013, it detected the presence of rust and perforation in the metal part of the roof, whereas before this period, its knowledge to this effect was limited. The City therefore argued that prescription began running as of May 2013 and that its action was not time-barred.

The Superior Court noted that while the prescription period is three years, it commences on the day the damage manifested for the first time, given that it appeared gradually. More precisely, the Court clarified that prescription “begins running on the day that a prudent and diligent person could suspect that there exists a link between the prejudice and the fault.” [par 35; our translation]

The Court stated that the presence of rust was an aggravation of the damage whereas the source of the problem remained the leaking roofs. The Court cautioned not to confuse the gradual appearance of a prejudice and its aggravation. In addition, the Court underlined the fact that the City had a lot of experience, noting that there were many possible starting points for the prescription period. In fact, the Court stated that that the best-case scenario for the City regarding the starting point was January 15, 2013, when Anjalec advised not being able to repair the roofs. At that moment, the City had everything in hand to institute the action.

The lack of vigilance of the City did not suspend the prescription. Although Courts are generally reluctant to dismiss actions at a preliminary stage, the Court confirmed that the demand must be dismissed when all the facts leading to that conclusion appear from the file, as was the case in the present matter. The motion was granted, and the City’s action was dismissed.

Ms. Dikranian represented one of the insurers before the Court of Appeal.

Posted in Publications |