Supreme Court of Canada
Commission des Écoles Catholiques de Pointe-Claire et Beaconsfield v. Tétrault Frères Ltée, [1973] S.C.R. 735
Date: 1972-10-18
La Commission des Écoles Catholiques de Pointe-Claire et Beaconsfield (Defendant) Appellant;
and
Tétrault Frères Ltée (Plaintiff) Respondent.
1972: June 7; 1972: October 18.
Present: Fauteux C.J. and Abbott, Martland, Pigeon and Laskin JJ.
ON APPEAL FROM THE COURT OF QUEEN’S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC
Contract—Construction—Failure on part of contractor to carry out its obligations—Delay in completion of the work—Cancellation of the contract and completion of work by another contractor—Civil Code, art. 1691 and 1065.
The respondent had undertaken to perform and complete some erection work for the appellant for a certain date as stated in the contract. Since the work had not been completed by that date and after having without success requested that respondent carry out its obligations, the appellant ordered that the latter cease all work on the site and had the work completed by another contractor. In its action respondent claimed the amount allegedly owned to it for the work done, and appellant claimed from respondent by way of cross‑demand an amount as damages resulting from the delay in completion of the work, from the bad workmanship, hidden defects, and from the costs of the work required in the contract and not performed. The Superior Court, applying the provisions of art. 1691 of the Civil Code dismissed the cross-demand. This decision was affirmed on appeal. Hence the appeal to this Court.
Held: The appeal should be allowed.
The reason which induced appellant to require the contractor to suspend all work was the latter’s failure to carry out his obligations. Consequently the present case is not governed by the provisions of art. 1691 of the Civil Code but by the provisions of art. 1065. It follows that the appeal must be allowed and the case must be remitted to the Superior Court so that the amounts owned on the principal demand and on the cross-demand be determined and the costs in this respect be adjudicated.
APPEAL from a judgment of the Court of
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Queen’s Bench, Appeal Side, Province of Quebec, affirming a judgment of Mr. Justice Puddicombe. Appeal allowed.
Marc Beauregard and Jacques Viau, Q.C., for the defendant, appellant.
J.E. Mullaly, Q.C., for the plaintiff, respondent.
The judgment of the Court was delivered by
THE CHIEF JUSTICE—By an agreement concluded between the parties on July 15, 1963, respondent undertook to build a school for appellant at Pointe-Claire, and to complete all work planned for that purpose by January 29, 1964, at the latest. When that date arrived the work had not yet been completed. Several times appellant formally requested that respondent carry out its obligations and complete performance of the contract, but without success. In desperation it sent respondent a letter on August 7, 1964, ordering it to cease all work on the site.
In its action respondent claimed from appellant the sum of $100,663.32, eventually reduced to $54,000, allegedly owed to it for the work done. As a defence to this action appellant argued that the work had only been partially completed and was not in accordance with the plans and specifications; and appellant claimed from respondent by way of cross-demand the sum of $113,315.40, as damages resulting from the delay in completion of the work, from the bad workmanship, faults and hidden defects, and from the cost of the work required in the contract and not performed.
In the Superior Court Mr. Justice Puddicombe held that by this letter of August 7, 1964, appellant had cancelled this fixed price contract, as permitted by art. 1691 C.C., and accordingly could not claim for work not done, and the learned judge consequently dismissed the cross-demand.
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This decision was affirmed on appeal, without any addition being made to the reasons given in the Superior Court.
Hence the appeal to this Court.
Art. 1691 C.C. provides that:
1691. The owner may cancel the contract for the construction of a building or other works at a fixed price, although the work have been begun, on indemnifying the workman for all his actual expenses and labor, and paying damages according to the circumstances of the case.
Thus, as is noted in Mignault, Droit civil canadien, Vol. 7, p. 416:
[TRANSLATION] … in contrast with other synallagmatic contracts which may not be cancelled at the will of one party, the owner may unilaterally terminate the contract for construction of a building or other work.
This article, he goes on,
[TRANSLATION] … comes to the aid of the owner by enabling him to abandon a construction which he might not have the means to pay.
That is not the situation in the case at bar. While under art. 1691 the owner does not have to give the contractor the reasons prompting him to cancel the fixed price contract, the reason which in the present case induced appellant to require the contractor to suspend all work was the latter’s failure to carry out his obligations, and it was for this reason that appellant dismissed him and had the work completed by another contractor. This is shown by the following letters:
[TRANSLATION] La Commision des Écoles Catholiques de
Pointe-Claire et Beaconsfield
Catholic School Commission
Pointe-Claire, Que.
June 23, 1964
REGISTERED MAIL,
Tétreault Frères Limitée,
1200 Avenue de l’Église,
Verdun, Que.
Attention: M. Gérard Tétreault, President.
Re: Construction of elementary school at Pointe-Claire.
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Dear Sir:
This is to point out to you that work on the aforementioned construction project is progressing extremely slowly, and that if a sufficient number of specialized workmen such as carpenters, cement finishers, painters etc. are not on the job on a full time basis as of Friday, the 26th inst., we shall be forced to take drastic measures without further notice nor delay.
This contract, which is already about one year behind schedule, looks like dragging on for ever, and we fully intend to see that this building is available for our use, completely finished and approved by the architect, by July 15 at the latest.
In the view of the School Commission this is more than a reasonable period in which to complete the work.
Yours truly,
GERARD LEPAGE
GL/ms Superintendent
La Commission des Écoles Catholiques de Pointe-Claire & Beaconsfield
Catholic School Commission
Pointe-Claire, Que.
July 10, 1964.
REGISTERED MAIL
Tétreault & Frères Limitée,
1200 Avenue de l’Église,
Verdun, Que.
Attention: Mr. Gérard Tétreault—President.
Re: Elementary school at Pointe-Claire.
Dear Sir:
This is to inform you that, as discussed between yourself, the architect for the project and myself, the Catholic School Commission of Pointe-Claire and Beaconsfield will allow you until July 27 of this year to complete work on the aforementioned project in accordance with the plans and specifications and to the architect’s satisfaction.
Any part of the contract which is not completed on July 27, 1964 will be done by someone else at your expense.
We have come to this decision after a number of discussions, complaints and even threats, and you may be assured that it is irrevocable and will be put into effect; at any rate, a reasonable period of
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time has been allowed, according to what is betrayed by your very words.
For the greater benefit of all concerned, therefore, please govern yourself accordingly.
Yours truly,
GÉRARD LEPAGE
GL/ms Superintendent
La Commission des Écoles Catholiques de Pointe-Claire & Beaconsfield
Catholic School Commission
Pointe-Claire, Que.
August 7, 1964.
Tétreault & Frères Limitée,
1200 Avenue de l’Église,
Verdun, Que.
Attention: Mr. Gérard Tétreault, President.
Re: Elementary school at Pointe-Claire.
Dear Sir:
Further to our letters of June 23 and July 10 of the current year, sent by registered mail, the Catholic School Commission of Pointe-Claire and Beaconsfield hereby orders you to suspend all work on the site of the aforementioned school project, effective Saturday, August 8, 1964: the Commission also requires that you do not keep any workmen, specialized or otherwise, on the premises at the said site after that date.
The architect for the project and the consulting engineers will evaluate the work on Monday morning, August 10.
Yours truly,
GÉRARD LEPAGE
GL/ms Superintendent
In the course of the testimony of its president, respondent admitted that it had not complied with the letter of August 7, 1964, and that when it later left the premises, on August 24, 1964, work still remained to be done, while the date set by the contract for handing over the school was January 29, 1964.
With all due respect for the contrary opinion, I am of the opinion that art. 1691 C.C. does not
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apply, but that the case is governed by the following provisions of art. 1065 C.C.:
1065. Every obligation renders the debtor liable in damages in case of a breach of it on his part. The creditor may, in cases which admit of it, demand also a specific performance of the obligation, and that he be authorized to execute it at the debtor’s expense, or that the contract from which the obligation arises be set aside; subject to the special provisions contained in this code, and without prejudice, in either case, to his claim for damages.
It follows that the appeal must be allowed. It is impossible for this Court to dispose of this litigation completely, however, since the judgment of the Superior Court is silent on the merits of the cross-demand and the evaluation of the oral evidence given in respect of it. This being the case, counsel for the parties were informed that unless agreement was reached on the amounts that may be owing on the principal demand and on the cross-demand, the case would be remitted to the Superior Court. The Court has now been advised that the parties were unable to come to an agreement.
For these reasons I would allow the appeal and set aside the judgments of the Superior Court and of the Court of Appeal, with costs in this Court and in the Court of Appeal; I would remit the case to the Superior Court so that the amounts which may be owing on the principal demand and on the cross-demand be determined, and reserve for the Superior Court the adjudication as to costs in this respect.
Appeal allowed with costs.
Solicitors for the defendant, appellant: Lacroix, Viau, Bélanger, Page, Hébert & Mailloux, Montreal.
Solicitor for the plaintiff, respondent: James E. Mullally, Montreal.
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