Court of Appeal of Quebec

Les Industries Panfab inc. c. Axa assurances inc. et al.

June 26, 2018

500-09-026079-160

Hilton, Vauclair, Marcotte

Appeal from a judgment of the Superior Court granting in part an application claiming an amount of money based on a suretyship contract. Allowed.

In 2010, the Office municipal d'habitation de Longueuil (OMHL) gave the respondent Groupe Geyser inc. a mandate to build a three-building project. In accordance with the requirements of its contract, Groupe Geyser inc. asked the respondent Axa Insurance Inc. to issue a surety guaranteeing the payment of labour and materials in favour of the OMHL. In July 2011, the appellant entered into a contract with Geyser’s subcontractor, Les Revêtements RMDL inc., to supply metal covering panels for a total of $333,000. A few days before the first delivery, the appellant, in a written notice of disclosure, informed the respondents and the OMHL of the existence of its supply contract. In May 2012, the appellant sent them two further notices informing them that its contract had been increased to $355,000 and then $375,000 $. In June, it sent a fourth notice announcing that its contract had been increased to $400,000. RMDL made an assignment of its property, and the appellant gave its notice of intention to avail itself of the surety on the pledged property, services and materials by presenting a request for payment in the amount of $130,567 for unpaid materials. The appellant appeals from the judgment of the Superior Court ordering the respondents, solidarily, to pay it the amount of $54,830. 

The trial judge acknowledged the validity of the initial notice of disclosure. She erred, however, in finding that the appellant’s amended notices were sent after expiry of the deadline and that they were necessary for the appellant to be entitled to its total claim, justifying the intervention of the Court. This error is overriding because it concerns the amount to which the appellant is entitled. If there is only one contract, there can be only one notice of disclosure. Moreover, the suretyship contract did not require the value of the contract to be included in the notice of disclosure. The appellant’s claim cannot be limited on the grounds that it indicated the value although it was not required to do so. Once the notice of disclosure of the contract was valid, the respondents’ obligation to pay the appellant any amount resulting from the supply of materials intended for the project was created. Ordering them to pay the appellant the entire amount invoiced for the project in no way modifies the terms of the suretyship contract. Only the delivery of materials, their incorporation, and the establishment of their value need be established to justify the claim under the contract. Finally, as the respondents made no request for information, they cannot claim that the appellant breached its duty to inform. The argument concerning the holdbacks has no merit. The respondents are therefore ordered to pay the appellant, solidarily, the amount of $125,206, corresponding to balance owing under the contract.

*Summary by SOQUIJ
Text of the decision: Http://citoyens.soquij.qc.ca. This link open an external website in a new window.

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