Court of Appeal of Quebec

Ville de Montréal c. Octane Stratégie inc.

February 14, 2018

500-09-025740-150; 500-09-026456-160

Schrager, Mainville, Hogue

Appeals from a judgment of the Superior Court allowing a claim for an amount of money ($82,898) and dismissing a claim for damages. Dismissed.

On April 23, 2007, Octane Stratégie inc. was retained to prepare a strategic plan to launch the Ville de Montréal’s transportation plan. After the plan was launched, Octane sent the Ville three invoices, which were duly paid. The one from Productions Gilles Blais (PGB), a company that Octane had hired for staging and technical services for the launch for a total cost of $82,988, was sent on October 27, 2009. Octane, which had paid this subcontractor, claimed this amount from the city. The trial judge found that the rules set out in ss. 573 et seq. of the Cities and Towns Act (CQLR, c. C-19) governing the awarding of contracts had not been formally complied with since, under these rules, a city must proceed with a call for tenders by way of invitation for contracts worth between $25,000 and $99,000. He observed, however, that, given the urgency of the matter, it was illusory to proceed in this fashion. Because the launch of the transportation plan had already taken place, the judge concluded that restitution should be made by equivalence, i.e., the cost absorbed by Octane for the services of PGB, pursuant to art. 1700 of the Civil Code of Québec (S.Q. 1991, c. 64) (C.C.Q.). 

According to the doctrine of restitution of prestations, non-compliance with the formalities and a lack of approval does not mean that no contract has been concluded, but that the contract concluded is null because it does not comply with the formalities prescribed by law. Of course, even if this contract is “deemed never to have existed”, in accordance with art. 1422 C.C.Q., the fact remains that “[i]n such a case, each party is bound to restore to the other the prestations he has received”. In addition, even if the Ville’s hypothesis that the contract was absent ab initio is accepted, Octane would be entitled to recovery of what it provided, namely the prestation of services by PGB. Octane would therefore be in a situation where it agreed to provide these services on the basis of its erroneous but good faith belief that the Ville had done business with it in this respect. Finally, in the circumstances, it is not appropriate for the Court to exercise its discretion under the second paragraph of art. 1699 C.C.Q. to refuse restitution of prestations.

*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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