Court of Appeal of Quebec

Zurich Insurance Company Ltd. c. Procureur général du Québec

Morissette, Rancourt, Baudouin


Appeal from a judgment of the Superior Court granting an application to dismiss due to presumed discontinuance and an application to dismiss due to abuse of procedure. Allowed.

The appellants are the insurers of three companies (“Cascades”, “Abitibi-Price”, and “Alcan”) that sustained significant damage in 1996 during the “Saguenay flood”. After indemnifying their insureds, they instituted actions in subrogation against the respondents between 1997 and 1999.

The Superior Court granted the respondents’ exception to dismiss under article 177 of the Code of Civil Procedure (CQLR, c. C-25.01) (CCP), noting the appellants’ presumed discontinuance of the actions they instituted. Indeed, the court records were inactive between 1999 and 2015 for Cascades, between 1999 and 2019 for Abitibi-Price, and between 2001 and 2018 for Alcan. Relying on Jean c. Agence du revenu du Québec (C.A., 2019-03-15), 2019 QCCA 458, SOQUIJ AZ-51578546, 2019EXP-869, the trial judge analyzed the transitional law principles concerning article 177 CCP. Subsidiarily, the judge also accepted Abitibi-Price and Cascades’ application to dismiss for abuse of procedure under article 51 CCP.

The respondents seek the dismissal of the appeal on the grounds that it has no reasonable chance of success and that leave to appeal is required for Abitibi-Price and Cascades’ cases under the third paragraph of article 30 CCP.

With respect to presumed discontinuance, articles 110 and 265 to 269 CCP (former) (CQLR, c. C-25) governed the rules of peremption of suit at the time the appellants instituted their actions, in 1997 and in 1999. When those provisions were repealed in 2003, section 179 of the Act to reform the Code of Civil Procedure (S.Q. 2002, c. 7) provided a transitional provision stipulating that: “[a]ctions instituted before 1 January 2003 are governed by the former legislation, unless the parties agree to proceed under the new rules”. In this case, the parties never agreed to proceed under the new rules. In Jean, the proceedings were instituted in 2015 and were not covered by section 179 of the Act. The trial judge incorrectly considered himself bound by that judgment in ruling in favour of the respondents on this point.

As for the conclusion of abuse of procedure under article 51 CCP, leave to appeal should be granted. Because the appellants were not required to comply with the six-month time limit to set the case down under article 173 CCP, this conclusion must be reconsidered. The length of time that a court file remains inactive is usually sufficient to establish the appearance of abuse of procedure under article 52 and the second paragraph of article 53 CCP, but it is insufficient on its own to dismiss an application under the first paragraph of article 53 CCP. In this case, the files are extensive, they raise important issues, and they are the result of exceptional circumstances. The preliminary dismissal of Abitibi-Price and Cascades’ cases was not an appropriate remedy. 


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