On May 5, 2014 the Québec Court of Appeal upheld a
judgment of the Superior Court dismissing a motion for forced
surrender and ordering the radiation of several registrations in
the Land Register1.
The appeal was essentially aimed at determining whether or not
the spreading and grading of fill on a vacant industrial lot could
be considered construction work giving rise to a legal
The owner of the property, in contracting out this work at a
cost of more than $900,000, sought to render the lot in question
more attractive for building upon and thus more appealing to
potential buyers. The work was done between March 28, 2008 and
January 19, 2009. On November 24, 2008, the owner's plan to
sell the property to a third party for the construction thereon of
a processing centre was put on hold following the collapse of the
market for such projects.
The judgment of the Superior Court
The judge concluded that the Court was not bound by the clause
in the contract stipulating that "an immovable lien can secure
any balance due" and that the work "was not of the kind
giving rise to a legal construction hypothec" as the work
"was not part of a specific and planned construction
project" but consisted rather of the upgrading of a vacant lot
that was to be resold, without any construction thereon, as a
Without rejecting the principle whereby ancillary work that
preceded or was essential to construction could give rise to a
legal hypothec, the judge made entitlement to a legal hypothec
conditional upon there being an actual
The Court of Appeal's decision
Basing itself on various legal writers, the Court confirmed that
the work in question could not be considered construction work, as
it was not part of the construction of a building. That being the
case, the Court stated, the question of whether or not value had
been added to the property was moot.
How can it be that a contractor seemingly entitled to a legal
hypothec, who does work valued at more than $900,000 on a property
at the request of its owner who, moreover, has acknowledged the
contractor's entitlement to a legal hypothec, can be deprived
of his security by a normal hypothecary creditor who, when taking
the property in payment following the owner's default, benefits
from the value added by the contractor's work?
19072-7892 Québec Inc.
(Proc-co Beauce) v. Raymond Leblanc Inc., 2014 QCCA
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