In its decision in Groupe-conseil Génipur inc.
v. 9160-0569 Québec inc. (a real estate
promoter), 2015 QCCS 3052, the Superior Court of
Québec dealt with the claim of the latter (the
"Promoter") against engineering firm Groupe-conseil
Génipur inc. ("Génipur") for a cost overrun
it was forced to incur for the transportation of excess excavated
material from a construction site. Superior Court Justice Claudine
Roy found that Génipur repeatedly breached its duty to
adequately inform and advise the Promoter and rendered a very harsh
judgment against the firm, going so far as to hold that it had an
obligation of result under the agreement it had entered into with
the Promoter, which contained no provision regarding the costs of
transporting excavated material from the site. In other words, the
absence of the anticipated result (no costs for transporting such
material) gave rise to a presumption of fault on the part of
Génipur in drawing up the plans and specifications. Thus,
one of the principles that emerges from the decision is that a
service provider must be fully transparent with its client and has
an obligation to inform it of any factor that could have an impact
on the completion of the work at the agreed-upon price.
The facts of the matter are as follows: 9160-0569
Québec inc. had acquired various vacant lots from
the city of Sainte-Catherine with the intent of constructing a
number of residential housing units. The project required the
installation of municipal infrastructure, and the Promoter retained
Génipur to prepare the plans and specifications for that
purpose. The Court noted that upon Génipur obtaining the
contract, the Promoter informed it that it wanted to avoid any
costs associated with the removal of excavated material from the
site, and Génipur drew up the plans and specifications
accordingly. In the course of the construction work, it became
apparent that excess excavated material could not be used on the
site and that transportation costs would have to be incurred to
remove it. In fact, a misunderstanding between the parties
concerning the term "surplus excavation" and how the site
was to be graded appears to have been what led to the disputed
transportation costs that the Promoter was forced to incur, which
amounted to a total of $178,306.70. The Court ordered
Génipur to pay that amount to the Promoter.
What is important to take away from the judgment is that a
service provider must be sure to explain to the project owner all
of the imponderables that could impact the agreed-upon price for
the performance of the work. We feel that this judgment is overly
harsh for the engineering firm, considering that no clause of the
contract dealt with the costs associated with excavation and no
budget for the work had been prepared by Génipur. In light
of this decision, the addition of a limitation of liability clause
for cost overruns would be advisable in order to avoid liability
for going over budget.
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Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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