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The Québec Court of Appeal (the "Court") recently clarified how liability applies when a defective fire protection system causes the "loss of a work," particularly where the system's installer failed to maintain it even before the building was completed or delivered. In Tyco international du Canada ltée c. 9413-4343 Québec inc.,1 the Court examined four key issues:
- how article 2118 of the Civil Code of Quebec ("CCQ") makes contractors, subcontractors, and professionals solidarily liable for the loss of a work within five years of completion;
- the meaning of "completion of the work" when a building has never been formally accepted;
- how article 1480 CCQ applies to solidary extra-contractual liability; and
- how depreciation is assessed when a system that was never operational suffers from a lack of maintenance.
The facts: a defective fire system that undermined an entire project
The dispute arose from the installation of a defective fire protection system in a new refrigerated warehouse. The system, designed to operate at sub-freezing temperatures, was installed by Tyco International of Canada Ltd., but was never completed or certified. Even before construction ended, significant problems had been identified.
Despite these warnings, the owner, Entrepôt International Québec, released the contractual holdback based on the general contractor, Syscomax Inc.'s, promise to complete the system at its own expense. That promise was never fulfilled. On August 1, 2012, the general contractor abandoned the project, arguing that any potential claim was prescribed and that the problems stemmed from design flaws.
By October 2012, the owner discovered that the fire protection system was entirely inoperative.
The owner brought an action to recover the cost of replacing the system and to claim damages for lost rental income resulting from its failure.
What constitutes a "loss of the work" under the law?
The Court confirmed that the concept of "loss of the work" under article 2118 CCQ2 must be interpreted broadly to include serious defects that make the work unfit for its intended purpose. The sprinkler and fire detection system was essential and integral to the building, and its failure affected both the building's intended rental use, and occupant safety. The defect was therefore serious enough to qualify as a loss of the work.
Regarding prescription, the Court held that the general contractor's promises between 2008 and 2012 effectively suspended the completion of the work, such that it could be considered completed only when the contractor abandoned it in August 2012.
The system's failure, discovered in October 2012, therefore occurred within five years of completion, and the owner's 2013 claim fell within both the five-year warranty period under article 2118 CCQ and the three-year prescription period.
Solidary liability and defects in performance of the work
Experts identified four major defects that led to the failure of the system for which the installer and the electrical subcontractor were responsible. The trial judge held the installer and the general contractor solidarily liable under article 1480 CCQ, concluding that they had jointly participated in a wrongful act.
The Court corrected this approach. Since the trial judge had identified distinct faults and assigned specific shares of liability, article 1480 CCQ (which applies only when the actual author of the harm cannot be identified) should not have been relied upon.
However, this correction did not change the outcome: their solidary liability remained engaged under article 2118 CCQ.
Depreciation from lack of maintenance
The trial judge's conclusions regarding the owner's partial liability for the system's lack of maintenance are also noteworthy. The trial judge had deducted 9% from the replacement cost, attributing partial liability to the owner for failing to maintain the system.
The Court overturned this finding because:
- the system had never been completed or certified, nor put into service by the design engineer as required by industry standards; and
- the owner had received no training or documentation on how to maintain the system, making proper intervention impossible.
The Court reaffirmed that, under standard construction practices, the contractor or subcontractor remains liable for maintenance until the work is fully and properly delivered. In this case, that liability lay with the general contractor and its subcontractors, who had acknowledged that the system was incomplete and non-functional.
It would be illogical to expect the owner to maintain a system that had never been delivered in working order. The 9% reduction was set aside, and the full replacement cost was reinstated.
Ultimately, the system installer and the general contractor were held solidarily liable to pay the owner $956,183.20 for the system and $758,182.50 for financial losses.
Conclusion
This decision clarifies the principles governing the five-year warranty under article 2118 CCQ. The Court's observations on the alleged lack of maintenance of a system that had never been operational or properly delivered are particularly noteworthy.
Footnotes
1 Tyco international du Canada ltée c. 9413-4343 Québec inc. (Entrepôt international Québec), 2025 QCCA 1227
2 Article 2118 CCQ:
2118. Unless they can be relieved from liability, the contractor, the architect, the engineer and the professional technologist who, as the case may be, directed or supervised the work, and the subcontractor with respect to work performed by him, are solidarily liable for the loss of the work occurring within five years after the work was completed, whether the loss results from faulty design, construction or production of the work, or defects in the ground.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
