Legal Footings #1: The Legal Guarantee Against the Loss of the Work

Written by Samuel St-Jean

In this series of articles, we will address in a simple and accessible manner certain basic notions of Québec construction law. This first article of the series offers a general presentation of the legal liability against loss of work, which applies to almost all parties involved in a construction project.

The Civil Code of Québec (C.C.Q.) provides, in its chapter on contracts of enterprise, two legal warranty systems that apply to almost all participants in the construction of an immovable: the guarantee against loss of the work, and the guarantee against poor workmanship. Under the liability regime against the loss of the work, the participants in a construction project are solidarily liable for the loss of the work occurring within five years after the project was completed.

This legal guarantee places an enormous burden on the shoulders of construction stakeholders, as it creates a “no-fault” liability regime. In other words, the parties involved in a construction project can be held liable for its loss, or the serious defects that affect it, without even having to prove their fault. Let us now see to whom this first regime applies, as well as its conditions of opening.

The Legal Guarantee Against the Loss of the Work

What is the loss of the work?

The loss of the work can be total, partial, or potential. For example, it could be the total collapse of the building, the collapse of its roof only, or the discovery of a defect so serious that it affects the solidity of the building or makes it unfit for its intended use. Here, it is important to emphasize the notion of seriousness of the defect. A defect of lesser importance which, for example, would not affect the solidity of the work, would be qualified as a simple defect and would fall under the legal guarantee against poor workmanship, which we will study in another article.

Who does the warranty apply to?

The legal guarantee against loss of the work applies to contractors, architects, engineers, subcontractors and property developers selling the work he has built or caused to be built. Note that this list is limitative, so it applies only to the five parties mentioned above. The legal liability for the loss of the work does not apply to the other actors involved on the construction site such as, for example, the supplier of materials or the manufacturer. Those parties could, however, be sued by the party against whom the legal guarantee is exercised.

Who is it protecting?

Anyone who may be a “victim” of the loss of the work. This could be the client who ordered the work, or even a third party with no contractual relationship with the above-mentioned parties (provided the loss occurs within five years of the work's completion).

How does it apply?

Solidarily. Thus, any of the interveners mentioned may be liable for the loss, even if the loss is attributable to another. For example, if the loss of the building is caused by an error in the plans (due to a fault of the architect), the contractor who did not commit any fault could be forced to compensate the client. It would then be up to the contractor to sue the architect, either by seeking his intervention in the same suit or by filing a separate action. The purpose of this solidarity is to facilitate the client's recourse and spare him the task of having to track down all the parties involved in the construction.

How does the loss occur?

The loss must result from faulty design, construction or production of the work, or defects in the ground. This list covers almost all types of defects that could affect the solidity of the building and that could have been detected by careful examination by the responsible party. Thus, even if the loss of the building is attributable to the geological quality of the soil, a field of expertise that may be totally foreign to a contractor, the latter could still be held liable. This example is a good illustration of the severity of this legal guarantee.

What does the client, owner or victim of the loss have to prove?

1) The existence of a work; 2) that a loss has occurred; 3) that this loss is probably due to a faulty construction, design, production of the work or a defect in the ground; and 4) that the loss (or the appearance of the serious defect) occurs within five years of the completion of the work. Thus, if these four elements are present, it is presumed that the loss of the building is due to the fault of one of the parties mentioned, hence the “no-fault” liability. This has the effect of preventing the owner from having to find the precise cause of the damage and, by the same token, obliges the party being sued to establish the reason for the loss, in his defence. This constitutes an exception to the principle that the plaintiff must prove the facts underlying his claim since the burden of proof is reversed and placed on the defendant's shoulders.

What are the possible grounds of defence?

The party sued under the legal guarantee must prove that they did not commit any fault in the performance of their duties. In other words, the non-existence of a fact must be proven. In most cases, this will amount to proving the fault of another party.

The architect or engineer will have to prove that the plans and expert reports they have prepared are free of defects, or that they did not commit any fault in the direction or supervision of the work.

The contractor or developer must prove that the defect results from an error or defect in the expert reports or plans of the architect or engineer chosen by the client. Here, it is important to emphasize that it is the architect or engineer chosen by the client. Thus, contractors offering a “turnkey” service for the construction of a house, therefore retaining the services of their own architect, could be held liable for errors committed by “their” architect.

The subcontractor will be relieved of liability only by proving that the defects resulted from the contractor's decisions or from the architect's or engineer's expert opinions or plans.

Each of the parties involved may prove that the defects result from decisions imposed by the client in the choice of ground or materials, or in the choice of subcontractors, experts, or construction methods. However, this defence will be particularly difficult to establish, given that the client often has little knowledge of construction, while the intervener is qualified as an expert in the field. It will therefore be difficult to prove that a decision was imposed by the client. Such a defence will usually apply when we are dealing with a client who is himself an expert in construction (think of a Montréal contractor who would have a cottage built in the Laurentians, and who would therefore retain the services of a local contractor for convenience, or a public body with its own in-house team of engineers, architects and construction experts).

Finally, each of the parties involved could also avoid liability by proving that the loss was due to a force majeure, i.e. an unforeseeable and irresistible event (such as a natural disaster), or to the fault of a third party.

Conclusion

In conclusion, the legal liability regime for the loss of the work imposes a heavy burden on the shoulders of those involved in a construction project. This is even truer for the general contractor, who is considered an expert in almost all areas of construction, even though these areas are increasingly numerous and complex. Moreover, in practice, the general contractor will very often be the client's direct contact and thus, naturally, the natural scapegoat in case of a glitch.

The Cotney Attorneys team specializes in construction law in the defense of stakeholders in the event of a lawsuit for serious defects and faults. Our lawyers have a practical knowledge of the construction industry, which allows them to quickly understand the facts underlying a dispute and to propose realistic and effective solutions to their clients. Do not hesitate to contact one of our lawyers if you have any questions.

About the author: Samuel St-Jean is an associate attorney at our Montréal office. Mr. St-Jean practices primarily in civil and commercial litigation, including construction law, injunctions, commercial and residential leasing, and shareholder disputes. He also assists several small and medium-sized businesses in corporate law, in addition to drafting and reviewing enterprise or service contracts. Contact: sstjean@cotneycl.com

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

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