In a dispute over liability for damage caused by a water main break, the trial court had dismissed the insurer's claim against the municipality. That decision has now been overturned by the Quebec Court of Appeal.

In June 2025, Justice Louis Marquis of the Superior Court of Quebec, sitting in the district of Saint-François, ruled in favour of the City of Sherbrooke and dismissed the claim brought by Beneva Insurance Company. The water main broke on November 6, 2021. Property damage sustained by individuals insured by Beneva totalled $115,000.

Having compensated the policyholders for their losses and become subrogated to their rights, Beneva argued that the municipality was liable for the damage, either because of a lack of maintenance or a construction defect. The defendant, for its part, argued that the insurer had failed to prove a lack of maintenance.

According to the insurer's expert, the hole in the pipe was consistent with a lack of maintenance or a construction defect, and the required causal link had been established.

In his testimony, however, the municipal foreman maintained that the expert had examined the wrong perforation. The court found that the insurer's expert evidence created confusion. Unable to draw a favourable inference based on proof by factual presumption, Justice Marquis dismissed the insurer's claim.

The insurer's claim was based on article 1467 of the Civil Code of Québec, which provides that the owner of an immovable is liable to make reparation for injury caused by its ruin. For the factual presumption to be established, the pipe's failure must have resulted from a lack of maintenance or a construction defect. If that is the case, the owner is liable.

The parties agreed on the list of circumstantial facts surrounding the pipe's failure. Justice Marquis considered these facts insufficient to give rise to a presumption of lack of maintenance or a construction defect.

In its appeal, Beneva did not challenge the trial judge's conclusions regarding its expert evidence. "The grounds it raises concern only his refusal to infer, from the evidence presented, a presumption that the pipe's failure resulted from a lack of maintenance or a construction defect," the Court of Appeal noted.

On appeal

The three Court of Appeal judges, Martin Vauclair, Stephen Hamilton and Éric Hardy, overturned the trial court's judgment. In their decision rendered on October 2, which is available only in French, they found that the trial judge had erred in his interpretation of the applicable legal standard and in applying it to the facts established before him. This error warranted intervention by the Court of Appeal.

When an underground water main breaks without any identifiable external cause and has not yet reached the end of its useful life, a lack of maintenance or a construction defect must be presumed. "In fact, this is the only reasonable and probable conclusion that can be drawn from the established facts," the three judges stated, citing earlier decisions rendered by the Court of Appeal in 1989 and 1995 and by the Superior Court in 2002.

The insurer's appeal was therefore allowed. Interest calculated at the legal rate will be added to the $115,000 claimed, but the additional indemnity will not be awarded. The appellant had failed to request it in its notice of appeal or in the factum submitted to the Court.