The court has partially granted the claim of a supplier to a company in connection with a contract with the City of Gatineau that went awry in 2023. The insurer that acted as surety is held jointly and severally liable for reimbursing the plaintiff.
The case was heard on April 13 and 14, 2026, in Montreal by Justice Éric Dufour of the Superior Court of Quebec. The plaintiff in the dispute is 9362-8428 Québec inc., a Montreal-based company whose president is Jean-Pierre Beauchamp. The firm provides civil engineering services for roads, streets and bridges.
The company agreed to supply pipes for a project being carried out by 6369472 Canada inc., doing business as Équinoxe JMP, under a rental and services contract. The company provides water distribution services and is headed by Julie and Pascal Bouladier. Intact Insurance acts as surety for the project.
In January 2022, Équinoxe asked Mr. Beauchamp’s company for a quote to subcontract part of a contract it was seeking to obtain from the municipality.
The contract involved the partial rehabilitation of a force main for the municipal pumping station. The project included the installation of a 2,500-metre temporary bypass line.
The supplier was also required to assemble the pipe sections, provide the required specialized labour and conduct pressure tests to commission the bypass line. The pipes were initially to be rented for a period of 75 days, but Équinoxe subsequently specified that the rental was to cover the entire duration of the work. Part of the disagreement between the parties concerns additions to the purchase order that were allegedly made by the contractor but rejected by Mr. Beauchamp.
The plaintiff alleges that it was not fully paid under the contract, which the contractor partially acknowledges. Équinoxe disputes part of the claim, relying on the exception for non-performance.
The contractor maintains that the goods delivered by the supplier were of poor quality and were the cause of a claim by the City of Gatineau. It also alleges that the plaintiff failed to adequately advise it about the risks of using the temporary line during the winter.
The call for tenders
On April 6, 2022, Équinoxe won the call for tenders with a bid that was $1.6 million lower than that of the only other bidder. The purchase order for the pipes was issued on May 9, 2022.
The additional conditions imposed by Équinoxe in Exhibit P-3, four months after the initial order, were allegedly not accepted by the supplier. The court does not accept the defendant’s version of events. If Équinoxe’s theory were accepted, it would amount to the plaintiff’s equipment being rented free of charge for almost the entire initial term of the contract. The contract extended over 144 days, rather than the 75 days initially anticipated, even though the supplier was in no way responsible for the delays experienced on the project.
Problems with the project
Along the way, Équinoxe changed the initial connection point of the line, adding 383 metres to the required length of pipe to be delivered and fused by the plaintiff. The plaintiff was informed of this in June 2022, more than five months after the offer contained in Exhibit P-3.
Subsequently, the City and Équinoxe disagreed over the contractor’s engineering plans, and the dispute delayed the start of the work. Between July 30 and December 21, 2023, the supplier delivered and installed the pipes, and a total of 2,885 linear metres of pipe were ultimately used.
Other problems arose because of the City’s objections to the use of drinking water for hydrostatic testing. The bypass line went into operation on November 23, 2023. At 3 p.m. that day, Julie Bouladier called Mr. Beauchamp, who was at another worksite in Saguenay, to report that the line had broken.
Mr. Beauchamp arrived at the site at 7 a.m. on November 24, 2023, and found that, as he had suspected, the break was located near a joint at the 90-degree elbow installed in an upstream section. The tension caused by ground movement following freezing conditions allegedly caused the break. The damage was repaired, and the line remained operational for the rest of the contract.
Return of the equipment
Équinoxe dismantled the line just before Christmas in December 2023. According to the plaintiff, the condition of the pipes was unsatisfactory. The pipes were to be cleaned and returned in the same state of cleanliness as when they were rented. Cleaning costs amounted to $36,918.47.
The court awards this amount, which the supplier claimed from Équinoxe. Justice Dufour notes that a lessee must return leased property in the condition in which it was received, except for deterioration or normal wear and tear. This is an obligation of result, and the defendant returned the leased property soiled with residue resulting from the use of the bypass line.
Two other invoices are disputed by the defendant, which made a payment of $34,492.50 on November 28, 2023. This amount was subsequently deducted.
Exhibit P-4, issued on October 24, 2023, is for $213,853.50 and concerns the extended equipment rental period. The court also awards this amount.
Invoice P-6, issued on January 9, 2024, in the amount of $129,005.96, concerns the adjustment for the additional linear metres required by the change in the connection point. In his decision dated August 12, 2026, published only in French, Justice Dufour reduces the amount payable by the defendants because certain items do not constitute proven damages.
For invoice P-6, the total is adjusted to $121,673.45, including taxes, from which the payment already made by Équinoxe is deducted. The total amount for which the defendant and its surety are held jointly and severally liable is $337,952.92.
Interest and the additional indemnity are calculated from the formal notice dated January 19, 2024. On February 19, 2024, the formal notice was also sent to Intact Insurance, which had issued a surety bond on behalf of Équinoxe.
Defence rejected
To challenge the invoices, the defendant invoked the exception for non-performance under article 1591 of the Civil Code of Québec. According to the court, Équinoxe does not meet the conditions required to invoke this exception. According to a doctrinal work on the Civil Code, this equitable rule may be invoked when one party to a contract refuses to perform its own obligation as a result of the other party refusing or neglecting to perform its obligation.
This remedy allows the performance of an obligation to be suspended but does not extinguish it. In the present dispute, the contract has ended. The defendant is seeking compensation for alleged damages arising from the performance of the contract. However, the court concludes that the plaintiff committed no fault.
It was only when the line broke that the supplier was accused of a contractual fault. However, Mr. Beauchamp had warned the other party of the danger if the project was delayed. He had designed the assembly on the basis that the project would be completed before freezing conditions set in. Delivery on July 30, 2023, for a period of 75 days suggested that the project would be completed around mid-October.
The defendant also maintains that Mr. Beauchamp did not adequately advise it about using the line during freezing conditions. That risk had nevertheless been disclosed. Moreover, Équinoxe is not a novice in the field of water and sewer systems.
As early as October 26, 2023, Mr. Beauchamp warned the project manager of his concerns as winter approached, and he repeated the warning to the contractor. Contract P-3 was prepared in January 2022, but nothing happened until the summer of 2023. During cross-examination, the president of the plaintiff company stated that if he had known the line would be used in winter, he would have designed it differently.
Équinoxe’s defence does not hold up, according to the court, and because it filed no counterclaim against 9362-8428 Québec inc., its claim for compensation cannot be granted.
The court rejects the plaintiff’s assertion that the defence presented by Équinoxe and Intact was abusive. The Quebec Court of Appeal “continually reminds us that the threshold for abuse is high and must remain so,” Justice Dufour states.
