Executive Summary: Key Legal and Evidentiary Issues

• Innavik Hydro sought cancellation of two construction legal hypothecs registered by CRT Construction Inc., totalling approximately $61.25 million, on a hydroelectric power plant CRT had built.
• Central to the dispute is whether the EPC contract signed on June 10, 2020, was a fixed-price contract permitting no extras, as Innavik maintained.
• CRT repeatedly failed to meet court-ordered deadlines for filing expert reports, resulting in the disjoinder of its counterclaim from the main action in November 2023.
• Despite multiple judicial warnings, both parties engaged in excessive and disproportionate procedural conduct, drawing criticism from more than fifteen judges of the Superior Court.
• Procedural proportionality under the Code of Civil Procedure was a recurring issue, with courts repeatedly invoking the parties' duty of cooperation and efficient use of judicial resources.
• Innavik also claimed liquidated damages exceeding $43,000,000 for delays in the completion of the construction works.

Facts of the case

Innavik Hydro, Société en Commandite (Innavik) engaged CRT Construction Inc. (CRT) to build a hydroelectric power plant under an Engineering, Procurement and Construction (EPC) contract signed on June 10, 2020. Following completion of the works, CRT registered two construction legal hypothecs against the property: the first on January 25, 2023, for $57,768,015.50, and the second on October 25, 2023, for an additional $3,483,228.38, bringing the total to approximately $61.25 million. On February 27, 2023, Innavik filed an originating application — subsequently amended on May 31, 2024 — seeking cancellation of both hypothecs and claiming $3.7 million in damages. Innavik's position was that the EPC contract was a fixed-price agreement under which CRT held no valid claim for extras. Innavik further claimed liquidated damages exceeding $43,000,000 for delays in the completion of the works. CRT, for its part, filed a counterclaim asserting payment of the debt underlying the hypothecs.

Contractual and procedural matters at issue

The core contractual dispute turned on the nature of the EPC contract: Innavik maintained it was a fixed-price contract under which no extras were payable, while CRT asserted a substantial unpaid claim. Procedurally, a protocol of the instance filed on July 14, 2023, required CRT to produce an expert report on the "scope and quantum of the works and costs claimed" by no later than September 15, 2023. CRT failed to meet this deadline and continued to miss successive court-ordered deadlines thereafter. On November 29, 2023, Justice Chantal Corriveau disjoined CRT's counterclaim from the main action, noting that CRT had formally renounced filing expert reports in the main proceeding in order to avoid being declared foreclosed. That disjoinder order was upheld on March 19, 2024, when the Court of Appeal (Justice Geneviève Marcotte) refused CRT permission to appeal, observing that CRT had been unable to explain its delays, had never formally sought relief from its default, and had not even retained an expert by that point.

Reasoning and analysis

By the time of the present management notice, the case file opened in 2023 had accumulated nearly 150 entries in the court register, and more than fifteen judges of the Superior Court had dealt with multiple management notices. The Court of Appeal had also rejected two applications for leave to appeal management decisions. Against that backdrop, Justice Synnott addressed three requests brought by CRT by way of management notice.

On the request to file two new expert reports — one on the causes of CRT's delays and one on the quantum of Innavik's claim — the court found the request untenable. CRT had announced both reports as far back as the July 2023 protocol, formally renounced filing them in the main proceeding in November 2023 to avoid forfeiture, and had since made repeated but unsuccessful attempts to resurrect them. The court held that CRT could not continually relitigate its own past procedural choices, and that introducing new expert evidence at this stage would cause further delays contrary to the guiding principles of the Code of Civil Procedure.

On the request to examine three additional representatives of Innavik — Messrs. Letellier (two hours), Atagotaaluk (45 minutes), and Chen (30 minutes), for a combined total of three hours and fifteen minutes — the court declined. It noted that pre-trial examinations are not a pre-trial or a general investigation, and that less than two months earlier, on February 23, 2026, Justice Forlini had already authorized the continuation of examinations of three other Innavik representatives (Messrs. Claude Chartrand, François Hébert, and Louis Robert) for a total of three hours and thirty minutes. The court found that the three individuals CRT wished to examine could instead be called as witnesses at trial, and that CRT would suffer no prejudice from that approach.

On the request for additional document production, the court observed that Innavik had already transmitted more than 2,000 documents in response to undertakings and pre-undertakings throughout the proceedings, in addition to all documents CRT had held since the start of the project. The court characterized CRT's further request as akin to a blind search where every stone seemed to need turning, and declined to order additional production, finding that Innavik had complied with its disclosure obligations. The court further noted that any documents still needed could be obtained at trial through subpoenas duces tecum.

Ruling and outcome

Justice Bernard Synnott, sitting in the Superior Court of Quebec (District of Montreal), rejected CRT's management notice in its entirety. The court denied CRT's requests to file expert reports, to conduct further pre-trial examinations, and to obtain additional documents. A peremptory deadline of July 2, 2026, was imposed for the inscription of the matter for hearing, and both parties were prohibited from bringing any further applications prior to inscription. Costs were awarded in favour of the successful party, Innavik Hydro. No specific monetary amount was fixed in this decision in respect of costs; the exact quantum remains to be determined.