Executive Summary: Key Legal and Evidentiary Issues

• Construction Morival Ltée claimed payment of a contractual holdback and additional compensation for extra work performed during the rehabilitation of the Clos Darlington service yard in Montreal.
• Liability for deficient concrete walls arose from Morival's failure to maintain required temperatures during curing and its premature removal of formwork less than 24 hours after the pour on November 26, 2018.
• Expert testimony conflicted on whether the concrete wall fissures were normal shrinkage cracks or abnormal deficiencies caused by faulty workmanship, with the court preferring the opinion of the City's expert, Gabriel Mathieu.
• Procedural compliance with the contractual change management and dispute resolution process under the CCAG was disputed, with the court finding that the City had waived strict adherence through its own conduct on the worksite.
• Prescription of the City's counterclaim was raised by Morival and rejected, as Morival's own action filed on March 12, 2021 interrupted prescription with effect extending to the City's counterclaim arising from the same contract.
• Both parties achieved partial success: the City was entitled to set off $86,847.75 in corrective work costs against the holdback, while Morival was awarded $40,531.74 plus applicable taxes for extra work, plus the return of an unsubstantiated $15,000 holdback for paving deficiencies.

Facts of the case

The dispute arose from a public construction contract awarded on July 10, 2018, by the Ville de Montréal to Construction Morival Ltée (Morival) for the rehabilitation of the Clos Darlington service yard, located on Darlington Street in the Côte-des-Neiges–Notre-Dame-de-Grâce borough. The project involved building five concrete storage cells consisting of a ground-level slab and structural reinforced concrete walls topped with a steel roof frame. The structural plans were prepared by design firm Cima+, and the City retained IGF Axiom (IGF) to supervise the works, with Érick Frigon serving as project supervisor.

Work was ordered to begin on August 6, 2018, with completion required within 75 calendar days, targeting around October 19, 2018. The project did not progress as planned. On November 8, 2018, a special meeting was held where the parties debated the type of construction joint required for the concrete slab, with differing opinions among the borough, Morival, and IGF. Cima+ was consulted and on November 9, 2018 issued Site Instruction C-01, clarifying that the slab had to be poured in three stages rather than one. On November 26, 2018, Morival poured the concrete walls. That same day, IGF issued Notice to Contractor 13A noting that heating of the formwork area remained inadequate, with formwork temperatures at 0°C and the transition slab at 2°C — both below the required minimum of 5°C. The following morning, Morival stripped the formwork from the concrete walls in under 24 hours, while IGF issued another notice (14A) advising that no heating or shelter had been provided and that the formwork should remain in place.

A partial provisional acceptance was issued on December 20, 2018, which noted fissures in the cast-in-place concrete walls as a deficiency to be repaired in the spring. The City began using the facility. On February 7, 2019, IGF notified Morival that special holdbacks totaling 5.5% ($58,977.78) linked to the wall construction would be maintained for two years due to the decision to pour in cold conditions without heating and to strip formwork in under 24 hours, which had caused multiple wall fissures. A full provisional acceptance was issued on November 29, 2019. While engineer Silverio Marzin — retained by Morival — opined that the fissures were superficial shrinkage cracks that did not weaken the structure, IGF retained $20,000 from the holdback for waterproofing work. By February 2020, the City observed that fissures had nearly doubled and commissioned a second opinion from engineer Alexandre Senet of Génipur, whose October 2020 report concluded that the fissures resulted from inadequate thermal conditions during the November 26, 2018 pour and the absence of proper curing, and estimated corrective work at $102,961. The City's subsequent engineer, Gabriel Mathieu of Côté-Jean et Associés, similarly concluded in his September 2022 report that faulty workmanship — specifically inadequate thermal protection and premature formwork removal — caused excessive fissuring that would reduce the durability of the structure.

On January 20, 2021, Morival sent a formal demand letter to the City seeking release of the holdback and payment of outstanding extra work. Morival filed its action on March 12, 2021. The City responded with a formal demand on March 25, 2021, requiring Morival to carry out corrective works per Génipur's recommendations, and filed a counterclaim on October 16, 2023, initially claiming approximately $200,000 in damages, seeking to retain the contractual holdback of $136,323.47 and condemn Morival to pay the shortfall of $63,676.53. By the time of the hearing, the City had completed the corrective works through contractor Cimota under IGF's supervision, with a final acceptance certificate issued on November 18, 2025. The total corrective cost was $86,847.75 (before taxes), comprising $11,540 for design by Côté-Jean, $14,733.38 for supervision by IGF, and $60,574.37 for construction by Cimota.

Policy terms and contractual clauses at issue

The contract between the parties was a lump-sum construction contract with adjustment provisions, governed in part by the Cahier des clauses administratives générales (CCAG). Two bodies of contractual provisions were central to the dispute.

The first concerned the change management and dispute resolution process. Clauses 5.1.11 and 5.1.12 of the CCAG established a framework under which the contractor was required to provide written notice of any claim for additional compensation within five business days of the triggering event, and to submit the detailed claim within 60 calendar days of the completion of related works. Failure to comply could extinguish the contractor's right to claim compensation. The second set of provisions involved the City's right of retention and set-off under clause 4.3.11.6, which permitted the City to withhold amounts otherwise owed to the contractor as a sufficient provision against potential damages, with compensation to be applied upon final judgment or settlement. Clause 5.1.17.2 further allowed the City to deduct from amounts owed the equivalent of damages caused by deficient works left in place.

Court's reasoning and analysis

On Morival's claim for extra work, the City raised a preliminary objection that Morival had not followed the contractual dispute resolution procedure by failing to transmit a second written notice and detailed claim within the prescribed deadlines. The court rejected this argument on three grounds. First, the evidence showed that both parties and IGF had consistently applied a simplified, informal procedure for managing changes — involving payment requests with supporting documents, review by the supervisor, discussion, and completion of a change notice — without reference to strict contractual deadlines. Second, IGF supervisor Érick Frigon himself described the process as complete and final once a change notice was either signed or refused, with no mention of any second-notice mechanism. Third, the City had failed to raise the procedural objection in a timely manner, not invoking it when Morival submitted claims in August and September 2019, nor in the City's own demand letters of March 2021 and February 2022.

Regarding the specific extra work claims, the court dismissed the claims covered by signed change notices (AC-02, AC-03, AC-04, AC-07, AC-08, AC-09, AC-10, AC-12, AC-13, AC-15, and AC-19), finding that Morival had accepted final settlement amounts without reservation and could not reopen those agreed figures. Claims for repairing an underground electrical conduit (AC-14), installing additional rebar (AC-16), and for price increases in steel (AC-18) and bitumen (AC-23, AC-24) were also dismissed for insufficient evidence or because the price increases were foreseeable after contract award. The hand-laid paving claims (AC-22 and AC-25) were rejected as unproven. However, the court allowed the claim for the three-pour concrete slab (AC-17 and AC-20), totaling $40,293.86, finding that ambiguity in Cima+'s plans reasonably led Morival to assume a single pour was sufficient; the conceptual error was confirmed by IGF's own acknowledgment at the November 8, 2018 meeting that the joint type was unclear. The court also allowed $237.88 for injection resin under AC-21, the only supplementary material the City had acknowledged.

On the City's counterclaim for deficient concrete walls, Morival raised prescription, arguing that fissures were first noted at the December 2018 provisional inspection, more than five years before the counterclaim filed in October 2023. The court rejected this argument, holding that Morival's own action filed on March 12, 2021 interrupted prescription, and that the City's right to damages for deficient walls arose from the same contractual source, so the interruption extended to the counterclaim under articles 2892 and 2896 C.C.Q.

On the merits, the court found Morival liable for the wall fissures. It accepted Gabriel Mathieu's expert opinion that the fissures exceeded what would normally result from concrete shrinkage, and that the cause was Morival's faulty execution — specifically, inadequate thermal protection of the formwork and premature stripping of the forms within 24 hours of the pour, in breach of the CAN/CSA A-23.1 standard, which required a minimum temperature of 10°C for the first three days following a pour in winter conditions (i.e., when temperatures fall below 5°C). The court found that the corrective works carried out by the City — fissure grouting and application of a surface coating — were reasonable and proportionate, and that the City had minimized its damages by selecting the lowest bidder.

The City's claim for $15,000 in paving deficiencies was dismissed. The court found that the sketch, photos, and testimony adduced were insufficient to establish the existence of a deficiency, its scope, Morival's responsibility, or the quantum of repair costs. Accordingly, the court found the City had retained that $15,000 without legal basis and ordered its return with interest from the date of Morival's January 20, 2021 demand.

On the timing of interest on the $34,475.72 excess holdback released by the City on May 1, 2026, the court held that once the corrective works were completed and accepted on November 18, 2025, the City had sufficient information to calculate the excess and should have released those funds at that point. Interest on that sum therefore ran from November 19, 2025 to January 27, 2026 (the City having already paid interest from January 28, 2026 onward). Morival's request for compensation for alleged procedural abuse by the City under article 342 C.p.c. was rejected, as no misconduct in the conduct of proceedings was demonstrated.

On costs, given the mixed outcome — neither party fully succeeding — the court ordered each party to bear its own legal costs. The City was awarded $6,000 in expert fees (out of $15,211.19 claimed), with the court noting that Morival's expert Laurent Arsenault had been retained not only for litigation but also in the context of pre-litigation discussions between the parties.

Ruling and overall outcome

The Québec Superior Court, Justice Gabrielle Brochu presiding, issued judgment on May 28, 2026, partially allowing both Morival's main claim and the City's counterclaim. The City was ordered to pay Morival $40,531.74 plus applicable taxes for additional works, with interest and the additional indemnity from January 20, 2021. The City was declared entitled to apply a contractual holdback of $86,847.75 against the equivalent cost of corrective works to the concrete walls, with contractual set-off permitted for that amount. The City was further ordered to release $15,000 (plus applicable taxes) wrongly retained for alleged paving deficiencies, with interest from January 20, 2021, and to pay interest and the additional indemnity on the $34,475.72 excess holdback for the period from November 19, 2025 to January 27, 2026. Morival was ordered to reimburse the City $6,000 in expert fees. Each party was ordered to bear its own legal costs. The outcome was mixed, with both parties achieving partial success on their respective claims.