Executive Summary: Key Legal and Evidentiary Issues

• The central dispute concerns whether Ville de Montréal was contractually obligated to pay 9154-6937 Québec inc. (Location Guay inc.) $165,860.35 for 1,600 guaranteed hours under a two-year equipment rental contract, despite only 387.75 hours being actually worked.
• Contractual interpretation was at issue, specifically whether the guaranteed hours stated in the detailed price schedule (bordereau de prix détaillés) were binding, or merely estimated quantities under the service contract's general terms.
• Document hierarchy formed a key point of contention, as the City argued the technical specifications (devis technique) should prevail over the price schedule, which it claimed contained an error regarding guaranteed hours for Lot 4.
• Ville de Montréal acknowledged that the colleague who prepared the tender documents had made an error by including guaranteed hours for Lot 4, but the court found that the contractor could not have been expected to detect this error.
• Force majeure based on COVID-19 pandemic restrictions was initially raised by the City but was abandoned at trial in light of Decree 223-2020, which maintained construction and infrastructure maintenance as priority services.
• Under Article 1432 of the Civil Code of Québec, the court applied the rule that contracts of adhesion are interpreted in favour of the adhering party, as contractors had no ability to negotiate the City's standard service contracts.

Facts of the case

9154-6937 Québec inc., operating as Location Guay inc. (the plaintiff), entered into a two-year service contract with Ville de Montréal (the City) under tender call 19-17688 for the rental of a backhoe excavator (commonly called a "pépine") with operator, maintenance, and accessories in connection with aqueduct, sewer, and sidewalk works. The contract covered the years 2019–2020 and 2020–2021 and related specifically to Lot 4, under the jurisdiction of the Ville-Marie borough. The detailed price schedule (bordereau de prix détaillés) — which formed part of the contractual documents — specified 800 guaranteed hours for each of the two contract years, along with projected quantities of 1,500 hours per year. During the contract period, the plaintiff made its equipment and operators available as required, but the City called upon its services for only 387.75 hours in total across both years. The City paid for those 387.75 hours actually worked. On 24 November 2021, the plaintiff issued an invoice of $165,860.35 representing the balance of the guaranteed hours that were never called upon. The City refused to pay, giving rise to this litigation.

Contractual terms and clauses at issue

The plaintiff's claim rested on the guaranteed hours provision in the bordereau de prix détaillés, which clearly stated 800 guaranteed hours for each of the two contract years. The City countered by invoking clause 9.01 of the service contract, which provided that the quantities set out in the tender documents were indicative only and that the City did not commit to ordering all services listed. The City also relied on a footnote in the price schedule stating that, absent contrary indication, estimated quantities are provided solely to calculate the lowest price and do not constitute a commitment by the owner. Additionally, the City pointed to clause 6 of the technical specifications, which provided that only hours actually worked would be paid, with a guaranteed minimum of four hours on any day the operator and equipment attended the worksite. The City further invoked the document hierarchy clause (article 0.02.02), which ranked the contract and technical specifications above the submission and price schedule, arguing this meant the technical specifications should prevail. The plaintiff, for its part, argued that there was no contradiction between the documents: the technical specifications were silent on guaranteed hours for Lot 4 (unlike Lot 2, where zero guaranteed hours were expressly stated), while the price schedule explicitly provided for 800 guaranteed hours. The plaintiff relied on Articles 1425, 1426, 1427, and 1434 of the Civil Code of Québec to argue that contract clauses must be interpreted in context and given their natural meaning.

Court's reasoning and analysis

The court found no contradiction between the technical specifications and the price schedule with respect to Lot 4. It reasoned that the technical specifications expressly provided a guaranteed minimum for Lot 1 (250 hours) and expressly excluded guaranteed hours for Lot 2, while remaining entirely silent on Lot 4. The court concluded that silence in the technical specifications did not override the clear statement of 800 guaranteed hours appearing in the price schedule. Giving effect to Article 1428 C.c.Q., which requires that a clause be interpreted so as to produce some effect, the court held that the word "guaranteed" could only reasonably mean that the City was obliged to pay for those hours regardless of whether they were actually worked. The court also rejected the City's argument that the price schedule's footnote on "estimated quantities" applied to the guaranteed hours, holding that the terms "800 heures garanties" were incompatible with the notion of estimated quantities — the footnote applied only to projected hours, not guaranteed ones. On the document hierarchy argument, the court found that because the technical specifications said nothing about guaranteed hours for Lot 4, there was nothing for the hierarchy clause to resolve. The court accepted that the use of guaranteed hours in tender calls of this nature was an established trade usage, confirmed by the City's own engineer, who acknowledged that guaranteed hours were included in tender documents to attract a sufficient number of bidders, given the significant cost of transporting heavy equipment to worksites. The court also dismissed the City's contention that the contractor breached its obligation by rotating different backhoes on the worksite, finding that the contractual obligation was one of availability — not continuous physical presence of the same machine — and that the City had never issued any notice of default during the contract period. The court rejected the defence argument that the claim was properly characterized as one for loss of profits requiring proof of damages, holding instead that the guaranteed hours constituted an obligation of result: once the contractor had performed its obligations, payment of the guaranteed hours was due.

Ruling and overall outcome

The court allowed the action of 9154-6937 Québec inc. (Location Guay inc.) in full. Ville de Montréal was ordered to pay the plaintiff $165,860.35, together with interest at the legal rate plus the additional indemnity under Article 1619 of the Civil Code of Québec, running from 20 April 2022. No costs were awarded.