Executive Summary: Key Legal and Evidentiary Issues

• A 2005 land exchange contract between 9081-1142 Québec inc. and the Ville de Longueuil was left partially unexecuted after two partial exchanges in 2010 and 2011.
• The City argued the contract became lapsed (caduc) in 2006 when its deadline passed, a position directly contradicted by the notarized deeds it signed in 2010 and 2011.
• Prescription (limitation period) was raised as a defence, but the court found the City's continued conduct constituted an implicit renunciation of any acquired prescription.
• Both notarized deeds expressly acknowledged that further exchanges remained to be completed, undermining the City's caducity argument.
• A federal emergency decree issued on November 20, 2021 protecting the western chorus frog (rainette faux-grillon) drastically reduced the value of the remaining lands from $2,359,456 to $331,437.48.
• The City's force majeure defence failed because it did not establish that performance was absolutely impossible, only more burdensome.

Facts of the case

9081-1142 Québec inc. (9081) is a residential real estate developer that has operated in Longueuil for over 35 years, having contributed to the construction of more than 900 residential homes in the city. In 2001, the former Ville de Longueuil sold 9081 approximately 30 lots in the Cantin sector of Vieux-Longueuil for $255,267.10, with a view to permitting residential development. Those lots subsequently became non-constructible following a moratorium imposed by the Ministère de l'Environnement in April 2003 and the adoption of a conservation plan on March 15, 2005, which rendered construction impossible on virtually the entire sector.

To remedy this situation and restore the original intent of the 2001 transaction, the City and 9081 entered into a land exchange agreement on July 19, 2005. Under this agreement, 9081 would transfer to the City lands totalling 53,991.08 m² in the Cantin sector, in exchange for an equivalent area from the City in the boulevard Béliveau sector, between Roberval and Vauquelin. The City adopted a resolution on August 23, 2005 authorizing the transaction. Due to circumstances not attributable to 9081 — including urban planning modifications, environmental studies, and adjustments to the final alignment of boulevard Béliveau — the parties were unable to complete the exchange by the contractual deadline of September 1, 2006. The deadline was repeatedly extended, explicitly and tacitly, by mutual agreement.

A first partial exchange was completed by notarized deed on September 9, 2010, wherein 9081 transferred 32,710.75 m² to the City and received 26,096.17 m² net. A second partial exchange followed on November 14, 2011, in which 9081 transferred 11,152.46 m² and received 7,213.80 m² net. Both notarized deeds contained an identical preamble explicitly stating that each act constituted only a partial execution of the underlying agreement and that further transfers would be made to respect the integrity of the original contract. As of June 14, 2011, the City's own representative, Mr. François Clouâtre, confirmed in writing that the City still owed 9081 approximately 12,382.31 m².

From 2013 onward, the file was suspended at the City's specific request while it was engaged in separate litigation with another developer, Cité Frank Catania et associés (Catania), over adjacent lands. The City told 9081 it would not transact on any lands in the sector until that dispute was resolved, and 9081 agreed to wait. Internal City communications from June and September 2019 confirmed that approximately 12,619 m² remained to be transferred to 9081. The Catania litigation concluded with a Court of Appeal decision in November 2019 rejecting Catania's appeal. When 9081 re-engaged the City in early 2020, the City initially indicated it was close to finalizing the matter. However, in October 2020, a City official raised for the first time the possibility that the agreement might be lapsed or prescribed. On December 16, 2020, the City formally indicated it did not intend to proceed with the exchange as originally agreed, proposing instead to sell the lands at current market value. 9081 instituted legal proceedings in 2021.

Contractual clauses at issue

The 2005 agreement was structured as a square-metre-for-square-metre land exchange. A key clause reserved to the City the right to "modify the geometry of its consideration" should the final alignment of boulevard Béliveau be altered, to accommodate the projected development plan, or to adjust to the boundaries of the priority conservation zone. The agreement also stipulated that the parties would "collaborate to finalize the transaction on or before September 1, 2006." The City argued this deadline created an obligation of result, the non-fulfillment of which rendered the contract lapsed. Both the 2010 and 2011 notarized exchange deeds contained preamble clauses acknowledging partial execution and committing to further transfers — language that the court found directly contradicted the City's caducity argument.

Reasoning and analysis

The court rejected the City's caducity argument on the basis that the parties' own conduct demonstrated they never treated the September 2006 deadline as extinguishing the contract. The delays leading up to 2011 were caused by the City itself, and from 2013 to 2020, the file was suspended at the City's express request. The two notarized deeds — signed by the City in 2010 and 2011 — explicitly acknowledged that the contract remained in force and that further exchanges were still to come. Relying on Uniprix inc. c. Gestion Gosselin et Bérubé inc., 2017 CSC 43, the court affirmed that where the text of a contract does not reflect the true common intent of the parties, that intent must be ascertained from the parties' conduct. It concluded that 9081 was entirely justified in believing the contract remained alive throughout the relevant period.

On the prescription defence, the court found that the City's continuous conduct — reassuring 9081, suspending the file at its own request, and signing deeds acknowledging ongoing obligations — amounted to an implicit renunciation of any acquired prescription under article 2885 C.c.Q. The court held that the City could not, in good faith, invoke prescription after having created legitimate expectations that the contract would be performed. The right of action arose only in December 2020, when the City adopted its contradictory position for the first time. The court referenced articles 6, 7, and 1375 C.c.Q. as imposing a duty of loyalty and coherence that the City had breached.

The City's force majeure defence, based on the federal emergency decree of November 20, 2021 protecting the rainette faux-grillon, was also dismissed. Relying on Immeubles Redbourne South Shore inc. c. Soutex inc., 2026 QCCA 434, the court noted that imprévisibilité requires an event that a normally diligent person could not reasonably have foreseen, while irrésistibilité requires that performance be rendered absolutely impossible — not merely more costly or difficult. The court found that other lands were available in the continuation of boulevard Béliveau near the original perimeter and that the City had not demonstrated absolute impossibility of performance. Additional administrative burdens and costs did not meet the threshold required under article 1470 C.c.Q.

On damages, the parties submitted agreed admissions establishing that the remaining area to be transferred was 81,080.99 sq. ft. net (equivalent to 7,532.67 m² net). Before the federal decree, the agreed market value was $29.10/sq. ft., producing a figure of $2,359,456.81. Following the decree, that value dropped to $4.10/sq. ft., yielding an agreed damages figure of $331,437.48. The court accepted this lower figure, reasoning that even had the City transferred the lands promptly upon receiving formal notice, the evidence showed on a balance of probabilities that 9081 would not have been able to develop them before the decree was issued. Accordingly, it was the post-decree value that reflected 9081's actual loss.

Ruling and overall outcome

The Honourable Justice Bernard Synnott of the Québec Superior Court allowed the claim in part. The City was ordered to pay 9081-1142 Québec inc. the sum of $331,437.48, with interest from the date of service and the additional indemnity provided under the Civil Code of Québec. The court also declared that 9081 must, in consideration, transfer to the City the lots designated as 2,586,258, 2,586,259, and 2,586,261 of the Cadastre du Québec, circonscription foncière de Chambly, with a total area of 12,721.70 m². Costs of justice were awarded against the City. The $30,000 claim for troubles and inconvenience had been withdrawn by 9081 at the opening of trial and formed no part of the judgment.