Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff's claim was dismissed after it failed to appear at the hearing despite being duly summoned.
   
• Quebec's Small Claims Division required the defendant to prove its counterclaim on a balance of probabilities despite the plaintiff's default.
   
• Central to the dispute was whether the plaintiff had been placed in formal default under the Civil Code of Québec before liability could attach.
   
• Verbal complaints and dissatisfaction, the court found, do not satisfy the requirement of a written notice of default.
   
• Liability was established for damage to a valve core and for the plaintiff's failure to safeguard the truck while in its custody.
   
• Punitive damages were denied because no legislative provision authorized their award on these facts.
   

Facts of the case

Les Mécaniques Lapierre inc. (Lapierre) sued 9378-3421 Québec inc. (9378) in Quebec's Small Claims Division for amounts related to repair services and parts sold for 9378's truck. 9378 contested the claim and filed a cross-demand, alleging that Lapierre had failed to properly repair and safeguard the truck while it was in Lapierre's custody, causing it damage, and seeking both compensatory and punitive damages. At the hearing, Lapierre — though duly summoned and called from outside the courtroom — failed to appear, and the court dismissed its claim on that basis. The court permitted 9378 to proceed by default on its cross-demand but required it to still prove its claim by a preponderance of the evidence. The dispute centred on a truck valve that Lapierre had agreed to replace, delays in obtaining the correct part, a second valve and core that 9378 purchased from a third party, damage to a valve core removed during the process, and the condition of the truck when 9378 retrieved it, including water damage, a bird's nest, and drained batteries.

Policy and legislative provisions at issue

The case turned on provisions of the Civil Code of Québec governing contracts of enterprise and deposit. Article 2098 defines a contract of enterprise as one by which a contractor undertakes to carry out work for a client in exchange for payment, and article 2100 requires the contractor to act with prudence and diligence in the client's interest. Articles 1590 and 1594 to 1597 set out that liability requires an obligation, a breach, and that the debtor be in default, with article 1595 specifying that notice of default must generally be in writing. Article 2283, relating to contracts of deposit, similarly requires a depositary to act with prudence and diligence in the custody of property entrusted to it. On damages, article 1607 limits recoverable loss to that which is an immediate and direct consequence of the breach, and article 1479 requires a claimant to mitigate its damages. Article 1621 restricts punitive damages to cases where a specific legislative provision authorizes them.

Reasoning and analysis

On the valve replacement, the court found that Lapierre had undertaken to install a new valve but was delayed in sourcing the correct part. Although 9378's representative expressed frustration over the delay, the court held that verbal complaints do not amount to a written notice of default as article 1595 requires, and there was no evidence that Lapierre had clearly refused to perform, which would have placed it in default by operation of law. Without proof of default, Lapierre's liability for the valve replacement — and the associated claim for lost profit and driver wages — could not be established. The court likewise rejected 9378's claim for reimbursement of a second valve and core purchased from a third party, finding no evidence that Lapierre had promised to return the packaging or that 9378 was entitled to a refund from the third-party seller. On the broken valve core, the court found that Lapierre had removed screws it should not have removed, breaking the core and making it impossible to return it in its original condition — placing Lapierre in default by operation of law and engaging its liability. The court reduced the amount claimed, reasoning that the cost of a replacement core, rather than the time spent attempting repairs, reflected the direct consequence of the breach, and it exercised its discretion to award a lower figure. On the truck's custody, the court found that Lapierre had failed to act with prudence and diligence by leaving a window open, allowing water and birds into the vehicle and permitting the batteries to drain, and that this failure placed Lapierre in default by operation of law. While the evidence did not establish the value of repairing the door's electrical system, the court found that 9378 had proven significant damage overall and used its discretion to fix an amount. Finally, the court denied punitive damages, holding that an allegation of intentional conduct is not sufficient; only damages authorized by a specific legislative provision, which was absent here, could be awarded.

Ruling and overall outcome

The court dismissed Lapierre's claim in its entirety due to its failure to appear and partially granted 9378's cross-demand. It found Lapierre liable for breaching its obligations regarding the broken valve core and the custody of the truck, but not for the valve replacement delay or the third-party valve purchase, and it declined to award punitive damages. The successful party, 9378, was awarded $2,100 in compensatory damages — $100 for the broken core and $2,000 for the custody breach — with interest at the legal rate and the additional statutory indemnity running from October 20, 2024. Lapierre was also ordered to pay 9378 $546 in court costs for the filing fees incurred in contesting the claim and pursuing the cross-demand.