2020 QCCA 495, 2020 QCCA 495

Unofficial English Translation of the Judgment of the Court SNC-Lavalin inc. (Terratech inc. et SNC-Lavalin Environnement inc.) c. Deguise 2020 QCCA 495 COURT OF APPEAL C ANADA PROVINCE OF QUEBEC REGISTRY OF QUEBEC Nos.: 200-09-008788-140 200-09-028788-153 200-09-038788-151 200-09-048788-159 200-09-058788-156 200-09-068788-154 200-09-108788-156 200-09-118788-154 200-09-128788-152 200-09-158788-155 (400-17-002016-091) DATE: April 6, 2020 CORAM: THE HONOURABLE FRANÇOIS PELLETIER, J.A. LORNE GIROUX, J.A.

GUY GAGNON, J.A. (200-09-008788-140)* SNC-LAVALIN INC. (formerly doing business as TERRATECH INC. and SNC-LAVALIN ENVIRONMENT INC.) and ALAIN BLANCHETTE APPELLANTS – Defendants v.

LISE DEGUISE AND CHRISTIAN YARD RESPONDENTS – Plaintiffs and AIG INSURANCE COMPANY OF CANADA (formerly known as CHARTIS INSURANCE COMPANY OF CANADA) (as insurer of SNC-LAVALIN INC. and ALAIN BLANCHETTE), LLOYD'S UNDERWRITERS (as insurer of SNC-LAVALIN INC. and ALAIN BLANCHETTE) , ZURICH INSURANCE COMPANY LTD. (as insurer of SNC-LAVALIN INC. and ALAIN BLANCHETTE) , ACE INA INSURANCE (as insurer of SNC-LAVALIN INC. and ALAIN BLANCHETTE) , CARRIÈRE B & B INC., AIG INSURANCE COMPANY OF CANADA (as insurer of CARRIÈRE B & B INC.) , NORTHBRIDGE GENERAL INSURANCE CORPORATION (as insurer of CARRIÈRE B & B INC.), 9312-1994 QUÉBEC INC. (formerly known as CONSTRUCTION YVAN BOISVERT INC.), NORTHBRIDGE GENERAL INSURANCE CORPORATION (as insurer of 9312-1994 QUÉBEC INC.), ST.

PAUL INSURANCE COMPANY (as insurer of 9312-1994 QUÉBEC INC.), FRANCOIS MONTMINY RESPONDENTS - Defendants and CHUBB INSURANCE COMPANY OF CANADA (as insurer of SNC-LAVALIN INC. and ALAIN BLANCHETTE) RESPONDENT IN CONTINUANCE OF SUIT – Defendant JUDGMENT 1 BACKGROUND 7 2 THE FIRST WAVE OF PROCEEDINGS DETERMINED AT TRIAL 7 2.1 General facts 10 2.1.1 Introduction 10 2.1.2 Chronological review 11

2.2 Trials 25 2.2.1 Court agreements 25 2.2.2 Impleading of Lafarge and Marie De Grosbois 32 2.2.3 T rial 33 2.3 Judgments 34 2.3.1 Introduction 34 2.3.2 Main judgment 36 2.3.3 Judgment following the splitting of the proceeding 41 3 APPEALS 42 3.1 First series of appeals 42 3.2 Management of appeals 42 4 STRUCTURE OF JUDGMENTS 45 4.1 Foreword 45 4.2 Outline of the Main judgment 46 4.3 Standard of review 47 5 PRELIMINARY REMARKS 48 6 LIABILITY OF CONTRACTORS 48 6.1 Ground No. 7: Liability under

article 2118 C.C.Q. 49 6.1.1 Theory of the inapplicability of liability under

article 2118 C.C.Q. 52 6.1.2 Grounds of exemption under the legal scheme applicable to certain losses of the work 56 6.2 Ground No. 16,

part 1: contractors/formworkers’ warranty of quality and the presumption of knowledge of the defect in

article 1728 C.C.Q.;

part 2: ground concerning certain specific sequences 64 Ground No. 18: Absence of fault by the contractors/formworkers (2098 et seq. C.C.Q.) 64 7 LIABILITY RESULTING FROM THE SALE OF DEFECTIVE CONCRETE 65 7.1 Ground No. 9: Knowledge attributed to the concrete suppliers and to B&B (common endeavour) 65 7.2 Ground No. 13: Absence of fault by CYB 74 7.3 Ground No. 3: Application of the warranty of quality of the concrete suppliers and of B&B 75 7.4 Ground No. 7.1: Liability under

article 2118 C.C.Q. and grounds of exemption 75 8 LIABILITY OF SNC AND GEOLOGIST BLANCHETTE 76 8.1 Ground No. 1: Determination of geologist Blanchette’s faults 76 8.1.1 Criterion for assessing professional fault 76 8.1.2 Contesting the trial judge’s analysis of fault 80 8.1.2.1 Trial judgment 80 8.1.2.2 Analysis 81 8.1.2.3 Multiplicity of faults 88 8.2 Ground No. 2: Causal connection between geologist Blanchette’s faults and the damage 91 8.2.1 Reasons 91 8.2.2 Assessment of causation 92 8.2.3 Argument on the break in the chain of causation 92

8.2.3.1 The 2002 Bérubé report 93 8.2.3.2 The 2006 intervention of Marie De Grosbois 96 8.2.3.3 Additional studies requested in 2006 99 8.3 Ground No. 4: Extracontractual liability of SNC/Blanchette 101 8.3.1 Confidentiality of geologist Blanchette’s reports 101 8.3.2 Liability of geologist Blanchette to the plaintiffs 103 8.3.3 Analysis of the causal connection 108 8.4 Ground No. 5: Starting point of Blanchette’s and SNC’s liability 11138.4.1 Geologist Blanchette’s knowledge of the use of his May 2003 report 113 8.4.2 The so-called “falsification” of the May 2003 report 118 8.5 Ground No. 8: Period of SNC/Blanchette’s liability 119 8.5.1 Theory of the Group 1 appellants 120 8.5.2 Theory of the Group 2, 3 and 4 appellants 122 9 APPORTIONMENT OF SOLIDARY LIABILITY OR LIABILITY IN SOLIDUM AND THE APPLICATIONS FOR FORCED INTERVENTION 124 9.1 Introduction 124 9.2 Grounds No. 6 and no. 19: Apportionment of liability between the defendants and the various applications for forced intervention 125 9.2.1 Respective shares of each concrete supplier vis-à-vis B&B 129 9.2.2 Share of the contractors vis-à-vis the concrete suppliers and B&B and absence of fault by the contractors/formworkers (Ground No. 18) 133 9.2.3 Share of certain self-builders vis-à-vis the concrete suppliers and B&B (Ground No. 27) 156 9.2.4 Share of contractors and certain self-builders vis-à-vis SNC/Blanchette 160 9.2.5 Share of tandems BL/B&B and CYB/B&B vis-à-vis SNC/Blanchette 164 9.2.6 CYB’s applications for forced intervention against BL 171 9.2.7.

Defendants’ insurers 173 10 DAMAGES (general grounds) 174 10.1 Ground No. 35: Establishment of a threshold volume of 0.23% of pyrrhotite in the aggregate for the assessment of damage s 174 10.1.1 Background 174 10.1.2 Analysis 176 10.1.2.1 The moment of the appearance of damage is indeterminate 176 The natural protection conferred by burying components of concrete 176 The inferences arising from the pyrrhotite level of 0.23% 179 10.1.2.2 Uncertain damage 185 10.1.2.3 The judge did not adhere to his analytical framework 189 The factors of the analytical framework are not cumulative 192 The factors of the analytical framework are not all of equal value 194 10.1.2.4 Absence of depreciation 196 10.1.3 Conclusion 197 10.2 Ground No. 36: Expert fees 198

10.2.1 Background 198 10.2.2 Analysis 200 10.2.2.1 The findings of solidary or in solidum liability 204 10.2.2.2 The agreements on expert fees 205 10.2.2.3 The usefulness of the expert reports 206 10.2.3 Conclusion 206 INTRODUCTION TO THE ANALYSIS OF ALL INSURANCE ISSUES 207 11 THE INSURANCE POLICIES OF THE CONCRETE SUPPLIERS, OF B&B, AND OF CERTAIN CONTRACTORS 210 11.1 Ground No. 54: Nullity ab initio of the policies issued by AIG 210 Ground No. 54: Nullity ab initio of the policies issued by Northbridge 210 Ground No. 66: Period of application of the nullity ab initio 210 11.1.1 The judgment under appeal 210 11.1.2 Analysis 217 11.1.2.1 The applicable law 217 11.1.2.2 The period prior to December 1, 2007 220 The judge’s method of analysis 220 The facts known to the insurer 222 The insurer’s duty to investigate 224 AIG in its capacity as excess insurer 234 Conclusion on nullity ab initio before December 2007 240 11.1.2.3 The period subsequent to November 2007 243 11.2 Ground No. 67: The Prior Insurance and Non-Cumulation of Liability clause in the AIG and Northbridge policies 244 11.3 Ground No. 69: Exclusion of “pyrite”-related risk 249 11.4 Ground No. 68: Effective date of the damage and of the insurance coverage 254 12 SNC’S INSURANCE POLICIES 258 12.1 Ground No. 63: The multiplication of coverage for the 2009-2010, 2010-2011 and 2011-2012 insurance tower 261 12.1.1 Background 263 12.1.2 Analysis 267 12.1.2.1 The reference policy 267 12.1.2.2 Presentation of the disputed insurance clauses 269 Clause 4.1 or 4.2, as the case may be 273 Clause 7.1.2 275 Clauses 6.5.1 and 6.5.2 277 12.1.2.3 The tardiness of the insurers’ argument 283 12.1.3 Conclusion 284 12.2 Ground No. 61: Retroactive date in the ACE policy 284 12.2.1 Background 284 12.2.2 The judgment 285

12.2.3 Analysis 286 12.2.3.1 The follow form system 287 What is follow form? 287 Legal aspects of the follow form system 287 The application of the true follow form system to the facts of this case 293 The reference policy 294 12.2.3.2 The concept of a retroactive limitation date 297 The inconsistency (2400 C.C.Q.) 298 The validity of the factual premises of ACE’s argument 301 12.2.4 Conclusion 301 12.3 Ground No. 62: the share of each of SNC’s insurers in the award of damages 302 12.3.1 Analysis 302 12.3.1.1 The reference policy 303 12.3.1.2 Allocation among the insurers of the damages awarded against SNC 304 12.3.2 Conclusion 308 12.4 Ground No. 64: Application of Ontario law to the Zurich policies 308 12.4.1 Background 308 12.4.2 Analysis 310 12.4.2.1 The follow form system 310 12.4.2.2 The Choice of Law and Jurisdiction clause and 3119 C.C.Q. 311 A contract covering property or an interest situated in Quebec or that is subscribed in Quebec by a person resident in Quebec 315 The policyholder applies for the insurance in Quebec or the insurer signs or delivers the policy in Quebec 316 12.4.3 Conclusion 318 12.5 Ground No. 60: Erosion of the limits of the 2009-2010 tower 319 12.5.1 Background 320 12.5.2 Analysis 322 12.5.2.1 The rights of injured third persons under domestic law and the insurance contract 327 Articles 3119 and 2414 C.C.Q. 327 The Choice of Law and Jurisdiction clause 334 12.5.2.2 Clauses 3.1 and 3.2 of the reference policy 332 12.5.3 Conclusion 337 GENERAL CONCLUSIONS ON THE 8788 FILES 340 1 BACKGROUND [ 1 ] This case was originally named the “pyrite case”.

Over time, it developed into a genuine regional catastrophe that harmed hundreds, if not thousands, of residents in the Trois-Rivières area. Some have renamed it the “pyrrhotite case”.

[ 2 ] As an introduction, here is a rudimentary description of the problem at issue. [ 3 ] Concrete is a highly resistant construction material frequently used to build foundations. It is manufactured by binding various aggregates, in particular sand and stone, using a paste often made of cement and water. [ 4 ] Pyrrhotite is an iron sulphide found rarely in Quebec in deposits mined to extract concrete stone aggregate. A given quantity of this crucial element in this aggregate is deleterious because it may cause highly undesirable chemical reactions.

The sulphide starts to oxidize when certain conditions are present. This process causes the concrete to expand internally, leading to the degradation of the foundation and therefore the weakening of the immovables resting on top. [ 5 ] There is at least one deposit in the Trois-Rivières area whose rocks contain pyrrhotite. It was mined for the purpose of manufacturing concrete aggregate, which in many cases caused the above-described adverse consequences. [ 6 ] Such is the backdrop against which the multiple proceedings in the “pyrrhotite case” are set.

At the time this judgment was filed, these legal disputes were divided into three groups called [ translation ] “waves”. [1] The Honourable Michel Richard of the Superior Court rendered 69 judgments [2] on the merits in the first group, while those in the second and third groups are still pending trial. 2 THE FIRST WAVE OF PROCEEDINGS DETERMINED AT TRIAL [ 7 ] As related by the judge, the first wave groups over 880 actions and concerns 832 immovables, including 446 single-family residences, 312 semi-detached residences, 56 multi-unit residential immovables and 18 commercial immovables. [3] [ 8 ] The plaintiffs claim that major defects affect the solidity of their immovables’ foundations.

Two hundred and ninety-nine plaintiffs describe themselves as self- builders. [4] Others purchased their residence directly from the property developer or from the previous homeowner. The plaintiffs also include two administrators of new home warranty programs, the APCHQ’s Garantie des bâtiments résidentiels neufs [“GMN”] [5] and Qualité Habitation [“QH”].

These administrators essentially claim the cost of repairs carried out or to be carried out under the contracts entered into pursuant to these programs. [ 9 ] Below is a brief description of the principal parties who are being sued in one capacity or another: - the individual sellers, where the circumstances so warrant; - the general contractors or formworkers involved in building the foundations [the “contractors” when referred to collectively]; - “the concrete suppliers” [referred to collectively as such] who supplied the problematic concrete, either Construction Yvan Boisvert inc. [ “CYB”] or Béton Laurentide inc. [ “BL”]; - the corporation that mined the quarry where the deleterious aggregate was extracted, Carrière B&B inc. [ “B&B”]; [6] - Alain Blanchette, the geologist who approved the use of aggregate extracted from the B&B quarry, [7] and the successor to his employer, SNC-Lavalin Inc. [ “SNC”] [referred to collectively as “SNC/Blanchette”]; [8] - the various insurance companies that entered into contracts with any of the parties being sued. [ 10 ] The Superior Court judge was faced with a multiplicity of claims and took over the case management.

After grouping together all the disputes, he asked the parties to simplify the proceedings, which counsel did professionally and with an open mind. The result was a special procedural context in which every party was named as either a plaintiff or a defendant. At the judge’s urging, the numerous plaintiffs grouped together to form only 69 Superior Court cases.

Moreover, the multiple disputes amongst the defendants were incorporated into the defences as if there had been a formal forced intervention. [ 11 ] Ultimately, and subject to some exceptions, the judge held the contractors, B&B with BL or CYB, depending on the case, SNC/Blanchette and their insurers liable. As between the various parties held liable, the judge apportioned liability in accordance with

article 469 of the former Code of Civil Procedure . [9] [ 12 ] The trial judgments concerning the first wave of proceedings resulted in the filing of over 800 appeals. The Court deals with the remaining 769 appeals in the group of judgments rendered today. The reasons that follow in this judgment address the common issues that concern most of the proceedings and, as such, are meant to be incorporated into all the other judgments. In keeping with the trial judge’s approach, the Court names it the “Main judgment”.

Specific reasons that respond to particular issues, however, are recorded in the cases that concern them more directly. [ 13 ] Before presenting the general facts, some remarks are necessary with respect to the quotations and footnotes in support of today’s judgments. [ 14 ] The quotations are always verbatim and the few errors found therein were deliberately overlooked. Most references to case law, commentary, and evidence include the full citation to facilitate their retrieval. References to the evidence are exclusively according to exhibit number and the pagination of the joint schedules filed by the parties.

The same applies to references to testimony. 2.1 General facts 2.1.1 Introduction

[ 15 ] The trial judge did not devote a particular

section to the chronological description of events at the origin of the proceedings. This observation is not a criticism of the chosen approach, especially since the judge’s findings of fact are generally accepted. A brief review of the most vital events is helpful to a proper understanding of the matter, however. This overview is based on the judge’s findings scattered throughout the judgments under appeal. It should be noted that this review concerns only the general facts of the matter, to the exclusion of those concerning the insurers’ involvement.

That specific part of the proceedings will be addressed later. [ 16 ] As an introduction to this review, it bears keeping in mind that the defective aggregate at the origin of every proceeding in the first wave came from the same quarry. That quarry belongs to B&B, which was incorporated in 1994 and whose shares at the time were held equally by CYB and André Bouvet ltée. In 2001, André Bouvet ltée sold its shares to BL. Therefore, throughout the period relevant to the proceedings, CYB and BL, through their representatives, together controlled the fortunes of B&B.

Already president of CYB, Yvan Boisvert became president of B&B as well. [ 17 ] CYB and BL are both active in the construction industry and specialize particularly in concrete manufacturing. In this capacity, and as the directing minds of B&B, they became leading actors in the drama that unfolded in the Trois-Rivières area. [ 18 ] The trial judge noted that BL is responsible for B&B’s administration and provides its head office and labour. CYB is responsible for maintaining the heavy equipment used for operations and contributes personnel when required.

Moreover, the concrete suppliers’ directors together decide how much stone to produce annually. [10] Last, the sole B&B employee holds the position of head of operations in addition to the functions he already holds at BL. [ 19 ] CYB is managed by Yvan Boisvert, both shareholder and president, and Carl Poulin, director of production. BL’s fortunes at the relevant period were between the hands of a board of directors composed of representatives of its two shareholders, Gestion Bellemare inc., which owned 66 2/3%, and Lafarge Canada Inc. [11] [“Lafarge”], which owned the remaining block of shares.

At one time or another, the following people played an important role: − François Bellemare, BL director and B&B officer; − Tom Bellemare, BL president, director and officer and B&B director; − Michel Bergeron, BL executive and director; − France Côté, BL’s general manager and responsible for B&B billing and general administration; − Bernard Marcotte, BL director of operations as of May 2006 and former Béton Maskimo inc. officer. [ 20 ] B&B’s mining site is located close to a similar site operated by a company called Carrière Maskimo inc. [“Maskimo”].

Maskimo is a competitor that performs the same activities as B&B, including the extraction of concrete aggregate. [ 21 ] Having made these preliminary remarks, what follows is a brief narrative of the main events relevant to the proceedings. 2.1.2 Chronological review [ 22 ] The B&B quarry started up operations in the second half of the 1990s. Its directors at the time did not consider it necessary to consult anyone to develop an operating plan. Nor did they seek the expertise of a geologist to better identify the types of rock likely to be extracted from the deposit in question.

According to Yvan Boisvert’s testimony, only part of the stone extracted from the B&B quarry was to be used to manufacture concrete while it was in operation. [ 23 ] As of 1996, B&B became the exclusive supplier of concrete aggregate to its shareholder, CYB. At the same time, from 1996 to the fall of 1998, BL, who had not yet acquired any shares in B&B, procured aggregate from Maskimo and generally used cement produced by Lafarge to manufacture its concrete. [ 24 ] In 1999, CYB asked a laboratory named Lab Journeaux, Bédard inc. to analyze aggregate samples extracted from the B&B quarry.

The laboratory’s report did not note the presence of any iron sulphides and concluded that the risk of an alkali-aggregate reaction was low. [ 25 ] In addition to this information, the evidence establishes that B&B had been supplying the concrete suppliers with concrete aggregate for some years without any of the problems of the nature now under review. [12] As will be seen, these problems were caused by the aggregate produced by B&B and used exclusively by CYB and BL. [ 26 ] Meanwhile, a problem with concrete expansion appeared for the first time in the Trois-Rivières area in late 2001.

The anomaly resulted in approximately thirty proceedings questioning the quality of foundations poured during the period extending from 1996 to 1998. The aggregate used came from a quarry operated by Maskimo, B&B’s neighbour. [ 27 ] BL, who as we know occasionally procured aggregate from Maskimo at the time, found itself embroiled in some of these proceedings, in particular one that was frequently raised at trial.

This litigation concerned a building housing a retail food store operating under the IGA banner for which BL had provided the concrete for the foundation. [13] [ 28 ] Some believed that the cement, the quality of the concrete, or the recipe used for the mix caused the concrete expansion. Others believed that it was caused by the presence of aggregate containing iron sulphides, pyrite [14] or pyrrhotite.

The various hypotheses, especially those opposing the quality of the concrete and the presence of pyrite and pyrrhotite, persisted more than 10 years and affected the first wave of trials. [ 29 ] In November 2001, concrete suppliers BL and CYB started hearing about issues with concrete degradation in the Trois-Rivières area. Bernard Marcotte, then a Maskimo officer, informed Michel Bergeron, a BL executive, that five foundations containing Maskimo

stone were affected by their “pyrite” content and had to be demolished. [15] Several days later, at least according to his notes taken at the time, Michel Bergeron gave this information to Carl Poulin of CYB. Poulin told him to take the necessary steps to have the stone from the B&B quarry tested. [16] [ 30 ] In December of that same year, BL was served with a formal notice complaining about the state of the IGA foundation poured, as we know, with concrete containing Maskimo aggregate. Oddly enough, however, BL had on that occasion used cement from cement manufacturer Ciment St.

Laurent [17] [“CSL”], when it usually procured its cement from Lafarge. [18] [ 31 ] The situation at neighbouring Maskimo was cause for concern for the B&B officers and the concrete suppliers.

In January 2002, at the suggestion of Patrick Plante, [19] Michel Bergeron contacted Professor Marc-André Bérubé of Université Laval for an opinion on the quality of the samples taken from the IGA foundation. [ 32 ] In this same context, as a precursor to what was to become the pyrrhotite problem, B&B management, in this instance representatives of BL and CYB, planned to take steps to ensure that B&B produced quality aggregate. [20] Below is a relevant excerpt from the minutes of a meeting held on January 23, 2002: [ translation ] 1.- After discussing the possible problems with the Maskimo St-Boniface stone, it was unanimously resolved to take the necessary steps to ensure that quality stone is produced.

The following steps will be taken: A.- Michel Bergeron will find a geologist to examine the quarry face and identify the right location before blasting. B.- During the crushing period, Yvan Boisvert will provide a technician to regularly take samples.

These samples will then be sent to Béton Laurentide , who will conduct the granulometry. [Bold emphasis in original.] [ 33 ] In a telephone conversation the next day, January 24, Professor Bérubé suggested to Michel Bergeron that he conduct a test called “total sulphur” on the B&B stone, and the task was assigned to Martin Perreault. [21] Perreault picked up the B&B stone samples the same day from the BL offices. He sent them for analysis to Marie De Grosbois, a senior geologist at Lafarge. [ 34 ] In February 2002, BL received the results of Lafarge’s chemical analysis of the B&B aggregate.

The next day, Michel Bergeron contacted Ms. De Grosbois and, according to the trial judge, he understood from the explanations given that the stone was suitable to manufacture concrete. He also sent her the results of the 1999 alkali-aggregate tests conducted by Lab Journeaux, Bédard inc. on the B&B aggregate. [22] [ 35 ] In March 2002, BL retained the services of Professor Bérubé to conduct a comparative analysis.

Here is how Professor Bérubé described the objective of the work he was assigned: [ translation ] Our mandate was to conduct a petrographic examination of that sample [B&B] and determine whether it was the same type of aggregate that Béton Laurentide had used to manufacture the concrete of the foundation walls of a commercial building in the Trois-Rivières area, which concrete displayed certain signs of degradation presumably associated with the oxidation of sulphides in this aggregate. [23] [ 36 ] In May 2002, BL read Professor Bérubé’s petrographic examination report. [24] It drew a parallel between the properties of the samples from the B&B quarry and the issues observed in the IGA building.

It stated the following: [ translation ] To the extent that pyrrhotite actually caused the issues observed in the above-mentioned building and that its chemical composition is similar, there is every reason to believe that the aggregate examined could also cause the same type of issue because its sulphide content is significant. [25] [ 37 ] Moreover, Mr. Bergeron’s contemporaneous handwritten notes record the contents of a discussion during which Professor Bérubé told him that he was convinced that the pyrrhotite had caused the concrete degradation in the IGA building.

That telephone conversation took place on May 7, 2002. [26] [ 38 ] In the following days, BL sent the Bérubé report to three Lafarge employees: Marie De Grosbois, Martin Perreault, and Serge Plante. [27] The cover letter addressed to Ms. De Grosbois stated: [ translation ] We are somewhat confused about this report, especially since your analyses indicated that there was no problem with using this stone to manufacture concrete. Do you think that this stone reacts more with one type of cement as opposed to another?

Awaiting your comments … [ 39 ] The evidence reveals, however, that this question remained unanswered and that no one bothered to follow up. [28] [ 40 ] In 2003, both of the concrete suppliers, BL and CYB, poured foundations using concrete containing B&B aggregate. [29] [ 41 ] At the same time, a major protagonist in the proceedings before the Court, geologist Alain Blanchette, then employed by Terratech, a division of SNC, entered the scene .

[ 42 ] Cement manufacturer CSL was the first to require his services. Without revealing the source of the aggregate to be analyzed, the cement manufacturer gave Mr. Blanchette stone extracted from the B&B quarry. CSL’s objective was to dispel any doubt CYB might have about the quality of its cement so that it would buy its cement from CSL. [30] [ 43 ] Mr. Blanchette therefore conducted a petrographic examination of the B&B stone. His report concluded as follows: [ translation ] I am of the opinion that, as concrete aggregate, this aggregate is not reactive to the Portland cement alkali.

The percentage of quartz is moderate and the undulatory extinction is low to moderate. The percentage of pyrite appears normal for igneous rock and this pyrite is known as a stable cubic form. My opinion is that this pyrite is not deleterious and there are no contraindications to using the aggregate in the cement concrete. [ 44 ] In the spring of 2003, CYB received the report Mr. Blanchette had sent to his client CSL. CYB quickly sent it to BL.

The evidence establishes that CYB and B&B also distributed it to certain contractors in the area. [ 45 ] This was happening at the same time as the proceedings involving the Maskimo quarry. Counsel for Laboratoire de Construction 2000 inc., which was being sued, retained Mr. Blanchette’s services as an expert. [ 46 ] According to the trial judge’s findings, Maskimo’s problems were well known in the Trois-Rivières area starting in the fall of 2003, more specifically in the construction industry. [31] The Le Nouvelliste newspaper was monitoring the progress of the proceedings and published an

article on Mr. Blanchette’s role. In an

article titled “Débat d’experts en vue”, journalist Brigitte Trahan reported statements she attributed to Mr. Blanchette: [ translation ] Certain experts say that it’s the pyrite. I disagree with that opinion. My theory at the moment is that the problem we have has nothing to do with pyrite. [ 47 ] Several days after this

article appeared, France Côté, BL’s general manager and responsible for B&B’s general administration, asked Mr. Blanchette to conduct a petrographic examination of three stone samples taken from the B&B quarry. She wrote: [ translation ] We need to know the risks of using this stone to manufacture concrete in terms of the percentage of pyrite this stone contains. [ 48 ] According to the trial judge, this service was requested following a telephone call during which Mr. Bergeron raised the

article published in Le Nouvelliste during a discussion about the Maskimo quarry proceedings. The judge therefore drew the inference that Mr. Blanchette’s services were retained because of the opinion he gave to journalist Trahan and because of Mr. Blanchette’s good reputation. [32] [ 49 ] The results of the analysis requested by Ms. Côté were sent to Mr. Bergeron in early January 2004.

Geologist Blanchette’s conclusions on the presence of iron sulphides stated in particular: [ translation ] - With respect to the presence of iron sulphides (pyrite and pyrrhotite), the percentage appears to be around 3% and these crystals are disseminated throughout the mass. They appear massive and not framboidal. My opinion is, given the low percentage of absorption of this stone, that the sulphides present offer no risk of concrete sulphation when used in good-quality concrete of normal density and do not present excessive cracking.

Consequently, considering all the results obtained, my opinion is that the crushed stone from Carrière B&B in Saint-Boniface is suitable concrete aggregate and can be used without risk of a deleterious reaction. [ 50 ] Operations at the B&B quarry continued during 2004. In November, geologist Blanchette sent the parties concerned the results of a second petrographic examination.

It read, in part: [ translation ] - With respect to concrete of normal volumetric mass density poured on site and properly dosed, my opinion is that this aggregate may be used, but production must continue to be monitored to ensure that the percentage of iron sulphides does not increase compared to the sample analyzed. - I am also of the opinion, considering the possible consequences, that a more detailed study of the quarry should be conducted to properly identify the lateral and vertical variations of the petrographic facies to be mined, and to detect any possible sectors with the best quality aggregate in terms of mineralogical composition.

Therefore, for the time being, in the absence of specific standards on the percentage of iron sulphides that concrete aggregate may present before it becomes problematic. The known percentages (5 to 7%) set certain limitations on the use of this material. Quarrying should be monitored to ensure that aggregate presenting more iron sulphides than what was analyzed is not available for sale. The examination of the quarry should target sectors presenting the least iron sulphides possible.

A percentage of 5% or less (based on the crystalline form of the sulphides) should be targeted during quarrying. [ 51 ] In early 2005, Radio-Canada broadcast an episode of the program La Facture during which geologist Blanchette stated that the

problems observed in the foundations in the [ translation ] “Maskimo cases” were due to factors other than the mere presence of sulphides. [33] [ 52 ] Shortly afterward, in March 2005, counsel and experts involved in the Maskimo cases held a meeting. Contrary to the opinion expressed by geologist Blanchette, several experts said that they were of the view that the concrete degradation was caused by the presence of iron sulphides in the aggregate incorporated into the mixes. [ 53 ] After visiting the Maskimo quarry, Mr.

Blanchette submitted a report on compliance with accepted practices during tests conducted by Laboratoire de Construction 2000 inc. [34] It should be noted that Mr. Blanchette also conducted petrographic examinations on aggregate from the Maskimo quarry under a contract for services granted by Laboratoire de Construction 2000 inc. to his colleague, expert Émile Hanna. [ 54 ] In September 2005, shortly after having received a formal notice related to the Maskimo proceedings, the members of the BL board of directors were again faced with the experts’ conflicting theories on the quality of the aggregate.

They then agreed to ask their shareholder Lafarge to assess the quality of the B&B stone. On September 26, 2005, representatives of Lafarge, including Ms. De Grosbois and engineer Éric Fontaine, met with the BL representatives to discuss the expert reports on the B&B stone.

The minutes of that meeting are reproduced in full below: [ translation ] PRESENT: Martin PERREAULT, LAFARGE - CEMENT Isabelle LORD - LAFARGE CEMENT Marie DEGROSBOIS - GEOLOGIST - LAFARGE Eric FONTAINE - AGGREGATE ENGINEER- LAFARGE Tom BELLEMARE - LAURENTIDE / CARRIÈRE B & B France CÔTÉ - LAURENTIDE I CARRIÈRE B & B Michel BERGERON - LAURENTIDE Michel BERGERON briefly explained the purpose of the meeting: ➢ To interpret the various reports dealing with pyrite. ➢ Find one or more ways to ensure that our stone (B&

B) is not dangerously reactive to sulphides. After two (2) hours of discussion, MS. Marie DEGROSBOIS accompanied by France and Éric went to Carrière B&B and Maskimo to visually inspect and collect some stone samples. At the same time, Richard gave Ms. DEGROSBOIS a stone sample taken from Carrière Continental. Using these samples, Ms. DEGROSBOIS should be able to conduct tests comparable to the tests conducted by Marc André Bérubé, whose results were included in his report dated May 4, 2002. [ 55 ] At the same time, B&B asked geologist Blanchette to conduct a third petrographic examination.

Blanchette did so and sent the results to B&B in December 2005. [35] His report stated: [ translation ] - With respect to iron sulphides, thin laminae of pyrite and pyrrhotite were recognized and a chemical analysis of a composite sample revealed a percentage of 2.26%.

The sulphides are recognized to be generally massive. - Clause 4.2.3.5.2 (section on “Deleterious reactions of aggregates”) of CSA standard A23.1-04 states that “ the presence of sulphides, such as pyrite, pyrrhotite, and marcasite, in the aggregate that may oxidize and hydrate with volume increase, or the release of sulphate that produces sulphate attack upon the cement paste, or both...

" - CSA standard A23.1-04 (or other Canadian and/or Quebec standards) does not specify, however, any maximum acceptable amount of sulphides in concrete aggregate. - Concrete sulphation issues due to the presence of iron suphides remain marginal and rare in Quebec and the few recognized cases involved slightly clayey limestone aggregate containing framboidal sulphides. - Iron sulphides recognized in the Carrière B&B aggregate were rather massive and the low percentage of absorption of this aggregate minimizes the potential for oxidation and subsequent sulphation. - Consequently, based on the results obtained, I am of the opinion that the risk of concrete sulphation, normally dosed, with normal porosity, and using this aggregate, seems low to zero and should not constitute a limitation on the use of this aggregate. - The percentage of iron sulphides may vary in this type of aggregate and periodic tests should be conducted to confirm the percentage of sulphides present.

[ 56 ] Ms. De Grosbois signed a report on her own analyses in which she concluded that the aggregate from Maskimo was similar to that from B&B. [36] Below is what she wrote in this document dated January 31, 2006: [ translation ] The two samples from Carrière Maskimo and Carrière B&B have comparable total amounts of sulphides: 3.8% in the Carrière Maskimo sample and 4.8% in the Carrière B&B sample. The vast majority of these sulphides are pyrrhotite ( >90%), with minor amounts or small pyrite, pentlandite, and chalcopyrite inclusions in the pyrrhotite.

The sample from Carrière Continental has a very low 0.03% sulphur content, and no sulphide was observed under the microscope. All observations and measures taken were limited to the available samples from the quarries under study and may not be representative of past or future aggregate production or the rocks as a whole.

It is impossible to say whether the measured amounts of sulphides in the form of pyrrhotite are deleterious in aggregate used to manufacture concrete because there is no acceptance criterion for aggregate related to the amount of sulphides in the current BNQ or CSA standards. [ 57 ] A little later, in March, Alain Canuel and Martin Perreault of Lafarge met with the BL representatives and told them that Lafarge recommended that they stop using B&B aggregate. [37] The trial judge had considerable reservations about the firmness of the recommendation in question, however, and wrote: [ translation ] [949] It was only in 2006 that Lafarge grudgingly started to discuss the danger of using the aggregate. [950] Laurentide was grudgingly informed of Lafarge’s position because the Court notes that there is very surprisingly no evidence that the letter Lafarge claims to have written to Laurentide telling it not to continue using the stone was sent. [ 58 ] The judge also rejected Lafarge’s claim that it had told Yvan Boisvert about this opinion during a social gathering in April 2006. [38] [ 59 ] In May 2006, Bernard Marcotte, who had also been involved in the saga that had shaken Maskimo, became director of operations at BL. [39] He quickly sought to postpone the studies on the aggregate after discussions with the B&B officers and the concrete suppliers.

He felt that it was imperative to know why Maskimo had been plagued with problems that seemed to have spared B&B up to then. [40] [ 60 ] That is why France Côté first approached geologist Josée Duchesne of Université Laval. In reply to this request, Ms. Duchesne conducted a comparative examination of the 2006 B&B aggregate, the B&B stones from a core sample extracted from a foundation poured in 1999 and, last, stone drawn from a foundation poured by Maskimo in 1998.

In June, she basically concluded that the three samples were comparable and that there was no obvious reason to explain why one stone rather than the others reacted in the concrete. [41] [ 61 ] The B&B management felt that it had not received a sufficiently conclusive answer and turned to geologist Lucie Tremblay of IOS Services Géoscientifiques inc. At the same time, it asked geologist Blanchette to conduct another petrographic examination. [42] [ 62 ] On August 31, 2006, geologist Tremblay submitted a report that again compared the samples examined by Ms.

Duchesne. [43] She found that the concrete was manufactured using the same type of aggregate, which [ translation ] “... would, a priori , be suspected as potentially deleterious and likely to cause local expansion of the concrete”. [44] She also wrote that a factor other than the slightly higher iron sulphide content in the Maskimo aggregate than in the B&B stone samples appeared to have played a role in the concrete deterioration. She therefore recommended that the composition of the concrete paste be studied. [ 63 ] This led the B&B management to re-contact geologist Blanchette.

On September 7, 2006, B&B sent him a copy of Ms. Tremblay’s report and asked him to attend a meeting at their office. After that in-person meeting, geologist Blanchette submitted an offer of services that he enhanced shortly thereafter. [45] He then proposed setting up an expansion-testing program spread out over one year. B&B agreed to that proposal. [ 64 ] The tests in question concerned three aggregate samples.

The first sample was from the Maskimo quarry reserves, and the two others were taken from different sectors of the B&B quarry. [46] In addition, for each of these samples, geologist Blanchette had to use cement from different producers to verify the influence of that component on the percentage of concrete expansion. [ 65 ] In late October 2006, Mr. Blanchette sent another report unrelated to the expansion tests referred to above.

It was a petrographic examination requested in August 2006, in which the geologist stated the following: [ translation ] The petrographic number (NQ 2560-900) and the petrographic examination (ASTM C295) indicate that the sample analyzed is composed of anorthositic gabbro. The physical and mechanical properties appear very good, as demonstrated by the petrographic number and, in my opinion, meet the requirements for use as concrete aggregate. The iron sulphide content was assessed at 4.5% using a chemical analysis.

There is currently no standard or specification concerning the percentage of iron sulphides that concrete aggregate may present. The percentage of iron sulphides measured, however, limits certain uses and I am of the opinion that the aggregate should not be used in architectural concrete or exposed aggregate concrete. [ 66 ] In November 2006, B&B stopped producing aggregate to manufacture concrete. [47] According to its officers, they decided to temporarily suspend production until they had disposed of considerable stone dust reserves. In reality, however, this suspension was permanent.

[ 67 ] As of that date and until 2007, BL used its stockpiles. [48] [ 68 ] CYB, however, sold concrete containing B&B aggregate throughout 2007. It even used this concrete to erect its own immovables. Furthermore, in 2007, Carl Poulin, its director of production, used the aggregate for his personal home addition project. CYB purchased its last load of concrete stone from the B&B quarry in September 2007. [49] [ 69 ] During that same period, Mr. Blanchette continued his work on the expansion- testing program agreed on with B&B.

On June 5, 2007, he produced the first progress report on the situation after a four-month period. The report contained no recommendation on the use of the different aggregate samples studied. [ 70 ] The same is not true for the following report on the situation after nine months, sent on November 28, 2007. To properly understand its scope, it should be recalled that the concrete suppliers were using only aggregate from the quarry sector described as [ translation ] “rich in garnet” to manufacture concrete. In the

section of that report titled “Synthesis and recommendation”, Mr. Blanchette wrote: [ translation ] The three sources of aggregate present characteristics that meet the current standards for concrete aggregate. The percentage of oxidized fragments in the B&B quarry sample rich in pyrite is, however, of concern. The percentages of iron sulphides are classified as being very high for the two aggregates from Carrière B&B and high in the case of Carrière Maskimo. During the expansion tests, the results obtained with the B&B aggregate rich in pyrite are of concern.

As a preventive measure, this aggregate should not be used as concrete aggregate. The expansion percentages obtained with the B&B aggregate rich in garnet vary depending on the cement used. The expansion percentages obtained with the Carrière Maskimo aggregate are low after nine months of curing. [ 71 ] The trial judge found that the date this progress report was sent marked the end of the period of SNC/Blanchette’s liability. [50] [ 72 ] In February or March 2008, a meeting was held between the B&B officers and the concrete suppliers. Back from vacation, Mr.

Boisvert read geologist Blanchette’s latest report. [ 73 ] In May 2008, after having exhausted the stockpiles at its plant, CYB stopped using B&B aggregate. [51] As a result, the last time concrete was poured for a building covered by the trial judgment was on May 5, 2008. [52] [ 74 ] Shortly after, as of the fall of 2008 and more intensively during 2009, the concrete suppliers and B&B were assailed by formal notices claiming that their product was of poor quality. [53] A series of legal proceedings instituted by over 850 plaintiffs then ensued. [ 75 ] These proceedings caused a storm for B&B and the concrete suppliers.

In February 2009, BL sold its shares in B&B to a CYB- related company. [54] Tom Bellemare, BL’s representative on B&B’s board of directors, resigned from his position. Not long after, on July 23, 2009, B&B sold its land to Carrière P.C.M. (1994) inc. Last, on November 30, 2009, Lafarge ceased being a BL shareholder. 2.2 Trials 2.2.1 Court agreements [ 76 ] The Court briefly mentioned at the start of this judgment that the trial judge very quickly realized the scope of the issues and foresaw the multitude of suits likely to result.

He therefore decided to manage all the proceedings by holding successive conferences uniting the protagonists identified as they appeared in the legal process. [ 77 ] As a result, some 880 actions were grouped into 69 cases at trial. [ 78 ] At the judge’s invitation, the plaintiffs summoned all the parties likely to have incurred liability for the alleged injury. The defendants agreed to proceed in a manner whereby they had to include their application for forced intervention in the allegations and conclusions of their defence to the principal actions. [ 79 ] Below is a brief

summary of the minutes of the management conferences, the contents of which ultimately shaped the way the proceedings unfolded as well as the conduct of the hearing : [ translation ] Minutes of January 22, 2010 4) GROUPING CASES FOR MANAGEMENT PURPOSES The parties agree to group the cases by contracting general contractor. The plaintiffs will institute proceedings by joining according to

article 67 C.C.P., so that cases against one general contractor can be grouped together. Last, the plaintiff self-builders’ cases will be grouped by the name of the Concrete supplier or of the Quarry, according to the most common denominator.

… 9) RECOURSE IN WARRANTY This refers to the recourses in warranty that may be raised in this kind of proceeding between the various defendants previously summoned.

By consent, it was suggested that the parties attend the next management session with a list of the parties that they would like to call in warranty, so that all the recourses to be exercised against another party already on the record may be subject to specific agreements to avoid accumulating potentially useless motions in the record. [55] Minutes of September 10, 2010 11) RECOURSE IN WARRANTY Mtre Lajoie asked that a mechanism equivalent to a recourse in warranty be found.

Mtre Lajoie was asked to prepare a form to cover this aspect of the recourse in warranty so that each party named in the proceeding will be able to ask the Court to rule on the potential recourses resulting from the state of the cases. That agreement will be submitted at the next management session. [56] Minutes of February 1, 2011 1.

Welcome After noting the excellent cooperation of counsel and the parties in the conduct of the case, the Court reminds counsel for the plaintiffs to pay specific attention so that all parties are sued in the principal actions to avoid calls in warranty and to facilitate the case management, as decided in previous meetings. [57] Minutes of June 22, 2011 6.

Individual defences (to be completed) It is agreed that each party will file a written defence setting out the grounds for its contestation, which defence will apply to all the cases in which each party is involved. … Therefore, each individual defence will be considered by the Court to be applicable to all the cases and will constitute the written individual defence. [58] Minutes of October 27, 2011 9) COURT AGREEMENT ON CALLS IN WARRANTY Mtre Lajoie sent every party the draft court agreement on calls in warranty that is not yet ready for confirmation.

At the request of certain counsel representing the sellers being sued by the actual owners of some of the immovables concerned, it appears that the document prepared could allow some of these persons to avoid recourses in warranty, as is the case for the other direct interveners. These persons will be asked to sign the agreement on the conduct of the proceeding at the same time that they file a defence that complies with the stated objectives. [59] Minutes of January 26, 2012 10. COURT AGREEMENT The parties have read the document sent by Mtre Héon concerning the court agreement on calls in warranty.

That document was prepared by Mtre Lajoie and Mtre Bienjonetti and was amended following feedback from those who were interested in improving it. The text was submitted to all parties and, following discussions held from the bench, all the parties agreed to accept the court agreement, with the result that: THE COURT RENDERS THE FOLLOWING ORDER: RECEIVES, CONFIRMS AND MAKES ENFORCEABLE the attached court agreement on calls in warranty and DECLARES that such contract binds every party currently a party to the pending proceedings.

The Court notes that Mtre Legault, on behalf of Lafarge, plans to reserve his position on accepting the court agreement. Concerning the proceedings in warranty:

It is suggested that every party who files a defence by invoking its right to a recourse in warranty should indicate against whom this right is sought and in which file. [60] [ 80 ] Note that one aspect of these agreements concerns the conduct of the principal actions. It had the effect in particular of creating a rather exceptional group of plaintiffs within the same case. [61] [ 81 ] The other

part concerns proceedings that can be described as subsidiary to the extent that they depend on the chain reaction resulting from the relationships between certain parties, be they contractual or sometimes even extracontractual. [ 82 ] This last part was the subject of the agreement described in the minutes under the name [ translation ] “court agreement” or [ translation ] “court agreement on calls in warranty”. The judge confirmed the agreement during the management conference of January 26, 2012.

It is useful to reproduce the agreement in full due to its repercussions on the conduct of the proceedings and the conclusions in the judgments under appeal: [ translation ] COURT AGREEMENT FOR THE PURPOSE OF THIS AGREEMENT, THE UNDERSIGNED DEFENDANTS STATE: WHEREAS the signatories hereto (hereinafter the “defendants”) are all defendants in the above-described cases (hereinafter the “cases”); WHEREAS the cases were instituted before the Superior Court in the judicial district of Trois-Rivières and cover the same type of dispute involving hundreds of owners of immovables whose concrete foundations are purportedly defective; WHEREAS these owners essentially claim that the concrete in their building foundations was manufactured with aggregate containing pyrite and/or pyrrhotite, which they claim caused the premature degradation of the concrete; WHEREAS all these cases are grouped and are subject to special case management by the Honourable Michel Richard, J.S.C.; WHEREAS the defendants expect other similar cases to be added to those already existing, which will also be subject to special management by the Honourable Michel Richard, J.S.C.; WHEREAS the defendants wish to avoid a multiplicity of anticipated applications for forced intervention (resulting anticipated recursory actions, calls in warranty, in sub-warranty or in sub-sub-warranty, or other recourses in warranty) between them, and waive prescription already acquired and the benefit of time elapsed for prescription purposes, applicable to such anticipated applications for forced intervention, where necessary; WHEREAS the defendants wish to simplify the procedure for instituting and defending such applications; WHEREAS the defendants acknowledge that the institution of such anticipated applications for forced intervention, in accordance with the provisions of the Code of Civil Procedure (

article 216 et seq. C.C.P.), would make the management of these cases even more complex and counter to the best interests of justice and the parties, contrary to the principles of proper administration and proportionality, in particular with respect to costs and time limits; WHEREAS the defendants, however, do not wish to waive their rights and defences that may be exercised by an anticipated application for forced intervention; WHEREAS the defendants therefore wish to enter into the following agreement dispensing them from instituting anticipated applications for forced intervention against each other, in accordance with the provisions of the Code of Civil Procedure (

article 216 et seq. C.C.P.), and authorizing them to institute such applications by way of a simplified, accelerated procedure that will nonetheless allow the Court to render judgment as if such applications for forced intervention had been instituted as prescribed by the Code of Civil Procedure ; THE DEFENDANTS THEREFORE ENTER INTO THE FOLLOWING AGREEMENTS: 1. The above-mentioned

preamble forms an integral part of this agreement; 2. The defendants agree to proceed by evidence common to all the grouped cases, rather than with separate evidence for each separate case, it being understood that the specific facts of a case may also be adduced into evidence; 3. The defendants agree that the Court will apportion liability as between them, in accordance with

article 469 C.C.P., where applicable, and make such condemnation enforceable between them; 4. The defendants agree to use the defences as a procedural method and means to introduce conclusions of the nature of an anticipated application for forced intervention against one or more defendants within the time limits to be determined by the Court; 5.

The defence including the conclusions of the nature of an anticipated application for forced intervention will be titled [ translation ] “defence and application for forced intervention” and must be signed electronically by counsel for the parties concerned, the defendants agree and waive direct service; 6. The defendants in the anticipated application for forced intervention will be dispensed from reappearing if they have already appeared in the principal action;

7. The defendants in forced intervention may reply to the conclusions sought against them by way of a defence included by amendment in a specific

section in their own defence to the principal application within the time limits to be determined by the Court; 8. The parties irrevocably accept and agree that the Court will render judgment at the same time on the principal actions and on the conclusions in forced intervention set out in the defendants’ defences, the whole as if an anticipated application for forced intervention in accordance with the provisions of the Code of Civil Procedure had been submitted; 9.

The Court’s judgment thus rendered will have the same effects and the same executory force as a judgment rendered according to the regular procedure and will be subject to the same recourses or appeals; 10. Each defendant waives in advance its right to ask that any judgment rendered against it hereunder be revoked or set aside on the ground that the rules of civil procedure regarding the institution of an anticipated application for forced intervention have not been followed; 11.

The defendants agree that the Court may rule on any issue as long as it does not prejudice their respective rights, it being understood that this agreement is entered into for the purpose of avoiding a multiplicity of anticipated applications for forced intervention using the traditional procedure set out in the Code of Civil Procedure ; 12. The defendants waive prescription already acquired and the benefit of time elapsed for prescription purposes, applicable to every anticipated application for forced intervention made according to the terms of this agreement; 13.

The provisions herein do not have the effect of preventing any signatory hereto from summoning by anticipated application for forced intervention, of the nature of a call in warranty or an impleading, a third person who is not already a defendant in the above- mentioned cases; 14. The defendants agree to have the Court confirm the agreement they have reached, the whole pursuant to its powers conferred by law; [62] 2.2.2 Impleading of Lafarge and Marie De Grosbois [ 83 ] Some months before the hearing began, defendant Construction Fré-Jean inc. [“Fré-Jean”], sought authorization to implead Lafarge and Ms.

De Grosbois as principal defendants in the action instituted by Noëlla Doucet and Guylaine Beauchemin. [63] The judge granted that motion in a judgment rendered on March 13, 2012, and Lafarge and Ms. De Grosbois then sought leave to appeal. On April 26, 2012, Thibault J.A. granted leave and set the appeal hearing down for June. [64] [ 84 ] The Court allowed the appeal and removed Lafarge and Ms.

De Grosbois in July 2012, given that the plaintiffs opposed the impleading, that there was no apparent legal relationship between Fré-Jean and the Lafarge-De Grosbois duo, and to avoid breaching procedural fairness. [65] 2.2.3 Trial [ 85 ] There is no doubt that the size of the trial was comparable to a major class action. The rules on the various legal relationships between the parties, however, made this particular avenue unattractive, with the result that the judge had to handle a multitude of individual actions. This weighed heavily on the trial’s conduct.

In the Main judgment, the judge described the principal characteristics of this unconventional trial: [ translation ] [96] All the cases and their exhibits have been digitized and processed by computer so that no paper document was dealt with at trial unless it had been digitized and inserted into the trial management tree-diagram. [97] There were daily updates as the trial unfolded and each party had instant access to the daily additions and amendments through Dropbox, the information storage site agreed to by the parties. [98] The Court notes the invaluable support of the Ministère de la Justice, who arranged the courtroom and provided all the equipment required to manage, digitize, send the information to every lawyer, and to annotate it for both the lawyers at the hearing and the public outside the courtroom. [99] The resources made available to the parties and the Court greatly contributed to shortening the debates and facilitating the management of over 20,000 exhibits comprised of over 600,000 pages of text. [100] None of this would have been possible if the parties had not unanimously agreed to proceed by way of computer technology and to define the terms needed to simplify and accelerate the hearings. … [102] It would not have been possible to manage and update all these cases on a daily basis had it not been for the greatly appreciated skill of Yves Demontigny, the technician chosen by the parties, who offered invaluable and indispensable support in preparing, managing, and updating documents while remaining attentive to the frequent developments inherent in managing this amount of information. [103] By unanimous decision of the parties, the 70 court files were not physically present in the courtroom, such that any information added to the files was done through the minutes of the hearing or by the parties’ entering a document in the tree-diagram controlled by the computer technician according to a strict procedure observed throughout the trial.

… [106] This is why the trial lasted for 68 days of hearing and 9 days of pleadings, even though 185 witnesses were heard and 30 days were dedicated to experts. … [108] The parties conducted a great many pre-trial examinations (approximately 40), which considerably reduced the hearing time, given the scope of the subjects addressed. [109] Last, the Court cannot fail to mention the work done by certain insurers to develop electronic spreadsheets to calculate the exact amount each insurer will have to pay on behalf of their respective insured based on the coverage dates, the content of their policy, and each insured’s share of liability, all while considering the recourses in warranty. [Reference omitted.] [ 86 ] It should be noted that the parties agreed to designate the constructions with the name [ translation ] “sequence” and to identify them by number.

There are several hundred in the first wave of proceedings. The judge adopted the vocabulary agreed to between the parties when drafting his judgments. 2.3 Judgments 2.3.1 Introduction [ 87 ] The trial judge accomplished a colossal task, which cannot go unnoted. The judge equipped himself with rather audacious means that he felt would accelerate the proceedings, in order to finish the hearing involving such a large number of parties and issues to be determined.

Motivated by a sense of duty, he wanted to arrive at a just and fair conclusion as quickly as possible, in a case with characteristics that pushed the legal system to the limits of its capacities . [ 88 ] At the same time, however, the use of new instruments can conceal traps, and the proceedings in question offered fertile ground for them to emerge. [ 89 ] The judge therefore decided not to expressly rule on the actions in warranty contained in a very large number of defences.

He believed he was authorized to do so by paragraph 3 of the court agreement on calls in warranty, which is reproduced here again to facilitate the reading of the judgment: [ translation ] 3. The defendants agree that the Court will apportion liability as between them, in accordance with

article 469 C.C.P., where applicable, and make such condemnation enforceable between them; [66] [ 90 ] Here is what the judge said in this regard: [ translation ] [49] Several parties have asked the Court to rule on the recourses in warranty included in the defences filed. [50] As the Court has noted, the court agreement addresses the recourses in warranty. [51] Since the parties have agreed to have the Court apportion the liability of each defendant pursuant to the provisions of

article 469 C.C.P., and since the Court has done so in each individual judgment in the files, there is no need to revisit these applications. [67] [ 91 ] On appeal, several parties brought up this issue and faulted the judge for not having ruled on the calls in warranty. [68] 2.3.2 Main judgment [ 92 ] In December 2013, the judge accepted the parties’ unanimous suggestion to split the proceeding in order to postpone to a later stage the apportionment of amounts to be paid by the defendants and their insurers, if any.

First, he rendered 68 judgments ruling on the issues of liability and insurance, and issued the corresponding condemnations. He named one of these decisions the [ translation ] “Main judgment”. Then the judge rendered a judgment following the splitting of the proceeding in which he determined the share payable by each defendant or its insurer. [ 93 ] There were three versions of the Main judgment: the original filed on June 12, 2014, and the corrected versions respectively dated July 31 and November 6 of that same year.

Combined with the attached schedules, that judgment is 302 pages long and includes no less than 2,378 paragraphs. [ 94 ] The judge conducted a detailed analysis of the issues relevant to liability, damages, and the insurance, and he drew a series of conclusions that he summarized as follows: [ translation ] [2270] Based on its analysis, the Court arrives at the following conclusion:

(

A) Plaintiffs ➢ That the owner plaintiffs including the owner merchants are clients within the meaning of

article 2098 C.C.Q. This applies to self- builders. ➢ That, in that capacity, they benefit from the presumption in

article 2118 C.C.Q. ➢ That the plaintiffs suffered losses within the meaning of

article 2118 C.C.Q. ➢ That the serious defects affecting their properties occurred within five years of the construction, given the nature of the defect and its gradual, unavoidable development when the volume parameters of pyrrhotite are found in the aggregate. ➢ That these defects started to exist as soon as the foundations were poured, and that the damage insurance policies were triggered as of this point. (

B) Carrière B & B inc. ➢ That the liability of the B&B quarry arises from its status as manufacturer and specialized seller. ➢ That its liability is in solidum . ➢ That it operated a common endeavour with concrete suppliers Béton Laurentide and Construction Yvan Boisvert inc. ➢ That it failed to comply with the warranty of quality of its product. (

C) Concrete suppliers ➢ That the liability of the concrete suppliers arises from their status as contractor, manufacturer, and specialized seller. ➢ That they are subject to the obligations of contracts of enterprise. ➢ That they failed to comply with the warranty of quality of their product. (

D) Contractors/formworkers ➢ That the formworkers are specialized contractors who had turnkey contracts to build the works/foundations and that they are subject to the provisions of contracts of enterprise. ➢ That they are bound to the warranty of quality and are presumed to know the defects of the works that they have carried out. ➢ That the liability of the contractors arises from the provisions of the contracts of enterprise governing them. ➢ That the presumption of liability of persons to whom it applies failed to rebut it. (

E) SNC Lavalin Inc. and Alain Blanchette ➢ That SNC Lavalin Inc. and Alain Blanchette are liable in solidum for the damage caused to the plaintiffs for the period from May 2003 to November 28, 2007. (

F) Apportionment of liability ➢ That the apportionment of liability between the defendants is as follows for most of the residential cases, because certain actions will be addressed on their merits: SNC Lavalin Inc. and Alain Blanchette 70% Béton Laurentide inc. and/or Construction Yvan Boisvert inc. and Carrière B & B inc. 25% (That the 25% be divided in two, i.e., 12.5% for the concrete supplier at issue and 12.5% for the quarry) Individual contractors and formworkers 5% ➢ That the apportionment of liability between the defendants in the commercial cases will be determined based on each case and claim. The same applies for certain individual cases. (

G) Cause of damage ➢ That the sole cause of the damage is the oxidation of the pyrrhotite in the aggregate. ➢ That any immovable in which the pyrrhotite volume in the aggregate was established at over 0.23% has a defect that causes or has already caused the concrete to expand internally, resulting in the damage claimed. (

H) Actions of GMN and QH

➢ That both GMN and QH have proved the merits of their actions against the enterprises with whom they are bound by contract, aside from rare exceptions. ➢ That GMN’s assessment of damages to perform the work to be done is accepted. ➢ That the actions against the contractors’ sureties are well founded for the amount of $40,000. ➢ That the share of liability between the sureties and the enterprise is set at 0% for the sureties and 100% for the contractors, the whole as between them only. (

I) Share of damages to apportion ➢ That the plaintiffs are liable for the share of damages attributable to the contractors/formworkers/supervisors who were not sued. (

J) Method of reparation ➢ That the method of correcting the damage is to rebuild the defective foundations or slabs, except where specifically provided in the individual judgments. (

K) Construction G. Therrien inc. and commercial damage ➢ That Construction G. Therrien inc.’s contractual relationship is governed by the provisions of a contract of enterprise. (

L) Action in nullity ab initio ➢ That the companies Northbridge and Chartis are bound to honour the insurance policies that they respectively issued, except as of December 1, 2007, the date on which their issued policies were cancelled. ➢ That the exclusion clauses raised by these two insurers do not apply to these claims. ➢ Given the limited result of this contestation, the expenses will be borne by each party. (

M) Pyrite exclusion ➢ That the exclusions related to pyrite do not relieve the insurers from having to pay for the damage caused by the oxidation of pyrrhotite, a very different mineral from pyrite. (

N) Insurance towers ➢ That the insurance towers established to cover SNC Lavalin’s professional liability for each year concerned apply respectively to the claims filed and presented annually. ➢ That the exclusions raised by the insurers of these towers to limit their coverage does not apply to these claims. ➢ That the 2009-2010 tower was eroded based on the decisions in this judgment. ➢ That Ace Insurance Company’s request to limit its insurance coverage by raising a retroactive date is rejected because it does not apply to these situations. ➢ That the costs of this debate be borne by SNC’s liability insurance companies. (

O) Interest and additional indemnities ➢ That the interest granted runs as of the date of this judgment. ➢ That the additional indemnities be granted as of the date of this judgment, except with respect to the immovables that have not yet been repaired. (

P) Apportionment of damages between insurers ➢ That all the insurers/damages covering a party held liable must apportion the damages between them pro rata as of the exact dates of the coverage included between the time the concrete was poured and the date of crystallization admitted by the parties. [ 95 ] Among the major determinations that do not appear in the judge’s list in the above-reproduced paragraph is the determination of the damage ratings. Continuing the process aimed at shedding the most possible light, experts conducted a visual inspection after which each property was assigned a damage rating.

At the hearing, the parties admitted that immovables with a damage rating of 1 or higher required intervention. Most of the immovables fell into that category. It must also be borne in mind that for the purpose of the hearing, the parties had a geological analysis conducted of concrete core samples taken from numerous foundations to quantify the sulphides (pyrite or pyrrhotite) in the samples. [ 96 ] Furthermore, as the Court has previously noted, the judge did not issue any specific conclusions on the applications for forced intervention. He instead apportioned liability in accordance with

article 469 of the former Code of Civil Procedure [69] only as between the various parties held liable, as reflected in sub-paragraph (

F) reproduced above. 2.3.3 Judgment following the splitting of the proceeding

[ 97 ] That judgment is dated November 11, 2014. [ 98 ] To summarize, the judge addressed the issues on the actual apportionment of amounts based on continuous trigger, shared liability, solidarity, and experts’ fees. [ 99 ] The amount of the various shares for each sequence was determined using sophisticated computer tools created by an actuary whose services had been retained by the insurer Intact.

These tools were thoroughly analyzed, after which the parties all acknowledged their usefulness and reliability. [70] [ 100 ] In the judgment following the splitting of the proceeding, the judge also dismissed the requests of several defendants to rule on the recourses in warranty. [71] On November 20, 2014, the judge corrected clerical errors in that judgment in the conclusions concerning sequences 84, 638, and 682. 3 APPEALS 3.1 First series of appeals [ 101 ] First, it should be noted that certain parties – both plaintiffs and defendants – appealed the 68 judgments, even before the judgment following the splitting of the proceeding was rendered. [ 102 ] Motions to dismiss these first appeals were filed by parties who had not themselves filed an appeal.

Thus, rather paradoxically, certain plaintiffs and defendants found themselves united by a common goal. 3.2 Management of appeals [ 103 ] On September 24, 2014, the Court granted the joint motion to dismiss and declared that the appeals filed before the trial judge had rendered the judgment following the splitting of the proceeding were premature. [ 104 ] This first series of appeals clearly foreshadowed those to come once the judgment following the splitting of the proceeding was rendered.

Therefore, it was exceptionally decided to manage the conduct of the future proceedings even before the appeals of judgments rendered that day were formally filed. The management of this unusual case required the use of extensive judicial resources. In this regard, the considerable cooperation of all counsel involved must be noted. [ 105 ] SNC/Blanchette was a party to all the files at trial and appealed the judgments rendered in the 68 Superior Court cases.

This first step having been taken, the Court issued various safeguard orders, including one suspending all time limits until April 10, 2015. [ 106 ] During this suspension, the parties vainly tried to agree to limit the number of appeals. In the end, 803 appeals were filed, 769 of which were still pending during deliberations.

It should be noted that these appeals might group both appellants and respondents together, which is why the appeal files were not necessarily closed after certain appellants’ appeals were dismissed in the course of the proceedings. [ 107 ] Over the course of multiple management conferences held after the appeals were filed, the parties agreed to a number of unprecedented measures to adapt the procedure to the exceptional nature of the matter. The most salient measures concerned the following points:

i) Uniting the parties into four large groups: Group 1: SNC/Blanchette and their insurers; Group 2: B&B/concrete suppliers and their insurers; Group 3: Contractors and their insurers; Group 4: Plaintiffs. ii) Filing of joint statements of fact per group, first on the general facts, and second on the facts related to the insurance. iii) The identification of all issues raised in the notices of appeal in order to draw up a complete list.

The list approved by the parties includes over 70 items. iv) The grouping of these issues under the following main headings: ➢ Liability of SNC/Blanchette; ➢ Liability of B&B and the concrete suppliers ; ➢ Liability of the contractors; ➢ Apportionment between the various parties held liable and the applications for forced intervention; ➢ Liability issues related to individual cases;

➢ Issues relevant to the extent of the damage; ➢ Issues relevant to SNC/Blanchette’s insurance policies; ➢ Issues relevant to the other insurance policies. [ 108 ] The parties separated the briefs into two sections: a first

section common to parties included in a same group and a second

section in which each group member who so wished could submit its own arguments. [ 109 ] Using this particular format and in the sequential order above, the Court heard together all 771 appeals [72] that had not yet been determined in the fall of 2017. Earlier, in December 2016, the Court had allowed 29 appeals by the Zurich Insurance Company Ltd. [“Zurich”] because of a failure to summon in due form. [73] [ 110 ] The hearings took place over eight weeks during the 2017-2018 judicial year.

The parties abandoned several grounds for appeal in the course of this exercise, reducing the number of grounds to be dealt with by the Court to 50. [74] [ 111 ] The Court would like to note that the pleadings had to be amended throughout the proceeding. [75] Numerous errors and typos were also corrected. [76] As such, it is important to note that the judgments filed today confirm many corrections in the parties’ designations. [ 112 ] In this respect, a remark regarding the pleadings in both the trial and appeal pyrrhotite files as a whole is in order.

The Court observed many unusual situations and many errors by the parties, particularly in the designations and conclusions of the pleadings. Up to the very last minute, the Court drew the parties’ attention to several of the errors, some of which had a major impact on the conclusions. The fact remains, however, that it was impossible to correct every error so that the corrections might be reflected in the judgments’ conclusions.

In such cases, responsibility falls to the parties. [ 113 ] During a case management conference held in early December 2018, the parties again raised considerations regarding future orders splitting the proceedings so that the pecuniary condemnations could be apportioned. At the Court’s urging, all the parties confirmed their request in a letter in late 2018.

The Court will therefore order the proceedings to be split in the conclusions of today’s judgments. [ 114 ] During the same case management conference, the Court discussed with the parties the possibility of retaining the services of Yves Demontigny to manage the information with the assistance of complex computer tools. [ 115 ] The pyrrhotite cases were taken under advisement on June 13, 2019, after the Ministère de la Justice had in fact retained Mr.

Demontigny’s services. [77] 4 STRUCTURE OF JUDGMENTS 4.1 Foreword [ 116 ] The judge accepted that the oxidation of pyrrhotite in the aggregate from the B&B quarry caused the internal expansion of the concrete. He reached this conclusion after a careful analysis of the voluminous expert evidence adduced at trial. The parties did not question this finding on appeal. [ 117 ] The judge also concluded that the presence of a certain quantity of this pyrrhotite in the aggregate incorporated into the concrete met the legal

definitions of both a latent defect and a construction defect. [78] [ 118 ] Last, the judge found that the presence of pyrrhotite, in almost all cases, caused the loss of the work within the meaning of

article 2118 C.C.Q. He held that the loss had occurred within five years of the construction. [79] [ 119 ] The grounds raised by some parties against the judge’s findings will be discussed in greater detail, in particular during the analysis regarding the contractors’ liability. [ 120 ] Last and in general, the Court finds that it would have been preferable had the judge followed the sequence of contracts, as it would have helped shed light on the rules likely to directly impact on each party’s share of liability.

This finding has consequences on the plan and analysis the Court has decided to adopt. 4.2 Outline of the Main judgment [ 121 ] After certain preliminary remarks [“chapter 5”], in accordance with the rule set out above, the Court will analyze the issues by chapter, generally following the most common order of the contracts entered into between the parties, that is: − The contracts of enterprise entered into between the owners and the general contractors or formworkers [“chapter 6”]; [80] − The contracts of sale of concrete by the concrete suppliers and B&B [“chapter 7”]; − The contracts for professional services of geologist Blanchette and the issues related to his liability in general [“chapter 8”] . [ 122 ] The Court will then analyze the

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