2017 QCCA 1525, 2017 QCCA 1525

Procureure générale du Québec c. Inter-Cité Construction ltée 2017 QCCA 1525 COUR D'APPEL CANADA PROVINCE DE QUÉBEC GREFFE DE MONTRÉAL N o : 500-09-025672-155 (500-17-062182-103) PROCÈS-VERBAL D'AUDIENCE DATE : Le 28 septembre 2017 CORAM : LES HONORABLES MARIE ST-PIERRE, J.C.A. MARK SCHRAGER, J.C.A. PATRICK HEALY, J.C.A. APPELANTE AVOCATE PROCUREURE GÉNÉRALE DU QUÉBEC me NANCY BRULÉ (Bernard Roy (Justice-Québec) ) Direction générale des affaires juridiques et législatives INTIMÉE AVOCATS INTER-CITÉ CONSTRUCTION LTÉE Me SIMON GRÉGOIRE Me PATRICK PLANTE (Borden Ladner Gervais)

En appel d'un jugement rendu le 21 septembre 2015 par l'honorable Christian J. Brossard de la Cour supérieure, district de Montréal. NATURE DE L'APPEL : Contrat d’entreprise – Annulation d’un appel d’offres – Dommages-intérêts Greffière d’audience : Claire Le Guerrier Salle : Antonio-Lamer AUDITION 11 h 10 Début de l’audition.

Identification de la cause et des procureurs. 11 h 10 Commentaires de l’honorable Marie St-Pierre, j.c.a. 11 h 10 Représentations de Me Brulé 11 h 31 Échanges entre la Cour et Me Brulé 11 h 55 Fin des représentations de Me Brulé 11 h 55 Représentations de Me Grégoire 11 h 57 Fin des représentations de Me Grégoire 11 h 57 Suspension de l’audience 12 h 2 Reprise de l’audience La Cour : Pour les motifs qui seront déposés au présent procès-verbal, l’appel est rejeté, avec frais de justice en faveur de l’intimée – arrêt – page 3.

Greffière d’audience PAR LA COUR ARRÊT [ 1 ] This appeal arises from a judgment of the Superior Court [1] that allowed in part the respondent’s action and awarded damages in the amount of $1,335,134.00 for breach of contract by the Ministère des Transports (“MTQ”). [2] The appellant does not contest the finding of fault but advances three grounds of appeal: • That the trial judge erred in law in finding a causal link between the appellant’s fault and the damages claimed by the respondent; • That the trial judge erred in law in admitting the testimony of Mr.

Jean-François Coudé on matters of fact of which he did not have

personal knowledge; and • That the trial judge erred in assessing the quantum of damages in the absence of sufficient evidence. [ 2 ] The central issues lie in the second and third grounds. If the second ground fails, the third ground raises a question of fact that is reviewable on appeal only if the reasons of the trial judge reveal palpable and overriding error. [3] Context [ 3 ] On November 25, 2009 the MTQ issued a call for tenders concerning road construction in the Municipality of Chelsea and in that call asserted that all environmental authorizations required for the project had been obtained.

The respondent submitted the lowest bid on January 27, 2010 but the MTQ could not award the contract because, in fact, some environmental authorizations had not been obtained from federal authorities. By the terms of the call for tenders the respondent was bound to honour its tender until March 13, 2010. Beginning in February 2010, and continuing until June 2010, there were many exchanges between the parties. The respondent continued to anticipate the award of the contract and undertook logistical preparations accordingly by keeping personnel and equipment on standby.

In March 2010, the MTQ informed the respondent that work on the project could not begin before August 2010. The respondent replied that as a result of this delay it would incur costs of $1,405,496.90 and advised the MTQ that it would seek compensation for the delay. [ 4 ] On April 8, 2010 the MTQ advised the respondent that no decision had yet been taken whether to cancel the call for tenders. On June 9, 2010 the MTQ advised the respondent, in accordance with the reserve clause, that the call for tenders was cancelled.

Between March 1, 2010 and the cancellation, the respondent kept employees and equipment on standby in anticipation of an agreement to commence work.

The respondent was unable to assign its personnel and equipment to alternative projects between the cancellation of the call for tenders in June 2010 and their eventual reassignment to other projects by the end of November 2010. [ 5 ] In its action the respondent claimed damages in the amount of $1,812,155.84 under three heads: costs related to its bid; costs relating to idle management personnel and machinery that were on standby between March 1, 2010 and the cancellation of the call for tenders on June 9, 2010; and costs relating to idle management personnel and machinery between June 10, 2010 and their reassignment on November 30, 2010. [ 6 ] At trial the respondent’s principal witness was Mr.

Jean-François Coudé. He was the manager of the project that is the subject of this case. In support of his testimony the respondent tendered various tables that had been prepared by Mr. Coudé. These tables were marked as exhibits. The tables itemized various costs incurred by the respondent in association with the project for which it had submitted a bid. Their relevance at trial was to provide a basis for the assessment of damages claimed by the respondent. In his testimony Mr.

Coudé explained that he had prepared these tables in accordance with standard company practice, including a variety of costs for services fixed according to a tariff used generally by the company. He said that the rates used in these tables concerning the equipment and the employees are either those he regularly uses in the tenders he prepares or rates fixed by the MTQ. He explained that to prepare his calculations for these tables he also relied to some degree upon information supplied to him by other sources or persons. [ 7 ] The appellant objected on several occasions to the admission of Mr.

Coudé’s evidence to the extent that it relied upon information, supplied by other sources or persons, of which Mr. Coudé had no personal knowledge. These were, in short, objections to the admission of hearsay contained in Mr. Coudé’s testimony and in Exhibits P-10, P- 11 and P-12. To repeat, all of these exhibits are tables prepared by Mr.

Coudé that present various costs incurred by the respondent as a result of the cancellation of the call for tenders. [ 8 ] The objections at issue in this appeal are Objections 2, 4, 5, 6, 7 and 8: • Objection 2 concerns costs related to members of the respondent’s staff for the period between January 4, 2010 and January 27, 2010, as represented in Exhibit P-11. The objection was dismissed and the evidence was admitted, subject to an assessment of its probative value. Although the ruling is not explicit in this respect, it would appear that the judge was satisfied that Mr.

Coudé had sufficient personal knowledge of the facts asserted in this evidence that an objection on grounds of hearsay could not be sustained. • Objections 4 and 5 concern the calculation of costs of $900.00 per week associated with pick-up trucks during the period on stand- by, as reflected in Mr. Coudé’s testimony and in Exhibit P-10. This objection was dismissed on the basis that the witness had sufficient personal knowledge of the matter in issue. • Objection 6 concerns the hourly wages of employees assigned by the respondent to the project, as reflected in Mr.

Coudé’ testimony and Exhibit P-10, between for the period between March 1, 2010 and April 1, 2010. This objection was dismissed on the basis that Mr. Coudé had sufficient personal knowledge of the facts asserted. • Objections 7 and 8 concern costs associated with keeping equipment and personnel on standby between June 10, 2010 and September 13, 2010, as reflected in Mr. Coudé’s testimony and Exhibit P-12. The judge dismissed in part this objection and admitted the evidence of costs related to keeping equipment on standby, again on the basis that Mr. Coudé had sufficient knowledge of the facts asserted.

The judge also admitted, under reserve, evidence related to the assignment of certain employees but noted that he had reservations about the probative value of the evidence for this purpose. He later sustained this objection because Mr.

Coudé’s hearsay assertions on this point were not based upon his personal knowledge of the employees in question but upon information provided to him by a colleague. [ 9 ] In short, with the exception of the last objection, the judge admitted the evidence to which the appellant objected but repeated with respect to each item that it was subject to careful scrutiny for its probative value. He was satisfied that Mr. Coudé had sufficient personal knowledge to assert the facts in issue as a basis for the assessment of damages. As the respondent’s manager in charge of the project, he had personal knowledge of :

• the work done by himself and the employees who worked with him on the project; • their hourly rates as stated in the tenders; • the trucks assigned to them; • the costs of those trucks as stated in the tenders; • the machinery that he required for the execution of the projects and saw daily in the company’s car park; • the necessity to keep it on standby to be prepared to begin the works as soon as the contract was awarded; and, • the lack of other projects for which the respondent could use this equipment in the year 2010.

Discussion [ 10 ] The appellant does not contest the finding of fault by the trial judge.

The breaches in question are essentially opening the call for tenders without being ready to award the contract, misleading the bidders by writing in the call for tenders that it had already obtained the authorizations required whereas it had not, not awarding the contract to the respondent without just cause, and misleading the respondent on the prospect of beginning the works shortly throughout the spring of 2010. [ 11 ] As a result of these breaches, the respondent suffered losses to its detriment. [ 12 ] The judge concluded that the respondent put and kept its personnel and equipment on standby due to the repeated representations of the MTQ that work would soon commence and the rapidity with which the work was required to be completed once construction began. [ 13 ] There is nothing in the judgment at first instance, or in the appellant’s submissions in this Court, to suggest any error of legal principle by the trial judge concerning the causal link between the appellant’s fault in breach of contract and damages suffered by the respondent.

There was therefore only a question of fact for determination by the trial judge. [4] [ 14 ] The judge found no causal link between the fault of the appellant and costs associated with the respondent’s preparation of the bid. [5] For this reason he dismissed the respondent’s claim on this head of damages. [ 15 ] For the other heads of damage the judge was satisfied that the respondent had proved the causal link between the appellant’s fault and respondent’s decision to keep its personnel and equipment on standby.

Moreover, he concluded that the ensuing damages suffered by the respondent were foreseeable. [ 16 ] On the issue of causation there was no identifiable error by the trial judge, let alone a palpable and overriding error. Accordingly, the first ground of appeal must be dismissed. [ 17 ] Although the second and third grounds of appeal are presented separately, they may be examined together because they address two aspects of a single issue, which is the assessment of damages.

The third ground concerns the quantum of damages while the second concerns the evidentiary foundation on which that quantum was assessed. [ 18 ] The trial judge relied extensively on the evidence of Jean-François Coudé in this exercise but subjected his examination of the probative value of that evidence to rigorous scrutiny. In the second ground the appellant argues that the evidence of Mr. Coudé contained inadmissible hearsay and that the trial judge erred in admitting it.

In the third ground the appellant argues that even if it was admissible, the evidence of the respondent was insufficiently probative to justify the judge’s assessment of the quantum of damages. [ 19 ] If the admission of the hearsay evidence discloses no error of law, it follows that the third ground of appeal raises only a question of fact for which the standard of review is palpable and overriding error.

Conversely, if the admission of that evidence was an error of law, a standard of correctness applies and the appeal should be allowed. [ 20 ] The reasons of the trial judge are exhaustive, detailed and careful. [ 21 ] With respect to the respondent’s evidence, he begins with a note of caution: [L]a preuve d’Inter-Cité présente certaines lacunes, soit parce qu’elle fait parfois appel à du ouï-dire, sans autres éléments corroboratifs vérifiables, soit parce que présentant une valeur probante douteuse. [6] [ 22 ] In the assessment of each head of damages following this observation, it is clear that the judge was scrupulously disciplined not to rely upon hearsay or evidence that was otherwise unreliable. [ 23 ] The judge concluded that the evidence established that for a period of fifteen weeks two of the respondent’s employees devoted 90% of their time to the project, and a third employee devoted 50% of his time, but that it failed to establish the time attributable to other employees.

Accordingly, he awarded $79,062.75 for the lost time of management personnel. [7] [ 24 ] For the period between June 10, 2010 and November 30, 2010 the judge concluded that the evidence failed to prove claims made with respect to lost time of three employees until their reassignment to another project. For this period he awarded $20,403.53. [8]

[ 25 ] He then determined that the evidence proved that between March 1, 2010 and March 23, 2010 various pick-up trucks were kept on standby and for this he awarded $8,991.00. [9] [ 26 ] With respect to machinery, the judge concluded that the respondent had to keep it on standby until March 23, 2010 but that the evidence failed to prove that the lighter equipment, as opposed to the heavy equipment, could not be reassigned to other projects.

Accordingly, for this head of damages, he awarded $507,936.69 for the period between March 1, 2010 and June 9, 2010 and $718,740.00 for the period between June 10, 2010 and November 30, 2010. [ 27 ] In sum, the judge granted the respondent’s claim in the total amount of $1,335,134.00, with interest at the legal rate from October 10, 2010 and the additional indemnity from November 24, 2010, with costs. [10] [ 28 ] With respect to the claims supported by Exhibits P-10, P-11 and P-12, the judge concludes as follows: • Hourly rates of management personnel, from $73,885.85 claimed to an award of $0.00; • Pick-up trucks, from $77,382.00 claimed to an award of $8,991.00; • Hourly rates, from $244,647.00 claimed to an award of $79,062.75; • Management personnel, from $73,171.80 claimed to an award of $20,403.58. [ 29 ] The difference between the amounts claimed and the awards made are explained entirely by the judge’s conclusions concerning the sufficiency of the evidence. [ 30 ] All but one of the appellant’s objections to elements of hearsay in Mr.

Coudé’s evidence were dismissed on the basis that he had sufficient personal knowledge of the facts asserted. The judge acknowledge there were some elements of hearsay in Mr. Coudé’s testimony and he was careful not to rely upon it in his assessment of the evidence or his conclusions. It is clear in the record and in his reasons for judgment that the trial judge was aware of the nature of hearsay and the principles of admissibility that govern its exclusion. He was also keenly aware of the distinction between inadmissibility and probative value.

There is no basis on which to claim that the judge made an error of law concerning the admissibility of Mr. Coudé’s evidence. The judge was quite right to conclude that the respondent was not required to call every employee in the company who might have been involved in supplying items of information to Mr. Coudé. [11] His determination that the witness had sufficient personal knowledge is a question of fact that in no way discloses palpable and overriding error. In the absence of such error this Court must not intervene.

For this reason the second ground of appeal is dismissed. [ 31 ] The trial judge accepted Mr. Coudé’s evidence with respect to several itemised elements in the respondent’s claim: the work done by Mr. Coudé, and his colleagues Fortin and Côté, and their hourly rates as set out in Exhibit E-9; the costs associated with pick-up trucks used by them; the machinery placed on standbydue to the delay caused by the appellant and the absence of alternative projects to which this equipment could be assigned. With respect to costs related to wages, the judge admitted Mr.

Coudé’s evidence relating to employees with whom he worked on the project but not others. With respect to costs related to idle equipment, the judge rejected evidence based upon information provided to Mr. Coudé by a colleague. However, the judge accepted Mr.

Coudé’s evidence, based on his personal knowledge, that he could see the idle equipment that had been planned for the project, that he was aware that this equipment had been designated for the project and that it was necessary to keep it available, that he was aware of the costs associated with keeping the equipment available and that he knew that there were no other projects to which this equipment could be assigned at the relevant times. [ 32 ] In short, while there are elements in Mr. Coudé’s evidence that were provided by other sources or persons, the trial judge relies only on information of which Mr.

Coudé had personal knowledge. As a result of his careful evaluation of all of the admissible evidence, the trial judge made significant adjustments in the amounts claimed by the respondent under the various heads of damages. None of these conclusions can be considered reversible on appeal. They certainly reveal no palpable or overriding error. [ 33 ] It follows that the third ground must also fail. The assessment of damages is a matter of fact that requires deference in an appellate court in the absence of palpable and overriding error.

Although it is a matter of fact, it is not always a matter of precision and as a result this assessment must sometimes accommodate a tolerable measure of approximation. [12] This point was noted expressly by the judge [13] and his review of the evidence in assessing each head of damages demonstrates scrupulous differentiation between claims of damages that are supported by the evidence and claims that are not. FOR THESE REASONS, THE COURT: [ 34 ] DISMISSES the appeal with legal costs. marie st-pierre, j.c.a.

mark schrager, j.c.a. patrick healy, j.c.a.