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Claim for Construction Defects: Legal Interest of a Syndicate of Co-owners and Starting Point of the Extinctive Prescription

By Santal Truong, from our Insurance Law Practice Group

February 22, 2022 — On January 24, 2022, in 9104-2523 Québec inc.c. Syndicat des copropriétaires du 5701 de Normanville, 2022 QCCA 95, the Court of Appeal of Quebec affirmed a judgment that awarded $53,452.04 to syndicates of co-owners for the damages suffered by co-owners.

The appellant is the builder of five buildings with residential units and shared parking spaces held in divided co-ownership. Shortly after the construction in 2010, several co-owners noticed problems of water accumulation and drainage in the common parts of the parking spaces during heavy rain and snow melting periods. The syndicates filed a claim for damages against the appellant on behalf of the co-owners for the loss of use of the parking units. The lawsuit was filed in May 2015.

We will focus on two elements addressed by the Court of Appeal.

Right of co-ownership

The trial judge ordered the appellant to pay compensation of $1,500 per co-owner, for a total of $30,000.

The Court of Appeal upheld the decision by stating:

[41] Accepting the appellant’s proposal would imply that, despite the mandate of the respondent syndicates to look after the common interests of the co-owners in the presence of defects affecting the common parts and the private portions (with the authorization of the co-owners), each co-owner would have to file her or his own claim in order to be compensated when the damages result from a same fault alleged by all the co-owners. This reading of article 1081 C.C.Q. seems to go as much against its text as it does against judicial economics. Instead, this provision “must be interpreted extensively” [1] so that it covers “all personal remedies of the co-owners on their behalf, including claims for price reduction, annulment, damages, etc.” [Our translation]

The Court therefore recognizes the legal interest of a syndicate of co-owners, whose main purpose is to safeguard the common interests of co-owners, and makes the restriction of the scope of article 1081 of the Civil Code of Québec conditional solely on obtaining the authorization of the co-owners when the defect affects their private fraction. In this case, the co-owners had expressly mandated their syndicate to claim on their behalf the damages resulting from the same construction defect; moreover, these mandates were not contested.

Extinctive prescription

The Court of Appeal then ruled on the starting point for calculating the prescription period for a claim for construction defects.

The prescriptive period begins to run from the moment the respondents became aware of their expert’s report confirming the construction defects. In this case, it is important to note that prior to being apprised of the report, none of the parties had identified serious indication that could have led to conclude that the water accumulation problem was caused by a construction defect. Originally, a simple hypothesis was inferred that a problem other than a lack of maintenance could be at the origin of the damage, without putting forward a definitive conjecture. The respondents were unaware of the facts giving rise to the damage, and it was not until they received their expert’s report in June 2013 that light was shed on the cause of said damage. In other words, the Court of Appeal held that it was only upon submission of their expert’s report that the respondents were able to recognize for the first time all elements required to bring their claim. Moreover, the appellant came to these same conclusions when it received its own report in 2015. It was in this context that it carried out corrective work and additional interventions, such as the repair of the underground pipe and the installation of a new drainage system, in addition to drain cleaning interventions.

Considering the facts of the case, the period preceding June 2013 was ruled as one where the respondents would have been unable to react sooner. The Court of Appeal thus affirmed the trial Court’s decision and rejected the argument that the period of prescription began running in the summer of 2010, when co-owners took possession of their residential units.

In essence, the Court of Appeal recognizes the right of the syndicate of a co-ownership to claim not only its own damages, but also those suffered personally by its co-owners in the presence of defects affecting the common and private fractions. As for extinctive prescription, it is always a question of mixed fact and law. The Court confirms that in a claim based on a construction defect, prescription starts to run the moment the elements of the effective cause of the damages have appeared.

[1] Gagnon, Christine, La copropriété divise, 5e ed., Montréal, Éditions Yvon Blais, 2020, p. 524.