The End of the Work Justifies the Legal Means

The concept of completion of the work, where construction is concerned, is crucial for any property developer, contractor or construction professional in several respects.

First, it sets the starting point for calculating the grace period for preserving a construction legal hypothec (art. 2727 of the Civil Code of Quebec [the “C.C.Q.”]): if the deadlines are not met, the legal hypothec may be cancelled.

It is also the starting point for the warranty against loss of the work (as defined by the court precedents) that occurs within five years against the parties who participated in its construction (art. 2118 C.C.Q.) and the starting date for calculating prescription (generally three years) of the remedy between the client and their contractor (arts. 2116 and 2925 C.C.Q.)

A recent decision of the Superior Court, 11489470 Canada inc. c. Constructions Maxime Langevin,^[1] rendered on March 22, 2023, offers a good summary of the principles by which anyone working in the construction industry must be guided in determining this key concept.

Criteria Used in the Courts’ Analysis

In order to determine whether completion of the work has occurred, a distinction must be made between the work provided for by the contract and work that was not provided for in the contract, plans and specifications:^[2]

[TRANSLATION] [51] In principle, when the scope of the work is provided for by contract, [completion of the work] occurs when the contract of enterprise has been performed in full, including all work that is a logical continuation of the work expressly set out in the contract, as minor as it may be. For work that is not expressly provided for in the contract, only work that is of a certain degree of importance for the usefulness of the building can operate to postpone completion of the work. Accordingly, correcting defects or poor workmanship does not delay completion, nor does failure of the work to comply with the applicable regulations in force.

[TRANSLATION] [52] Where the scope of the work is not specified in the contract, the completion of the work used for calculating the time applicable to a legal hypothec occurs when a combination of indications show that the building is fit to be used for its intended use, even if some work remains to be done.

As a result, if additions are made to the work initially agreed to, the question then becomes whether the additions are accessory to the work provided for in the contract and foreseeable when the contract was signed, or are additions independent of the work initially agreed to. ^[3] In the latter case, the additions do not postpone completion of the initial work, since they are considered to be separate work with their own completion.

Here follows examples of what the courts will examine when determining whether work has been completed or not in a case where scope of work is not clearly defined:^[4]

[TRANSLATION] [81] Given that completion of the work is a question of fact, certain common factual elements suggest or provide indications that the work has been completed within the meaning of article 2110 C.C.Q. Occupancy of the building by the owner, provisional acceptance, the words and deeds of the contractor, demobilization of the work site, the end of daily reports, payment by the contractor of the final electricity and gas accounts, removal of construction trailers, and holding a final site meeting are all indications from which completion of the work and the starting point for the prescriptive period can be established.

We can therefore see from the foregoing that completion of the work, as it is conceived in the Civil Code of Quebec, does not depend on one single document, such as a completion of work certificate or substantial completion certificate; rather, it calls for a broader factual and technical analysis.

Important Distinctions

As stated in Langevin, defects and poor workmanship cannot delay completion, since corrective measures are considered to be distinct from the work that must be completed in order to trigger the deadlines in the Civil Code.

What about starting up equipment? Tests to determine whether the building is in compliance? Manuals to be delivered when the work is completed?

While it may be provided for in the contract, the delivery of manuals, warranty documents or other written material is a contractual obligation but does not constitute work. As the Court pointed out in Langevin, it is important not to confuse [TRANSLATION] “the end of [the] contractual relationship ... and the relevant completion of the work for registration of the Hypothec, when those two points in time do not necessarily coincide.”^[5]

The tests for determining compliance with certain standards or regulations are not work within the meaning of the Code.^[6] All that such tests can reveal is whether or not there is a defect in the work previously carried out. However, since such a defect cannot delay completion, it is logical that the test that could detect any such defect, without adding anything to the structure, would not delay completion either.

In addition, if start-up is necessary for the structure to be used, or comprises a logical continuation of the construction or supply of the structure, a delay in the start-up procedure would normally mean a delay in the completion of the work.

Obviously, it will then be critical to distinguish start-up (starting up the equipment) from tests for proper operation (start-up diagnostics), since the latter cannot delay completion of the work, as noted above where testing for defects is concerned.

Here, the determining criterion for distinguishing between them is whether the outcome of the manipulation is to enable the structure to operate, or to detect a malfunction of the structure.

Checklist for Completion of the Work

To help those involved in the construction industry in properly analyzing the issue of completion of the work, we suggest the following checklist. This is not in any way a substitute for a legal opinion based on the facts specific to each situation, in order to assess all key criteria for completion of the work.

1. Is the item work as opposed to corrective measures, tests, or contractual obligations other than work?

If so, move on to the next question. If not, the item should not delay completion of the work.

2. Does the contract provide a clear description of the work, in particular in the plans and specifications?

3. If so, is the work in question part of the work specifications or a logical and foreseeable continuation of the work?

If so, it should be work within the meaning of the concept of completion of the work, even if the work is minimal and does not prevent the use of the structure.

4. Where there is no clear designation, or if the work analyzed was not provided for in the contract, does non-completion of that work prevent the structure from being used for its intended use?

5. If so, it will normally be work within the meaning of the concept of completion of the work. If not, it is very likely to be minimal unforeseen work that would not delay completion, or additions that would then constitute distinct, autonomous work that will have its own completion point, separate from the work initially agreed to.

As noted earlier, while these indications can guide our assessments of the actions to be analyzed, nothing can replace a legal opinion about your own specific situation.

If you need advice on this subject, please feel free to consult the authors of this bulletin or a member of our construction team at Fasken.

The authors would like to thank Tommy Giroux-Latouche and Frédéric Magnan (Fasken students) for their contribution to this bulletin.