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[Page 742]

Contract—Subcontracts—Clauses relating to the subcontractor’s renumeration—Intent of the parties stated in a clear wording.

The Commission entrusted Beaudet et Fils Inc., hereinafter called the general contractor, with the job of constructing a rehabilitation centre. The latter gave each of the respondents a subcontract in which clauses 6 and 7 state that the general contractor shall pay the total cost of labour allocated to the site by the subcontractor together with an overall renumeration at 9 per cent calculated on this cost and on the cost of all purchases as executed by the general contractor and accepted by the owner. In the course of operations, the general contractor and the Commission entrusted the execution of certain electrical and heating work to other subcontractors, who supplied the necessary materials for this purpose.

The general contractor contends that according to the interpretation of clauses 6 and 7, this renumeration of 9 per cent does not apply to materials supplied by the other subcontractors, but only to those which it purchased upon requisition made by the original subcontractors themselves. Hence the action by each of the subcontractors against the general contractor, as well as the subsequent intervention of the Commission. The Superior Court allowed the actions of the subcontractors and dismissed the Commission’s intervention, ordering the general contractor to pay the sum as provided in the contract. The Court of Appeal affirmed this judgment and dismissed the appeals entered separately by the Commission and the general contractor against each of the subcontractors. Hence the four appeals to this Court.

Held: The appeals should be dismissed.

The provisions of clauses 6 and 7 are stated in clear terms and state the intent of the parties. Resort to the rules of interpretation is therefore not necessary.

APPEALS from a judgment of the Court of Queen’s Bench, Appeal Side, Province of Quebec[1], affirming a judgment of Mr. Chief Justice Dorion. Appeals dismissed.

Jacques Flynn, Q.C., and Roger Thibaudeau, Q.C., for the appellant, Quebec Workmen’s Compensation Commission.

Jacques Delisle, for the appellant, Beaudet & Fils Inc.

[Page 743]

Louis LeBel, for the respondent, Pierre Tardif Inc.

Serge Vermette and Claude Bérubé, for the respondent, Tri-Bec Inc.

The judgment of the Court was delivered by

THE CHIEF JUSTICE—The facts from which this litigation arises are not in dispute, and the point of law raised in each appeal is the same.

On February 8, 1962, the Quebec Workmen’s Compensation Commission, hereinafter called the Commission, entrusted Beaudet et Fils Inc., hereinafter called the general contractor, with the job of constructing a rehabilitation centre in Quebec City. On March 15 the general contractor gave Pierre Tardif Inc. a subcontract for all the electrical work, and Tri-Bec Inc. a subcontract for all the heating work.

In each of the two cases the subcontractor’s remuneration was fixed by an identical formula, except for certain differences which are not relevant here, regarding distribution of the agreed rate. This formula is contained in clauses 6 and 7 of each subcontract, and in the subcontract relating to the subcontractor Pierre Tardif Inc. it reads as follows:

[TRANSLATION] Clause 6: Remuneration: The general contractor shall pay the subcontractor:

(1) The total cost of labour allocated to the site;

(2) An overall remuneration calculated on the total cost of the electrical work, including the cost of:

A) Labour allocated to the site by the subcontractor.

B) The net cost of all purchases, as executed (exécuté) by the general contractor and accepted (accepté) by the owner.

Clause 7: Rate of remuneration: The rate of remuneration shall be 9 per cent, distributed as follows:

A) 7 per cent for the execution of the work;

B) 1½ per cent for supplying all equipment and tools, excluding the list of equipment specified in clause 3;

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C) ½ per cent for administrative and financial costs of the project.

In the course of operations, the general contractor and the Commission entrusted the execution of certain electrical and heating work to other subcontractors, who supplied the necessary materials for this purpose. The total cost of the materials so furnished by these subcontractors was $236,608.95 for the electrical work, and $259,282.29 for the heating work. Accordingly the remuneration, calculated in each case at 9 per cent on the total cost of the materials, would be $21,294.80 in the first case and $23,335.41 in the second. However, the general contractor contends that according to the interpretation which should be given to clauses 6 and 7, this remuneration of 9 per cent does not apply to materials supplied by the other subcontractors, but applies only to those which it purchased upon requisition made by the original subcontractors themselves. These subcontractors, on the other hand, contend that the clauses cited above do not make such a distinction, and that whether the required materials were brought to the site by a supplier of materials or by another subcontractor is accordingly immaterial.

Hence the action by the subcontractor Pierre Tardif Inc. and the action by the subcontractor Tri-Bec Inc., against the general contractor Beaudet & Fils Inc., as well as the subsequent intervention of the Commission in each of these cases in support of the contention of the general contractor.

At the commencement of the trial in the Superior Court, all parties concerned in both cases agreed that the oral and documentary evidence to be adduced in the action instituted by Pierre Tardif Inc. should be used mutatis mutandis in that instituted by Tri-Bec Inc.

In deciding these two cases, Mr. Chief Justice Dorion of the Superior Court adopted the interpretation given to clauses 6 and 7 by the subcontractors and accordingly allowed their actions, dismissed the Commission’s intervention with costs, and ordered the general contrac-

[Page 745]

tor to pay Pierre Tardif Inc. the sum of $21,294.80, and Tri-Bec Inc. the sum of $23,335.41, with interest and costs in both cases.

In each of the two cases the Commission and the general contractor entered separate appeals to the Court of Queen’s Bench, sitting in appeal, and the members of that Court in a unanimous judgment dismissed these four appeals with costs. Hence the four appeals to this Court.

At the start of the hearing before this Court, the general contractor filed into the record a document by which it agreed to be bound by the judgment to be given on the appeals entered by the Commission.

In the circumstances, therefore, it is only necessary to rule on the meaning and scope of clauses 6 and 7, as to the basis of the remuneration of the subcontractors with regard to the materials required for electrical and heating work.

In my opinion it is unnecessary to add to the reasons given by Mr. Chief Justice Dorion—reasons which I adopt—in support of the conclusion arrived at by him and unanimously affirmed by the Court of Appeal. In short, the provisions of clauses 6 and 7 are stated in clear terms, and give rise to no ambiguity. Resort to the rules of interpretation is therefore not necessary. The intent of the parties is that stated in the clear wording which they agreed to express in the contract.

I would dismiss the four appeals with costs.

Appeals dismissed with costs.

Solicitors for the appellant, Quebec Workmen’s Compensation Commission: Flynn, Rivard, Jacques, Cimon, Lessard & LeMay, Quebec.

Solicitors for the respondent, Beaudet & Fils Inc.: Létourneau, Stein, Marseille, Bienvenue, Delisle & LaRue, Quebec.

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Solicitors for the respondent, Pierre Tardif Inc.: Desilets, Grondin, LeBel, Morin & Ass., Quebec.

Solicitors for the respondent, Tri-Bec Inc.: Des Rivières, Choquette, Rioux, Paquette, Goodwin & Vermette, Quebec.

 



[1] [1971] Que. A.C. 238.

 

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