The Inability to Use the Work for Its Intended Purpose Precludes its Completion

What Constitutes the End of the Work?

Most people working in the construction industry in Québec are familiar with the concept of “completion of the work,” which is central to the remedies available to the parties to a contract of enterprise. The courts often have to examine this concept, which by its very nature is highly factual and therefore requires a close examination of the facts.

The completion of the work means that the contract has been fully executed and that the work is ready for its intended use. In practice, this means that all the work stipulated in the plans and specifications must be completed. Failure to carry out certain elements of the work, however minor, will delay the end of the work. That said, remedial work—in particular, due to defects—won’t necessarily set back the completion date. Unlike the temporary suspension of work, the contractor’s permanent abandonment of the site has the effect of triggering the end of the work.

The notion of completion of the work should not be confused with acceptance of the work, i.e. the voluntary act whereby a client accepts the work, with or without reservation. In practical terms, the acceptance of the work will sometimes be represented by the issuance of a certificate of substantial completion or provisional acceptance by the professionals commissioned by the client. The date of acceptance of the work and the end of the work may coincide, since the client is bound to accept the work when work is completed. However, these two concepts shouldn’t be confused, since the courts often rule that they’re not linked by the issuance of a certificate by a professional, as this doesn’t always mean that all the planned work has been completed. Acceptance of the work, which generally enables the contractor to obtain payment of the contractual holdback, is one of the factors used to determine the completion date—but it isn’t the only deciding factor.

The Importance of the Completion of the Work

The completion of the work has a direct impact on the start of the guarantee against loss of the work, which establishes a presumption of liability on the part of the contractor and professionals who led or oversaw the work in the event of loss of the work within 5 years after the completion of the work.

What’s more, under a contract of enterprise, the limitation period between the parties only begins once the work has been completed. The end of the work therefore constitutes the starting point for the client’s remedy against the contractor for apparent defects that would have been the subject of a reserve at the time the work was accepted.

Finally, the end of the work is also a determining factor for the publication of a legal hypothec of construction, which must be published no later than 30 days after the work is completed.

The Case of Tyco International of Canada Ltd v. 9413-4343 Québec inc. (Entrepôt international Québec), 2025 QCCA 1227

Recently, the Court of Appeal had the opportunity to revisit the principles applicable to the completion of the work in a case arising from a 2006 design-build contract between Entrepôt international Québec (“EIQ”) and contractor Syscomax inc. (“Syscomax”) for the construction of a refrigerated warehouse and that had been in litigation for over a decade. 

The contract included the installation of a fire protection system, which Syscomax entrusted to a subcontractor who, in turn, enlisted the services of Tyco International of Canada Ltd. (“Tyco”) for the installation of the detectors and alarm panel. As early as 2007—before the completion of the work—recurring problems with the fire protection system’s detectors, for which Tyco was responsible, were identified. Tyco was unable to identify the cause of the malfunction, however, and EIQ was forced to put the system into silent mode to avoid freeze damage.

Nevertheless, in July 2008, EIQ agreed to release the contractual holdbacks it was exercising against Syscomax in return for its commitment to complete the system installation at no additional cost. However, Syscomax was never able to find a solution to the problems with the system. On August 1, 2012, Syscomax notified EIQ that it would not be following through on its commitment to complete the work and that it was abandoning the work on the grounds that the time limit on EIQ’s claims had elapsed, the certificate of completion having been issued on July 17, 2008. 

The experts commissioned by EIQ subsequently came to the conclusion that the fire protection system needed to be replaced entirely. In February 2013, EIQ took legal action against Syscomax and Tyco.

Lessons from the Court of Appeal

Despite the various arguments raised, the Superior Court and the Court of Appeal both came to the conclusion that Syscomax and Tyco should be held jointly and severally liable on the basis of the guarantee against loss of the work.

First, the courts rejected the argument that the prescribed time period for EIQ’s claim had elapsed because it was filed more than three years after the work was completed, and instead determined the completion of the work to have occurred on August 2, 2012, the day after Syscomax abandoned the project. Therefore, the claim filed in 2013 was within the prescribed time limit.

In fact, although the architects had issued a certificate of completion on July 17, 2008, and payments had been made by EIQ, these elements alone were not deemed decisive, as the courts were not bound by completion documents issued by professionals. Instead, it was found that Tyco had failed to complete the fire protection system installation work since the latter had never fulfilled its responsibility of ensuring the safety of the public and the building occupants. What’s more, the completion of the system was subject to inspection and approval, neither of which had taken place. Since not all the work had been carried out and the work wasn’t fit to be used for its intended purpose, both the Superior Court and the Court of Appeal concluded that the completion of the work couldn’t be deemed to have taken place before August 2, 2012, given that Syscomax’s promise to complete the system had suspended the work.

Second, Syscomax and Tyco were held liable on the basis of the guarantee against loss of the work, which encompasses the threat of potential loss of the work as well as the serious defect causing significant inconvenience and rendering the work unfit for use. By fall 2012, experts commissioned by EIQ had, in fact, concluded that the system was inoperable and needed to be completely replaced. The loss of the system in October 2012 occurred within five years of the end of the work on August 2, 2012.

The Court of Appeal also concluded that it was erroneous to argue that a contractor’s abandonment of the site could preclude the application of the guarantee against loss of the work on the grounds that the work had never been accepted, such a claim being incompatible with the said guarantee, whose purpose is to protect public safety. Instead, the court upheld the trial judge’s conclusion that the acceptance of the work had occurred at the same time as the completion of the work—that is, after the contractor abandoned the site.

In short, neither Syscomax nor Tyco were able to overcome the presumption of fault under the guarantee against loss of the work, the means of exoneration from which are, it should be noted, rather limited. They were jointly and severally ordered to pay EIQ more than $1.5M to cover the cost of replacing the faulty system and the financial losses it had incurred.

Therefore, although legal proceedings were instituted almost six years after all parties had been made aware of the problem, the contractor was still held liable. Note that the client’s knowledge of the issues affecting the work is irrelevant to a claim based on the guarantee against loss of the work.

Takeaways

This case highlights the well-known principles of establishing the end of the work, and serves as a reminder that this is a multifaceted issue requiring careful study of the specific facts of each project. In view of the major impact of the completion date, all stakeholders should exercise caution before jumping to the conclusion that the end of the work has occurred or was suspended.

If you have any questions, please feel free to contact our Construction Litigation team, who’ll be happy to advise you.