Minimizing costs is not an emergency

This post, published on Éditions Yvon Blais’ blog on latent defects on October 17, 2017 (FR), discusses the judgment in SG2C inc. c. Morin (Full Text | Fiche Quantum), in which the Superior Court reminds us of the notion of emergency, under which a buyer may be exceptionally exempted from giving notice to the seller of a latent defect before any corrective work is carried out.

Indeed, a buyer will not be required to notify the seller of the defect in writing before carrying out corrective work if the defect is dangerous to the safety of the occupants and is likely to result in immediate decay or loss of the property.

However, the notion of emergency must be interpreted objectively and narrowly: not everything is urgent.

What a buyer may consider an emergency will not necessarily be considered as such by the courts: for there to be an emergency, there must be a threat to the integrity of the property.

In this case, concerning a soil contamination problem, the buyer justified the failure to send a notice to the seller by citing the approach of the construction holidays and the fact that equipment and specialized workers (who had removed an underground tank) were already on site, to support that he had to quickly make a decision, following the discovery of contamination, to proceed with the work immediately to avoid waiting for cold weather or indefinitely postponing the work to be resumed whenever specialized workers were to be available.

The buyer argued that suspending the decontamination work in order to give proper notice of the contamination problem and to allow a reasonable time for the seller to correct the defect would increase the total costs of the work, and that the need to minimize the costs in these circumstances constituted an emergency that exempted it from notifying the seller of the defect in writing.

The Court stressed that the emergency must relate to the property itself, which was not the case here.

The notion of emergency implies a risk of the property’s loss or immediate decay. The increase in the cost of remedial work due to delays caused by the requirement to notify the seller of the defect in writing and to allow a reasonable time does not constitute an emergency allowing the buyer to ignore its obligation of giving notice provided for in article 1739 of the Civil Code of Québec.

Furthermore, this decision sheds interesting light on the notion of emergency, which is sometimes interpreted very broadly by buyers in certain situations. This decision reminds us that an emergency exists only if there is a risk of the property’s loss or immediate decay. The emergency must relate to the property itself, not to its owner.

Therefore, the increase in the cost of remedial work or the rental losses that a building owner might suffer cannot in themselves be considered an emergency