Sainte‑Julie (City) v. Investissements Laroda inc.

Sainte‑Julie (City) v. Investissements Laroda inc.

The 2001 agreement effected novation by substituting a new obligation (the 26,705.78 m2 area bank) for the prior debt arising from the 3,898.27 m2 excess transfer; the parties intended a suspensive term tied to future cadastral operations (an event they subjectively considered certain), not a conditional obligation; under art. 1512 C.C.Q. the indeterminate term is fixed at December 15, 2015 (demand letter date); specific performance being circumstantially impossible, Laroda is entitled to damages under performance-by-equivalence equal to the market value of 26,705.78 m2 as of December 15, 2015, with remand to Superior Court to fix that value.

Citation
2025 SCC 44
Parties
Appellant/respondent on Cross Appeal: Ville de Sainte-Julie; Respondent/appellant on Cross Appeal: Investissements Laroda inc.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
19 December 2025
Procedural Posture
Appeal and Cross Appeal / Judgment on Appeal to the Supreme Court of Canada From Quebec Court of Appeal
Outcome
Appeal dismissed; cross-appeal allowed in part
Legal Topics
Novation, Obligation With Term, Conditional Obligation, Fixing of Term, Performance by Equivalence, Restitution of Prestations, Damages, Interpretation of Civil Code of Québec
Source Language
English
Contracts Property Law Municipal Law Civil Obligations Novation Obligation With Term Conditional Obligation Fixing of Term +4 more

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Parties

Ville de Sainte-Julie

Appellant/respondent on Cross Appeal

Investissements Laroda inc.

Respondent/appellant on Cross Appeal

Procedural Posture

Appeal and Cross Appeal / Judgment on Appeal to the Supreme Court of Canada From Quebec Court of Appeal

Legal Issues

  1. 1 Whether the 2001 agreement effected novation of the City’s pre-existing obligation arising from excess land transferred
  2. 2 Whether the agreement created an obligation with a suspensive term or a conditional obligation
  3. 3 If a term, when and by what rule the term must be fixed

Ratio Decidendi

The 2001 agreement effected novation by substituting a new obligation (the 26,705.78 m2 area bank) for the prior debt arising from the 3,898.27 m2 excess transfer; the parties intended a suspensive term tied to future cadastral operations (an event they subjectively considered certain), not a conditional obligation; under art. 1512 C.C.Q. the indeterminate term is fixed at December 15, 2015 (demand letter date); specific performance being circumstantially impossible, Laroda is entitled to damages under performance-by-equivalence equal to the market value of 26,705.78 m2 as of December 15, 2015, with remand to Superior Court to fix that value.

Court Disposition

Appeal dismissed; cross-appeal allowed in part

Orders

  • Declare that novation was effected and the City’s prior debt extinguished and replaced by a new obligation consisting of a 26,705.78 m2 area bank
  • Declare that the City’s obligation is an obligation with a suspensive term and fix the term as December 15, 2015