Desrosiers et al. v. Gauthier

Desrosiers et al. v. Gauthier

The Court held that where the penal clause is for delay the creditor may claim both the extra cost to complete the work (or compensatory damages) and the liquidated damages for delay under art.1133 C.C.; here the reasonable delay was assessed at 45 days ($4,500) but the Superior Court had awarded $5,459.05 without deducting the $4,500 second instalment the contractor would have earned, so the excess $4,500 is set off against the penalty leaving a net entitlement of $959.05; appeal dismissed.

Citation
[1978] 1 SCR 308
Parties
Appellant (plaintiff): Marcel Desrosiers; Appellant (plaintiff): Adélard Dufour; Respondent (defendant): Jean‑Marie Gauthier; Respondent (defendant in Continuance): Dame Gisèle Thibeault
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
29 April 1977
Procedural Posture
Contract / Appeal to Supreme Court of Canada From Court of Appeal for Quebec
Outcome
Appeal dismissed
Legal Topics
Penal Clause, Delay in Performance, Partial Performance, Set‑off, Liquidated Damages, Calculation of Moratory Damages
Source Language
English
Contract Civil Law Remedies Penal Clause Delay in Performance Partial Performance Set‑off Liquidated Damages +1 more

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Parties

Marcel Desrosiers

Appellant (plaintiff)

Adélard Dufour

Appellant (plaintiff)

Jean‑Marie Gauthier

Respondent (defendant)

Dame Gisèle Thibeault

Respondent (defendant in Continuance)

Procedural Posture

Contract / Appeal to Supreme Court of Canada From Court of Appeal for Quebec

Legal Issues

  1. 1 Whether an owner may recover both the extra cost to complete partially performed work and liquidated damages under a penal clause for delay
  2. 2 Whether a penal clause for delay survives unilateral abandonment of contract and can be joined with compensatory damages
  3. 3 How to calculate the period for which liquidated damages apply where work is incomplete

Ratio Decidendi

The Court held that where the penal clause is for delay the creditor may claim both the extra cost to complete the work (or compensatory damages) and the liquidated damages for delay under art.1133 C.C.; here the reasonable delay was assessed at 45 days ($4,500) but the Superior Court had awarded $5,459.05 without deducting the $4,500 second instalment the contractor would have earned, so the excess $4,500 is set off against the penalty leaving a net entitlement of $959.05; appeal dismissed.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed
  • Set off $4,500 penal damages against the $4,500 excess awarded by the Superior Court resulting in owner’s net additional entitlement of $959.05