Resolute FP Canada Inc. v. Hydro-Québec

Resolute FP Canada Inc. v. Hydro-Québec
Collection
Supreme Court Judgments
Date
2020-12-11
Neutral citation
2020 SCC 43
Report
[2020] 3 SCR 789
Case number
38544
Judges
Wagner, Richard; Abella, Rosalie Silberman; Moldaver, Michael J.; Karakatsanis, Andromache; Côté, Suzanne; Brown, Russell; Rowe, Malcolm; Martin, Sheilah; Kasirer, Nicholas
On appeal from
Quebec
Notes
Case in Brief SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: Resolute FP Canada Inc. v. Hydro‑Québec, 2020 SCC 43, [2020] 3 S.C.R. 789
Appeal Heard: January 21, 2020 Judgment Rendered: December 11, 2020 Docket: 38544
Between:
Resolute FP Canada Inc.
Appellant
and
Hydro-Québec and Gatineau Power Company
Respondents
Official English Translation
Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.
Reasons for Judgment: (paras. 1 to 177)
Kasirer J. (Wagner C.J. and Abella, Moldaver, Karakatsanis, Brown and Martin JJ. concurring)
Dissenting Reasons: (paras. 178 to 279)
Côté J. (Rowe J. concurring)
resolute fp canada inc. v. hydro‑québec
Resolute FP Canada Inc. Appellant
v.
Hydro-Québec and
Gatineau Power Company Respondents
Indexed as: Resolute FP Canada Inc. v. Hydro-Québec
2020 SCC 43
File No.: 38544.
2020: January 21; 2020: December 11.
Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.
on appeal from the court of appeal for quebec
Contracts — Assignment — Power supply contract entered into in 1926 by forest products company and private electricity supply company — Private company and Hydro‑Québec entering into contract for sale of movable property and lease of immovables in 1965 in context of nationalization of electricity in Quebec — Whether 1965 contract made Hydro‑Québec forest products company’s other contracting party by way of assignment of 1926 contract, thereby enabling Hydro‑Québec to claim from company payment of levies imposed on it by two Quebec statutes.
In 1926, the corporate predecessor of Resolute FP Canada Inc. (“Resolute”) and the Gatineau Power Company (“Gatineau Power”) signed a synallagmatic contract of successive performance for the supply of electric power. Article 20 of that contract provided that Resolute would accept any increases in the price of electricity that might result from future increases in taxes or charges levied by the provincial or federal government on electrical energy generated from water power. In the early 1960s, the Quebec government acquired the capital stock of a number of private power production companies, including Gatineau Power, which became a wholly owned subsidiary of Hydro‑Québec. In 1965, Hydro‑Québec entered into a bilateral contract with Gatineau Power that was designed to unify that company’s management and operations. This contract provided for the sale of all of Gatineau Power’s movable property to Hydro‑Québec and the lease to the latter of all of the former’s immovables for a term of 25 years. Hydro‑Québec was to benefit from the revenue derived from Gatineau Power’s power contracts, and was entitled to use the premises leased from the latter as if they were its own. In 1982, Resolute and Hydro‑Québec entered into a contract for the supply of additional power. Between 2005 and 2009, Gatineau Power assigned to Hydro‑Québec three power plants that Hydro‑Québec had been leasing from it and that had supplied Resolute before the nationalization.
Starting in 2007, Hydro‑Québec had two levies imposed on it under provincial legislation: a new amount fixed by s. 32 of the Hydro‑Québec Act (“HQA”) and an amount provided for in s. 68 of the Watercourses Act (“WA”) from which it had previously been exempted. The levied amounts are paid into the Generations Fund, a fund established by the Quebec government in 2006 for the purpose of reducing the public debt. In 2011, Hydro‑Québec sent Resolute an electricity bill for over $3 million. Relying on the price adjustment clause in the 1926 contract, Hydro‑Québec claimed from Resolute an increase in the price of electricity that resulted from the levies it paid to the Quebec government. Resolute paid this bill under protest and asked the Superior Court to declare that it did not owe the amount being claimed from it to either Hydro‑Québec or Gatineau Power.
The Superior Court granted Resolute’s motion to institute proceedings for a declaratory judgment. It declined to find that the effect of the 1965 contract was that Gatineau Power had assigned its rights and obligations under the 1926 contract to Hydro‑Québec, and declared that Hydro‑Québec could not claim payment of the levies from Resolute. The Court of Appeal allowed Hydro‑Québec’s appeal in part, declaring that the levies in question constituted taxes or charges that were payable by Resolute to Hydro‑Québec under the 1926 contract.
Held (Côté and Rowe JJ. dissenting): The appeal should be dismissed.
Per Wagner C.J. and Abella, Moldaver, Karakatsanis, Brown, Martin and Kasirer JJ.: The 1965 contract effected an assignment of the 1926 contract. As a result, Hydro‑Québec is a party to the 1926 contract and can therefore invoke art. 20 of that contract with respect to Resolute. Because the two levies at issue are a “tax or charge” on electricity generated from water power within the meaning of that same art. 20, the 1926 contract applies to them and they are therefore payable by Resolute to Hydro‑Québec under that agreement.
The Court of Appeal was justified in intervening in this case. It took note of Resolute’s argument that Hydro‑Québec and Gatineau Power had admitted that no assignment had been made. Observing that Hydro‑Québec had framed its arguments differently in its appeal, the court rightly rejected this argument. The trial judge understood Hydro‑Québec to be essentially arguing that it was Resolute’s other contracting party and that the 1926 contract had been assigned. In her analysis, she not only referred to that argument, but also took it into account and formally rejected it.
Resolute in fact made specific submissions on the interpretation of the 1965 contract at trial. Moreover, the position of Hydro‑Québec and Gatineau Power has at all times been that art. 20 of the 1926 contract applies and that Hydro‑Québec may request a price increase. There is every reason to believe that the trial judge understood that Hydro‑Québec had made no concession in this regard. The Court’s role at this stage of the litigation consists in determining whether the trial judge made a palpable and overriding error in interpreting the 1965 contract, not whether she made the exact error identified by the Court of Appeal.
It is necessary, in interpreting a contract, to seek the common intention of the parties while taking into account the nature of the contract, the circumstances in which it was formed, the interpretation which has already been given to it by the parties or which it may have received, and usage (arts. 1425 and 1426 C.C.Q.). Each clause is to be interpreted in light of the others so that each one is given the meaning derived from the contract as a whole (art. 1427 C.C.Q.). In this case, none of these considerations suggest that Gatineau Power and Hydro‑Québec intended to achieve anything other than the assignment contemplated in the text of the 1965 contract.
Assignment of contract is known in Quebec civil law. It is firmly rooted in commercial life, and it enables contracting parties to meet complex objectives. It is a business technique with a legitimate malleability that is supported by the principle of autonomy of the will. Assignment of contract — seen as a transfer to the assignee not merely of rights and obligations but also of the contract itself — can be achieved in a manner that, while protecting the interests of the assigned party, is compatible with the principles of binding force and relativity of contract. There is thus no conceptual or moral bar to the assignment of a contract, seen as a patrimonial asset in itself, provided that the operation protects the interests of the assigned party. Although, according to the subjective conception of contract, the contract is viewed as a legal relationship, it is also possible to consider the contract from another angle, as being patrimonial in nature. It is this conception that helps to explain the fact that a contract can be assigned.
In this case, the key clauses of the 1965 contract have the effect of assigning the 1926 contract and are incompatible with the very essence of the concepts of mandate and administration of the property of others. It is true that the 1965 contract confers certain powers of administration on Hydro‑Québec; however, Gatineau Power, in selling its movables and leasing its immovables to the state‑owned enterprise, transferred legal rights to Hydro‑Québec that the latter may exercise in its own interest, which is something that a mandatary or an administrator of the property of others cannot do. What is more, Hydro‑Québec took on personal obligations that are incompatible with the functions of a mandatary or an administrator of the property of others, who as a general rule does not give undertakings in his or her own name. This operation means that the 1965 contract is one that could be characterized as a contract of sale, lease, assignment and mandate whose assignment component was necessary in order to achieve the objective of nationalizing electricity stated in the preamble.
In the absence of evidence from the time of formation of the 1965 contract that would indicate the common intention of the parties, the preamble to the agreement is particularly important for the purpose of identifying the objectives of the parties to the contract, Gatineau Power and Hydro‑Québec. It is true that a preamble is not generally intended to create obligations, but it is helpful to make connections between the undertakings of Hydro‑Québec on the one hand and the expectations of Gatineau Power on the other. The objectives of the parties as stated in the preamble provide insight into the fundamental structure of the contract: Hydro‑Québec undertook to assume liability for Gatineau Power’s obligations and, in return, Hydro‑Québec was to control the production of energy under Gatineau Power’s power supply contracts for the term of the agreement and would receive the revenue derived from it. To conclude that Hydro‑Québec acts only in Gatineau Power’s name and in its interest in managing its assets and contracts is inconsistent with the objectives stated in the preamble. The contract forms part of the process of nationalization of electricity: it is Hydro‑Québec that is charged with generating, acquiring, selling, transmitting and distributing electric power and energy throughout the province of Quebec, which it does in its own name, in accordance with the law, and not in the name or in the interest of others; it does so by exercising rights it holds, not by exercising powers in Gatineau Power’s interest.
Thus, the 1965 contract does not name Hydro‑Québec mandatary of Gatineau Power in relation to its power contracts. Rather, the entire 1926 contract was assigned by operation of the relevant provisions of the 1965 contract, as interpreted having regard to the objectives stated in the preamble and to the totality of the 1965 contract. If the contract is read as a whole, the interpretation to the effect that Hydro‑Québec has managed Gatineau Power’s assets and contracts must be rejected. On the contrary, for the term of the lease, Gatineau Power did not simply confer powers over the 1926 contract on Hydro‑Québec; rather, it transferred rights and obligations to Hydro‑Québec, subject to an extinctive term. On entering into the 1965 contract, Hydro‑Québec undertook personally to perform the obligations provided for in the 1926 contract, including the obligation to supply electricity to Gatineau Power’s customers. At the same time, Hydro‑Québec obtained a right to all the advantages of the 1926 contract, including the right to be paid, personally, for the electricity it is contractually obliged to supply to Resolute.
Furthermore, the term imposed by the parties for the 1965 contract does not preclude the existence of an assignment of contract. There is no legal bar to an assignment of contract being limited in time if the parties agree to this, subject to the rules concerning the assigned party’s consent — the general conditions for validity of a contract apply to an assignment of contract, which is, like any contract, subject to the general provisions of the C.C.Q., including those relating to the term of the contract (arts. 1508 et seq.). Even though an assignment is a translatory act through which rights and obligations are transferred from one patrimony to another, a type of act that is ordinarily absolute, there is nothing in the civil law that precludes the parties from devising a translatory act or an act of alienation whose effects are not permanent. Freedom of contract is key: assignment of contract does not follow a single model but may on the contrary, like any contract, be tailored to the intention of the parties, provided that it is consistent with the rules governing its validity. In this case, the parties were therefore free to limit the translatory effect of the assignment in time so as to tailor it to the business model that was consistent with their objectives. The assignment of the 1926 contract had full translatory effect — the assignor, Gatineau Power, transferred all of its rights and all of its obligations under this power contract to the assignee, Hydro‑Québec — but only for the term of the agreement.
Factors extrinsic to the 1965 contract also confirm that there was an assignment of the 1926 contract and that that assignment is still in effect. The assignment of the 1926 contract cannot have expired as a result of the sale of the three plants on the Gatineau River given that, despite that sale, the lease provided for in the 1965 contract on which the assignment is based continued to be in effect, because Gatineau Power leased all its immovables to Hydro‑Québec. In addition, the 1965 agreement transferred all of Gatineau Power’s claims and obligations without distinguishing contracts on the basis of the plants to which they related. Resolute’s mill is now supplied by Hydro‑Québec’s integrated network, and it is not possible to say that the electricity it receives comes from a particular plant. The lease remained in effect in 2011, when Hydro‑Québec claimed, as assignee of the 1926 contract, the agreed payment for electricity as increased under art. 20 of that contract.
Resolute’s consent, which was necessary in order for the assignment of the contract to be valid, was given in the 1926 contract. It is clear from the very words of art. 22 of that contract that the parties consented in advance to any possible assignment of the contract. If the conception of assignment of contract as a whole is adopted, the assigned party’s consent is required. If assignment is seen as the transfer of the contract itself, which implies the transfer of party status to the assignee, the assigned party’s consent is necessary from the standpoint of both relativity of the assignment and binding force of the assigned contract. In order to give effect to the principle of relativity of contract, the transfer of the existing contract to a new contracting party requires the consent of a party on which a new partner is imposed that has characteristics not possessed by the assignor. The principle of binding force of contract also leads to the conclusion that the assignee cannot assert him or herself as a new contracting party of the assigned party without the latter’s consent. The assigned party’s consent is required even where the assignment of contract is imperfect in order to ensure conformity with the general principles of the law of contracts and to protect the assigned party. The assigned party’s consent can, as in this case, be given in advance: because Resolute’s predecessor had consented to the assignment in advance in the 1926 contract, Gatineau Power validly transferred its status as party to the contract to the assignee, Hydro‑Québec. Gatineau Power thus serves as a personal surety against any future breach by Hydro‑Québec of its obligations. The fact that the assignment in this case is imperfect does not change the outcome, since it is nonetheless Hydro‑Québec that, as a principal debtor that also has party status, supplies electricity and can therefore raise the price of the electricity under art. 20.
If consent was given in advance, however, the assignment of a contract cannot be set up against the assigned party if he or she was never informed of the assignment. In the absence of express rules on assignment of contract, the conditions for setting up such an assignment can be clarified by considering the rules with respect to assignment of claim. An assignment of claim may be set up against the assigned party as soon as that party has acquiesced in it or received a copy or a pertinent extract of the act of assignment or any other evidence of the assignment which may be set up against the assignor. In this case, the evidence shows that Resolute’s predecessor and Hydro‑Québec signed a new contract in 1982 for the distribution of power that was in addition to what was provided for in the 1926 contract. Thus, Resolute knew it was doing business with Hydro‑Québec well before the litigation began and had acquiesced in that situation. The assignment may therefore be set up against it.
The assignment of the 1926 contract does not violate the rule against making an assignment of claim (and therefore, by extension, an assignment of contract) that is injurious to the rights of the debtor or that renders his or her obligation more onerous (art. 1637 para. 2 C.C.Q.). The increase in the price of electricity resulted not from the assignment of contract, but from legislative changes. The parties to the 1926 contract expressly provided that they would be subject to future provincial laws and that those laws would affect their contractual relationship. The assignment of the 1926 contract therefore had full effect with respect to Resolute, and Hydro‑Québec is entitled, as a party to that contract, to claim payment from it for the taxes and charges contemplated in art. 20.
Article 20 of the 1926 contract applies to the levies provided for in s. 32 of the HQA and s. 68 of the WA, and Hydro‑Québec can therefore claim payment for them from Resolute. First, although Hydro‑Québec is a mandatary of the government, it is nonetheless a separate entity, and the legislature can therefore impose a tax or charge on it. The amounts that are collected differ from the revenues collected by the government when Hydro‑Québec declares dividends, even though all of Hydro‑Québec’s shares are owned by the government; they cannot be lumped together. Next, the amounts payable under s. 68 of the WA, like the levy under s. 32 of the HQA, constitute a tax or a charge, and not an allocation of government revenues. The fact that the legislature decided to allocate the collected amounts to the Generations Fund does not change the nature of the levy. The nature of the levy must not be confused with the place where it is to be deposited. Moreover, a reading of the contract suggests that the parties’ intention was to have the price for electricity remain stable, subject to the imposition of new taxes and charges, such that the seller company’s net revenue would remain constant but it would not be penalized if its production costs rose because of an unforeseen tax or charge levied upon electricity. Lastly, no claim for payment of the tax under the WA was extinguished by prescription or tacitly waived.
Per Côté and Rowe JJ. (dissenting): The appeal should be allowed and the Superior Court’s decision restored. The trial judge did not make a reviewable error in finding that Gatineau Power had not assigned the 1926 contract to Hydro‑Québec and that the 1965 contract had instead made Hydro‑Québec a mandatary of Gatineau Power. Gatineau Power’s status as a party to the 1926 contract was therefore not transferred to Hydro‑Québec, and Hydro‑Québec is a third person in relation to that contract. The relativity of the 1926 contract prevents Hydro‑Québec from invoking the price adjustment clause to pass on the taxes or charges for which it may be liable. As a result, Resolute is not required to pay either the charge under s. 32 HQA or the one under s. 68 WA. The Court of Appeal should not have intervened by analyzing the case from a new angle without regard for the Superior Court’s findings of fact and the judicial contract before it.
The characterization of a contract must be considered to be a question of mixed fact and law when it involves the consideration of a multitude of facts, such as the circumstances surrounding the formation of the contract and how the parties subsequently applied it. In such a case, the applicable standard for appellate intervention is palpable and overriding error, unless there is an extricable error of law. Appellate courts must take a highly deferential approach to mixed questions, because the answer to such questions is intertwined with the weight assigned to the evidence by the trial judge, who is in a much better position than an appellate court to assess and weigh such matters. To determine whether there is a reviewable error in the trial judge’s reasons in this case, the Court must review the Superior Court’s decision and consider the arguments presented to that court and the manner in which it disposed of them.
First, the trial judge did not make a reviewable error in rejecting the three arguments made by Hydro‑Québec and Gatineau Power with respect to assignment. At no time did Hydro‑Québec and Gatineau Power argue in the Superior Court that the 1965 contract had effected an assignment of the 1926 contract. Rather, they argued that the assignment had occurred either in 1982, when Hydro‑Québec and Resolute entered into a contract for the supply of additional electric power, or in 1997, when Hydro‑Québec became the exclusive distributor of electricity under the Act respecting the Régie de l’énergie, or in 2005‑2006, when Gatineau Power transferred the ownership of its power plants to Hydro‑Québec. The trial judge correctly understood that the issue was whether the contract had been assigned either in 1982, in 1997 or in 2005‑2006. She decided the case as it had been presented to her. She did not make a reviewable error in interpreting the 1982 contract as not effecting an assignment, in not accepting the argument that the coming into force of the Act respecting the Régie de l’énergie in 1997 had affected the relativity of the 1926 contract, or in rejecting the argument that the transfer of the ownership of the plants in 2005‑2006 had effected an assignment of the 1926 contract, given the absence of evidence of the setting up of an assignment against Resolute and the fact that a reading of the acts of transfer reveals no so‑called assignment of contract.
Second, the trial judge did not make a palpable and overriding error in accepting Resolute’s argument — uncontested before her — that the 1965 contract had not effected an assignment. The evidence in the record supported such a conclusion, and it was entirely justified for her to give effect to the judicial contract between the parties by accepting Resolute’s uncontested argument after she rejected the three arguments made by Hydro‑Québec and Gatineau Power.
The parties’ subsequent conduct confirms the trial judge’s conclusion in this regard. Article 1426 of the C.C.Q. calls for consideration of the parties’ subsequent conduct when interpreting a contract. This rule is based on the following premise: it is assumed that the parties seek to perform their obligations rather than to evade them, and that their conduct until the day a dispute arises is an indicator of their common intention crystallized earlier in their contract. The parties’ subsequent conduct takes on even greater importance in the case of long‑term contracts, because the more time has elapsed, the more compelling the parties’ subsequent conduct will be as evidence of their original intent. The trial judge relied largely on the facts put before her and did not make a palpable and overriding error in relying on the parties’ subsequent conduct. Indeed, the absence of evidence of the setting up of an assignment against Resolute was in addition to the financial statements making no reference to any assignment, the notices of renewal all addressed to Gatineau Power, the invoices indicating the electricity supplied under the 1926 contract separately from that supplied under the 1982 contract, the testimony of a Hydro‑Québec manager confirming that there had been no assignment, and the opportunistic reinterpretation of the parties’ legal situation in order to treat it as an assignment of the 1926 contract.
The trial judge was also bound by the judicial contract between the parties, in which the characterization of the 1965 contract was not in dispute. Hydro‑Québec and Gatineau Power, which had the burden of proof, did not dispute the fact that the 1965 contract had made Hydro‑Québec a mandatary and had not assigned the 1926 contract. Rather, their position was that the 1965 contract was a mandate, sale and lease agreement and that the assignment had occurred later, in 1982 at the earliest. Only Resolute discussed how the terms of the 1965 contract should be interpreted, and it did so to establish that the contract had not effected an assignment, despite the fact that it did not have the burden of proof. Hydro‑Québec and Gatineau Power offered no interpretation of the terms of the 1965 contract that would give it a scope different from that proposed by Resolute. It is justified for a trial judge to accept an uncontested argument and not to undertake a needless interpretation exercise. To require otherwise would undermine the very foundations of the adversarial system. Article 10 of the Code of Civil Procedure reiterates the adversarial nature of the civil justice system. It is the parties who control the course of their case, not the courts (art. 19 para. 1 C.C.P.). Accordingly, the courts cannot base their decisions on arguments or rationales that have not been debated (art. 17 para. 2 C.C.P.). The principle of proportionality and of proper administration of judicial resources requires nothing less of them (art. 18 C.C.P.).
The issues between the parties become joined once both sides have presented their arguments; the judicial contract then reflects the procedural relationship (lien d’instance) between the parties with respect to the questions that are in issue and those that are not in dispute. The trial judge is also bound by this judicial contract. This means that the judge cannot disregard the contract and rule on a ground or an argument that is not in issue. This holds true even when the judicial contract relates to a question of law, unless it is a matter of public order that would allow the judge to go beyond the parties’ consent. Although an admission of law is not, strictly speaking, binding on the courts, they must nonetheless take note of a party’s decision not to contest, and thus to acknowledge, the existence of a legal situation. The judge’s task is primarily to look where the parties ask him or her to look, not to reframe the debate. The role of a court that has to render a declaratory judgment is limited to resolving a genuine problem between the parties with respect to the scope of a specific juridical act; the court must therefore take care to remain within the defined parameters of the debate before it so as to avoid prejudicing the future legal arguments raised by the parties or the interests of third persons who are not parties to the proceeding.
In this case, the core of the issue forming the judicial contract between the parties had to do with the assignment at one of the three suggested points in time. The parties’ procedural relationship did not encompass the characterization of the 1965 contract. The trial judge focused her analysis on the core of that issue. After she rejected the arguments of Hydro‑Québec and Gatineau Power, all that remained was Resolute’s uncontested argument that the 1965 contract had not effected an assignment either, a legal situation that was confirmed, in her view, by the absence of evidence of the setting up of an assignment against Resolute and by the evidence in the record concerning the parties’ subsequent conduct. As a result, the trial judge did not have to consider the interpretation of the 1965 contract in detail, and it is not appropriate on appeal to engage in an exercise that was not fully before the trial judge by analyzing the 1965 contract at length.
Since the trial judge did not make a reviewable error in finding that the 1926 contract had not been assigned to Hydro‑Québec, Gatineau Power did not transfer its status as a party to that contract to Hydro‑Québec. As it is not a party to the 1926 contract, Hydro‑Québec cannot increase the price of the electricity supplied to Resolute. This is because status as a party to the 1926 contract is what makes it possible to invoke the price adjustment clause in order to pass on any “tax” or “charge” paid. The principle of relativity of contract means that a contract has effect only between the contracting parties and that it does not affect third persons (art. 1440 C.C.Q.). As a result, third persons cannot rely on the content of a contract for their own benefit, except in a few very limited cases, none of which applies here. The 1926 contract states that the only contracting parties are Resolute and Gatineau Power. The relativity of the 1926 contract therefore prevents Hydro‑Québec from invoking the price adjustment clause in that contract in order to pass on the charges it paid under the HQA and the WA.
Cases Cited
By Kasirer J.
Applied: Uniprix inc. v. Gestion Gosselin et Bérubé inc., 2017 SCC 43, [2017] 2 S.C.R. 59; approved: N.C. Hutton Ltd. v. Canadian Pacific Forest Products Ltd., 1999 CanLII 13538; considered: Modern Cleaning Concept Inc. v. Comité paritaire de l’entretien d’édifices publics de la région de Québec, 2019 SCC 28, [2019] 2 S.C.R. 406; referred to: Quebec (Attorney General) v. Algonquin Développements Côte‑Ste‑Catherine inc. (Développements Hydroméga inc.), 2011 QCCA 1942, [2011] R.J.Q. 1967; Salomon v. Matte‑Thompson, 2019 SCC 14, [2019] 1 S.C.R. 729; Pincourt (Ville de) v. Construction Cogerex ltée, 2013 QCCA 1773; Groupe Sutton‑Royal inc. (Syndic de), 2015 QCCA 1069; Aqueduc du Lac St. Jean v. Fortin, [1925] S.C.R. 192; General Accident Insurance Co. v. Cie de chauffage Gaz naturel, [1978] C.S. 1160; Banque royale du Canada v. P.G. du Québec, [1976] C.S. 634; Hamel v. Banque de Montréal, 2008 QCCS 3603; Nesterenko v. Skierka, 2010 QCCS 3613, [2010] R.J.Q. 2007; Alberta (Treasury Branches) v. M.N.R., [1996] 1 S.C.R. 963; Place Québec inc. v. Desmarais, [1975] C.A. 910; Denis Cimaf inc. v. Caisse populaire d’Amos, 1997 CanLII 10252; Comité paritaire de l’entretien d’édifices publics de la région de Québec v. Modern Concept d’entretien inc., 2017 QCCA 1237, aff’d 2019 SCC 28, [2019] 2 S.C.R. 406; Lee v. Pointe of View Developments (Encore) Inc., 2010 ABQB 558, 35 Alta. L.R. (5th) 42; Immobilière Natgen inc. v. 2897041 Canada inc., [1998] R.D.I. 545; Caisse populaire de Maria v. Beauvais et Verret Inc., [1994] R.D.J. 592; Westbank First Nation v. British Columbia Hydro and Power Authority, [1999] 3 S.C.R. 134; 620 Connaught Ltd. v. Canada (Attorney General), 2008 SCC 7, [2008] 1 S.C.R. 132.
By Côté J. (dissenting)
Hydro‑Québec v. Matta, 2020 SCC 37, [2020] 3 S.C.R. 595; Uniprix inc. v. Gestion Gosselin et Bérubé inc., 2017 SCC 43, [2017] 2 S.C.R. 59; 3091‑5177 Québec inc. (Éconolodge Aéroport) v. Lombard General Insurance Co. of Canada, 2018 SCC 43, [2018] 3 S.C.R. 8; Churchill Falls (Labrador) Corp. v. Hydro‑Québec, 2018 SCC 46, [2018] 3 S.C.R. 101; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Benhaim v. St‑Germain, 2016 SCC 48, [2016] 2 S.C.R. 352; J.G. v. Nadeau, 2016 QCCA 167; Salomon v. Matte‑Thompson, 2019 SCC 14, [2019] 1 S.C.R. 729; Nelson (City) v. Mowatt, 2017 SCC 8, [2017] 1 S.C.R. 138; Skyline Holdings Inc. v. Scarves and Allied Arts Inc., 2000 CanLII 9274; Richer v. Mutuelle du Canada (La), Cie d’assurance sur la vie, [1987] R.J.Q. 1703; Rainboth v. O’Brien (1915), 24 B.R. 88; Imperial Oil v. Jacques, 2014 SCC 66, [2014] 3 S.C.R. 287; Compagnie d’assurances générales Co‑Operators v. Coop fédérée, 2019 QCCA 1678, aff’d 2020 SCC 41, [2020] 3 S.C.R. 785; Gervais v. Association canadienne de protection médicale, 2007 QCCS 4564; Janacek v. Bell Canada, [2001] R.J.Q. 584; Godbout v. Pagé, 2017 SCC 18, [2017] 1 S.C.R. 283; Droit de la famille — 871, [1990] R.J.Q. 2107; Apple Canada Inc. v. St‑Germain, 2010 QCCA 1376, [2010] R.J.Q. 1627; Sunoco inc. v. Église Vie et Réveil inc., les ministères d’Alberto Carbone, 2002 CanLII 62388; Lizotte v. Aviva, Compagnie d’assurance du Canada, 2015 QCCA 152, aff’d 2016 SCC 52, [2016] 2 S.C.R. 521; 4077334 Canada inc. (Solutions Voysis IP) v. Sigmasanté, 2013 QCCS 2859.
Statutes and Regulations Cited
Act respecting the Quebec Hydro‑Electric Commission, R.S.Q. 1941, c. 98A [am. 1944, c. 22], ss. 4, 10, 29, 40.
Act respecting the Régie de l’énergie, S.Q. 1996, c. 61, s. 62.
Act to amend the Act to insure the progress of education, S.Q. 1947, c. 32, s. 9.
Act to assure budgetary control of certain expenditure, S.Q. 1961, c. 8, ss. 13, 18.
Act to insure the progress of education, S.Q. 1946, c. 21, ss. 2, 3, 19 paras. 1 and 2.
Act to reduce the debt and establish the Generations Fund, CQLR, c. R‑2.2.0.1, s. 2.
Act to reduce the debt and establish the Generations Fund, S.Q. 2006, c. 24.
Business Corporations Act, CQLR, c. S‑31.1, s. 227.
Civil Code of Lower Canada, arts. 1138, 1571, 1619, 1655, 2577, 2578.
Civil Code of Québec, arts. 1110, 1113, 1114, 1310, 1425, 1426, 1427, 1434, 1439, 1440, 1508 et seq., 1517, 1637, 1641, 1671, 1870 to 1873, 2130, 2138 paras. 1 and 2, 2475, 2476.
Code civil (France), arts. 1216, 1216‑1.
Code of Civil Procedure, CQLR, c. C‑25.01, arts. 10, 17 para. 2, 18, 19 para. 1, 79, 142.
Hydro‑Québec Act, CQLR, c. H‑5, ss. 3.1.1, 3.1.2, 3.1.3, 16, 32.
Watercourses Act, CQLR, c. R‑13, s. 68.
Authors Cited
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APPEAL from a judgment of the Quebec Court of Appeal (Vauclair, Marcotte and Roy JJ.A.), 2019 QCCA 30, [2019] AZ‑51560250, [2019] J.Q. no 56 (QL), 2019 CarswellQue 102 (WL Can.), setting aside in part a decision of Le Bel J., 2016 QCCS 3862, [2016] AZ-51315251, [2016] J.Q. no 10288 (QL), 2016 CarswellQue 13488 (WL Can.). Appeal dismissed, Côté and Rowe JJ. dissenting.
Yves Martineau, Patrick Girard and Guillaume Boudreau‑Simard, for the appellant.
Dominique Ménard, Max R. Bernard and Nicolas Roche, for the respondents.
English version of the judgment of Wagner C.J. and Abella, Moldaver, Karakatsanis, Brown, Martin and Kasirer JJ. delivered by
Kasirer J. —
I. Overview
[1] In 2011, the appellant, Resolute FP Canada Inc. (“Resolute”) — a forest products company — received an unexpected electricity bill. The respondent Hydro‑Québec, relying on a clause of a power contract dating from 1926, sought to significantly increase the price of electricity purchased from it by Resolute, citing taxes or charges Hydro‑Québec paid to the Quebec government that it could, under the 1926 contract, claim from Resolute.
[2] Resolute sees this as unfair. It asserts that, because Hydro‑Québec was not incorporated until the 1940s, it had not signed the 1926 contract, which remains in effect and instead binds Resolute and the Gatineau Power Company (“Gatineau Power”), a private electricity producer. Hydro‑Québec counters that this is not true, because even though Gatineau Power continues to exist, it assigned that contract to Hydro‑Québec in 1965 at one stage of the nationalization of electricity in Quebec, and the Canadian International Paper Company (“CIP”), Resolute’s corporate predecessor, consented to that assignment in advance in the original contract.
[3] Resolute in turn argues that, properly understood, the contract between Gatineau Power and Hydro‑Québec merely made the latter a mandatary for purposes of managing the 1926 contract, as opposed to a true party to the contract in its own name. As well, it would be unacceptable to consider the 1965 arrangement between Gatine