Executive Summary: Key Legal and Evidentiary Issues

• Central dispute concerns the existence and quantum of CRT’s alleged construction claim underpinning two legal hypothecs totaling nearly $62 million on Innavik’s hydroelectric project.
• Whether the EPC contract between Innavik and CRT is a fixed-price agreement or allows extras is a foundational legal and evidentiary issue shared by both the main action and the reconventional claim.
• The Court assesses CRT’s procedural conduct, including repeated delays and failure to file its quantum expert report on time, as highly relevant to case management and proportionality.
• A key question is the proper use of article 49 C.p.c. and the principles of proportionality and efficient administration of justice to justify suspending the reconventional action.
• The risk of contradictory judgments on overlapping issues (existence of the claim, extras under the contract, and alleged dol or bad faith) drives the Court’s analysis of whether to suspend the reconventional file.
• The Court evaluates whether allowing the reconventional file to proceed in parallel would cause duplicative evidence, unnecessary expert costs, and inefficient use of limited judicial resources.

Facts of the case
Innavik Hydro, société en commandite, is the owner of a hydroelectric project for which it retained CRT Construction Inc. under an EPC (Engineering, Procurement and Construction) contract signed on 10 June 2020. Innavik’s position is that this EPC agreement is a fixed-price contract, meaning that CRT has no right to unilaterally claim additional sums (“extras”) beyond the agreed price absent proper contractual entitlement and procedure. CRT maintains that it has a substantial claim against Innavik for unpaid amounts, including alleged extras and COVID-19 related impacts, arising from its work on the project. To secure payment, CRT registered a first legal hypothec of construction on 25 January 2023 in the amount of $57,768,015.50, followed by a second legal hypothec of $3,483,228.38 on 25 October 2023, bringing the total registered security to nearly $62 million against the immovable where the hydroelectric project is located. In response, Innavik instituted an originating application (Dossier 233) on 27 February 2023, later amended, seeking the cancellation (radiation) of both legal construction hypothecs and claiming approximately $3.7 million in damages. Innavik alleges that CRT has no valid claim for extras under what it characterizes as a fixed-price contract and that Innavik has at all times acted in good faith, such that the heavy encumbrance of legal hypothecs on its property is unjustified. CRT, for its part, filed a reconventional demand to recover the sums it claims to be owed, including amounts in excess of those reflected in the hypothecs. That reconventional demand was initially coupled with CRT’s defence in Dossier 233 but, over the course of case management, became the subject of a separate file (Dossier 240).

Procedural background and case management issues
After Innavik’s originating application, the Superior Court imposed a schedule in July 2023 to move the case forward efficiently. That timetable required CRT to file a complete defence and reconventional demand, answer pre-hearing undertakings, and produce an expert report on the “scope and quantum” of its claimed works and costs by 15 September 2023. CRT initially filed only a summary defence and “pro forma” reconventional demand in August 2023, stating that it would complete its pleading after examinations and once its quantum expert report was available. It then failed to produce the promised expert report by the September 2023 deadline and missed a subsequent deadline set at 15 November 2023. As Innavik continued to press for progress through multiple case-management notices, the Court ordered CRT in November 2023 to file a complete defence and reconventional demand and fixed the examinations of CRT’s representatives for December 2023. CRT ultimately filed a full defence and reconventional demand on 13 November 2023, and shortly thereafter the Court, in a judgment of 29 November 2023 (Judge Corriveau), disjoined CRT’s reconventional claim from the main action. The judge found that CRT had not been diligent in progressing the matter, had repeatedly delayed its expert report, and that maintaining the reconventional claim in the same proceeding would unfairly prejudice Innavik, whose immovable had been encumbered by legal hypothecs for approximately $60 million since January 2023. The Court of Appeal later refused CRT leave to appeal that disjoinder decision, emphasizing that CRT had not justified its delays in obtaining an expert, had not sought formal relief from its default to file the report, and had not even yet retained an expert.

The two dossiers and their interaction
From the disjoinder onward, the main file, Dossier 233, concerns Innavik’s originating application to have CRT’s two legal hypothecs cancelled and to claim damages, while the separate file, Dossier 240, concerns CRT’s reconventional claim for payment of its alleged construction debt. The Court repeatedly noted that, despite being procedurally distinct, the two files are tightly linked factually and legally. Both revolve around whether CRT actually has a valid and existing claim against Innavik, whether the EPC contract is genuinely fixed-price or allows extras, and whether Innavik acted in bad faith or with alleged dol (fraudulent conduct) in its dealings with CRT. The evidence and documentation pleaded by CRT in support of its defence in Dossier 233 are largely the same as those put forward in its disjoined reconventional demand in Dossier 240. In addition, questions related to CRT’s COVID-19-related claims, alleged over-costs, and the role of certain individuals (including a third party, Claude Chartrand, in professional liability allegations) are all interwoven with the central dispute over the existence and scope of CRT’s alleged debt.

Progress of the main action versus the reconventional file
Following the disjoinder, the Court took steps to ensure that Dossier 233 would proceed without being held hostage to CRT’s outstanding expert evidence. A case-management judgment on 10 May 2024 stressed there was a significant factual intersection between the main claim for cancellation of hypothecs and CRT’s reconventional claim, particularly on the existence of the debt, the possibility of extras under the contract, and the alleged dol by Innavik. At the same time, the Court emphasized the need for efficiency and speed in adjudicating Innavik’s demand for radiation of the legal hypothecs. Examinations of CRT’s three representatives finally took place in June 2024, and by early 2025 the main file was nearly ready for trial, with only a hearing on objections from pre-hearing requests (set for April 2025) remaining before the case could be set fully for hearing. In contrast, very few steps had been taken by CRT to advance Dossier 240. After filing its disjoined reconventional demand in December 2023 and obtaining one extension of the inscription (trial-setting) deadline to 13 December 2024, CRT allowed that deadline to lapse. Only a few days before the January 2025 hearing on Innavik’s motion to suspend Dossier 240 did CRT serve a bene esse application seeking leave to file a quantum expert report in the reconventional file, underscoring the limited progress made relative to the main action.

Legal framework: suspension of proceedings and proportionality
Innavik’s motion was based on article 49 of the Code of Civil Procedure, which grants the Superior Court broad, inherent powers to control its process and to suspend proceedings where required in the interest of justice. The Court set out the procedural philosophy of the C.p.c., including the principles of proportionality (article 18) and the sound administration and orderly conduct of proceedings (article 19). These principles seek to ensure that civil justice is accessible, of good quality, and rendered expeditiously through just, simple, proportionate, and economical procedure. Drawing from appellate authorities, the judge summarized key guiding criteria for suspending an instance in favour of another: (1) the existence of an undeniable link between the two proceedings; (2) the fact that the ultimate outcome of one depends to a significant extent on the outcome of the other; (3) whether suspension promotes proportionality; (4) the presence of a risk of contradictory judgments; and (5) whether the absence of suspension would needlessly multiply procedures and costs. The Court emphasized that these criteria are not cumulative, nor exhaustive, but are tools to help determine whether suspension is required in the interest of justice. A significant risk of contradictory judgments alone can justify suspension, especially where the same factual matrix and overlapping legal issues are being litigated in two files.

Contractual framework and disputed “extras”
While this procedural judgment does not reproduce the full EPC contract wording, its reasoning turns on how that contract is characterized. Innavik contends that under article 3.1.1 and related clauses, the EPC contract is a fixed-price agreement, limiting CRT’s entitlement to extras and making its large additional claims unsustainable. CRT’s reconventional demand and defence rely on a different reading, asserting that extras and additional compensation are available, including for pandemic-related impacts and other alleged changes. The existence of the claimed “créance” (debt), whether extras are contractually permitted, and whether Innavik’s conduct in relation to these extras was dolosive or in bad faith are all central questions that the judge identifies as common to both the main action and the reconventional file. Those contract-driven questions will necessarily be addressed in depth when the Court hears Dossier 233 on the merits, including any COVID-19-related claims already pleaded there.

Analysis of the criteria for suspension
The judge then applies the suspension criteria to the facts. First, he finds there is an undeniable link between the two instances: the main action (Dossier 233) challenges the existence of CRT’s claim and seeks cancellation of the legal hypothecs, while the reconventional action (Dossier 240) seeks payment of that same alleged debt. Both parties and prior judges had already acknowledged this tight linkage in their pleadings and case-management decisions. Second, the Court holds that the fate of the reconventional demand largely depends on the outcome of the main file. Should the Court ultimately find in Dossier 233 that CRT has no enforceable claim, the reconventional demand for payment of that debt would become moot. The purported differences CRT highlights—such as slightly different quantum figures, additional heads of claim, non-updated amounts, or the presence of an additional defendant in professional liability—are all viewed as variations within the same core dispute that will be addressed in the main proceeding.

Proportionality, risk of contradictory judgments, and costs
Third, the judge concludes that suspension is necessary to respect proportionality. Dossier 233 is almost ready for trial, while Dossier 240 is at a much earlier stage and would require fresh interrogations, new expert evidence on quantum, and likely a responsive counter-expert from Innavik. Allowing the reconventional file to proceed in parallel would mean re-litigating largely the same factual matrix and contract issues already in play in the main action, at great expense of time, expert fees, and judicial resources. If Innavik ultimately prevails in Dossier 233 and CRT’s claim is held not to exist, these efforts in Dossier 240 would likely prove unnecessary. Fourth, the Court places considerable weight on the risk of contradictory judgments. Because both files ask essentially the same core questions—whether CRT’s claim exists, whether the contract allows extras, and whether Innavik acted with dol or bad faith—the possibility of inconsistent conclusions is significant if two different judges were to decide the issues separately. CRT itself had stressed this risk earlier when opposing the disjoinder. Fifth, in terms of costs and procedural economy, the Court finds that refusing suspension would result in substantial duplication of evidence and expert analysis, multiplied legal fees, and the needless consumption of limited court resources, especially in circumstances where Dossier 233 can advance to judgment in the near term. The judge notes that any prejudice to CRT from delayed recovery of its alleged claim can be mitigated by interest and additional indemnity if CRT ultimately succeeds at trial.

Outcome and consequences of the decision
In light of all these factors, the Superior Court grants Innavik Hydro’s motion and orders that Dossier 240 (CRT’s disjoined reconventional claim) be suspended until a final judgment is rendered in Dossier 233, the main action where Innavik seeks the cancellation of CRT’s legal hypothecs and related damages. The Court expressly grounds this outcome in the best interests of justice, the guiding principles of the Code of Civil Procedure, and the need to avoid disproportionate, duplicative, and potentially inconsistent litigation. Costs of the motion are ordered to follow the outcome of the main instance, meaning that no party is immediately awarded costs. In this procedural decision, the successful party is Innavik Hydro, société en commandite, but the Court does not adjudicate or fix any monetary damages, costs, or quantum in its favour or against CRT. The reconventional file is simply put on hold pending the merits determination in the main file. As a result, the total amount of any monetary award, damages, or costs that may ultimately be granted to either party cannot be determined from this judgment alone.