Sainte-Julie (City) v. Investissements Laroda inc., 2023 QCCA 1294, 2025 SCC 44 (41036)
“During the 1990s, Larochelle, a real estate developer, completed several projects on the territory of Ville de Sainte‑Julie (“City”). To comply with the statutory and by‑law provisions in force, Larochelle was required to transfer 10% of the total area of its projects to the City for the purposes of parks, playgrounds or green spaces, but it transferred excess land. Since the City was unable to return the land or reimburse its value, and since the City wanted to acquire an additional area of land owned by Larochelle, the parties entered into an agreement creating a land area bank in favour of Larochelle. That bank was to be applied in compensation for future park fees to be paid to the City in connection with cadastral operations allowing for new real estate developments. In the end, however, those operations never took place.
Larochelle’s successor, Laroda, turned to the courts to seek compensation for the value of the area bank. The Superior Court dismissed the application. It found that the City’s obligation resulting from the agreement was conditional on the approval of cadastral operations, that is, a future and uncertain event which had not occurred and for which the parties had not stipulated any term. Because the fulfilment of the condition had become impossible, the judge held that the City was released from its obligations. The Court of Appeal allowed Laroda’s appeal and ordered the City to pay Laroda $287,458.51. In its view, the parties’ goal had not been to extinguish the City’s obligation, but rather to delay when the performance of the obligation would be exigible. The parties had therefore made the City’s obligation subject to a term rather than a condition, a term that had to be fixed by the court. Next, in determining the quantum of the remedy, the Court of Appeal held that the value of the excess received by the City had to be determined as of the time when Larochelle had transferred the land, that is, in 2001″
The SCC (9:0) dismissed the appeal and allowed the cross-appeal in part.
Justice Côté wrote as follows (at paras. 4-7):
“…it is important to consider the legal nature of the obligation arising from the agreement: Is it an obligation with a term, whose exigibility is deferred in time, or a conditional obligation, which depends on an uncertain event? In this case, I am of the view that the parties agreed on an obligation with a suspensive term. In other words, the City’s obligation to effect compensation for the value of the “area bank” would not become exigible until the occurrence of events that the parties considered certain, namely cadastral operations allowing for new real estate developments.
That being the case, the term was indeterminate because the parties did not know when those cadastral operations would take place, such that it becomes necessary to fix it. Having regard to the nature of the City’s obligation, the situation of the parties and the circumstances, I am of the opinion that the term must be fixed at December 15, 2015, when Laroda sent the City a demand letter. It was on that date that the City’s obligation with a term became exigible.
As for the remedy to which Laroda is entitled, the applicable regime must be determined: Is it restitution of prestations or performance by equivalence? Given the fact that novation extinguished the debt resulting from the excess land received by the City that was mistakenly transferred by Larochelle, I am of the view that the restitution of prestations regime does not apply to this area of land (3,898.27 m2). Rather, it is the performance by equivalence regime that applies here, both for the excess received by the City and for the additional area of land (22,807.5 m2) transferred later. As a result, Laroda is entitled to damages equivalent to the market value of the area recognized in the bank, which is to say vacant bulk land free of park fees, as it stood on the date of the term fixed, that is, at the time of the demand letter sent to the City by Laroda on December 15, 2015. However, the evidence in the record does not make it possible to determine the market value as of December 15, 2015, of the area recognized in the bank. The case should therefore be remanded to the Superior Court on this question alone so that evidence can be adduced in this regard, unless of course the parties come to an agreement on the market value as of December 15, 2015.”