MONTRÉAL (VILLE) v. OCTANE STRATÉGIE INC., 2019 SCC 57

Rules of restitution of prestations apply in municipal context and payment of services provided without any obligation and in error is recoverable.

This case discusses the provisions of Civil Code of Quebec [C.C.Q.] by focusing on the concept of restitution of prestations. The Appellants i.e. Ville de Montréal, made use of the services of Octane Stratégie inc. who are the Respondents in this case and refused to make the payment and claimed that they never authorized the mandate. Further, the respondent filed appeal against Mr. Richard Thériault contending that he had given a mandate for the event.

The facts of the case are that the Octane Stratégie inc., which is a public relations and communications firm provided services to the City’s director of transportation at the event of launch of city’s transportation plan on May 17, 2007. However, the latter did not pay for the services till May, 2017 and therefore, the Octane instituted a suit against the city. After the statement of the city that they never authorized the mandate, the plea of Octane was amended and Richard Thériault was added as defendants.

The court observed in this case that there wasn’t any contract between Octane and the city as the mandate was not approved by any valid authority from the city. The trial court raised the issue of receipt of payment not due. The payment can only be recovered if the conditions of receipt of payment not due as stipulated under Articles 1491 and 1492 of the C.C.Q. are fulfilled. The conditions are that – there should be a payment which has been made in the absence of debt and that payment arises out of an error or injury. The testimony of Octane distinctly signifies that it sincerely believed of having an obligation to provide services to the city and it was of the view that this obligation exist in law. The majority held that rules on restitution of prestations are not in contravention to the public interest and these apply in the municipal context unless the legislature makes an express provision for excluding the same. It was also held that Superior Court erred in concluding that there was a valid contract between Octane and the city on the basis of representations by Mr. Richard Thériault. Therefore, it was held that as conditions regarding receipt of payment not due were met and the error on part of Octane of not understanding that what is proper procedure of entering into a contract cannot be considered as a general principle to refuse it the restitution of prestations. With regard to Octane’s appeal against Mr. Richard Thériault, the court held that with the dismissal of city’s appeal against Octane, the Octane’s appeal against Mr. Richard Thériault has become moot. Moreover, the principal arguments of Octane were against the city and the counsel of city did not even try to persuade and stress upon the arguments against Mr. Richard Thériault’s mistake in giving assurances of payments to it. Octane provided services to the city on the basis of the contract which they had supposedly entered with the latter before Mr. Richard’s assurances regarding payment, which implies that there was not any causation between the assurances by Mr. Richard and the provision of services to the city, consequently Octane’s appeal against Mr. Richard Thériault’s was thereby dismissed.