SCC Decision: November 22, 2007

ABB Inc. v. Domtar Inc., 2007 SCC 50
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(Latent defect / Limitation of liability / Duty to warn)
In 1984, Domtar bought a recovery boiler for its pulp and paper mill from a predecessor of ABB.  Shortly after the boiler was installed, a number of cracks and leaks appeared in the boiler, related to the type of welds used in manufacture.  Ultimately, Domtar sued the predecessor and several insurers.  Under the civil code of Quebec, the Court found that the predecessor was liable for damages based on its warranty against latent defect.  The Court found that the duty to inform is wider than that covered by the latent defect, but relied on the latent defect analysis.  Based on the facts, the Court found against one insurer and in favour of another.
Majority/Dissent: 9/0