Case information

Contracts — Commercial contract — Breach — Exclusion of liability clause — Standard of review — Lengthy breach of contract litigation resulting in damage awards — Whether correctness is applicable standard of review when interpreting legal terms of art in a contract, and what is appropriate approach to interpreting legal terms of art — Whether correctness is applicable standard of review for a question of contractual interpretation where trial judge’s interpretation was not raised or argued by parties at trial.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

In early 2006, Enbridge Gas Distribution Inc. embarked on a major project to replace its many legacy customer information software systems with a single new system using enterprise resource planning software on a single IT platform. The applicant, Sapient Canada Inc. was the successful bidder and became the project’s prime contractor. Sapient entered into a fixed price subcontract with Siemens Canada Limited. The respondent, Atos Inc. is the corporate successor to Siemens.

Sapient terminated the subcontract with Siemens for cause. Siemens sued, claiming damages for wrongful termination of the subcontract. In turn, Sapient counterclaimed for damages arising from the delay in completing the project.

The trial judge concluded that Sapient wrongfully terminated the subcontract. However, he also held that Siemens breached parts of the subcontract at various times during the project, entitling Sapient to damages as well. Atos was awarded damages of $6, 291, 680; Sapient was awarded damages of $746, 199.84. The Court of Appeal allowed the appeal in part. It reduced Atos overall damage award to $4, 947, 405.