Case Overview

Daro Industries Inc. (Daro) installed a floor topping, “Fina,” supplied by Lafarge Canada Inc. (Lafarge) at the Four Seasons Hotel (FSH) project in Toronto. Some of the Fina delaminated, leading to disputes over whether the issue stemmed from a defective product or improper installation. Lafarge sued for unpaid invoices and defamation, while Daro counterclaimed for $50M, alleging breach of contract, negligence, and defamation.

Key Legal Issues & Findings

• Breach of Contract: Daro failed to prove Fina was defective under the Sale of Goods Act. The court found installation errors (poor primer application, environmental conditions) more likely caused the delamination.
• Negligence: Lafarge met the standard of care in developing and testing Fina. There was no duty to warn Daro of risks it was already aware of.
• Defamation: No evidence Lafarge made defamatory statements about Daro’s role in the FSH project.

Conclusion

Daro’s counterclaim was dismissed. The court found no defect in Fina and ruled the delamination was due to installation issues. While Daro claimed significant financial losses, the court rejected its claims, though it noted it would have awarded $2M in lost profits if liability had been proven. The parties were left to resolve costs?. No monetary award specified.