ABB Inc. v. Domtar Inc., [2007] 3 SCR 461, 2007 SCC 50 (CanLII)

Issue:  What are the conditions for the existence of latent defects and how to evaluate whether a defect is hidden or not.  Complete Decision.

Decision: Whether a defect is hidden or not is assessed objectively.  One must review the buyer’s examination of the good in light of what a prudent and diligent buyer of identical expertise would have done.   In other words, the issue is not limited to ignorance of the defect; it must also be determined whether a reasonable buyer in the same circumstances would have realized that there was a defect.