Case information

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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.

Contracts - Breach - Anticipatory breach of contract - Fundamental breach - Consideration of legal test and factors - Failure to deliver commercial property on occupancy date promised - Trial judge held that Spirent was in anticipatory breach of contract, and had repudiated its fundamental obligation to deliver commercial rental property on the occupancy date promised - Trial judge found that Quake acted throughout in a commercially reasonable manner - Court of Appeal reversed the trial judge’s decision on the basis that the trial judge failed to measure Spirent’s breach against the legal standard of fundamental breach - Whether the Court of Appeal erred in reversing the trial judge’s decision - What is the legal test for anticipatory breach? - Whether the Court of Appeal’s judgment results in confusion in the law and uncertainty for both the legal and business communities - Whether there are conflicting appellate authorities - Whether there are issues of public importance raised?

Spirent agreed to lease the majority of an Ottawa office building that was under construction. Quake agreed with Spirent that it would sublease part of the building for three years. June 1, 2001, was the specified occupancy date for both Spirent and Quake. Weather and construction mistakes lead to delays in the construction of the building. In April 2001, Quake learned that occupancy would be delayed until July 15, 2001. It advised Spirent that due to a number of shortcomings, including the failure to be able to deliver occupancy on June 1, 2001, it would not proceed with the sublease agreement. Spirent disputed the alleged shortcomings and maintained that the subleased premises would be available on June 1, 2001, as agreed. Quake subleased space elsewhere. Spirent sued Quake for the difference between the amount it would have received under the sublease agreement and that which it was actually able to obtain. Quake defended on the basis that Spirent’s breaches of the agreement entitled Quake to treat the agreement as at an end. Quake counterclaimed for expenses incurred. The trial judge dismissed Spirent’s claim and gave judgment on the counterclaim to Quake. The Court of Appeal allowed the appeal. Spirent was entitled to judgment in the amount of $1,096,793.87 with costs. Quake’s counterclaim was dismissed.