The respondents retained the appellant notary to conduct a title search for a property they intended to purchase.
The notary discovered that a previous hypothec on the property had been granted by someone other than the registered owner, though a subsequent default judgment on a giving in payment clause had declared the hypothecary creditor the absolute owner.
The notary advised the respondents that the title was defective because the original hypothec was void, ignoring the effect of the default judgment.
The respondents refused to close the transaction and were sued by the vendor.
They brought a recourse in warranty against the notary.
The Supreme Court of Canada held that the default judgment had acquired the authority of res judicata and cured the title defect.
The Court found that the notary's failure to recognize the effect of res judicata was an unreasonable error of law that constituted a fault, even though his advice aligned with common notarial practice at the time.
The notary was held liable for the damages suffered by the respondents.
