The appellant trust company retained the respondent solicitors to perform legal services for a mortgage transaction.
The mortgage was later declared void under the Nova Scotia Companies Act because it constituted unlawful financial assistance for the purchase of the company's shares.
The appellant sued the respondents for negligence.
The Supreme Court of Canada held that a solicitor can be concurrently liable to a client in tort and contract.
The respondents were found negligent for failing to identify the statutory prohibition and warn the appellant.
The Court also applied the discoverability rule to the limitation period, holding that the tort action was not statute-barred because the cause of action did not arise until the appellant discovered or ought to have discovered the negligence.
