The appellant mortgage company agreed to lend money to a client of the respondent lawyers, on the condition that the mortgage would be a first charge.
The respondents acted for both the borrower and the appellant but failed to advise the appellant of outstanding judgments against the borrower or to obtain postponements.
The Supreme Court of Canada restored the trial judge's finding that the respondents were retained by the appellant, owed a duty of care, and were negligent in failing to secure a first charge or advise the appellant of the risks.
The respondents were held liable for damages, including the costs of lawsuits brought by the appellant to maintain priority.
