Central Trust Co v Rafuse

Central Trust Co v Rafuse, [1986] 2 SCR 147 is a leading decision of the Supreme Court of Canada on liability of solicitors in negligence and breach of contract as well as the doctrine of discoverability under the Statute of Limitations.
Background.
Jack Rafuse and Franklyn Cordon were solicitors hired by a company that had purchased the shares of Stonehouse Motel and Restaurant Ltd. The agreement of sale required that the purchasers take out a mortgage on the property and use the assets used as part of the purchase price of the shares. The solicitors had been retained in order to complete the mortgage transaction.
Eight years later, the creditor for the mortgage, Central Trust Co., initiated a foreclosure of the mortgage. The creditor, Irving Oil Ltd., tried to prevent the foreclosure by claiming the mortgage was invalid. The case went to the Supreme Court of Canada and in the decision of "Central and Eastern Trust Co v Irving Oil Ltd", the mortgage was invalidated. Having lost the case, Central Trust brought an action against the lawyers for negligence and breach of contract.
In their defence, Rafuse and Cordon claimed:
The issues before the Court were:
Reasons of the court.
LeDain J wrote the reasons for the majority.
On the first issue, he held that the duty in tort and in contract are two entirely separate duties and can be held concurrently by a defendant.
On the limitations issue, it was held that the plaintiffs were not statute-barred from commencing an action. The commencement of the limitation period was postponed pursuant to the common law "discoverability principle": "A cause of action arises for purposes of a limitation period when the material facts on which it is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence."