Bertolo v Bank of Montreal 1986 CarswellOnt 801, a decision of the Ontario Court of Appeal was one the earlier cases in Canada to support the legal proposition that independent legal advice(ILA) must be present, if in this situation, a bank is to rely upon suing a guarantor who did not receive same.

The Plaintiff’s son sought a loan from bank and the bank requested its solicitor to arrange for plaintiff, who was providing security for loan, to have independent legal advice.

The solicitor however arranged for the elderly plaintiff to consult with partner in same law firm.

The law partner provided the bank with letter confirming independent legal advice.

The son’s business failed and the bank demanded repayment of loan.

The elderly plaintiff sued and succeeded in having the promissory note declared invalid both at trial and on appeal.

The Courts held that the plaintiff received no independent legal advice.

Where plaintiff’s son and the bank possessed a mutual interest in completing the transaction, the solicitor acting on their behalf and the members of the firm are under a duty to disclose that interest to the plaintiff.

A lawyer, whether a partner or associate of a firm, is not to be viewed as an entity separate and apart from the firm or the member acting in a particular matter for the purpose of determining whether or not he or she is in a conflict of interest position. Where the member acting in the matter would be in a conflict of interest position if he were to advise another client, so also would his partner or associate.

The plaintiff, an elderly widow, possessed little formal education, was not fluent in English language, lacked business experience, and was unaware of terms of loan or restaurant purchase.

The plaintiff became the principal debtor by executing a promissory note secured by a mortgage on her home.

The plaintiff received no advice concerning legal obligations and risks to her property. The plaintiff was at a disadvantage in dealings with the bank and the latter was not entitled to recover where knowing or ought to have known that debtor not receiving independent legal advice.