B.M.P. Global Distribution Inc. et al. v. Bank of Nova Scotia et al., (2009) 268 B.C.A.C. 1 (SCC)

• Judge: McLachlin, C.J.C., Binnie, LeBel, Deschamps and Rothstein, JJ.
• Court: Supreme Court (Canada)
• Case Date: May 15, 2008
• Jurisdiction: Canada (Federal)
• Citations: (2009), 268 B.C.A.C. 1 (SCC);2009 SCC 15;268 BCAC 1;[2009] 1 SCR 504;58 BLR (4th) 1;304 DLR (4th) 292;386 NR 296;94 BCLR (4th) 1;[2009] SCJ No 15 (QL);[2009] 8 WWR 428

BMP Global Distr. v. BNS (2009), 268 B.C.A.C. 1 (SCC);

    452 W.A.C. 1

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2009] B.C.A.C. TBEd. AP.033

B.M.P. Global Distribution Inc. (appellant) v. Bank of Nova Scotia doing business as the Scotiabank and the said Scotiabank (respondent)

Bank of Nova Scotia doing business as the Scotiabank and the said Scotiabank (appellant) v. B.M.P. Global Distribution Inc., 636651 B.C. Ltd., Audie Hashka and Paul Backman (respondents)

(31930; 2009 SCC 15; 2009 CSC 15)

Indexed As: B.M.P. Global Distribution Inc. et al. v. Bank of Nova Scotia et al.

Supreme Court of Canada

McLachlin, C.J.C., Binnie, LeBel, Deschamps and Rothstein, JJ.

April 2, 2009.

Summary:

Newman purchased the right to distribute BMP's products in the United States. BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account. The cheque was drawn on an account at the Royal Bank of Canada (RBC). The funds were dispersed by BMP. The cheque was later found to be counterfeit, as the drawer's signatures were forged. RBC asked for BNS's assistance. BNS interrupted all transactions in BMP's account. BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC. BMP claimed damages equivalent to the restrained amounts, non-pecuniary damages for stress, wrongful disclosure of information and defamation and aggravated and punitive damages. Backman also claimed damages regarding BNS's failure to honour certain payment instructions while his account was restrained.

The British Columbia Supreme Court, in a decision reported at [2005] B.C.T.C. 1091, allowed the action and ordered BNS to pay BMP $777,349.54. The court also ordered payments of modest sums for improper disclosure of private information and for defamation. BNS appealed. BMP cross-appealed the denial of punitive damages.

The British Columbia Court of Appeal, in a decision reported at 235 B.C.A.C. 252; 388 W.A.C. 252, allowed the appeal and dismissed the cross-appeal. BMP appealed the reversal of the trial judge's conclusions on damages and sought punitive damages. BNS cross-appealed the issue of tracing in the related accounts.

The Supreme Court of Canada dismissed the appeal and allowed the cross-appeal.

Banks and Banking - Topic 8

General and definitions - Tracing - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - With regard to the funds traced in the related accounts, the Court of Appeal found that the transfers were proper and that the cheques were actual bills of exchange, unlike the forged cheque - Absent a finding that the cheques in question were improper, BNS was entitled only to "a remedy of tracing, or an enquiry into the true ownership of the accounts" - BNS cross-appealed the issue of tracing in the related accounts - The Supreme Court of Canada allowed the cross-appeal - Tracing at law was permitted where a person had received money rightfully claimed by a claimant (RBC) - Liability was based on mere receipt and the extent of liability would depend on the amount received - Neither the fact that a cheque was cleared through the banking system before being deposited in the payee's account nor the fact that the payee had mixed the funds with other funds was sufficient to bar recovery at common law - It was possible at common law to trace funds into bank accounts if it was possible to identify the funds - Mixing by the recipient was not a bar to recovery - The question to be asked was whether the money deposited in those accounts was "the product of, or substitute for, the original thing" - In the case at bar, the identification process was quite simple - There was no relevant movement of funds - The transferred funds were clearly related to the forged cheque BNS had mistakenly credited to BMP's account - The monies used for the transfers came from BMP's account - The link was made with the funds RBC had used to pay the forged cheque - See paragraphs 75 to 88.

Banks and Banking - Topic 3521

Cheques and orders drawn on deposits - Forged drawing of cheques - General - [See all Mistake - Topic 1663 ].

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - The Supreme Court of Canada dismissed BMP's appeal - The case was about the restitution of amounts paid by RBC by mistake - The court applied the test laid down by Barclays Bank Ltd. v. W.J. Simms Son & Cooke (Southern) Ltd. (1979, Eng. C.A.) for recovering money paid under a mistake of fact: " 1. If a person pays money to another under a mistake of fact which causes him to make the payment, he is prima facie entitled to recover it as money paid under a mistake of fact. 2. His claim may however fail if: (a) the payor intends that the payee shall have the money at all events, whether the fact be true or false, or is deemed in law so to intend; (b) the payment is made for good consideration, in particular if the money is paid to discharge, and does discharge, a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt; (c) the payee has changed his position in good faith, or is deemed in law to have done so." - See paragraphs 22 and 23.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - The Supreme Court of Canada dismissed BMP's appeal - This case was about the restitution of amounts paid by RBC by mistake - The court held that under the first step of the test laid down by Barclays Bank Ltd. v. W.J. Simms Son & Cooke (Southern) Ltd. (1979, Eng. C.A.) for recovering money paid under a mistake of fact, RBC had a prima facie right to recover - It was common ground that payment was made on the basis of a forged document - Under s. 48(1) of the Bills of Exchange Act (Can.), a forged signature was wholly inoperative - It did not create a right to give a discharge for the bill or to enforce payment - RBC made the payment before discovering that the drawer's signatures were forged - There was no basis for denying that RBC had a prima facie right to recover the funds - See paragraph 24.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - BMP appealed - This case was about the restitution of amounts paid by RBC by mistake - BMP asserted that RBC was deemed to have intended that BMP keep the money, under the second step of the test laid down by Barclays Bank Ltd. v. W.J. Simms Son & Cooke (Southern) Ltd. (1979, Eng. C.A.) for recovering money paid under a mistake of fact - BMP argued that the principle of finality of payment formed part of the common law and that it prevented RBC from recovering the paid proceeds of a forged cheque from anyone other than the forger - The Supreme Court of Canada dismissed the appeal - The assessment of RBC's rights required a more nuanced enquiry - The principle of finality of payment underlied both the common law rules and the Bills of Exchange Act's (Can.) provisions and served as a general goal, but as laudable as it was, it did not negate rights that might otherwise accrue to a party - It could not be raised by a payee (BMP) as an indiscriminate bar to the recovery of a mistaken payment - See paragraphs 29 to 35.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - BMP appealed - This case was about the restitution of amounts paid by RBC by mistake - BMP asserted that RBC was deemed to have intended that BMP keep the money, under the second step of the test laid down by Barclays Bank Ltd. v. W.J. Simms Son & Cooke (Southern) Ltd. (1979, Eng. C.A.) for recovering money paid under a mistake of fact - BMP argued that the ss. 128(a) of the Bills of Exchange Act (Can.) did not allow RBC to recover from BNS or BMP - The Supreme Court of Canada dismissed the appeal - Section 128(1) provided that "the acceptor of a bill by accepting it is precluded from denying to a holder in due course (a) the existence of the drawer, the genuineness of his signature and his capacity and authority to draw the bill" - RBC, in requesting restitution from BNS was in fact denying to both the collecting bank and BMP the genuineness of the drawer's signatures - Consequently, the question was whether BNS and BMP were holders in due course and therefore entitled to rely on s. 128(a) - One requirement for qualifying as a holder in due course under s. 55(1)(b) of the Act was lacking - BMP did not take the instrument for value, so it was not a holder in due course - Since only a holder in due course could benefit from s. 128(a), even if RBC were deemed, by payment, to have accepted the forged cheque, it would not be precluded from denying to BMP the genuineness of the drawer's signatures - See paragraphs 37 to 39.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - BMP appealed - This case was about the restitution of amounts paid by RBC by mistake - BMP asserted that RBC was deemed to have intended that BMP keep the money, under the second step of the test laid down by Barclays Bank Ltd. v. W.J. Simms Son & Cooke (Southern) Ltd. (1979, Eng. C.A.) for recovering money paid under a mistake of fact - BMP argued that the s. 165(3) of the Bills of Exchange Act (Can.) did not allow RBC to recover from BNS or BMP - The Supreme Court of Canada dismissed the appeal - Section 165(3) provided that "where a cheque is delivered to a bank for deposit to the credit of a person and the bank credits him with the amount of the cheque, the bank acquires all the rights and powers of a holder in due course of the cheque" - Section 165(3) afforded protection to a bank - The bank was not obligated to rely on this protection when restitution was claimed from it - BMP stood as a third party with respect to the protection - It could not use the bank's shield as a sword against it - The purpose of granting the bank the status of a holder in due course was not to create an entitlement for BMP of a forged instrument - BMP might benefit from defences that were inherent in the rules on mistake of fact, but not from the protection afforded to a bank by s. 165(3) - In other words, if the forged instrument were held to be a bill of exchange, BMP could not argue, that BNS was deemed in law to be entitled to receive the funds irrespective of the validity of the drawer's signatures - See paragraphs 40 to 45.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - BMP appealed - This case was about the restitution of amounts paid by RBC by mistake - BMP asserted that RBC was deemed to have intended that BMP keep the money, under the second step of the test laid down by Barclays Bank Ltd. v. W.J. Simms Son & Cooke (Southern) Ltd. (1979, Eng. C.A.) for recovering money paid under a mistake of fact - BMP argued that a service agreement between BNS and BMP precluded BNS from recovering such proceeds from BMP - BMP argued that under the service agreement, BNS could charge back only the credits for which it had not received settlement (clause 4.7) - The Supreme Court of Canada dismissed the appeal - Although the restraint of the funds by BNS could not be based on clause 4.7, since BNS had received settlement from RBC, the contract did not preclude the application of the common law where a payment had been made under a mistake of fact - Rather, the common law was implicitly incorporated, since it did not conflict with the explicit terms of the contract - Thus, clause 4.7 was not a bar to applying the common law to the relationship between BNS and BMP where BNS's role was no longer that of a collecting bank - See paragraphs 49 to 53.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - BMP appealed - This case was about the restitution of amounts paid by RBC by mistake - BMP asserted that RBC was deemed to have intended that BMP keep the money, under the second step of the test laid down by Barclays Bank Ltd. v. W.J. Simms Son & Cooke (Southern) Ltd. (1979, Eng. C.A.) for recovering money paid under a mistake of fact - BMP argued that a service agreement between BNS and BMP precluded BNS from recovering such proceeds from BMP - BMP argued that the service agreement incorporated the clearing rules of the Canadian Payments Association - The Supreme Court of Canada dismissed the appeal - The clearing rules provided for the survival of the members' common law rights - The preamble of the rules contained an express disclaimer of application to third parties - Further, the clearing rules applied only to relations between members of the Canadian Payments Association and did not create entitlements for third parties - Finally, the service agreement did not incorporate the clearing rules for BMP's benefit - See paragraphs 54 to 60.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - BMP appealed - This case was about the restitution of amounts paid by RBC by mistake - BMP asserted that the payment was made under good consideration, under the second step of the test laid down by Barclays Bank Ltd. v. W.J. Simms Son & Cooke (Southern) Ltd. (1979, Eng. C.A.) for recovering money paid under a mistake of fact - The Supreme Court of Canada dismissed the appeal - The question whether BMP had given consideration was easily answered in light of the trial judge's finding of fact that BMP gave no value for the instrument - At the same time, BMP's position that RBC should bear the loss entailed an implicit acknowledgment that neither itself nor BNS had given consideration for the instrument - See paragraph 61.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - BMP appealed - This case was about the restitution of amounts paid by RBC by mistake - BMP asserted that it had changed its position in good faith, or was deemed to have done so, under the second step of the test laid down by Barclays Bank Ltd. v. W.J. Simms Son & Cooke (Southern) Ltd. (1979, Eng. C.A.) for recovering money paid under a mistake of fact - The Supreme Court of Canada dismissed the appeal - Although BNS's role was changed from that of a collecting bank to that of a borrower, for the purposes of the change of position analysis, it had to be concluded that BNS remained the holder of the funds - Moreover, at the time they were restrained, the funds claimed by BMP were still credited to its account - Therefore neither BNS as the holder of the funds nor BMP as the payee had changed its position - In conclusion, BMP had not changed its position and the defence was available neither to it nor to BNS - See paragraphs 62 to 65.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - BMP appealed - This case was about the restitution of amounts paid by RBC by mistake - The Supreme Court of Canada dismissed the appeal - The jus tertii argument (the right of the third party) the trial judge relied on could be accepted only if RBC had no right to recover the funds from BNS - Only then could BNS be said to have acted in RBC's stead - Where BNS was entitled to give effect to RBC's claim for restitution of the monies paid under mistake of fact, the jus tertii argument failed - See paragraph 67.

Mistake - Topic 1663

Recovery of money paid under mistake - Mistake of fact - Circumstances when recovery allowed - Newman purchased the right to distribute BMP's products in the United States - BMP deposited an unendorsed cheque for $904,563 in a Bank of Nova Scotia (BNS) account - The cheque was drawn on an account at the Royal Bank of Canada (RBC) - The funds were dispersed by BMP - The cheque was later found to be counterfeit, as the drawer's signatures were forged - RBC asked for BNS's assistance - BNS interrupted all transactions in BMP's account - BNS restrained the remaining funds and recovered funds totalling $777,336.04, which were transferred to RBC - BMP sued - The trial judge awarded judgment to BMP - The British Columbia Court of Appeal allowed an appeal - BMP appealed - This case was about the restitution of amounts paid by RBC by mistake - The Supreme Court of Canada dismissed the appeal - There was no policy consideration that would preclude BNS from responding to RBC's common law right in this case - There was no rule preventing RBC or BNS from arguing that the payment to BMP was made by mistake - The court stated that "[a]t common law, the principle of finality of payment must be balanced against the right of the owner of the funds to recover money paid under a mistake of fact. The common law affords a defence to an innocent party who has given consideration or changed his or her position. However, the person who is still in possession of the funds is in the best position to stop the fraud. To preclude means to prevent the continuation of a fraud in order to allow a fraudulent payment to be finalized would be a strange policy. Thus, there is no overarching policy consideration that would bar the payee's bank from resisting a claim based on a signature that has been proven to be forged where the payee has not used the funds and has neither given consideration for them nor changed his or her position" - See paragraphs 71 to 73.

Mistake - Topic 1675

Recovery of money paid under mistake - Mistake of fact - Defences - General - [See third, fourth, fifth, ninth, tenth and eleventh Mistake - Topic 1663 ].

Mistake - Topic 1676

Recovery of money paid under mistake - Mistake of fact - Defences - Material change of circumstances - [See ninth Mistake - Topic 1663 ].

Negotiable Instruments - Topic 4181

Cheques - Forged endorsements or drawing of cheques - General - [See all Mistake - Topic 1663 ].

Cases Noticed:

Barclays Bank Ltd. v. Simms (W.J.) Son and Cooke (Southern) Ltd. et al., [1979] 3 All E.R. 522 (Q.B.), appld. [para. 21].

Royal Bank v. R., [1931] 2 D.L.R. 685 (Man. Q.B.), consd. [para. 21].

Royal Bank of Canada v. LVG Auctions Ltd. (1983), 43 O.R.(2d) 582 (H.C.), affd. (1984), 12 D.L.R.(4th) 768 (Ont. C.A.), refd to. [para. 21].

Toronto-Dominion Bank v. Pella/Hunt Corp. (1992), 10 O.R.(3d) 634 (Gen. Div.), refd to. [para. 21].

LePage (A.E.) Investments Ltd. et al. v. Canadian Imperial Bank of Commerce et al. (1994), 77 O.A.C. 280; 120 D.L.R.(4th) 499 (C.A.), refd to. [para. 21].

Central Guarantee Trust Co. v. Dixdale Mortgage Investment Corp. et al. (1994), 77 O.A.C. 253; 24 O.R.(3d) 506 (C.A.), refd to. [para. 21].

Bank of Montreal v. R. (1907), 38 S.C.R. 258, refd to. [para. 29].

Price v. Neal (1762), 3 Burr. 1354; 97 E.R. 871, refd to. [para. 29].

Lipkin Gorman v. Karpnale Ltd., [1991] 2 A.C. 548; 127 N.R. 380 (H.L.), refd to. [para. 31].

St. Martin Supplies Inc. v. Boucley, [1969] C.S. 324, refd to. [para. 39].

Quebec v. Bank of Montreal, [1979] 1 S.C.R. 565; 25 N.R. 330; 96 D.L.R.(3d) 586, refd to. [para. 47].

Joachimson v. Swiss Bank Corp., [1921] 3 K.B. 110 (C.A.), refd to. [para. 47].

Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711; 77 N.R. 161; 21 O.A.C. 321, refd to. [para. 48].

National Bank of Greece (Canada) v. Bank of Montreal, [2001] 2 F.C. 288; 266 N.R. 361 (F.C.A.), refd to. [para. 57].

Bank of Nova Scotia v. Regent Enterprises Ltd. et al. (1997), 157 Nfld. & P.E.I.R. 102; 486 A.P.R. 102 (Nfld. C.A.), refd to. [para. 57].

Toronto-Dominion Bank v. Dauphin Plains Credit Union Ltd. (1992), 79 Man.R.(2d) 307; 90 D.L.R.(4th) 117 (Q.B.), revd. (1992), 83 Man.R.(2d) 132; 36 W.A.C. 132; 98 D.L.R.(4th) 736 (C.A.), leave to appeal refused [1993] 2 S.C.R. vii; 154 N.R. 400; 92 Man.R.(2d) 78; 61 W.A.C. 78, refd to. [para. 57].

Mobil Oil Canada Ltd. v. Storthoaks (Rural Municipality), [1976] 2 S.C.R. 147; 5 N.R. 23, refd to. [para. 62].

Foley v. Hill (1848), 2 H.L.C. 28; 9 E.R. 1002, refd to. [para. 63].

Gingras, Trustee in Bankruptcy, for B/D Construction Ltée v. Banque Canadienne Nationale et Bérubé, [1977] 2 S.C.R. 554; 15 N.R. 598, refd to. [para. 69].

British American Continental Bank v. British Bank for Foreign Trade, [1926] 1 K.B. 328 (C.A.), refd to. [para. 77].

Bavins, Jr. & Sims v. London and South-Western Bank Ltd., [1900] 1 Q.B. 270 (C.A.), refd to. [para. 77].

Agip (Africa) Ltd. v. Jackson, [1992] 4 All E.R. 451 (C.A.), affing. [1992] 4 All E.R. 385 (Ch.), refd to. [para. 78].

Citadel General Life Assurance Co. et al. v. Lloyd's Bank of Canada et al., [1997] 3 S.C.R. 805; 219 N.R. 323; 206 A.R. 321; 156 W.A.C. 321, refd to. [para. 78].

Banque Belge pour l'Etranger v. Hambrouck, [1920] 1 K.B. 321 (C.A.), refd to. [para. 79].

Taylor v. Plumer (1815), 3 M. & S. 562; 34 E.R. 721, refd to. [para. 79].

Foskett et al. v. McKeown et al., [2001] 1 A.C. 102; 257 N.R. 294 (H.L.), refd to. [para. 85].

Lawrie v. Rathburn (1876), 38 U.C.Q.B. 255, refd to. [para. 85].

Carter v. Long & Bisby (1896), 26 S.C.R. 430, refd to. [para. 85].

Centrac Inc. v. Canadian Imperial Bank of Commerce (1994), 77 O.A.C. 290; 21 O.R.(3d) 161 (C.A.), refd to. [para. 87].

Statutes Noticed:

Bills of Exchange Act, R.S.C. 1985, c. B-4, sect. 128(a) [para. 37]; sect. 165(3) [para. 40].

Authors and Works Noticed:

Ames, J.B., The Doctrine of Price v. Neal (1891), 4 Harv. L. Rev. 297, pp. 297 to 299 [para. 31].

Birks, Peter, Overview: Tracing, Claiming and Defences in Laundering and Tracing (2003), pp. 302 to 305 [para. 83].

Crawford and Falconbridge, Banking and Bills of Exchange: A Treatise on the Law of Banks, Banking, Bills of Exchange and the Payment System in Canada (8th Ed. 1986), vol. 1, pp. 742, 743 [para. 63].

Crawford, Bradley, Payment, Clearing and Settlement in Canada (2002), vol. 1, p. 168 [para. 56].

Fridman, Gerald Henry Louis, Restitution (2nd Ed. 1992), p. 458 [para. 62].

Geva, Benjamin, Conversion of Unissued Cheques and the Fictitious or Non-Existing Payee - Boma v. CIBC (1997), 28 Can. Bus. L.J. 177, p. 189 [para. 71].

Geva, Benjamin, Reflections on the Need to Revise the Bills of Exchange Act - Some Doctrinal Aspects: Panel Discussion (1981-82), 6 Can. Bus. L.J. 269, pp. 289 ff. [para. 39]; 308 ff. [paras. 31, 62]; 309 [para. 31].

Goff, Robert, and Jones, Gareth, The Law of Restitution (6th Ed. 2002), pp. 847 [para. 77]; 852 [para. 62].

Goode, R.M., The Right to Trace and its Impact in Commercial Transactions - I (1976), 92 L.Q. Rev. 360, pp. 378 [para. 85]; 380 [para. 84]; 390, 391, 395 [para. 85].

Hall, Geoff R., Canadian Contractual Interpretation Law (1st Ed. 2007), p. 125 [para. 48].

Klinck, Dennis R., Two Distincts, Division None: Tracing Money into (and out of) Mixed Accounts (1988), 2 B.F.L.R. 147, p. 148 [para. 79].

Maddaugh, Peter D., and McCamus, John D., The Law of Restitution (2nd Ed. 2004) (2008 Looseleaf Update, Release 4), pp. 10-32 [para. 21]; 10-35 [para. 62]; 10-57 [para. 87]; § 10:500.10 [para. 62].

Millett, P.J., Tracing the Proceeds of Fraud (1991), 107 L.Q. Rev. 71, p. 74, fn. 7 [para. 83].

Ogilvie, M.H., Bank and Customer Law in Canada (2007), pp. 179 [para. 63]; 284 [para. 20]; 285 [para. 21]; 292, 293 [para. 44]; 295 [para. 42].

Scott, Stephen A., Comment on Benjamin Geva's Paper: Reflections on the Need to Revise the Bills of Exchange Act - Some Doctrinal Aspects (1981-82), 6 Can. Bus L.J. 331, p. 342  [paras. 31, 35, 71].

Scott, Stephen A., The Bank is Always Right: Section 165(3) of the Bill of Exchange Act and its Curious Parliamentary History (1973), 19 McGill L.J. 78, generally [para. 42].

Smith, Lionel D., The Law of Tracing (1997), pp. 74 [para. 85]; 183 ff. [para. 79]; 194 ff. [para. 85].

Ulph, J., Retaining Proprietary Rights at Common Law Through Mixtures and Changes, [2001] L.M.C.L.Q. 449, generally [para. 85].

Ziegel, Jacob S., Geva, Benjamin, and Cuming, Ronald C.C., Commercial and Consumer Transaction: Cases, Text and Materials (3rd Ed. 1995), vol. 2, p. 396 [para. 31].

Counsel:

Paul E. Jaffe and Dean Fox, for the appellant and the respondents on cross-appeal;

D. Geoffrey G. Cowper, Q.C., Brook Greenberg and Jennifer Francis, for the respondent/appellant on cross-appeal.

Solicitors of Record:

Paul E. Jaffe, Vancouver, B.C., for the  appellant and the respondents on cross-appeal;

Fasken Martineau DuMoulin, Vancouver, B.C., for the respondent/appellant on cross-appeal.

This appeal and cross-appeal were heard on May 15, 2008, by McLachlin, C.J.C., Binnie, LeBel, Deschamps and Rothstein, JJ., of the Supreme Court of Canada. The following judgment of the Supreme Court was delivered in both official languages by Deschamps, J., on April 2, 2009.