The appellant advanced funds to a corporation controlled by a fraudster.
The fraudster used the funds to purchase shares, which he and his spouse pledged to the respondent bank in exchange for an increased credit limit.
The appellant obtained a tracing order for the fraudulently obtained funds, excluding assets in the hands of bona fide purchasers for value without notice.
The Supreme Court of Canada held that the bank acquired a valid security interest under the Personal Property Security Act and qualified as a bona fide purchaser for value without notice, thereby defeating the appellant's equitable claim to the proceeds of the shares.
