The appellant bank appealed a summary judgment requiring it to honour three certified cheques.
The cheques were purchased using funds derived from a fraudulent mortgage scheme.
The motion judge had found no evidence that the respondent payee participated in the fraud and held that the bank was obliged to pay.
The Court of Appeal allowed the appeal, finding that the motion judge misapplied the burden of proof under the Bills of Exchange Act.
Because the bills were affected by fraud, the burden shifted to the respondent to prove he was a holder in due course.
Given the suspicious circumstances and credibility issues, there were genuine issues for trial.
