The appellant bank appealed an order striking portions of its defence in a cheque conversion action arising from employee fraud and forged endorsements.
The court held it lacked jurisdiction over the procedural complaint about allowing a late Rule 21 motion because that issue was interlocutory and required leave to the Divisional Court.
On the merits, the court held that the Supreme Court's strict liability conversion analysis in Boma bars a defence of contributory negligence, but does not eliminate the distinct statutory defence of preclusion under s. 48(1) of the Bills of Exchange Act.
Because the impugned paragraphs were unclear and could amount to contributory negligence, they were properly struck to that extent, but the appellant received leave to amend to plead any legally available defence clearly.
Costs were ordered in the cause.
