The appellant deposited a materially altered cheque into his account at the respondent credit union as part of a wire transfer scam.
After the drawee bank dishonoured the cheque, the respondent exercised its common law right of charge-back against the appellant's accounts and sued for the unrecovered balance.
The trial judge found for the respondent.
On appeal, the appellant argued that the right of charge-back was extinguished once the respondent received funds from the drawee bank, and alternatively, that the respondent was negligent in failing to warn him that the credit was provisional.
The Court of Appeal dismissed the appeal, holding that a collecting bank does not lose its right of charge-back upon receiving payment from the drawee bank, and that the respondent owed no duty to warn the appellant in these circumstances.