COURT OF APPEAL FOR ONTARIO
CITATION: Tran v. Chung, 2016 ONCA 378
DATE: 20160519
DOCKET: C60661
Simmons, LaForme and Huscroft JJ.A.
BETWEEN
Nip Y Tran
Plaintiff (Appellant)
and
Phu Man Chung, Majekodunmi Adega, also known as Majek Adega, Tu Hong Luong, Tradeworld Realty Inc., Bank of Montreal, and Cynthia Dacosta, also known as Cynthia DaCosta, also known as Cynthia Da Costa, and Kerryon Nugent
Defendants (Respondent)
James H. Chow, for the appellant
Allyson Fox, for the respondent
Heard: December 9, 2015
On appeal from the order of Justice Mary E. Vallee of the Superior Court of Justice, dated May 25, 2015, with reasons reported at 2015 ONSC 3315.
H.S. LaForme J.A.:
A. INTRODUCTION
[1] The appellant, Nip Y Tran, claims she was fraudulently induced to provide a bank draft payable to the Bank of Montreal (“BMO”) by a group of alleged fraudsters. Unbeknownst to her, the alleged fraudsters gave the bank draft to a third party whom the appellant did not know. The third party then took the bank draft to BMO. Following the third party’s instructions, BMO accepted the bank draft and deposited it to her line of credit. The third party then instructed BMO to provide her with funds equal to the amount of the bank draft and gave those funds to one of the alleged fraudsters.
[2] Did BMO commit the tort of conversion? The motion judge said no and dismissed the appellant’s claim on a motion for summary judgment. For the reasons that follow, I disagree and would allow the appeal and grant judgment to the appellant.
B. BACKGROUND
[3] Ms. Tran owned a house, which had a $225,750 mortgage registered against it in favour of BMO. In 2009, the mortgage went into default.
[4] Ms. Tran was concerned about the bank repossessing her house and confided in one of the defendants, Phu Man Chung, who was a tenant at the property. Mr. Chung told Ms. Tran that he could sell the house for her quickly. Ms. Tran trusted him and left the matter in his hands.
[5] Mr. Chung was friends with the defendant, Tu Hong Luong, who was a real estate agent with the defendant, Tradeworld Realty Inc. Mr. Luong listed the property for sale although there was no listing agreement signed by Ms. Tran. Mr. Chung advised Mr. Luong that he owned the property.
[6] Mr. Chung’s brother-in-law, Hui Ming Zhou, offered $420,000 to purchase the property. Ms. Tran signed an agreement of purchase and sale, prepared by Mr. Luong.
[7] The defendant, Majek Adega, was Ms. Tran’s real estate lawyer. After the transaction closed on March 9, 2010, Ms. Tran was accompanied by Mr. Chung to Mr. Adega's office where Mr. Adega provided her with a bank draft payable to her in the sum of $148,788.32 — the equity she had after the mortgage was discharged.
[8] On the same day, Ms. Tran was escorted to a branch of the Royal Bank of Canada (“RBC”) where a bank account under her name had previously been opened under the instructions of, and with the assistance of, Mr. Chung.
[9] At the RBC branch, Mr. Adega, Mr. Chung and Kerryon Nugent — a real estate agent who had acted for Mr. Zhou — were there to ensure that Ms. Tran’s bank draft in the sum of $148,788.32 was deposited into her bank account. She was then instructed by them to sign purchase orders for four RBC bank drafts payable as follows: $90,190 to BMO, $4,193.50 to Ms. Nugent, $40,000 to Mr. Chung, and $11,000 to Vicky Le.
[10] Ms. Tran, who cannot read English and who completed only limited education in Vietnam, claims that she acted as instructed because she believed the drafts were necessary to complete the transaction for the sale of her property and to discharge her mortgage with BMO. However, BMO accepts that, on the date the bank draft was issued, Ms. Tran did not owe any money to BMO as her mortgage had already been discharged. Ms. Tran gave the $90,190 bank draft payable to BMO to Ms. Nugent who, in turn, gave the bank draft to Cynthia DaCosta, another defendant. Ms. Tran did not know Ms. DaCosta and did not know that the bank draft was given to her. Ms. DaCosta admits that she had no right to any money from Ms. Tran, and that Ms. Tran never gave her the draft and has never known her.
[11] On March 10, 2010, Ms. DaCosta, accompanied by Ms. Nugent, visited a BMO branch. BMO, following Ms. DaCosta's instructions, deposited the $90,190 bank draft payable to BMO into Ms. DaCosta’s line of credit account with BMO. This bank draft had Ms. Tran’s name and address written on the front of it as the purchaser of the draft. Ms. DaCosta then immediately withdrew the exact sum of the bank draft in two transactions: (i) a bank draft made payable to "Majek Adega" in the sum of $79,190; and (ii) cash in the sum of $11,000. She then gave both the cash and bank draft to Ms. Nugent, who in turn gave them to Mr. Adega.
[12] Ms. Tran says the defendants told her that she would receive more than $100,000 from the sale in the days following the issuance of the draft. She has received nothing to date.
[13] Ms. Tran commenced an action against the individual defendants for fraud and various other breaches. She also included BMO as a defendant, claiming that BMO was liable for conversion because it collected the $90,190 and made those funds available to Ms. DaCosta, who was not a person entitled to receive them. In the alternative, Ms. Tran claimed that BMO was unjustly enriched.
[14] Ms. Tran subsequently brought a motion for summary judgment against BMO for $90,190, and BMO brought a competing motion for summary judgment for an order dismissing the action against it. The motion judge granted BMO’s motion for summary judgment and dismissed Ms. Tran’s claim against BMO.
C. The Motion Judge’s Decision
[15] The motion judge relied on the test for conversion of a cheque as set out in 373409 Alberta Ltd. (Receiver of) v. Bank of Montreal, 2002 SCC 81, [2002] 4 S.C.R. 312 (“373409 Alberta Ltd.”), at para. 10: a bank will be liable for conversion where it makes payment on a cheque to someone other than the rightful holder and that payment is not authorized by the rightful holder. The tort is one of strict liability.
[16] Ms. Tran’s theory of liability was described by the motion judge: BMO converted her $90,190 RBC bank draft, which was payable to BMO, on the direction of Ms. DaCosta, who was not authorized by Ms. Tran to possess the draft. Accordingly, Ms. Tran asserts that BMO committed the tort of conversion and is liable for the $90,190.
[17] The motion judge concluded that there were three questions to be answered to decide whether BMO was liable for conversion: (1) who was the rightful holder of the bank draft; (2) was the payment made to someone other than the rightful holder of the draft; and (3) was the payment not authorized by the rightful holder? The motion judge held that BMO was not liable for conversion of the bank draft.
[18] I will say more about the motion judge’s reasons for her decision in my discussion below.
D. SUBMISSIONS
[19] The sole issue raised by the parties on appeal is whether the motion judge erred in finding that BMO is not liable for conversion. Nevertheless, there are several other issues that arise out of my conclusion on conversion, which I comment on briefly near the end of these reasons.
[20] According to Ms. Tran, this is a classic case of conversion. She says that a bank converts an instrument by dealing with it under the direction of someone without authorization and making the proceeds available to someone other than the person rightfully entitled to possession. She alleges that, in this case, BMO converted the bank draft when it collected the proceeds of the bank draft and made them available to Ms. DaCosta and Mr. Adega, who had no entitlement to those funds.
[21] BMO, on the other hand, submits that:
Ms. Tran cannot bring an action in conversion on the bank draft because she was not the drawer, payee, or endorsee of the bank draft.
BMO cannot convert funds payable to BMO. The funds were guaranteed funds from RBC.
BMO did not wrongfully interfere with the draft since Ms. Tran had authorized the draft be made payable to BMO.
Ms. Tran cannot make out a claim for conversion because she was not in actual possession of the draft, nor was she entitled to immediate possession of it.
Ms. Tran voluntarily parted with the bank draft when she gave it to Mr. Adega, Ms. Nugent and Ms. Chung, which conveyed to them the right to use the bank draft. That right was subject to Ms. Tran revoking her consent, which she did not do.
In the alternative, BMO has a defence as a “holder in due course” under the Bills of Exchange Act, R.S.C. 1985, c. B-4.
[22] I will deal with these issues after first reviewing the law on conversion.
E. ANALYSIS
(1) The Tort of Conversion
[23] The tort of conversion involves “a wrongful interference with the goods of another, such as taking, using or destroying these goods in a manner inconsistent with the owner’s right of possession”: Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce, 1996 149 (SCC), [1996] 3 S.C.R. 727, at para. 31. The tort is of one of strict liability and so it is no defence that the wrongful act was committed without intent: Boma, at para. 31. Even if the claimant is negligent with respect to its chattel, the wrongdoer will not be able to contest liability on the basis of the claimant’s contributory negligence: Boma, at paras. 31-35. In other words, the tort of conversion is not concerned with the moral concept of fault: Westboro Flooring & Décor Inc. v. Bank of Nova Scotia (2004), 2004 59980 (ON CA), 71 O.R. (3d) 723 (C.A.), at para. 14.
[24] In Boma,at para. 36, Iacobucci J. referred to the seminal discussion of the conversion of cheques from Crawford and Falconbridge’s treatise, Banking and Bills of Exchange, 8th ed. (Toronto: Canada Law Book Inc., 1986):
Conversion is the remedy of the lawful possessor of chattels to have their value paid to him by a wrongful dispossessor. It is normally applied to goods and there might appear to be some difficulty in holding that a bank that had paid part of what it owes to a customer to some other person not entitled to receive it is guilty of a conversion of the customer’s chattel. But any such apparent difficulty has been surmounted by treating the conversion as being of the instrument itself, that is, of the piece of paper in respect of which the payment is made. Similarly, a bank that collects a sum of money under an instrument for a person not entitled to it is treated as having converted the instrument. It has been repeatedly held that a bank converts an instrument by dealing with it under the direction of one not authorized, either by collecting it or, semble (although this has not yet actually been decided) by paying it and in either case, making the proceeds available to someone other than the person rightfully entitled to possession. [Emphasis added.]
[25] Borrowing from this passage, Iacobucci J. affirmed, at para. 83, that “[a] bank converts an instrument, including a cheque, by dealing with it under the direction of one not authorized, by collecting it and making the proceeds available to someone other than the person rightfully entitled to possession.”
[26] The Supreme Court subsequently affirmed the test from Boma in 373409 Alberta Ltd., in the context of a cheque.At para. 10, Major J. noted that two factors must be present for a bank to be liable for conversion of a cheque:
[A] lending institution’s liability in conversion is predicated upon finding both that payment upon the cheque was made to someone other than the rightful holder of the cheque, and that such payment was not authorized by the rightful holder. If either of these criteria is not satisfied, there is no tort. [Emphasis in original.]
[27] Major J. noted, at para. 9, that “dealing with another’s chattel in a manner authorized by the rightful owner is consistent with the owner’s right of possession” and therefore does not qualify as wrongful interference.
(2) Application of Legal Principles
(a) Can Ms. Tran bring an action in conversion if she is not the drawer, payee or endorsee of the bank draft?
[28] BMO accepts that it is possible to sue in conversion on a bank draft. However, it relies on a comment in Boma to argue that Ms. Tran is unable to bring such an action because she is not the drawer, payee or endorsee of the bank draft. At para. 37 of Boma, Iacobucci J. stated that “[t]he drawer, the payee or the endorsee can bring an action for conversion of a cheque.”
[29] This argument is predicated on differences between a cheque and bank draft.
(i) Cheques vs. Bank Drafts
[30] A cheque is used to instruct a bank to pay funds from the payor’s account. In the case of a cheque, the following terminology is used:
The “drawer” is the payor, who directs, through the cheque, that funds be drawn from his or her account.
The “drawee” is the bank upon which the drawer writes the cheque (e.g., the drawer’s bank).
The “payee” of a cheque is the person to whom the draft is made payable.
An “endorsee” is a person to whom the cheque is negotiated by the original payee (or a previous endorsee). For instance, if a cheque is made payable to X, X may endorse it to Y. Y is now the endorsee and the person who is entitled to demand payment on the instrument.
[31] Similar to cheques, bank drafts are often used to effect payment from one party to another. However, bank drafts fall within a category of instruments referred to as “remittance instruments”, which also includes certified cheques and money orders.
[32] Unlike a cheque, a bank draft has a purchaser, who buys the instrument from an issuing bank. The purchaser instructs the issuing bank to fill out the draft with a payee and the amount he or she wishes to pay. The payee may be the purchaser or a third party. The bank then collects the payment amount from the purchaser (e.g., as a direct debit from the purchaser’s bank account). The purchased funds are placed in the issuing bank’s reserve account until the payee negotiates the draft. After negotiation by the payee, the issuing bank will transfer the funds to the payee’s account: M.H. Ogilvie, Bank and Customer Law in Canada, 2d ed. (Toronto: Irwin Law Inc., 2013), at pp. 426-428.
[33] Since the issuing bank holds the money in its own reserve account and then transfers it to the payee’s bank, the issuing bank is considered both the “drawer” and the “drawee” of the bank draft (unlike in the cheque context, where the drawer is the customer who asks, through the cheque, that money be transferred from its account to the payee). As with cheques, the “payee” is the person to whom the instrument is payable. While the purchaser may be named in the bank draft (e.g., on the face of the draft), it is not a party to the instrument.
[34] One reason for using a bank draft to make a payment instead of a cheque is that a bank draft is said to be “guaranteed” funds. Because the bank holds the payment amount in its own account, there is no risk of the draft “bouncing”, as compared to a regular cheque where the drawer/payor could theoretically give a cheque to the payee and withdraw all of the funds in its bank account before the cheque clears or cancel the cheque.
(ii) Conversion of a Bank Draft
[35] There is very little case law dealing with conversion of bank drafts. However, what little there is supports the view that a claim for conversion is available where it involves a bank draft.
[36] In Bank of Montreal v. Bloomer, 1965 92 (SCC), [1965] S.C.R. 696, the purchaser of a bank draft sued the bank for conversion. The Supreme Court overturned the lower courts’ finding that BMO was liable for converting a bank draft on the basis that conversion was established. It did not suggest that a purchaser of a bank draft could not establish conversion in a proper case. Nor did it suggest that the principles that apply to converting a bank draft are different than the principles that apply, for example, to converting a cheque.
[37] More recently in Raza Kayani LLP v. Toronto-Dominion Bank, 2013 ONSC 7967, 9 C.C.L.T. (4th) 154, the trial judge held that the defendant bank was liable for converting both a certified cheque and a bank draft. She did not specifically address whether the conversion analysis should be different in relation to the bank draft. Instead, at paras. 58 and 60, she appears to have equated the “drawer” of a cheque with the purchaser of a draft and assumed that the same principles apply in respect of both instruments:
Zwicker and Kayani were the drawers who authorized the writing of the cheque or draft on their Accounts. The Bank was the drawee, which was directed to pay a sum of money on an instrument, in this case a cheque or a draft.
In the conversion of cheques or bank drafts negotiated at a collecting bank and deposited to the credit of the collecting bank's customer, who was not entitled to the proceeds of the cheque or draft, the collecting bank is prima facie liable to the maker of the cheque or draft. [Emphasis added.]
[38] This court reversed the trial judge’s decision on appeal on the basis that the bank had a valid defence available to it under the Bills of Exchange Act: Raza Kayani LLP v. Toronto-Dominion Bank, 2014 ONCA 862, 378 D.L.R. (4th) 729. This court did not indicate any problems with the trial judge’s conclusion that the bank was prima facie liable for conversion, indicating that a bank draft may be the subject of a conversion action.
(iii) Ms. Tran can bring a claim for conversion
[39] As noted, BMO argues that Ms. Tran cannot bring an action in conversion as the purchaser of a bank draft.
[40] I reject BMO’s argument, which relies on para. 37 of Boma. While para. 37 says that a “drawer, payee or endorsee” can sue for conversion, the court in that case was expressly dealing with conversion of a cheque. The Supreme Court did not hold that only those three parties could maintain a claim in conversion for any kind of instrument.
[41] In conclusion, I reject BMO’s argument that Ms. Tran cannot bring a conversion action because she is not the drawer, payee or endorsee of the bank draft. As I will explain, in the circumstances of this case, Ms. Tran has met the test for conversion.
(b) Did BMO convert funds payable to BMO in the circumstances of this case?
[42] BMO submits that, even if a purchaser of a draft can bring an action in conversion, the tort cannot be made out on the facts of this case.
[43] Its primary argument is that the bank cannot convert a draft payable to itself and presented to it by its own customer. Relying on Boma and 373409 Alberta Ltd., it says there can be no conversion if the instrument is delivered to its intended payee and that BMO was the intended payee in this case. It also relies on the fact that a bank draft is guaranteed funds to assert that the proceeds belonged to BMO. I reject these arguments.
[44] Returning to the test from para. 83 of Boma, the question is whether BMO converted the bank draft “by dealing with it under the direction of one not authorized, by collecting it and making the proceeds available to someone other than the person rightfully entitled to possession.” Thus, the motion judge was required to consider (1) whether BMO dealt with the bank draft under the direction of one not authorized, and (2) whether the proceeds were made available to someone other than the person rightfully entitled to possession.
[45] In grappling with those questions, the motion judge asked herself the following three questions: (1) who was the “rightful holder” of the bank draft? (2) was the payment made to someone other than the rightful holder of the draft? and (3) was the payment not authorized by the rightful holder? (para. 22).
[46] The heart of her analysis, found at paras. 20-21 and 25-27, is as follows:
The authorities relied upon by the parties with respect to conversion deal with cheques payable to one person but deposited into the account of another person without the authority of the drawer of the cheque. The situation here is quite different. Firstly, it involves a bank draft not a cheque. The draft was payable to BMO. The plaintiff was not an endorsee. The draft was deposited into a BMO customer’s line of credit account. The line of credit was a debt secured against the customer’s property. Accordingly, the customer was indebted to the bank.
In 373409 Alberta Limited, the court stated that, a lending institution’s liability in conversion is predicated upon finding both that the payment upon the cheque was made to someone other than the rightful holder of the cheque, and that such payment was not authorized by the rightful holder. If either of these criteria is not satisfied, there is no tort. (see para. 10)
In this matter, the plaintiff states that she gave the drafts to the defendants Adega, Chung and Nugent. Accordingly, they were the rightful holders; however, the draft was not payable to them. Nugent then gave the draft to DaCosta. According to the plaintiff, Nugent did not did use the cheque for the purpose she intended.
Even though the plaintiff did not know the reason for it, by virtue of the fact that she requested and obtained a draft payable to BMO, she intended that the $90,190 be payable to BMO. It was deposited into a line of credit account in which the holder of the account was indebted to BMO. The deposit was a payment to the bank on account of a secured debt.
The bank was entitled to accept a draft payable [to] itself and to deposit it to an account in which the account holder was indebted to the bank. The fact that the plaintiff was fraudulently induced to obtain the draft may give her a cause of action against Adega, Chung and Nugent as well as the person who ultimately received the funds; however, the bank did not commit the tort of conversion.
[47] In her analysis, she referred to 373409 Alberta Ltd. for the proposition that “[a]n owner’s right of possession includes the right to authorize others to deal with his or her chattel in any manner specified.” She also made reference to Jer v. Samji, 2014 BCCA 116, 60 B.C.L.R. (5th) 173, which Ms. Tran relied on in support of her argument that she was the rightful holder of the draft because her mortgage with BMO was already paid out.
[48] In my view, the motion judge’s analysis overlooks several important points.
[49] First, while Ms. Tran authorized Mr. Adega, Mr. Chung, and Ms. Nugent to give the bank draft to BMO, it is fair to infer from the affidavit evidence that they were not authorized to do whatever they wanted with it. Rather, they were authorized to deliver the bank draft on Ms. Tran’s behalf.
[50] Second, I fail to see how Ms. DaCosta became rightfully entitled to possess the bank draft. Ms. Tran had never heard of Ms. DaCosta and so it cannot be said that Ms. Tran authorized her to deal with the draft. Nor did Ms. Tran authorize Mr. Adega, Mr. Chung and Ms. Nugent to give the draft to anyone other than BMO.
[51] Third, as the collecting bank, BMO acted on the instructions of Ms. DaCosta to deposit the proceeds of the bank draft into her account to reduce her indebtedness to BMO. Without Ms. DaCosta’s instructions, there was no reason to deposit the proceeds of the draft into her account, as she was neither the payee nor an endorsee. In acting on her instructions, BMO acted on the instructions of one not authorized to deal with the proceeds.
[52] Fourth, in the circumstances, it is reasonable to infer that Ms. Tran never intended to either gift money to BMO or to pay off Ms. DaCosta’s line of credit.
[53] BMO, however, points to the fact that it was entitled to the bank draft as payee of the draft and that, as payee, it was entitled to the “guaranteed funds” from RBC.
[54] BMO provided no authority in support of the bald proposition that a bank cannot convert a bank draft made payable to itself where presented by its own customer to pay down an existing third-party debt.
[55] BMO also submits that a plaintiff must prove that she was either in actual possession or entitled to immediate possession of the chattel in order to sue for conversion. It notes that, once Ms. Tran handed over the draft to the alleged fraudsters, she no longer had actual possession. Nor, in BMO’s submission, was she entitled to immediate possession of the proceeds, as she had authorized that the bank draft be payable to BMO.
[56] It is clear, in my view, that in relation to Mr. Adega, Ms. Nugent and Mr. Chung, Ms. Tran was entitled to demand immediate possession of the bank draft. They were not the payees or endorsees of the draft and it was clear that the draft was meant to be delivered to BMO. Effectively, they were merely messengers acting on Ms. Tran’s behalf.
[57] Ms. Tran was also entitled to immediate possession as against Ms. DaCosta as, on the evidence before this court, Ms. Da Costa had no legal entitlement to the bank draft. To paraphrase the words of the House of Lords in Midland Bank v. Reckitt(1932), [1933] A.C. 1, at p. 14, had Ms. Tran found Ms. DaCosta at the counter of the bank waiting to deposit the RBC bank draft to her own account, Ms. Tran could have, if she knew the facts, demanded Ms. DaCosta deliver the bank draft to her.
[58] In my view, Ms. Tran also had a right to demand immediate possession of the proceeds from BMO in the circumstances of this case. In Boma, the Supreme Court indicated that, where an instrument is payable to someone without any legal entitlement to the proceeds of the cheque, the payee will not have a right of possession as against the owner of the proceeds. At para. 38 of Boma, the court noted that “the payees of the cheques in question had no right of possession to the cheques, as they were not created in respect of legitimate debts owed to them by the appellants.”
[59] Here, BMO recognizes that Ms. Tran owed it nothing at the relevant time. Furthermore, BMO treated the funds represented by the bank draft as being the property of Ms. DaCosta and not as BMO’s property. BMO took instructions from Ms. DaCosta on how and where to pay the funds, even though she was not the payee of the bank draft. On her instructions, they credited the proceeds to her account and then permitted her to withdraw the same amount in the form of a new bank draft, payable to Adega, and cash.
[60] As I have already noted, wrongful interference in the conversion context does not involve any moral wrongdoing. Because Ms. Tran was entitled to immediate possession of the draft from BMO, the wrongful interference consisted of paying the proceeds to Ms. DaCosta without proper authorization.
[61] BMO submits that it is irrelevant whether Ms. Tran intended Ms. DaCosta to have possession of the proceeds. It refers to iTrade Finance Inc. v. Bank of Montreal, 2011 SCC 26, [2011] 2 S.C.R. 360, at para. 49, for the proposition that when an innocent party consensually advances funds to another under an agreement, it voluntarily parts with those funds, and that divestiture conveys the right to use them. Until the transferor discovers the fraud and voids the transaction, the fraudster retains beneficial title. Relying on iTrade, BMO argues that Ms. Tran conveyed the right to use the bank draft when she transferred it to Mr. Adega, Mr. Chung and Ms. Nugent.
[62] iTrade does not assist BMO in this case. In the passages cited by BMO in support of its position, Deschamps J. was discussing principles that apply when a transfer occurs under a contract obtained through fraud. Those passages stand for the unremarkable proposition that a contract obtained through a fraudulent misrepresentation is voidable and that, until it is voided, it remains an effective contract.
[63] Here, there was no contract between Ms. Tran on the one hand and Mr. Adega, Mr. Chung and Ms. Nugenton the other. She gave them the bank draft based on their representation that they would give it to BMO to pay off a debt she thought she owed. Ms. Tran did not receive any consideration and did not enter into any legal agreement. iTrade has no application in this case.
(c) Can BMO rely on a defence under the Bills of Exchange Act?
[64] BMO raised an alternative argument for the first time in oral argument before this court. Counsel submitted that, if BMO’s actions amounted to conversion, it is a “holder in due course” and as such can rely on s. 55 of the Bills of Exchange Act to absolve itself of liability.
[65] While certain provisions in the Bills of Exchange Act may afford a defence to an action in conversion, since BMO did not plead a statutory defence or raise any such defence before the motion judge, I would not consider this ground of appeal. BMO was required to put its best foot forward on the summary judgment motion; however, it failed to raise this argument. Further, and in any event, BMO did not fully argue this issue on appeal and did not provide sufficient information in the record to allow this court to assess the merits of any defence it may have under the Bills of Exchange Act.
(d) Conclusion
[66] On the record in this case, Ms. Tran’s motion for summary judgment should have been granted and BMO’s motion to dismiss her claim for conversion of the bank draft should have been dismissed.
F. DISPOSITION
[67] I would set aside the motion judge’s order and replace it with an order allowing Ms. Tran’s motion for summary judgment for conversion and denying BMO’s motion to dismiss her claim.
[68] Ms. Tran is awarded her costs of the appeal as well as those in the court below. Ms. Tran will have fourteen days from the release of these reasons to provide brief written submissions on costs. BMO will provide its brief written submissions within fourteen days thereafter.
Released: “GH” MAY 19 2016
“H.S. LaForme J.A.
“I agree. J. Simmons J.A.”
“I agree. Grant Huscroft J.A.”