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398:, the trial judge ordered BNS to pay $ 777,336 in total pecuniary damages and also awarded damages for wrongful disclosure of information and defamation. In his view, BNS had violated the service agreement as well as the law applicable to banker/customer relations by charging back amounts credited to BMP's and the related accounts.
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It is possible at common law to trace funds into bank accounts if it is possible to identify the funds. When the chain is broken by one of the intervening parties paying from its own funds, identification of the claimant's funds is no longer possible. However, the fact that a cheque passes through a
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that led to the payment, the payor is entitled to recover the money, unless (1) the payor intends that the payee shall have the money at all events or is deemed in law so to intend, (2) the payment is made for good consideration, or (3) the payee has changed his position in good faith or is deemed in
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After the cheque had cleared and the funds were subsequently released to BMP, several transfers took place over the following ten days to other accounts at BNS held by BMP's principals and a related company. RBC subsequently notified BNS that the cheque for $ 904,563 was counterfeit, as the drawer's
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BNS then restrained the funds in accounts under its control that it linked to the forged cheque. RBC and BNS entered into an agreement by which BNS was, at RBC's request, to transfer the restrained funds to RBC and RBC was to indemnify BNS for any losses related to the restraint and transfer. BNS
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BMP, a company that distributed non-stick bakeware, entered into an agreement with a third party for selling the rights to distribute such goods in the United States. Subsequently, it received an unendorsed cheque of $ 904,563 payable to BMP. The cheque was drawn on the account of a company at the
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signatures were forged and asked for BNS's assistance. BNS interrupted all transactions in BMP's account and in all related accounts and asked BMP for assistance in recovering the proceeds of the forged cheque. BMP insisted on retaining the amount it still held.
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which was produced by the sale of the goods of the principal... or into other merchandize... for the product of or substitute for the original thing still follows the nature of the thing itself, as long as it can be ascertained to be such, and
308:("RBC"). Neither this company nor the name of the sender of the envelope containing the cheque was known to BMP, or was apparently linked to the business purchasing the right to distribute the bakeware. BMP banked with the
405:, BNS's appeal was allowed against BMP by reducing the latter's damages to $ 101. As to the funds traced in the related accounts, the court found that BMP's transfers were proper and that the cheques were actual
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It makes no difference in reason or law into what other form, different from the original, the change may have been made, whether it be into that of promissory notes for the security of the money
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Here, RBC had a right to recover the money paid to BMP. RBC's payment was made on the basis of a forged cheque and the defences are not available to BMP in the circumstances of this case.
520:, which is the case when the subject is turned into money, and mixed and confounded in a general mass of the same description. The difficulty which arises in such a case is a
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BNS had the right to claim the amount in BMP's account and to trace funds in the related accounts. There is no issue of identification of the money in BMP's account.
524:, and the dictum that money has no ear‑mark must be understood in the same way; i.e. as predicated only of an undivided and undistinguishable mass of current money.
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Bank of Nova Scotia doing business as the
Scotiabank and the said Scotiabank v. B.M.P. Global Distribution Inc., 636651 B.C. Ltd., Audie Hashka and Paul Backman
508:, does not break the chain, as the funds have not lost their identity. Tracing is impossible only when the means of ascertainment fail. As noted by the Court,
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it forms part of the common law and that it prevents the drawee bank from recovering the paid proceeds of a forged cheque from anyone other than the forger
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The decision has given
Canadian financial institutions some protection in the event of the deposit of counterfeit cheques. The Court, however, in
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the service agreement between BNS and BMP precludes BNS from recovering such proceeds from BMP
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entitled to recover it. The person's claim may fail, however, if:
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Barclays Bank Ltd. v. W. J. Simms Son & Cooke (Southern) Ltd.
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the right only ceases when the means of ascertainment fail
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217:, 2009 SCC 15, is a significant case of the
362:. Unsourced material may be challenged and
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106:Appeal dismissed and cross‑appeal allowed.
382:Learn how and when to remove this message
291:Learn how and when to remove this message
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594:Canada Trustco Mortgage Co. v. Canada
536:Canada Trustco Mortgage Co. v. Canada
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360:adding citations to reliable sources
269:adding citations to reliable sources
556:SCC Case Information - Docket 31930
116:If a person pays another due to a
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522:difficulty of fact and not of law
96:Supreme Court of British Columbia
403:British Columbia Court of Appeal
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320:transferred $ 777,336 to RBC.
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638:Supreme Court of Canada cases
598:[2011] 2 S.C.R. 635
215:[2009] 1 S.C.R. 504
16:Supreme Court of Canada case
504:, or that it may have been
413:Appeal to the Supreme Court
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421:The right to recover funds
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492:The principles of tracing
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474:RBC should bear the loss
453:on finality of payment:
615:Supreme Court of Canada
558:Supreme Court of Canada
471:on good consideration:
219:Supreme Court of Canada
45:Judgment: April 2, 2009
35:Supreme Court of Canada
617:decision available at
571:(R.S.C., 1985, c. B-4)
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427:Barclays Bank v. Simms
43:Hearing: May 15, 2008
569:Bills of Exchange Act
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181:Unanimous reasons by
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