Tran v. Chung

Tran v. Chung

The Court of Appeal held that BMO committed conversion because it collected a bank draft payable to BMO on the instructions of a person not authorized by the plaintiff and made the proceeds available to persons not rightfully entitled to them; the purchaser of a bank draft can maintain a conversion action in these...

Source-derived case information.

Citation
2016 ONCA 378
Parties
Plaintiff/appellant: Nip Y Tran; Defendant/respondent: Phu Man Chung; Defendant/respondent: Majekodunmi Adega (also known as Majek Adega); Defendant/respondent: Tu Hong Luong; Defendant/respondent: Tradeworld Realty Inc.; Defendant/respondent: Bank of Montreal; Defendant/respondent: Cynthia DaCosta (also known as Cynthia Dacosta, also known as Cynthia Da Costa); Defendant/respondent: Kerryon Nugent
Court
Court of Appeal for Ontario
Jurisdiction
Canada
Judgment Date
19 May 2016
Procedural Posture
Civil / Appeal From Summary Judgment Motion
Outcome
Appeal allowed; motion judge's order set aside; appellant's motion for summary judgment for conversion allowed; defendant BMO's motion to dismiss denied
Legal Topics
Conversion, Bank Draft, Fraud, Summary Judgment, Bills of Exchange Act, Holder in Due Course, Possession
Source Language
english
Tort Banking Law Civil Procedure Property Conversion Bank Draft Fraud Summary Judgment +3 more

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Parties

Nip Y Tran

Plaintiff/appellant

Phu Man Chung

Defendant/respondent

Majekodunmi Adega (also known as Majek Adega)

Defendant/respondent

Tu Hong Luong

Defendant/respondent

Tradeworld Realty Inc.

Defendant/respondent

Bank of Montreal

Defendant/respondent

Cynthia DaCosta (also known as Cynthia Dacosta, also known as Cynthia Da Costa)

Defendant/respondent

Kerryon Nugent

Defendant/respondent

Procedural Posture

Civil / Appeal From Summary Judgment Motion

Legal Issues

  1. 1 Whether Bank of Montreal committed conversion by collecting a bank draft payable to BMO on instructions of an unauthorized person and making proceeds available to persons not entitled to them
  2. 2 Whether the purchaser of a bank draft who is not the drawer/payee/endorsee can bring an action in conversion
  3. 3 Whether a bank can convert a draft payable to itself when presented by its customer to pay a third party debt

Ratio Decidendi

The Court of Appeal held that BMO committed conversion because it collected a bank draft payable to BMO on the instructions of a person not authorized by the plaintiff and made the proceeds available to persons not rightfully entitled to them; the purchaser of a bank draft can maintain a conversion action in these circumstances and BMO failed to establish a pleaded statutory defence under the Bills of Exchange Act.

Court Disposition

Appeal allowed; motion judge's order set aside; appellant's motion for summary judgment for conversion allowed; defendant BMO's motion to dismiss denied

Orders

  • Set aside the motion judge's order dated May 25, 2015
  • Allow Nip Y Tran's motion for summary judgment for conversion (judgment in her favour regarding the $90,190 bank draft)