The court hears arguments in case #28607, Bank of Montreal v. Ernst and Young Inc. in its capacity as receiver and manager of 373409 Alberta Ltd. and Province of Alberta Treasury Branches, on October 1, 2002.
Douglas Lakusta, the owner of both 373409 Alberta Ltd. and Legacy Holdings Ltd., altered the face of a cheque payable to 373409 Alberta Ltd. in order to indicate Legacy Holdings Ltd. as an additional payee. He then deposited the cheque, without endorsing it, to a Bank of Montreal account for Legacy Holdings Ltd. and subsequently withdrew the funds. 373409 Alberta Ltd. later went into liquidation. Ernst and Young Inc., which was appointed receiver and manager for the company, sued the Bank of Montreal for having accepted the cheque for deposit. The Alberta Court of Queen’s Bench held that the bank had violated the Bills and Exchange Act in crediting Legacy’s account with the proceeds of the unendorsed cheque. A majority of the Alberta Court of Appeal dismissed the Bank of Montreal’s appeal. The bank is now appealing to the Supreme Court.
Lawyer James McFayden presents arguments on behalf of the Bank of Montreal. Lawyer Douglas Tkachuk presents arguments on behalf of Ernst and Young Inc.