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Torts - Conversion

Kayani v. Toronto-Dominion Bank (Ont CA, 2014)

In this case the Court of Appeal set out the elements of the tort of conversion. The context was a lawsuit against a bank by solicitors who were subject of a fraud scheme whereby they were duped into writing trust cheques to the fraudster, cheques which the bank then honoured. The primary issue was whether the bank could avail itself of a statutory Bills of Exchange Act defence:
[27] 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 CanLII 149 (SCC), [1996] 3 S.C.R. 727, at para. 31; 373409 Alberta Ltd. (Receiver of) v. Bank of Montreal, 2002 SCC 81 (CanLII), [2002] 4 S.C.R. 312, at para. 8.

[28] An authorized interference is not wrongful and, therefore, cannot amount to conversion. As Major J. stated in 373409 Alberta Ltd., at para. 9,
An owner’s right of possession includes the right to authorize others to deal with his or her chattel in any manner specified. As a result, dealing with another’s chattel in manner authorized by the rightful owner is consistent with the right of possession, and does not qualify as wrongful interference.

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