N.B. court revives lawyer’s $100,000 claim against Scotiabank after counterfeit-draft fraud

The New Brunswick Court of Appeal has restored a lawyer’s lawsuit against Scotiabank over a $100,000 loss from a counterfeit bank draft, finding that disputed evidence about assurances from bank staff could not be left unresolved when dismissing the claim.

In Morrison v. The Bank of Nova Scotia, 2026 NBCA 83, released July 16, Justice LeBlanc, with Justices LaVigne and Robichaud concurring, set aside a summary judgment that had ended Barry Morrison’s action. The court directed that the case proceed to trial and awarded him $2,500 in appeal costs. It did not decide whether the bank was liable for the loss.

A counterfeit draft and a disputed assurance

Morrison, a sole practitioner in Saint Andrews, received an email in December 2021 from someone seeking help recovering money supposedly owed under a divorce settlement. A person claiming to be the former spouse later arranged to send a bank draft.

What arrived on December 22 appeared to be a CIBC draft for $265,900, dated December 24. Morrison took it to Scotiabank on December 24 and asked to deposit it without a hold so he could transfer funds that day. A manager approved the no-hold deposit. He then requested a $100,000 wire transfer from his trust account to a bank in Hong Kong.

The transfer was completed on December 29. Two days later, Scotiabank learned the draft was counterfeit. It froze Morrison’s accounts and reversed the deposit. He replenished the trust account, after which the freeze was lifted.

The central factual dispute concerned what happened at the branch. Morrison said he asked whether the draft was legitimate and whether it was safe to wire the funds, and that a teller reassured him about the draft after leaving the counter. The teller and manager denied that any assurances had been sought or given. Both said they would have responded differently had they known the draft was post-dated.

Morrison and the two bank employees provided affidavits, but none was cross-examined on the summary judgment motion. Morrison also said another employee later told him she would have recognized the draft as fraudulent; the bank supplied no evidence from that employee.

Contract terms did not eliminate the need for findings

The motion judge had treated Morrison’s Business Banking Services Agreement as a complete answer to the lawsuit. Its provisions required sufficient cleared funds, allowed the bank to freeze accounts and reverse deposits, and excluded liability for specified losses involving fraudulent instruments or instructions.

The appeal court found that this reasoning depended on facts the judge had not clearly settled. She questioned Morrison’s evidence but neither expressly accepted nor rejected his account of the teller’s assurances. If that account was accepted, the reasons did not explain how it affected the contract’s application or the negligence claim.

New Brunswick’s summary judgment process permits a judge to decide whether the existing record can fairly resolve a dispute and, where necessary, to consider additional fact-finding powers under Rules 22.04(2) and (3). The appeal court said the judge might have resolved the conflict through those powers. Dismissing the action without identifying the accepted evidence and factual basis was premature and legally erroneous.

The panel also addressed Morrison’s acknowledged failure to follow the Law Society’s client-identification rules. The motion judge had not explained how that failure interacted with the alleged bank assurances or why it necessarily resolved liability in the bank’s favour. Nor had the evidence established that Morrison understood the significance of a post-dated draft. LeBlanc also noted that even a cursory inspection would have raised concerns: a draft purportedly issued in Mississauga on December 24 could not already have been in Morrison’s hands at the Saint Andrews branch before 9:30 a.m. that day.

Exclusion-clause analysis required a factual foundation

The same gap affected the judge’s application of the exclusion-clause framework from Tercon Contractors. Its first question is whether the clause covers the circumstances established by the evidence. Without clear factual findings, the appeal court could not see how that question had been answered.

Other contract provisions also potentially mattered. One limited the bank’s liability to proven direct damages from gross negligence or wilful misconduct; another contained a corresponding exception to the customer’s obligation to indemnify the bank. The court said those provisions had to be considered against the facts found, if engaged.

If Morrison’s account were accepted, the motion judge’s reasoning would effectively shield the bank regardless of what its employees had said. The panel held that a conclusion of that breadth required fuller examination under the public-policy part of the Tercon framework.

The ruling did not invalidate the agreement or establish a general obligation for banks to identify every fraud. It reopened this action because the unresolved evidence mattered. The court expressly left the merits and ultimate allocation of responsibility to the trial court.