Is a bank liable for honouring a forged cheque?
Ontario, Canada
The following excerpt is from SNS Industrial Products Ltd v. Bank of Montreal, 2009 CanLII 4246 (ON SC):
Absent any contractual provision, the bank is strictly liable for honouring a forged cheque. Apart from contract, the plaintiff owes no duty to its bank to examine bank statements with due care and report discrepancies to the bank, nor does it owe a duty to its bank to maintain an adequate system of internal accounting to prevent and minimize loss through forgery: CP Hotels Ltd v. Bank of Montreal, 1987 CanLII 55 (SCC), [1987] SCJ No. 29, per LeDain J. ¶54.
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