Legal Blog

Bum Cheque

A lawyer was closing a purchase. His client had funds in German currency and went to an exchange house to have this currency exchanged for Canadian dollars. The cheque from the exchange house was given to the lawyer and the lawyer used the funds to close the purchase. Unfortunately, the cheque accepted by the lawyer was uncertified and bounced. These are the facts in Fisch v. Vojimirovic, another 1997 decision of Madam Justice Lax.

The exchange house coughed up $26,400 before it went out of business. The lawyer was short $70,000.00. Like a good boy, he immediately had replenished his trust account with his own money after the cheque bounced.

The lawyer sued his client for the $70,000. After all, the client had the house and it was his contractual duty to provide the lawyer with funds to pay for it.

Bad News

The Court held that there were two innocent parties: the lawyer and the client. The lawyer could have insisted on a certified cheque, but did not. Once the lawyer accepted an uncertified cheque, the lawyer waived the client’s contractual responsibility to provide him with funds and assumed the risk of a bad cheque. The judge stated that had the lawyer “attempted to certify the cheque prior to closing and discovered that the cheque was not certifiable, he could have informed (his clients) that he would not provide his services without certified funds and given them a reasonable opportunity to comply”.

Our Reaction

The cheque was not certifiable, but we have our own opinions as to who may be. In any case, given this decision, get your cheques certified.