I don’t see why this is a issue, the check is not money it self, the bank has the money, surely the bank can issue the funds to the correct person.
This seems to be the crux of the issue:
After CBC Toronto contacted TD this week, it offered to issue a new cheque with the condition George sign an indemnity agreement, which means he would be held liable for the money if the original cheque is ever found and cashed by someone else.
George says he declined, and instead offered to sign an agreement that says he’d be liable for $150,000. He says he isn’t comfortable with the risk of having to repay the full amount. He also says he’s done nothing wrong so shouldn’t be the one on the hook.
So it seems that this offer has been made, but on the condition that if the original cheque is ever found and cashed Kavaratzis would be on the hook for it. Kavaratzis contends that that’s not fair as he wasn’t the one who lost the original.
The problem is that it’s a bank draft, not a cheque. The whole idea of a bank draft is that it’s guaranteed by the bank, so it can’t be unilaterally cancelled after it’s been issued. It’s why you only accept a bank draft when selling a used car; once you have the bank draft, the other party cannot cancel it. The funds have already been removed from their account and are being held in trust by the bank.
It’s a sticky situation. TD doesn’t want to be on the hook for $300K should the original draft be deposited, but they can’t cancel their obligation to that bank draft unless it is surrendered to them.
Meanwhile, Canada Post doesn’t insure mail to the tune of $300K. They would have needed to buy separate insurance ahead of mailing the draft.
I don’t see how this can be resolved at this point, even with media attention. $300K of cash should not be sent in the mail without adequate insurance.
Essentially, how would this story be different if they were literally shipping a box of cash by registered mail? I think it’s pretty clear that that’s a very risky thing to do.
The problem is that it’s a bank draft, not a cheque.
It was a certified cheque, not a bank draft. Granted, that poses much the same problem.
certified cheque
This is US law, maybe Canada has different rules, but:
https://www.sapling.com/8611754/do-void-certified-check
But the New York Credit Union Association cites §3-403(2) of the UCC. This section indicates that payment can be stopped on a certified check if 90 days have passed since it was issued and the check has been lost, destroyed or stolen. The remitter would have to submit an affidavit to the bank or credit union in this case and request a stop payment order in writing.
The CP admitting that they lost the check should suffice as evidence that the cheque has been “lost, destroyed or stolen”.
Imagine a bank robbery and the robbers demand the tellers issue a bank draft / certified check to the robbers actual name.
At the end of the robbery the bank has, a serial number of the check, the payer name.
It would be silly to expect this bank to honor this bank draft / certified check. They simply wouldn’t do it.
So the rest of the “we can’t prevent double spend of this bank draft”, is silly. They can verify the payee, pay the draft and cancel the original draft by serial number.
This is a straightforward administrative problem. TD needs to just do their fucking job.
This is the best summary I could come up with:
Louis Kavaratzis says his retirement plans are ruined after Canada Post misplaced a piece of registered mail that contained a certified cheque for $301,560 — money left for him in his late father’s will.
Canada Post didn’t answer a list of questions from CBC News, but apologized to the brothers in a statement for the “unfortunate and frustrating delivery experience.”
George chose to send the cheque through registered mail because it provides confirmation Canada Post received the item and proof of delivery by requiring a signature by the recipient.
In the village of Ayer’s Cliff — nearly 150 kilometres southeast of Montreal — mail is delivered to residents’ mailboxes located inside the local post office.
An Aug. 11 letter from George’s lawyer to the bank indicates TD couldn’t put a stop payment on the cheque and instead asks it to be flagged in case someone else attempts to cash it.
“If the wrong person gets a hold of a cheque there are layers of protection,” said Fares, who lectures at Toronto Metropolitan University’s Ted Rogers School of Retail Management.
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