2015 - 2016

Payment systems

Cheque

Mr E hired a contractor to complete work on his property.  He gave the contractor a post-dated cheque for $500.  Mr E’s bank allowed the contractor to cash the cheque before the specified date.  The contractor then failed to complete the work.

Mr E then complained to his bank that it should not have honoured the cheque before the specified date.  The bank offered to reimburse him the $500, but he declined the offer and brought his complaint to us.

We considered the date of the cheque amounted to an instruction to Mr E’s bank to pay the funds on, or after that date.  By paying early, the bank had not followed Mr E’s instructions.  We considered that Mr E’s loss amounted to the value of the cheque only, although the bank increased its offer to $1,000 in recognition of the stress and inconvenience suffered.  Mr E accepted this offer.