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TO TAKE OR NOT TO TAKE, THAT IS THE QUESTION

The other day a friend of mine called me to discuss an interesting situation.  It seems that the Bank at which he deals, mistakenly credited his account with $5,000.00, while in reality he knew that he only had $5.00 credited to his account.  My friend wanted to know what the legal consequences were for him if he was to drain his account and go on a spending spree.  His opinion was that it was the Bank's mistake in placing the money in his account and in essence giving him the money, and therefore he should not be on the hook for taking the money and spending it.   I told him that he should not take the money and that if he did he would most likely be charged with theft under the Canadian Criminal Code.  However, once I got off the phone to my friend and some after thought, I found myself intrigued by my friends argument and so I decided to do some research to answer the question.

From my research I was only able to locate two cases in which the same situation occurred.  The first was R. v. Johnson, a 1978 decision of the Manitoba Court of Appeal.  In the case, the Bank had mistakenly placed approximately $6,000.00 in the Bank account of the accused.  Knowing the Bank had made the error, and that the money was not his, the accused spent it.  Subsequently, the accused was charged under section 283 of the Canadian Criminal Code for theft arising out of the taking of the money, or of converting the money to his own use when he knew the money was not his.  The question before the court was whether the actions of the accused amounted to theft under section 283 of the Canadian Criminal Code.  In convicting the accused of theft, the majority of the Court held that because the accused was not entitled to the money, and he knew the money was not his, his conduct of converting the money to his own use constituted theft.

Another more recent case is R. v. Lavery, a decision of the Ontario District Court in 1985 named.  Once again this case involved the same situation where an individual was charged with theft under the Criminal Code for knowingly withdrawing and spending money that he knew was not his, but which had been mistakenly placed in his account by the bank.  The argument of the accused was that the money in question was paid to him with the consent of the Bank, and that the error giving rise to the payment of the money to the accused was entirely that of the Bank, and the accused did not contribute to the Bank's error.  Thus, he argued that, although he may have had the required intention of committing a theft, the acts performed by him did not constitute the required act of theft.   In making its decision, the Court chose to accept the accused's argument and acquitted him of the charge of theft.  The judge went on to suggest that what the accused did may have constituted fraud.

Therefore my advice to anyone in this situation is to resist the temptation to withdraw the money and blow it.  Because although technically you may not be committing theft, you are most likely committing fraud.

By Glyn L. Walters
January 21, 2004