CIBC, John Doe sued as $350K goes missing

A Winnipeg law firm is suing the Canadian Imperial Bank of Commerce and an unidentified man after nearly $350,000 was transferred into the wrong account in a home-purchase deal, and then disappeared.

Taylor McCaffrey LLP and the Law Society of Manitoba — the legal profession’s provincial regulator — filed the statement of claim in the Court of King’s Bench this week, naming CIBC and John Doe as defendants.

John Doe is the individual whose account the funds were transferred to.

Taylor McCaffrey, which was acting for a client who had purchased a home, requisitioned $343,335 from the mortgagee, the Royal Bank of Canada, on July 31, 2024, says the claim.

The money was to be delivered to the law firm’s trust account at CIBC, but unbeknownst to the firm, the requisition document contained the wrong transit number, the claim alleges.

On about Aug. 2, 2024, RBC wired the money to CIBC, but as a result of the incorrect transit number, it was transferred into John Doe’s account, rather than its trust account, the suit says.

Taylor McCaffrey followed up with CIBC on Aug. 7 and learned about the incorrect transit number and transfer into the wrong account.

The firm sent a new requisition to RBC to deliver replacement funds to its CIBC trust account, which RBC did, allowing the real estate deal to go through.

Months later, the lawsuit alleges, CIBC told the law firm the initial cash transferred to John Doe was gone.

“On or about Nov. 12, 2024, CIBC advised the firm that the initial funds had been deposited into John Doe’s account and that the initial funds had been depleted from that account, therefore were unrecoverable,” says the claim.

“Subsequently, RBC demanded the firm return the initial funds which were deposited into John Doe’s account.”

RBC and the law society came to an agreement in December that in exchange for payment of $333,335 to RBC, the bank assigned its title and interest to its claim for the initial cash to the law society.

The court papers claim that CIBC has refused to provide the identity and other associated information about John Doe.

The lawsuit accuses CIBC of breaching its duty to ensure that the proper account information was in place before the transfer, and its duty to take all possible steps to locate and secure the funds, if the funds weren’t properly deposited, including by calling in law enforcement, if necessary.

The court papers also claim that John Doe knew or should have known he wasn’t entitled to the money that had been wrongly transferred into his account.

“Notwithstanding this, John Doe withdrew the funds so as to keep them out of the reach of others,” reads the claim. “The plaintiffs say that John Doe has been enriched to the detriment of the plaintiffs and there is no juristic reason for the said enrichment.”

CIBC and the unidentified individual have not filed statements of defence.

erik.pindera@freepress.mb.ca