Gudmundseth Mickelson LLP regularly acts in high profile, complex commercial, regulatory and public law cases. International Longshore & Warehouse Union Local 502 v. Ford is a case settling legal principles in an uncommonly litigated area of the law decided by the Court of Appeal of British Columbia in 2016.
COURT: Court of Appeal of British Columbia
COUNSEL: Arpal Dosanjh and Kyle Ferguson
Lawyer’s Weekly (June 24, 2016 issue)
THE FACTS AND HISTORY OF THE CASE
Mr. Ford was the former secretary-treasurer of the plaintiff union. He was found to have stolen $1.69 million over the course of six years. Almost half of that money was deposited into joint accounts that Mr. Ford held together with his wife. The plaintiff claimed Mrs. Ford was liable to it for money had and received. On summary trial, it was assumed that Mrs. Ford had no knowledge of the stolen funds in the joint accounts. The Supreme Court of British Columbia granted judgment against Mrs. Ford. The Court of Appeal of British Columbia dismissed the appeal except in relation to the impact of a settlement with the plaintiff’s auditors on the judgment, which was sent back to trial.
WHY IS THIS CASE IMPORTANT?
The most interesting aspect of the decision relates to the Court’s discussion concerning money had and received in to a joint account shared with an owner that stole the funds. After engaging in a detailed review of that issue, the three take away points from the decision are:
- It is the first case to explicitly hold that money had and received is available where money is paid to a joint account, regardless of the knowledge of an account holder claiming to be innocent. This conclusion flows from the fact that all account holders “receive” money in a joint account, and that a joint account holder takes the risk that the other will draw on funds in the account.
- It clarifies that there is no general balancing of the equities in analyzing money had and received. Confusion arose from an earlier decision of the Court in J. Seversen Inc. v. Qualicum Beach (Village), (1982), 135 D.L.R. (3d) 122 (B.C.C.A.). The Court explained the decision by noting that the consideration of equities is part of the change of position defence. This approach brings welcome clarity to claims for money had and received. While the Court’s holding may appear open to unfairness, it must be remembered that in claims for money had and received, the plaintiff’s money has found its way into the hands of the defendant, in the absence of good consideration and without an intent on the plaintiff’s part that the defendant should have such funds. In such circumstances, there is no need for the Court to engage in an unrestrained inquiry into the “balancing of the equities” before the funds are returned to the plaintiff.
- It confirms that the carelessness of the plaintiff is no defence.
Because of the Court’s detailed review of various aspects of money had and received, the decision should serve as a starting point in many decisions in the future.
If you have further inquiries about this or other commercial matters, please contact Arpal Dosanjh.