Cheque paid into wrong account

zeph_2

I wrote numerous cheques to a company. The cheques have been presented and credited to the account of a related company that has a trade with a same name. i.e. The cheques were written to Z Ltd and the cheques have been presented and credited by Y Ltd trading as Z.

I now have a dispute with Z Ltd but apparently it is a dormant company and therefore there is no money in it, therefore it would seem pointless bringing any legal action.

Do I have any recourse?

i.e Can I either (a) demand that the cheques only go to an account held by Z Ltd, or (b) request that the cheques are reversed and re-credited to my account, in the basis that they have gone to the wrong recipient?

Any advice appreciated.

Extant

You can't just reverse a cheque - otherwise, no-one would take them as payment, as they'd just get withdrawn. If the cheque was written as Z and paid in to Y trading as Z, then there's no recourse there if the cheque was crossed account payee either. In short, they haven't gone to the wrong recipient.

zeph_2

Thanks for the response.

The cheque was made out to Z Ltd. And it was cashed by Y Ltd trading as Z. These are 2 completely different entities. Therefore, the cheque has definitely gone to the wrong recipient.

In this case do the banks have the power to reverse the cheque - not such that the funds return to me, but so that the funds go to the correct recipient?

If not, do I have a claim against my bank, or the recipient bank, for allowing a cheque with the wrong name on it go into a different account?

Any input gratefully received.

agsnu

Did you intend to pay Z Ltd? If so, how did Y Ltd get ahold of the cheque? And why is Z Ltd letting Y Ltd trade under a similar name - surely this is what trademark law exists to prevent.

If you have been misled, then contact trading standards etc.

But from what you've said, it sounds like Z Ltd doesn't actually exist, and you're trying to wrangle out of a payment on the basis that you erroneously put "Ltd" on the end of the payee name.

willo65

Is Z part of a franchise? I think this is probably the situation ie the franchise is called "z" and the particular part of the franchise you used is owned by "y" if this is the case then you have paid the right people and the money has gone to the right people so no you can't do anything about it.

zeph_2

Z Ltd and Y Ltd are part of the same group - they have the same director, same registered office etc. That is how one company has got hold of the other company's cheque.

No franchise is involved.

I am not trying to wrangle out of a payment... to give a bit more info... I have a lease agreement with Z Ltd which they have defaulted on. I am now going to sue Z Ltd for breach of the lease. However, it turns out Z Ltd is a dormant company. Therefore, there is no money in the company. This is despite the fact that I have previously written numerous cheques to Z Ltd for other services they had provided to me. These cheques have been cashed by Y Ltd trading as Z. I want to try and force the bank or recipient of the cheque to (retrospectively...) cash these cheques in an account under the name of Z Ltd. This will mean they are forced to put the money into Z Ltd which will mean that it is worth taking legal action against Z Ltd to recover the rent due. I hope this makes sense.

So, to recap, the question is, if a cheque has been presented and banked by the wrong recipient, can this be reversed? I do not want the money back. I just want the cheque to only be for the benefit of the name which I wrote on the cheque. If anyone can shed any light on this I would be very grateful.

willo65

In theory if the y Ltd is trading as Zand thecque was payable to Z then yes they can bank it and you wouldn't be able to get it back. But I'm not sure if you could take some action against parent group or not?

david39

It seems to me that there is confusion here. Z is not the same entity as Z Ltd.

If the cheques were made out to Z Ltd, then they should not be cashed by "Y Ltd trading as Z" because Z is a different entity to Z Ltd for whom the cheques were intended.

I don't know what banking law has to say on this but it does seem to me that if Z Ltd was a dormant company then the cheques should have been returned by the recipient with a request to change the payee name.

zeph_2

That's correct david39.

But the cheques weren't returned, they were banked by the unintended recipient.

Does anyone know if I have any recourse?

Thanks

agsnu

If you're planning on suing them, you should probably take legal advice.

willo65

so if Z is not the intended recipient how did they get hold of your cheque?