Cancelling a cheq to stop payment (intentionally breech contract) is Fraud!

shocky_2

miduck wrote: »

That is exactly what I said - it depends on the intent of the buyer when entering into the contract.

I suggest you go back and read your post. That is not what you said. I said "Cancelling a cheque isn't fraud ...". In response to that you said "It can be, it depends ...".

Let's be clear. The act of cancelling a cheque is not fraud. This is true regardless of anything that happened earlier. The intent of the parties when the contract was entered into does not matter. This remains true regardless of anything that happened earlier.

When you say "it depends" you are misleading people into thinking that they might be done for fraud for bouncing a cheque where, for example, they are not satisfied with the work (of course there could be a civil claim for breach of contract or under the Bills of Exchange Act, but this is completely different to being accused of fraud).

What is fraud is entering into a contract with the intent of bouncing the cheque from the very beginning. The fraud is constituted by entering into the contract. the cancellation has nothing to do with it: when we are talking about fraud, it does not matter whether you go ahead and cancel the cheque or not.

shocky_2

JethroUK wrote: »

No it's fraud if its done with intent not to pay (as opposed to lost/stolen) - Young Solicitor?

You have much to learn o' young one

The definition of civil fraud is making a factual statement, knowing that it is false or having no belief in its truth, with the intention that it will be relied on by someone else.

The definition of criminal fraud is set out in the Fraud Act 2006, the relevant type of fraud is as follows:

"(1)A person is in breach of this section if he
(a)dishonestly makes a false representation, and
(b)intends, by making the representation
(i)to make a gain for himself or another, or
(ii)to cause loss to another or to expose another to a risk of loss."

In each case you need to make a factual statement to someone. Cancelling a cheque is not a statement and can never be fraud.

As explained above, if you enter into a contract and intend to dishonour the cheque from the very start, then that is fraud because handing over the cheque is making a promise to pay. It is the time at which you hand over the cheque that is relevant, not the time at which you decide to cancel it.

If you cancel a cheque because you didn't receive the product, that would not and can never be fraud.

shocky_2

zzzLazyDaisy wrote: »

If you do stop/bounce a cheque, the recipient can commence proceedings under the Bills of Exchange Act, and ask for summary judgement on the grounds that there is no defence (ie it would not go to a full hearing). It is not a breach of contract action, so you cannot counterclaim on the basis of their breach of contract in failing to carry out the work to a satisfactory standard - you would have to commence your own separate breach of contract claim.

All spot on. I would just add one point.

It is true that you would get summary judgment for a claim under the BOEA. But in an appropriate case I imagine you could request summary judgment on a parallel claim. You would then have two competing judgments, and could exercise a right of equitable set-off so that your net liability is zero. Do correct me if I'm wrong.

Of course this would only work in cases where summary judgment is feasible - e.g. where the merchant doesn't provide the product/service at all.

Hern

arcon5 wrote: »

But what about issuing a cheque in the knowledge you will be able to obtain goods knowing the cheque will be cancelled or dishonored. okay..

<sigh. . .> UK law provides for a range of penalties in the case of a driver exceeding the speed limit. The driver does not get off scott free if the evidence is clear and inarguable and there are no mitigating circumstances that could justifiably come into play.

UK law provides for a range of penalties in the case of someone dishonouring a cheque after they've written it. The cheque issuer does not get off scott free if the evidence is clear and inarguable and there are no mitigating circumstances that could justifiably come into play.

UK law additionally provides for a range of penalties in the case of a driver who in exceeding the speed limit shows a wilful, reckless, dangerous disregard to the safety of others.

That kind of dangerous driving isn't axiomatic in every speeding case and to assume that it is is to take a generalisation to the point of absurdity.

UK law additionally provides for a range of penalties in the case of a cheque issuer who dishonours the cheque for the purpose of committing a fraud.

That kind of dishonouring isn't axiomatic in every cancelled cheque case and to assume that it is is to take a generalisation to the point of absurdity.

Sheesh.

miduck

youngsolicitor wrote: »

I suggest you go back and read your post. That is not what you said. I said "Cancelling a cheque isn't fraud ...". In response to that you said "It can be, it depends ...".

Let's be clear. The act of cancelling a cheque is not fraud. This is true regardless of anything that happened earlier. The intent of the parties when the contract was entered into does not matter. This remains true regardless of anything that happened earlier.

When you say "it depends" you are misleading people into thinking that they might be done for fraud for bouncing a cheque where, for example, they are not satisfied with the work (of course there could be a civil claim for breach of contract or under the Bills of Exchange Act, but this is completely different to being accused of fraud).

What is fraud is entering into a contract with the intent of bouncing the cheque from the very beginning. The fraud is constituted by entering into the contract. the cancellation has nothing to do with it: when we are talking about fraud, it does not matter whether you go ahead and cancel the cheque or not.

Let me quote again what I said:

miduck wrote: »

It can be, it depends on what the intent of the buyer was when entering into the contract.

Anyone with half a brain can read the whole sentence, not just the first three words. I qualified my statement that it can be, dependent upon the intent of the buyer. What is so difficult about that for you to understand?

You failed to answer my question - you're not actually a solicitor, are you?

shocky_2

miduck wrote: »

Let me quote again what I said:
Anyone with half a brain can read the whole sentence, not just the first three words. I qualified my statement that it can be, dependent upon the intent of the buyer. What is so difficult about that for you to understand?

You said "It can be". You were replying to my post which only mentioned cancelling a cheque, nothing about anything else. Anyone reading your post could only conclude that you were talking about cancelling a cheque, and saying that cancelling a cheque could be fraud if certain conditions are met (which is wrong).

If you were talking about something entirely different than the post you were responding to - namely entering into a contract with intent to defraud, as distinct from cancelling a cheque - then you should have clarified.

May I suggest that you calm down a little, this is an internet discussion about the implications of cancelling a cheque not a fight to the death! :A

You failed to answer my question - you're not actually a solicitor, are you?

I am, and a very successful one at that, thanks for asking.

miduck

youngsolicitor wrote: »

You said "It can be". You were replying to my post which only mentioned cancelling a cheque, nothing about anything else. Anyone reading your post could only conclude that you were talking about cancelling a cheque, and saying that cancelling a cheque could be fraud if certain conditions are met (which is wrong).

If you were talking about something entirely different than the post you were responding to - namely entering into a contract with intent to defraud, as distinct from cancelling a cheque - then you should have clarified.

May I suggest that you calm down a little, this is an internet discussion about the implications of cancelling a cheque not a fight to the death! :A



I am, and a very successful one at that, thanks for asking.

It is odd that every one else understood and agreed with my post, yes?

I can only suggest that you speak to your supervisor about the deficiencies in your training. I have seen several posts where you have given very poor advice, and when picked up on it, rather than admitting your error (which we all make at times), you dig yourself a far deeper hole. I still doubt that you are a solicitor, but if you are, you should consider the damage you are doing to the image of your profession by acting in this way.

JethroUK

Hern wrote: »

.....

Can you not get it into your thick patronising head that cancelling a cheque is more than likely going to be decided by a CIVIL court as an UNLAWFUL act --- NOT a fraudulent act.......

do mse allow throwing of insults.?

thats rhetorical - I am going to suggest you ignore any more of my inane posts and I will return the favour

btw "more than likely" is not fact - and that's a fact!!!!!!

cancelling a cheque is fraud in any country/language

I dont need to "know" anything about the law to "know" that is a stone cold fact

thats the difference between "knowledge" and "intelligence"

I class you as the former

zzzLazyDaisy

youngsolicitor wrote: »

All spot on. I would just add one point.

It is true that you would get summary judgment for a claim under the BOEA. But in an appropriate case I imagine you could request summary judgment on a parallel claim. You would then have two competing judgments, and could exercise a right of equitable set-off so that your net liability is zero. Do correct me if I'm wrong.

Of course this would only work in cases where summary judgment is feasible - e.g. where the merchant doesn't provide the product/service at all.

I am not sure if I understand you? I don't know what you mean by 'parallel claims'.

Even if one party commenced proceedings for the dishonoured cheque, and the other for breach of contract, the two claims would be independent claims and heard separately, since they turn on different points of law and factual evidence.

There is (normally) no defence to a claim on a dishonoured cheque. On the other hand it is easy to raise a holding defence to a breach of contract claim, sufficient to ensure that evidence of fact must be heard, and therefore the case would not be suitable for summary judgement. So the likelihood is that the BofC case would take considerably longer to process through the courts.

In the meantime, the merchant will have quickly obtained his CCJ and commenced enforcement proceedings - which he is entitled to do, since his claim is completely independent (in law) of the other claim.

Maybe I have misunderstood your point, but I have never come across a scenario of the type you describe, in any practical setting.

JethroUK

Oli.s wrote: »

There are actually three or four defences to cancelling a cheque, I cant remember what they are but as others have said the legislation has already been mentioned in the thread.

Tradesmen should be taught about this legislation as part of the apprenticeships as it is little known in my experience but is very powerfull legislation if someone tries to dodge paying you by cancelling / bouncing a cheque and the pre court steps are very very simple.

cancelling a cheq because its lost or stolen is not fraudulent

cancelling a cheq because you dont intend to honour payment (even if your sink is still leaking) is fraud

the intent to defraud defines it