Bank denies liability after alleged $343K misdirected deposit

CIBC is asking a court to dismiss a lawsuit claiming it failed in its duty of care after $343K was deposited into the wrong account and withdrawn.

One of Canada’s largest banks is asking a court to dismiss a lawsuit that claims it failed in its duty of care after $343,000 was mistakenly deposited into the wrong account and later withdrawn.

In February, Taylor McCaffrey LLP filed a lawsuit against the Canadian Imperial Bank of Commerce (CIBC) over an alleged misdirected deposit on Aug. 2, 2024. The law firm says it was acting for a client in a real estate transaction and had instructed that $343,335 be transferred from a mortgage lender into its trust account at CIBC’s One Lombard Place branch in Winnipeg.

According to the claim, the firm contacted the bank on Aug. 7 after the funds did not arrive. It was then informed the money was deposited into the wrong account due to an incorrect transit number. In November, the bank allegedly told the firm the funds were “unrecoverable” because they had already been withdrawn.

However, in its statement of defence filed last week, CIBC denies liability, arguing it followed proper procedures and processed the transfer in accordance with Payments Canada rules.

The bank says the funds were deposited on Aug. 2 using the incorrect transit number provided by the law firm and credited to an account held by an incorporated company.

‘All reasonable attempts’ to recover funds made: CIBC

“Once CIBC was notified by the firm it took immediate action to trace the funds,” reads the statement of defence.

The bank’s investigation found that the account holder carried out multiple wire transfers shortly after receiving the money. On Aug. 5, $150,000 was sent to a bank in Morocco intended for an individual with the same name as a representative of the CIBC account.

That same day, $120,000 was also transferred to a bank in the United Arab Emirates, followed by another $25,000 transfer on Aug. 8. Each payment went to different recipients, according to the filing.

The bank says it then placed a hold to the account on Aug. 8 to prevent any further transfers, which at the time had an account balance of $4,789.45.

“CIBC further sent four recalls to the (company’s) account to recover the funds that were transferred on August 5, 2024 and August 8, 2024, as well as the remaining funds in (the company’s) account,” it reads. “These recall attempts were unsuccessful.”

The statement of defence also says CIBC tried contacting the account holder’s representative several times, including by sending a letter in September to demand the return of the funds, which were unsuccessful.

“CIBC made all reasonable attempts to recover and return the initial funds to the firm but was unable to do for reasons outside of its control.”

‘No duty to ensure the account information matched’

The law firm argues CIBC had a duty to verify that the account details matched the intended recipient before completing the transfer—a claim the bank disputes.

“CIBC had no duty to ensure that the account information matched the name of the account holder or to take all possible steps to locate and secure the initial funds,” reads the statement of defence.

The bank’s defence cites a bylaw under the Canadian Payments Act, which states that when a payment includes both a name and account number, financial institutions are not required to identify discrepancies between them.

“A receiving participant … may, for the purpose of making the amount of the payment available to the payee, rely on that account number or other identifier,” reads a portion of the bylaw referenced in the claim.

It claims that a financial institution remains compliant even if relying on the account number results in funds being deposited to someone other than the named payee.

The statement of claim notes that replacement funds were successfully sent to the firm’s trust account the following week, allowing the real estate transaction to proceed. In December 2025, the mortgage lender assigned its interest in the disputed funds to the Law Society of Manitoba, a co-plaintiff in the suit, in exchange for payment.

CIBC argues that any losses caused were due to law firm’s own negligence, including providing the wrong transit number and failing to promptly flag the issue. It also claims the plaintiffs did not adequately mitigate their losses, including by not notifying law enforcement.

The bank is requesting the claim to be dismissed with costs.

CTV News had reached out to the plaintiff’s lawyer for comment and is awaiting a response.

None of the claims have been tested in court.

• RELATED STORY: Over $343K for home purchase allegedly lost following wrong bank transfer: lawsuit