Cash is Suspect

Large transactions in cash, especially without receipts or records, are viewed with caution by the Court. There is good reason for this -- generally cash transactions, where large amounts are involved, are designed to avoid scrutiny because tax evasion or worse is involved. Put directly, respectable people don't do large transactions in case.



As a result, cases where large sums of money are transferred in cash tend to be given close scrutiny by the Courts. Yesterday's decision in D'Adamo v. Lamontagne, 2008 CanLII 3538 (ON S.C.) gives a good example of this.



The plaintiff claimed to have paid $60,000 in cash on a house deal. The defendant denied receiving the money. There were complex facts but, in short, the Court did not believe the money was paid. The reasoning is interesting and may well be applicable elsewhere. Specifically, the Court disbelieved anyone would keep sizable amounts of cash for an extended period. The Court writes:



"(4) I further find the plaintiff's evidence that she kept $170,000 cash in her home in February 2001 highly suspect. She had opened an RBC bank account in the summer of 2000. No explanation was offered by the plaintiff as to why she would continue to store a large sum of money in cash in her house, long after arriving in Canada."



Whether a convincing point or not -- and this author had family who not trust a bank with cash money -- the argument may have use in other cases where a cash payment is denied.