Pulaski

It is quite possible that there was a hold placed on the check and that the money withdrawn was, from the bank's perspective, from "other money in the account".

Suppose you receive a cheque for £114 and pay it in to an account already holding $1,000. You will be allowed to withdraw $200, but it will be from the $1,000 already in the account, not the proceeds of the cheque. There is a hold on the proceeds of the cheque, but the customer could easily be unaware of this fact.

Now suppose you deposit the cheque for £114 into an account that only has $50 in it. Although your account shows a balance of $250 you may find that you are only allowed to draw $50, being the money in the account before you deposited the cheque.

Depending on the banking laws in Canada it is also possible that a customer might be allowed to draw against an un-cleared cheque "as a courtesy", effectively creating a contingent overdraft situation. This is legal in the UK, but not legal in the US. I am not sure about Canada.

scot47

The error surely lies with the person who signed a cheque that was already invalid ?

bats

Update
The bank apologised and offered $100 as a sign of goodwill

Pulaski

Congratulations!