Bills of Exchange Act 1909 – Explained

Bills of Exchange Act (1882) “There is no recognisable legal means to respond to a demand for payment without a true bill which is based on a pre-existing commercial agreement.”

Fraud Act 2006 – “Insisting or demanding payment without a pre-existing commercial arrangement which is based on presentable fact in the form of a commercial agreement is an act of deception. Payment is a commercial activity. Profiteering through deception is an act of fraud.”

FOR YOUR INFORMATION

For the Sir or Madam of the Fiduciary Duties.

Money is a unit of exchange, including ‘Bills of Exchange’ in other words pieces of paper, ‘bill of exchange’ noun: plural noun: bills of exchange 1909 Act, a written order to a person requiring them to make a specified payment to the signatory or to a named payee; a promissory note. (BILLS OF EXCHANGE ACT 1909 (austlii.edu.au) SECT 45-46/61)

Definitions: “Bill” means bill of exchange, and “NOTE” means promissory note. “Delivery” means the bill has been delivered and the debt is now paid in full, discharged, and offset.

Have you ever noticed that ‘Bank of England’ notes have the phrase “I PROMISE TO PAY THE BEARER” on all BANK NOTES. There are also many other Bank Legislations defining what Bills of Exchange are and how they work which are law throughout the Commonwealth.  

Lord Denning, in the HOUSE OF LORDS stated, “A Promissory Note is to be treated as CASH”.

A Bill of Exchange, once tendered, has to be treated as CASH . . . The principle is that a Bill, Cheque, or Note in digital form, is given and ‘taken in payment’ as “CASH”. (see Jackson v Murphy [1887] 4 T.L.R. 92).

Lord Denning confirmed this when he said, “We have repeatedly said in this COURT that a Bill of Exchange or a Promissory Note is to be treated as ‘CASH’. It is to be honoured unless there is some good reason to the contrary” (see Lord Denning M.R. in Fielding & Platt Ltd v Selim Najjar [1969] 1 W.L.R. 357 at 361; [1969] 2 All E.R. 150 at 152.

So, if a Promissory Note is tendered and it is rejected, then there was no ‘debt’ in the first place. If the Promissory Note is accepted, then the ‘debt’ no longer exists because it’s been paid in full.

PART I–PRELIMINARY

• 1 Short title [ see Note 1]
• 2 Commencement [ see Note 1]
• 4 Interpretation of terms
• 5 Application of rules of bankruptcy and common law
• 6 Application of Act
• 7 Application of State laws

PART II–BILLS–OF EXCHANGE

Division 1–Form and interpretation

• 8 Bill of exchange defined
• 9 Inland and foreign bills
• 10 Effect where different parties to bill are the same person
• 11 Address to drawee
• 12 Certainty required as to payee
• 13 What bills are negotiable
• 14 Sum payable
• 15 Bill payable on demand
• 16 Bill payable at a future time
• 17 Omission of date in bill payable after date
• 18 Ante – dating and post – dating
• 19 Computation of time of payment
• 20 Case of need
• 21 Optional stipulation by drawer or indorser
• 22 Definition and requisites of acceptance
• 23 Time for acceptance
• 24 General and qualified acceptances
• 25 Inchoate instruments
• 26 Delivery

Division 2–Capacity and authority of parties

• 27 Capacity of parties
• 28 Signature essential to liability
• 29 Forged or unauthorized signature
• 30 Procuration signatures
• 31 Person signing as agent or in representative capacity

Division 3–The consideration for a bill

• 32 Value and holder for value
• 33 Accommodation bill or party
• 34 Holder in due course
• 35 Presumption of value and good faith

Division 4–Negotiation of bills

• 36 Negotiation of bill
• 37 Requisites of a valid indorsement
• 38 Conditional indorsement
• 39 Indorsement in blank and special indorsement
• 40 Restrictive indorsement
• 41 Negotiation of overdue or dishonoured bill
• 42 Negotiation of bill to party already liable thereon
• 43 Rights of holder

Division 5–General duties of the holder

• 44 When presentment for acceptance is necessary
• 45 Time for presenting bill payable after sight
• 46 Rules as to presentment for acceptance and excuses for non – presentment
• 47 Non – acceptance
• 48 Dishonour by non – acceptance and its consequences
• 49 Duties as to qualified acceptances
• 50 Rules as to presentment for payment
• 51 Excuses for delay or non – presentment for payment
• 52 Dishonour by non – payment
• 53 Notice of dishonour and effect of non – notice
• 54 Rules as to notice of dishonour
• 55 Excuses for non – notice and delay
• 56 Noting or protest of bill
• 57 Duties of holder as regards drawee or acceptor

Division 6–Liabilities of parties

• 58 Funds in hands of drawee
• 59 Liability of acceptor
• 60 Liability of drawer or indorser
• 61 Stranger signing bill liable as indorser
• 62 Measure of damages against parties to dishonoured bill
• 63 Transferor by delivery and transferee

Division 7–Discharge of bill

• 64 Payment in due course
• 65 Banker paying demand draft whereon indorsement is forged
• 66 Acceptor the holder at maturity
• 67 Express waiver
• 68 Cancellation
• 69 Alteration of bill

Division 8–Acceptance and payment for honour

• 70 Acceptance for honour supra protest
• 71 Liability of acceptor for honour
• 72 Presentment to acceptor for honour
• 73 Payment for honour supra protest

Division 9–Lost instruments

• 74 Replacement of lost or destroyed bill
• 75 Action on lost bill

Division 10–Bill in a set

• 76 Rules as to sets

Division 11–Conflict of laws

• 77 Rules where laws conflict
• 77A Effect of non – compliance with stamp laws in case of certain bills of exchange

PART III–CHEQUES–ON A BANKER

Division 1–Cheques generally

• 78 Cheque defined
• 79 Presentment of cheque for payment
• 80 Rights of banker as regards stale cheques
• 81 Revocation of banker’s authority

Division 2–Crossed cheques

• 82 General and special crossings defined
• 83 Crossing by drawer or after issue
• 84 Crossing a material part of cheque
• 85 Duties of banker as to crossed cheques
• 86 Protection to banker and drawer where cheque is crossed
• 87 Effect of crossing on holder
• 88A Cheques drawn by a bank on itself

Division 3–Other provisions relating to cheques

• 88B Protection of bankers paying unindorsed or irregularly indorsed cheques or drafts
• 88C Payment of unindorsed cheque or draft as evidence of receipt by payee
• 88D Protection of bankers collecting payment of cheques etc.
• 88E Rights of banker collecting cheque not indorsed by payee

PART IV–PROMISSORY–NOTES

• 89 Promissory note defined
• 90 Delivery necessary
• 91 Joint and several notes
• 92 Note payable on demand
• 93 Presentment of note for payment
• 94 Liability of maker
• 95 Application of Part II to notes

PART V–SUPPLEMENTARY

• 96 Good faith
• 97 Signature
• 98 Computation of time
• 99 When noting equivalent to protest
• 100 Protest when notary not accessible
• 101 Dividend warrants
  • FIRST SCHEDULE
  • SECOND SCHEDULE Form of protest which may be used