The Short Title of this Act is the Bills of Exchange Act 1908.
(2)
This Act is a consolidation of the enactments mentioned in Schedule 1 hereto.
(3)
This Act is divided into Parts, as follows:
PART 1—Bills of Exchange. (Sections 3 to 72.)
PART 2—Cheques on a Bank. (Sections 73 to 83.)
PART 3—Promissory Notes. (Sections 84 to 90.)
PART 4—Miscellaneous. (Sections 91 to 98.)
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Interpretation
In this Act, if not inconsistent with the context,—
Acceptance means an acceptance completed by delivery or notice
Action includes counterclaim and set-off
Banker includes a body of persons, whether incorporated or not, who carry on the business of banking
Bankrupt includes any person whose estate is vested in a trustee or assignee under the law for the time being in force relating to bankruptcy
Bearer means the person in possession of a bill or note payable to bearer
Bill means bill of exchange, and note means promissory note
Business day means any day that is not a non-business day
“Business day”: this definition was inserted, as from 1 January 1980, by section 2 Bills of Exchange Amendment Act 1979 (1979 No 3).
Delivery means transfer of possession, actual or constructive, from one person to another
Holder means the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof
Indorsement means an indorsement completed by delivery
Issue means the first delivery of a bill or note, complete in form, to a person who takes it as a holder
Non-business day means any Saturday or Sunday or any bank holiday (not being a part holiday) within the meaning of the Banking Act 1982; and includes, in respect of any bank premises, every day on which those premises are not open for business
“Non-business day”: this definition was inserted, as from 1 January 1980, by section 2 Bills of Exchange Amendment Act 1979 (1979 No 3).
Non-business day: the reference to the Banking Act 1982 was substituted, as from 16 December 1982, for a reference to the Banking Act 1908 pursuant to section 15 Banking Act 1982 (1982 No 144).
Value means valuable consideration.
A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer.
(2)
An instrument that does not comply with these conditions, or that orders any act to be done in addition to the payment of money, is not a bill of exchange.
(3)
An order to pay out of a particular fund is not unconditional within the meaning of this section; but an unqualified order to pay, coupled with (a) an indication of a particular fund out of which the drawee is to reimburse himself or a particular account to be debited with the amount, or (b) a statement of the transaction giving rise to the bill, is unconditional.
(4)
A bill is not invalid by reason that—
(a)
It is not dated:
(b)
It does not specify the value given, or that any value has been given, therefor:
(c)
It does not specify the place where it is drawn or the place where it is payable.
Compare: 1883 No 8 s 3
4-
Inland and foreign bills
(1)
An inland bill is a bill that is, or on the face of it purports to be,—
(a)
both drawn and payable in New Zealand; or
(b)
drawn in New Zealand on a person who resides or has a place of business in New Zealand.
(1A)
Any other bill is a foreign bill.
(2)
Unless the contrary appears on the face of the bill the holder may treat it as an inland bill.
Compare: 1883 No 8 s 4; 1884 No 28 s 2
Subsection (1) was substituted, as from 19 December 2002, by section 3 Bills of Exchange Amendment Act 2002 (2002 No 58).
Subsection (1A) was inserted, as from 19 December 2002, by section 3 Bills of Exchange Amendment Act 2002 (2002 No 58).
5-
How bills may be drawn
(1)
A bill may be drawn payable to or to the order of the drawer; or it may be drawn payable to or to the order of the drawee.
(2)
Where in a bill drawer and drawee are the same person, or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or as a promissory note.
The drawee must be named or otherwise indicated in a bill with reasonable certainty.
(2)
A bill may be addressed to 2 or more drawees, whether they are partners or not; but an order addressed to 2 drawees in the alternative, or to 2 or more drawees in succession, is not a bill of exchange.
Compare: 1883 No 8 s 6
7-
Certainty required as to payee
(1)
Where a bill is not payable to bearer, the payee must be named or otherwise indicated therein with reasonable certainty.
(2)
A bill may be made payable—
(a)
To 2 or more payees jointly; or
(b)
In the alternative to 1 of 2, or 1 or some of several payees; or
(c)
To the holder of an office for the time being.
(3)
Where the payee is a fictitious or non-existing person the bill may be treated as payable to bearer.
Compare: 1883 No 8 s 7
8-
What bills are negotiable
(1)
Where a bill contains words prohibiting transfer, or indicating an intention that it is not transferable, it is valid as between the parties thereto, but is not negotiable.
(2)
A negotiable bill may be payable either to order or to bearer.
(3)
A bill is payable to bearer if it is expressed to be so payable, or if the only or the last indorsement thereon is an indorsement in blank.
(4)
A bill is payable to order if it is expressed to be so payable, or if it is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it is not transferable.
(5)
Where a bill, either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option.
Compare: 1883 No 8 s 8
9-
Sum payable
(1)
The sum payable by a bill is a sum certain within the meaning of this Act, although it is required to be paid—
(a)
With interest:
(b)
By stated instalments:
(c)
By stated instalments, with a provision that upon default in payment of any instalment the whole shall become due:
(d)
According to an indicated rate of exchange, or according to a rate of exchange to be ascertained as directed by the bill.
(2)
Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the 2, the sum denoted by the words is the amount payable.
(3)
Where a bill is expressed to be payable with interest, unless the instrument provides otherwise, interest runs from the date of the bill, and, if the bill is undated, from the issue thereof.
Compare: 1883 No 8 s 9
10-
Bill payable on demand
(1)
A bill is payable on demand—
(a)
If it is expressed to be payable on demand, or at sight, or on presentation; or
(b)
If no time for payment is expressed therein.
(2)
Where a bill is accepted or indorsed when it is overdue, it shall, as regards the acceptor who so accepts, or any indorser who so indorses it, be deemed a bill payable on demand.
Compare: 1883 No 8 s 10
11-
Bill payable at a future time
(1)
A bill is payable at a determinable future time within the meaning of this Act if it is expressed to be payable—
(a)
At a fixed period after date or sight:
(b)
On or at a fixed period after the occurrence of a specified event that is certain to happen, though the time of happening may be uncertain.
(2)
An instrument expressed to be payable on a contingency is not a bill, and the happening of the event does not cure the defect.
Compare: 1883 No 8 s 11
12-
Omission of date in bill payable after date
Where a bill expressed to be payable at a fixed period after date is issued undated, or where the acceptance of a bill payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the bill shall be payable accordingly:
Provided that (a) where the holder in good faith and by mistake inserts a wrong date, and (b) in every case where a wrong date is inserted, if the bill subsequently comes into the hands of a holder in due course, it shall not be avoided by the insertion of a wrong date, but shall operate and be payable as if the date so inserted had been the true date.
Where a bill or an acceptance or any indorsement on a bill is dated, the date shall, unless the contrary is proved, be deemed to be the true date of the drawing, acceptance, or indorsement, as the case may be.
(2)
A bill is not invalid by reason only that it is antedated or postdated, or that it bears date on a Sunday.
Compare: 1883 No 8 s 13
14-
Computation of time of payment
Where a bill is not payable on demand, the day on which it falls due is determined as follows:
(a)
The bill is due and payable in all cases on the last day of the time of payment as fixed by the bill or, if that day is a non-business day, on the next following business day:
(b)
Where a bill is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run and by including the day of payment.
(c)
Where a bill is payable at a fixed period after sight, the time begins to run from the date of the acceptance if the bill is accepted, and from the date of noting or protest if the bill is noted or protested for non-acceptance or for non-delivery.
(d)
The term month in a bill means calendar month.
Compare: 1883 No 8 s 14
Paragraph (a) was substituted, as from 1 January 1980, by section 3(1) Bills of Exchange Amendment Act 1979 (1979 No 3). Under section 3(3) of that Act, the new paragraph (a) applies only to bills drawn on 1 January 1980 and later.
15-
Referee in case of need
The drawer of a bill and any indorser may insert therein the name of a person to whom the holder may resort in case of need—that is to say, in case the bill is dishonoured by non-acceptance or non-payment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not, as he thinks fit.
Compare: 1883 No 8 s 15
16-
Optional stipulations by drawer or indorser
The drawer of a bill, and any indorser, may insert therein an express stipulation—
(a)
Negativing or limiting his own liability to the holder:
(b)
Waiving as regards himself some or all of the holder's duties.
Compare: 1883 No 8 s 16
17-
Definition and requisites of acceptance
(1)
The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer.
(2)
An acceptance is invalid unless it complies with the following conditions, namely:
(a)
It must be written on the bill and be signed by the drawee; the mere signature of the drawee without additional words is sufficient:
(b)
It must not state that the drawee will perform his promise by any other means than the payment of money.
Compare: 1883 No 8 s 17
18-
Time for acceptance
(1)
A bill may be accepted—
(a)
Before it has been signed by the drawer or while otherwise incomplete:
(b)
When it is overdue, or after it has been dishonoured by a previous refusal to accept, or by non-payment.
(2)
Where a bill payable after sight is dishonoured by non-acceptance, and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as on the date of its first presentment to the drawee for acceptance.
An acceptance is either (a) general, or (b) qualified.
(2)
A general acceptance assents without qualification to the order of the drawer: a qualified acceptance in express terms varies the effect of the bill as drawn.
(3)
In particular, an acceptance is qualified which is—
(a)
Conditional—that is to say, which makes payment by the acceptor dependent on the fulfilment of a condition therein stated:
(b)
Partial—that is to say, an acceptance to pay part only of the amount for which the bill is drawn:
(c)
Local—that is to say, an acceptance to pay only at a particular specified place. An acceptance to pay at a particular place is a general acceptance, unless it expressly states that the bill is to be paid there only and not elsewhere:
(d)
Qualified as to time:
(e)
The acceptance of some one or more of the drawees, but not of all.
Compare: 1883 No 8 s 19
20-
Inchoate instruments
(1)
Where a simple signature on a blank stamped paper is delivered by the signer in order that it may be converted into a bill, it operates as a prima facie authority to fill it up as a complete bill for any amount the stamp will cover, using the signature for that of the drawer, or the acceptor, or an indorser; and in like manner, where a bill is wanting in any material particular, the person in possession of it has a prima facie authority to fill up the omission in any way he thinks fit.
(2)
In order that any such instrument when completed may be enforceable against any person who became a party thereto prior to its completion, it must be filled up within a reasonable time, and strictly in accordance with the authority given. Reasonable time for this purpose is a question of fact:
Provided that if any such instrument after completion is negotiated to a holder in due course, it shall be valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up within a reasonable time and strictly in accordance with the authority given.
