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Report of the Committee Appointed by the Commonwealth Government to Review the Bills of Exchange Act 1909–1958

Published online by Cambridge University Press:  24 January 2025

B. B. Riley
B. B. Riley*
Affiliation:
Bar of New South Wales
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Extract

The origin of the Commonwealth's Bills of Exchange Act 1909 is a guarantee of its efficiency. By the 1870's the merchants of the United Kingdom had worked out for themselves, with the help (and occasionally subject to the hindrance) of the courts and Parliament, a remarkably effective system of conducting commercial transactions by means of bills of exchange, cheques and promissory notes.

Type
Research Article
Information
Federal Law Review , Volume 1 , Issue 2 , June 1965 , pp. 183 - 201
Copyright
Copyright © 1965 The Australian National University

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Footnotes

†

The Committee (The Honourable Mr Justice Manning, Mr L. B. Evans, C.B.E., Mr D. Farquharson, Professor H. A. J. Ford, Mr J. W. Peden) reported to the Attorney-General on 1 May 1964; its report is hereinafter cited as ‘Report’. In the Fourth Schedule to the Report is a draft Bill for a proposed Cheques Act which is hereinafter cited as ‘Draft Bill’.

References

page 183 note 1 The history of the development of the law relating to these instruments has now been fully explored by Dr J.Milnes Holden in his absorbing and scholarly book The History of Negotiable Instruments in English Law (1955).

2 Chalmers on Bills of Exchange (13th ed. 1964) xli.

3 See Holden, op. cit. 203.

4 Ibid. 199.

5 Bank Polski v. K. J. Mulder and Company [1942] 1 K.B. 497, 500 per MacKin-non L.J.; ‘Mter a decent intervalthe draftsman was made a County Court judge.There are things even in this world which are exactly what they should be’: Birrell, The Duties and Liabilities of Trustees (1920) 2.

6 Sir John Paget, however, was far from being transported with delight about some of its provisions: e.g. of one he saidthat it was ‘a shocking piece of legislation’: Paget's Law of Banking(6th ed. 1961) 174-175. It cannot be denied that the Act con- tains occasional inelegancies and obscurities:e.g. s. 72 (3); but it is less open to criticism than most statutes.

7 Chalmers on Bills of Exchange (11th ed. 1947) xxxvii-xxxviii, xlvii-xlviii.

8 For these statutes see the Bills of Exchange Act 1909-1958 (Cth), First Schedule.

9 Stock Motor Ploughs Limited v. Forsyth (1932) 48 C.L.R. 128, 137 per Dixon J.

10 Between the wars, ‘ [t]he inland commercial bill“ was hurriedly vanishing from the face of the earth ”; and the international commercial bill followed close on its heels’: Holden, op. cit. 30l.

11 About 289 million cheques were stamped in the United Kingdom in 1915-1916; by 1952-1953 the number had risen to about 713 million: Holden, op. cit. 307. It is estimated that more than 300 million are drawn each year in Australia: Reportpara. 27.

12 ‘ A cheque is a bill of exchange drawn on a banker payable on demand ’: Bills of Exchange Act 1882 (U.K.), s. 73, reproduced as s. 78 (1) of the Australian Act.

13 See the Report ofthe Committee on Cheque Endorsement (The‘ Mocatta Report ’),1956 (Cmnd 3) paras 9-14. (It is curious that some writers are not satisfied to adopt the Act's spelling of ‘ indorsement ’.).

14 Stamp Act 1853 (U.K.), s. 19, which applied not merely to cheques but to ‘any draft or order drawnupon a banker for a sum of money payable to order on demand’.

15 Bills of Exchange Act 1882 (U.K.), s. 60; 1909-1958 (Cth), s. 65.

16 Bills of Exchange Act 1882 (U.K.), s. 82; 1909-1958 (Cth), s. 88.

17 Mocatta Report, para. 20.

18 Bills of Exchange Act 1882 (U.K.), s. 32 (4); 1909-1958 (Cth), s. 37 (d).

19 Mocatta Report, para. 7.

20 Ibid. para. 1.

21 Cheques Act 1957 (U.K.), s. 6 (1).

22 Ibid. s. 1 (1).

23 Ibid. s. 4.

24 Report, para. 2.

25 Report, para. 45.

26 The rest of this article will however demonstrate the author's utter disagreement with the Committee's own description of it in para. 311 (with the collaboration of the Government Printer) as the‘ daft’ (sic) Bill.

27 Cl. 39 (e).

28 Bills of Exchange Act 1909-1958 (Cth), s. 79 (a), (c).

29 Other examples are ell. 74 (1) and 77 (1). Some words have perhaps been inadvertently omitted from the latter: it is improved if read ‘ … or when any act or thing is required … ’.

30 Report, para. 55. Cf. Mocatta Report, para.'7.

31 Cf. Holden, op. cit. 315-320.

32 Where, as elsewhere when dealing with bills, the Act uses ‘negotiable’ to mean ‘ transferable’. This misuse is scrupulously avoided in the Report: see paras 54, 89 (3) (where ‘ acceptable’ should be read as ‘ capable ’), 184 and 185.

33 Report, para. 50.

34 SS. 65, 86 and 88.

35 Report, para. 58.

36 Ibid. para. 59.

37 Cl. 11 (1) (where ‘indicate’ would be better than ‘indicating ’).

38 Report, paras 115-118.

39 Cl. 63 (1), which is misprinted as ' 63 (4).

40 Cl. 63 (2).

41 Bills of Exchange Act 1882 (U.K.), S. 32 (4); 1909-1958 (Cth), S. 37 (a).

42 Draft Bill, cl. 63 (2) ; italics added.

43 Report, para. 112.

44 Holden, op. cit. 320-321; Capital and Counties Bank, Limited v. Gordon [1903] A.C. 240. ‘it is not within the control of bankers whether cheques reach them crossed or uncrossed and they exercise the same care in dealing with either’: Mocatta Report, para. 105.

45 Report, paras 130-133.

46 Supra, nn. 39-40.

47 Draft Bill, cl. 63 (3), (4).

48 Ibid. cl. 63 (5).

49 Ibid. cl. 64.

50 Report, para. 139, citing Charles v. Blackwell (1876) 1 C.P.D. 548.

51 Slingsby v. District Bank, Limited [1931] 2 K.B. 588, 598.

52 Report, para. 140.

53 Draft Bill, cl. 65 (2).

54 Ibid. cl. 65 (1).

55 Ibid. cl. 65 (3).

56 Report, paras 149-150.

57 Paget, op. cit. 222.

58 Ibid. 366.

59 Report, paras 86-87.

60 Ibid. paras 69, 74-75.

61 Ibid. para. 80.

62 Ibid. para. 77.

63 Paget, op. cit. 363-366; cf. Chorley, Law of Banking (4th ed. 1960) 111-112; Jones, Githart Lectures on Banking (1949) 18-19.

64 Report, paras 88-90; Draft Bill, ell. 27-30.

65 S. 78 (1).

66 Paget, op. cit. 168-169, 191-192.

67 Report, paras 151-170; Draft Bill, cl. 8 (5).

68 But the Committee rejected the suggestion that legislative provision should be made for banks to return paid cheques to drawers: Report, paras 171-181.

69 Cheques Act 1957 (U.K.), s. 3.

70 Cheques Act 1960 (N.Z.), s. 4.

71 Report, paras 100, 162.

72 Ibid. para. 163.

73 Ibid. para. 164; Draft Bill, cl. 75.

74 Report, para. 166.

75 Ibid. para. 192; Draft Bill, cl. 8 (3).

76 Cf. Orbit Mining and Trading Co. Ltd v. Westminster Bank Ltd [1963] 1 Q.B. 794, 811,821-822.

77 Bills of Exchange Act 1882 (U.K.), s. 2; 1909-1958 (Cth), s. 4.

78 E.g. Paget, op. cit. 4 et seq.; Chorley, op. cit. 22-24.

79 Report, para. 188; Draft Bill, cl. 4.

80 Report, paras 258-263.

81 S. 81A.

82 Report, para. 256.

83 Ibid. para. 257.

84 Draft Bill, cl. 76.

85 Ibid. cl. 19 (4).

86 Bills of Exchange Act 1909-1958 (Cth), s. 14 (2).

87 Report, para. 194.

88 Ibid.; Draft Bill, cl. 12.

89 Draft Bill, cl. 13.

90 Report, paras 241-244.

91 Orbit Mining and Trading Co. Ltd v. Westminster Bank Ltd [1963] 1 Q.B. 794.

92 Report, para. 190; Draft Bill, cl. 8 (1), (4).

93 A cheque expressed to be payable to the order of a specified person, and not to him or his order, is nevertheless payable to him or his order at his option: Bills of Exchange Act 1909-1958 (Cth), s. 13 (5); Draft Bill, cl. 11 (3).

94 Report, paras 196-199.

95 Ibid. para. 203; Draft Bill, cl. 50.

96 Ibid. paras 205-207; Draft Bill, cl. 14 (2).

97 Report, paras 246-248.

98 Ibid. para. 249; Draft Bill, cl. 60.

99 Bills of Exchange Act 1909-1958 (Cth), s. 74.

page 198 note 1 Report, paras 250-255; Draft Bill, ell. 69-71.

2 Report, paras 208-240.

3 Cf. s. 54 (l) of the Act, which provides that notice must be given within a reasonable time after dishonour and' in the absence of special circumstances … is not deemed to have been given within a reasonable time unless' certain times are kept.

4 Draft Bill, cl. 42.

5 Ibid. cl. 43.

6 Report, paras 215-219.

7 Ibid. para. 223.

8 Ibid. para. 222.

9 Draft Bill, cl. 44.

10 Ibid. cl. 45.

11 Ibid. ell. 46-48.

12 SS. 54-55.

13 Such as would have been given by Mauley J.: Robarts v. Tucker (1851) 16 Q.B. 560, 577-578: 117 B.R. 994, 1001—but not by Lord Macnaghten: Bank of England v. Vagliano Brothers [1891] A.C. 107, 157.

14 Report, paras 225-229; Draft Bill, cl. 74, which is disfigured by the opening words ‘Where a bank upon which a cheque is drawn does not honour such cheque which the customer was entitled to require it to honour … ’ italics added.

15 Bills of Exchange Act 1909-1958 (Cth), s. 14 (2); Report, para. 194; Draft Bill, cl.12.

16 Draft Bill, cl. 19 (4).

17 Bills of Exchange Act 1909-1958 (Cth), s. 74; Report, paras 250-255; Draft Bill, cll. 69-71.

18 Report, paras 283-284.

19 Ibid. para. 285.

20 Ibid. paras 297-300.

21 Ibid. para. 304.

22 Ibid. paras 308-310.

23 Ibid. paras 292-294.

24 Ibid. paras 315-317.

25 Ibid. paras 286-288.

26 Ibid. para. 289.

27 Ibid. paras 301-303.

28 Ibid. paras 306-307.

29 Nor, it is gratifying to note, did the Committee feel hampered by such concern for stamp-duty revenue as was the subject of submissions by the Premiers of two States and an Under Secretary of a third: Report, paras 264-273.