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Cheques Act 1960

NIUE LAWS
LEGISLATION AS AT DECEMBER 2006

CHEQUES ACT 1960

1960/17 (NZ) – 1 January 1961

1 Short title

2 Protection of bankers paying unindorsed or irregularly indorsed cheques

3 Rights of bankers collecting cheques not indorsed by holders

4 Unindorsed cheques as evidence of payment

5 Protection of bankers collecting payment of cheques

6 Application of certain provisions of principal Act

7 Effect of Act

8 [Spent]

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1 Short title

This Act is the Cheques Act 1960, and shall be read together with and deemed part of the Bills of Exchange Act 1908 (the principal Act).

2 Protection of bankers paying unindorsed or irregularly indorsed cheques

(1) Where a banker in good faith and in the ordinary course of business pays a cheque drawn on him which is not indorsed or is irregularly indorsed, he shall not, in doing so, incur any liability by reason only of the absence of, or irregularity in, indorsement, and he shall be deemed to have paid in due course.

(2) Where a banker in good faith and in the ordinary course of business pays any such instrument as the following; namely –

(a) A document issued by a customer of his which, though not a bill of exchange, is intended to enable a person to obtain payment from him of the sum mentioned in the document; or

(b) A draft payable on demand drawn by him upon himself whether payable at the head office or some other office of his bank –

he shall not, in doing so, incur any liability by reason only of the absence of, or irregularity in, indorsement, and the payment shall discharge the instrument.

3 Rights of bankers collecting cheques not indorsed by holders

A banker who gives value for, or has a lien on, a cheque payable to order which the holder delivers to him for collection without indorsing it shall have such rights (if any) as he would have had if, upon delivery, the holder had indorsed it in blank.

4 Unindorsed cheques as evidence of payment

An unindorsed cheque which appears to have been paid by a banker on whom it is drawn shall, in the absence of proof to the contrary, be sufficient evidence of the receipt by the payee of the sum payable by the cheque.

5 Protection of bankers collecting payment of cheques

(1) Where a banker in good faith and without negligence –

(a) Receives payment for a customer of an instrument to which this section applies, or

(b) Having credited a customer’s account with the amount of any such instrument receives payable of it for himself –

and the customer has no title, or a defective title, to the instrument, the banker shall not incur any liability to the true owner of the instrument by reason only of having received payment of it.

(2) This section applies to the following instruments, namely –

(a) Cheques;

(b) Any document issued by a customer of a banker which, though not a bill of exchange, is intended to enable a person to obtain payment from that banker of the sum mentioned in the document;

(c) Any document, not being a bill of exchange, issued by a member of the Niue Public Service which is intended to enable a person to obtain payment from a Niue public account of the sum mentioned in the document;

(d) [Repealed by 2004/270]

(e) Any draft payable on demand drawn by a banker upon himself, whether payable at the head office or some other office of his bank.

(3) A banker shall not be treated for the purposes of this section as having been negligent by reason only of his failure to concern himself with the absence of, or irregularity in indorsement of an instrument.

6 Application of certain provisions of principal Act

The provisions of the principal Act relating to crossed cheques shall, so far as applicable, have effect in relation to instruments (other than cheques) to which section 5 applies as they have effect in relation to cheques.

7 Effect of Act

Nothing in this Act shall be deemed to make negotiable any instrument which, apart from those provisions is not negotiable.