Commonwealth Consolidated Acts

CHEQUES ACT 1986 - SECT 3

             (1)  In this Act, unless the contrary intention appears:

"action" includes a counter-claim and set-off.

"agency cheque" means a cheque to which subsection 100(2) applies.

Note:          Under section 100A, subsection 100(2) may, in specified circumstances, apply to a cheque even if the customer's signature on the cheque is not authorised.

"Australia" includes the external Territories.

"bearer" means the person in possession of a cheque payable to bearer.

"delivery" , in relation to a cheque, means the transfer of possession of the cheque from one person to another.

"drawee institution" , in relation to a cheque, means the financial institution on which the cheque is drawn.

"FCA institution" means a body that is:

                     (a)  a registered entity under the Financial Sector (Collection of Data) Act 2001 ; and

                     (b)  prescribed for the purposes of this definition.

"financial institution" means:

                     (a)  the Reserve Bank of Australia; or

                     (b)  a body corporate that is an ADI (authorised deposit‑taking institution) for the purposes of the Banking Act 1959 ; or

                     (d)  a person who carries on State banking within the meaning of paragraph 51(xiii) of the Constitution; or

                     (e)  a person (other than a person referred to in paragraph (a), (b) or (d)) who carries on the business of banking outside Australia.

"holder" means:

                     (a)  in relation to a cheque payable to order--the payee or an indorsee who is in possession of the cheque as payee or indorsee, as the case may be; and

                     (b)  in relation to a cheque payable to bearer--the bearer.

"issue" , in relation to a cheque, means the first delivery of the cheque to a person who takes the cheque as holder.

"possession" , in relation to a cheque, means possession (whether actual or constructive) of the cheque.

"to or to the order of" has the meaning given by subsection (1A).

"value" means valuable consideration as defined by section 35.

          (1A)  For the purposes of this Act, a cheque is payable to or to the order of a person or persons if:

                     (a)  it is expressed to be payable:

                              (i)  to the person or persons; or

                             (ii)  to the order of the person or persons (or words to that effect); or

                            (iii)  to the person or persons or to the order of the person or persons (or words to that effect); and

                     (b)  it is not also expressed to be payable to bearer.

             (2)  A reference in this Act to an act or thing being done in good faith is a reference to the act or thing being done honestly, whether or not the act or thing is done negligently.

             (3)  Where a person obtains a cheque:

                     (a)  by fraud, duress or other unlawful means; or

                     (b)  for an illegal consideration;

the person's title to the cheque is defective.

             (4)  Subsection (3) shall not be taken to limit by implication the circumstances in which the title of a person to a cheque is defective.

             (5)  Where, at any time, a cheque appears on its face to have been drawn more than 15 months before that time, the cheque is, at that time, a stale cheque.

             (6)  A reference in this Act to a signature or indorsement being written or placed on a cheque without the authority of the person whose signature or indorsement it purports to be includes a reference to the forging of the signature or indorsement.

             (7)  A reference in this Act to a cheque, or a copy of a cheque, being exhibited to a person includes a reference to the cheque or the copy, as the case may be, being delivered to the person.

             (8)  An alteration of a cheque is a material alteration if it alters, in any respect, a right, duty or liability of the drawer, an indorser or the drawee institution.