Commonwealth Numbered Acts

CHEQUES AND PAYMENT ORDERS ACT 1986 No. 145 of 1986 - SECT 3

3. (1) In this Act, unless the contrary intention appears-
  "action" includes a counter-claim and set-off;   "Australia" includes the

external Territories;   "bank" means-


   (a)  the Reserve Bank of Australia;

   (b)  a bank within the meaning of the Banking Act 1959;

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

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

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

"building society" has the same meaning as in the Financial Corporations Act
1974;   "credit union" has the same meaning as in the Financial Corporations

Act 1974;   "delivery", in relation to a cheque, means the transfer of

possession of the cheque from one person to another;   "drawee bank", in
relation to a cheque, means the bank upon which the cheque is drawn;

"financial institution" means a bank or a non-bank financial institution;

"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;   "non-bank financial institution"
means-

   (a)  a building society or credit union that is a registered corporation
        within the meaning of the Financial Corporations Act 1974; and

   (b)  any other registered corporation within the meaning of that Act, being
        a registered corporation prescribed, or included in a class of
        registered corporations prescribed, for the purposes of this
        definition;

"possession", in relation to a cheque, means possession (whether actual or
constructive) of the cheque;   "value" means valuable consideration as defined
by section 35.

(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) Sub-section (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
bank.