Cheques and Payment Orders Amendment Act 1998
No. 76, 1998
Cheques and Payment Orders Amendment Act 1998
No. 76, 1998
An Act to amend the Cheques and Payment Orders Act 1986, and for related purposes
Contents
1 Short title..................................1
2 Commencement..............................1
3 Schedule(s).................................3
Schedule 1—Amendment of the Cheques and Payment Orders Act 1986 allowing cheques to be drawn on financial institutions and abolishing payment orders 4
Part 1—Main amendments 4
Part 2—Consequential amendments 8
Part 3—Transitional provisions 21
Schedule 2—Other amendments of the Cheques and Payment Orders Act 1986 22
Schedule 3—Amendment of other Acts 31
Bills of Exchange Act 1909 31
Debits Tax Administration Act 1982 31
Cheques and Payment Orders Amendment Act 1998
No. 76, 1998
An Act to amend the Cheques and Payment Orders Act 1986, and for related purposes
[Assented to 2 July 1998]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Cheques and Payment Orders Amendment Act 1998.
2 Commencement
(1) Subject to this section, this Act commences on the day on which it receives the Royal Assent.
(2) Subject to subsection (3), the items in Schedule 1, other than item 27 and items 70 to 82, and the items of Schedules 2 and 3, commence on a day to be fixed by Proclamation.
(3) If the items to which subsection (2) applies do not commence under that subsection within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period.
(4) Items 27, 70 to 78, 81 and 82 of Schedule 1 commence as follows:
(a) if item 6 of Schedule 1 to the Cheques and Payment Orders Amendment (Turnback of Cheques) Act 1998 (in this subsection and subsection (5) referred to as the Turnback Act) commences on or before the commencement of the items to which subsection (2) applies—items 27, 70 to 78, 81 and 82 of Schedule 1 commence on the later of the following times:
(i) immediately after the commencement of item 6 of Schedule 1 to the Turnback Act;
(ii) the commencement of the items to which subsection (2) applies;
(b) if item 5 of Schedule 1 to the Turnback Act commences on or before the commencement of the items to which subsection (2) applies and paragraph (a) does not apply—items 27, 70 to 78, 81 and 82 of Schedule 1 commence on the later of the following times:
(i) immediately after the commencement of item 5 of Schedule 1 to the Turnback Act;
(ii) the commencement of the items to which subsection (2) applies;
(c) if item 5 of Schedule 1 to the Turnback Act commences after the commencement of the items to which subsection (2) applies and item 6 of Schedule 1 to the Turnback Act commences immediately after the commencement of item 5 of that Schedule—items 27, 70 to 78,
Overview
The Cheques and Payment Orders Amendment Act 1998, enacted by the Parliament of Australia, amends the Cheques and Payment Orders Act 1986 to modernise and streamline the legislative framework governing cheques and payment orders. This Act aims to address the evolving financial landscape by broadening the definition of financial institutions eligible to draw cheques and abolishing payment orders, which were deemed outdated and redundant. The amendments introduce new definitions and provisions that expand the applicability of existing cheque laws to include financial institutions beyond traditional banks, thus ensuring consistency and fairness in cheque transactions across various financial entities. The policy objective is to enhance the efficiency and relevance of cheque legislation in line with contemporary financial practices.
Scope and Application
The Cheques and Payment Orders Amendment Act 1998 applies to financial institutions, including banks and other entities carrying out banking activities within Australia. The Act primarily amends the Cheques and Payment Orders Act 1986 to redefine and expand the scope of financial institutions to include those beyond traditional banks, such as building societies, credit unions, and other financial corporations as defined under the Financial Corporations Act 1974. It also introduces provisions for the turnback of cheques drawn on failed financial institutions and modifies the rules regarding the presentment and collection of cheques, their payment, and the liabilities associated with these activities. The Act extends to all states and territories of Australia, and its provisions are intended to modernise and clarify the legal framework governing cheques and payment orders. Notably, the Act excludes certain payment orders, which continue to be governed by the old Act under specific transitional provisions. The application of the Act may be further extended or restricted through subordinate instruments, though such provisions are not explicitly detailed within the Act itself.
Key Provisions
- The Cheques and Payment Orders Amendment Act 1998 (Act) introduces significant changes to the Cheques and Payment Orders Act 1986 (Cheques Act). The main operative sections of the Act focus on broadening the definition of financial institutions to include entities such as building societies, credit unions, and special services providers, while also allowing cheques to be drawn on these institutions (section 6). The Act repeals the definition of payment orders and eliminates the provisions relating to payment orders in the Cheques Act (section 5). Furthermore, it incorporates common law rules applicable to cheques drawn on banks to cheques drawn on other financial institutions (subsection 4(3)).
- The Act imposes several obligations and requirements on financial institutions and other entities governed by it. Financial institutions must now handle cheques drawn on themselves in a manner consistent with how they handle cheques drawn on other institutions, with certain exceptions outlined in the Act (section 5). Additionally, the Act mandates that the common law rules applicable to cheques drawn on banks also apply to cheques drawn on other financial institutions (subsection 4(3)). The Act also modifies the liabilities and protections available to financial institutions when dealing with cheques, including scenarios where a financial institution pays a cheque in good faith and without negligence (section 92, subsection 93(2), and section 94).
- The Act outlines various offences, penalties, and consequences for breaches. For instance, where a drawee institution pays a crossed cheque to an entity other than a financial institution, the institution is liable to the true owner of the cheque for any loss suffered as a result (subsection 93(1)). Additionally, the Act specifies that the drawee institution must retain cheques or copies of cheques for a period of seven years after the date of the cheque (subsections 68(3A) and 68(3AA)). Failure to comply with the requirements and obligations set out in the Act may result in financial penalties and legal liabilities for the institutions involved.
- Area of Law
- Commercial Law
- Financial Law
- Instrument
- Act
- Concepts
- Commencement Provisions
- Licensing & Registration
- Enforcement Powers
- Regulatory Standards
- Reporting & Disclosure Obligations
