Mercantile Law Act 1959

No. 1, 1959

Compilation No. 1

Compilation date:   13 August 2019

Includes amendments up to: Norfolk Island Continued Laws Ordinance 2015 (No. 2, 2015) as amended up to Norfolk Island Legislation Amendment (Fees and Other Matters) Ordinance 2019 (F2019L01048)

MERCANTILE LAW ACT 1959

TABLE OF PROVISIONS

PART 1  —  PRELIMINARY

 1. Short title

 2. Parts

 3. Application

 4. Interpretation

PART 2  —  BILLS OF SALE

 5. Bills of sale not to have effect

 6. Powers of attorney, etc

 7. Mode of registering bills of sale

 8. Register to be kept

 9. Registration to be renewed every 5 years

 10. Filing of memorandum of satisfaction

 11. Courts may order filling of memorandum

 12. Effect of filing memorandum of satisfaction

PART 3  —  GRANTS OF LIENS ON CROPS

 13. Liens on yearly crops

 14. Mode of registering grants of liens on crops

 15. Register to be kept

 16. Liens not affected by sale, etc, of land

 17. Sale of crops by grantee

 18. Grantee to pay rent of leased land before selling crop

 19. Grantee to pay interest to a mortgagee before selling crop

 20. Duration of lien

PART 4  —  MISCELLANEOUS

 21. Assignments

 22. Time for registration may be extended and mistakes in registers corrected

 23. Search of registers, etc

 24. Instruments and affidavits presumed to have been duly executed or sworn

 25. Time for registering instrument executed outside the Territory

 26. Covenants to be several as well as joint

 27. Covenants to bind executors, etc

            Schedule

Mercantile Law Act 1959

An Act relating to bills of sale and grants of liens on crops

PART 1  —  PRELIMINARY

Short title

 1. This Act may be cited as the Mercantile Law Act 1959.

Parts

 2. This Act is divided into Parts, as follows :

Part   1  —  Preliminary (Sections 1‑4)

Part  2  —  Bills of Sale (Sections 5‑12)

Part  3  —  Grants of Liens on Crops (Sections 13‑20)

Part  4  —  Miscellaneous (Sections 21‑27).

Application

 3. This Act does not apply to a bill of sale executed before the commencement of this Act.

Interpretation

 4. (1) For the purposes of this Act, a bill of sale is a document (whether expressed to be absolute or conditional or subject or not to a trust) —

(a) by which the grantor of the document assigns to, or confers on, the grantee of the document the ownership of, or the equitable title to, chattels and under which the holder or grantee has power, either with or without notice and either immediately or at any future time, to seize or take possession of chattels; or

(b) which is an agreement by which the legal or equitable right to chattels or to a charge or security on chattels is conferred, whether or not the agreement is intended to be followed by the execution of another document.

  (2) For the purposes of this Act, the following are not bills of sale:

(a) an assignment for the benefit of the creditors of the person making it;

(b) a marriage settlement or an agreement for a marriage settlement;

(c) a transfer or assignment of a ship or vessel or a share in a ship or vessel;

(d) a transfer of goods in the ordinary course of business of a trade or calling;

(e) a bill of sale of goods that are outside Norfolk Island;

(f) a bill of lading, warehouse keeper's certificate, warrant or order for the delivery of goods or any other document used in the ordinary course of business as proof of the possession or control of chattels or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive the chattels thereby represented;

(g) a grant of a preferable lien on crops under Part 3; or

(h) a debenture issued by an incorporated or joint‑stock company and secured upon the capital stock or chattels of the company.

  (3) In this Act, unless the contrary intention appears —

“bill of sale by way of security” means a bill of sale given to secure the payment of money;

“chattels” includes goods, furniture, fixtures and other articles capable of complete transfer by delivery but does not include —

(a) chattel interests in real estate;

(b) shares or interests in the stock, funds or securities of a Government or in the capital or property of incorporated or joint‑stock companies;

(c) choses in action;

(d) stock; or

(e) produce upon land which by virtue of a covenant or agreement or of the custom of the country ought not to be removed from the land where the produce is at the time of the execution of the bill of sale;

“crops” means crops of agricultural produce;

“grantee”, in relation to an instrument, means the person to whom chattels or crops referred to in the instrument or an interest in those chattels or crops are thereby granted or agreed to be granted, and includes his executors, administrators and assigns or, in the case of a company or corporation, the successors and assigns of the company or corporation;

“grantor”, in relation to an instrument, means the person who thereby grants or agrees to grant chattels or crops referred to in the instrument or an interest in those chattels or crops, and includes his executors, administrators and assigns or, in the case of a company or corporation, the successors and assigns of the company or corporation;

“instrument” means a bill of sale or a grant of a lien on crops under Part 3;

“registered bill of sale” means a bill of sale registered under this Act;

“registered grant of a lien on a crop” means a grant of a lien on a crop executed in accordance with, and registered under, this Act;

“registered instrument” means a registered bill of sale or a registered grant of a lien on a crop;

“schedule” includes inventory;

“stock” includes sheep, cattle, horses, pigs and poultry;

“the Court” means the Supreme Court of Norfolk Island;

“the Registrar” means the Registrar of Lands appointed under the Conveyancing Act 1913 and, in the event of the suspension or absence through illness or otherwise of the Registrar of Lands appointed under that Act, includes the Deputy Registrar of Lands appointed under that Act;

“the registry” means of the office of the Registrar.

  (4) A reference in this Act to a form by number shall be read as a reference to the form so numbered in the Schedule.

  (5) For the purposes of this Act, an instrument shall be deemed to be executed when it is signed by, or on behalf of, the grantor.

PART 2  —  BILLS OF SALE

Bills of sale not to have effect

 5. (1) A bill of sale by way of security does not have effect as to chattels comprised in it as against the grantor or any other person unless the bill of sale —

(a) is in accordance with Form 1;

(b) truly sets forth the consideration for which it is given;

(c) specifies the terms of every defeasance, condition or declaration to which it is subject;

(d) is executed in the presence of, and is attested by, at least one witness; and

(e) is registered under this Act.

  (2) A bill of sale, other than a bill of sale by way of security, does not have effect as to chattels comprised in it as against a person other than the grantor unless the bill of sale complies with the requirements specified, with respect to bills of sale by way of security, in paragraphs 5(1)(b), 5(1)(c), 5(1)(d) and 5(1)(e).

  (3) A registered bill of sale, in so far as it has effect as to chattels comprised in it as against a person other than the grantor, has effect as if it were executed at the time when it was registered.

Powers of attorney, etc

 6. A power of attorney, an authority or a licence, being a document given to secure the payment of money, that purports to authorise the grantee to take possession of chattels belonging to the grantor does not have effect as to the chattels as against the grantor or any other person.

Mode of registering bills of sale

 7. (1) The grantee of a bill of sale or his agent may register the bill of sale by filing in the registry, not more than 30 days after the day on which the bill of sale was executed —

(a) a true copy of the bill of sale and of every schedule that is annexed to it or referred to in it; and

(b) a statutory declaration made by the grantee specifying —

(i) the date on which the bill of sale was executed;

(ii) the name and address of the grantor of the bill of sale;

(iii) where the bill of sale is made or given by the grantor under or in execution of any process ‑ the name and address of the person against whom the process issued; and

(iv) the name and address of each witness attesting the execution of the bill of sale.

  (2) The approved fee is payable for the registration of a bill of sale.

Register to be kept

 8. (1) The Registrar shall keep a register of bills of sale.

  (2) When a bill of sale is registered in accordance with the section 7, the Registrar shall —

(a) number the copy of the bill of sale;

(b) mark on the copy of the bill of sale the time of registration;

(c) enter in the register of bills of sale —

(i) the number of the bill of sale;

(ii) the name of the grantor of the bill of sale;

(iii) where the bill of sale is made or given by the grantor under or in execution of any process ‑ the name of the person against whom the process issued;

(iv) the name of the grantee of the bill of sale; and

(v) the time of registration of the bill of sale.

  (3) The Registrar shall file the copies of registered bills of sale in the order of their numbers.

  (4) The Registrar shall keep an index of the names of persons entered in the register of bills of sale specifying, with respect to each name —

(a) the place or places in the register where it appears; and

(b) whether it so appears as grantor, grantee or person against whom process issued.

  (5) The index referred to subsection 8(4) shall be arranged in divisions corresponding with the letters of the alphabet so that the names of all persons whose surnames begin with the same letter (and no others) are comprised in one division.

Registration to be renewed every 5 years

 9. (1) The registration of a bill of sale shall, during the subsistence of the bill of sale, be renewed in the manner prescribed by this section once in every period of 5 years, commencing from the date of registration.

  (2) If the registration of a bill of sale is not renewed as provided by subsection 9(1), the registration shall cease to have effect at the expiration of 5 years from the date of registration or last renewal, as the case may be.

  (3) The grantee or his agent may renew the registration of a bill of sale by filing in the registry a statutory declaration made by the grantee specifying —

(a) the date of its registration and the date of the last renewal (if any) of registration;

(b) the names and addresses of the parties to the bill of sale; and

(c) where the bill of sale is a bill of sale by way of security ‑ the amount that is then actually due on the bill of sale.

  (4) The Registrar shall, when the registration of a bill of sale is renewed —

(a) number the statutory declaration as if it were a copy of a bill of sale filed under section 7;

(b) renumber the copy of the bill of sale filed in the registry with the same number and mark on it the date of renewal of registration;

(c) enter particulars of the bill of sale in the register in like manner as on an original registration; and

(d) enter the date of renewal of registration in the register.

  (2) The approved fee is payable for the renewal of the registration of a bill of sale.

Filing of memorandum of satisfaction

 10. (1) Where a bill of sale that is given to secure the payment of money or the performance of an obligation has been registered under this Act a memorandum of satisfaction signed by the grantee of the bill of sale and attested by at least one witness may be filed by the grantor of the bill of sale or his agent upon the payment of the approved fee and the production at the registry of the bill of sale and a statutory declaration by a witness who attested the execution of the memorandum of satisfaction verifying that execution.

  (2) A memorandum of satisfaction shall —

(a) in the case of a bill of sale given to secure the payment of money ‑ be in accordance with Form 2; or

(b) in the case of a bill of sale given to secure the performance of an obligation ‑ be in accordance with Form 3.

  (3) The Registrar may, in his discretion, dispense with the production of a bill of sale on proof, by statutory declaration, to his satisfaction, that the bill of sale has been destroyed, cannot be found or cannot be produced.

  (4) The Registrar shall attach the memorandum of satisfaction to the copy of the bill of sale filed in the registry and enter in the register of bills of sale, on the page where the entry relating to the bill of sale is made, a note of the filing of the memorandum of satisfaction.

Court may order filing of memorandum

 11. (1) The Court may, upon application made to it for the purpose, order a memorandum of satisfaction to be filed in respect of a bill of sale that is given to secure the payment of money or the performance of an obligation if it appears to the Court that the debt has been satisfied, the obligation has been performed or the debt or obligation has been discharged, as the case may be.

  (2) The Registrar shall deal with an order made under subsection 11(1) as if it were a memorandum of satisfaction filed under section 10.

Effect of filing memorandum of satisfaction

 12. After the filing of a memorandum of satisfaction, or the making of an order that a memorandum of satisfaction be filed, in respect of a bill of sale, the interest of the grantee in the chattels expressed to be discharged vests in the person for the time being entitled to the equity of redemption in the chattels, but so far only as the interest is expressed by the memorandum or order to be determined, and subject to a lien or equity affecting the chattels.

PART 3  —  GRANTS OF LIENS ON CROPS

Liens on yearly crops

 13. (1) Where —

(a) a person makes, in good faith, an advance of money or goods to a holder of land on condition of receiving by way of security for the advance the growing crop on the land;

(b) the grant relating to that security is made in accordance with Form 4 and purports on the face of it to have been made by way of security for the advance;

(c) the execution of the grant is attested by at least one witness; and

(d) the grant is registered in accordance with section 14,

the person making the advance has a lien upon, and is, for the purpose of satisfying the lien, entitled to, the whole of the crop and the whole produce of the crop.

  (2) Possession of the crop by the grantor shall be deemed for all purposes to be possession by the grantee.

  (3) When the amount of the advance is paid together with the interest specified in the grant, the possession of the crop reverts to, and vests in, the grantor.

Mode of registering grants of liens on crops

 14. (1) Subject to subsection 14(2), the grantee of a grant of a lien on a crop or his agent may register the grant by filing in the registry, not more than 30 days after the day on which the grant was executed —

(a) a true copy of the grant; and

(b) a statutory declaration made by the grantee specifying —

(i) the date on which the grant was executed;

(ii) the name and address of the grantor of the grant; and

(iii) the name and address of each witness attesting the execution of the grant.

  (2) Where the grant of a lien on a crop has been registered in accordance with subsection 14(1), the grant of another lien on the crop, whether executed before or after the execution of the registered grant, shall not be registered in accordance with that subsection until the Registrar enters satisfaction on the registered grant or the first‑mentioned lien ceases to be in force, whichever first occurs.

  (3) The approved fee is payable for the registration of the grant of a lien on the crop.

Register to be kept

 15. (1) The Registrar shall keep a register of grants of liens on crops.

  (2) When a grant of a lien on a crop is registered in accordance with section 14, the Registrar shall —

(a) number the copy of the grant;

(b) mark on the copy of the grant the time of registration;

(c) enter in the register of grants of liens on crops —

(i) the number of the grant;

(ii) the name of the grantor of the grant;

(iii) the name of the grantee of the grant; and

(iv) the time of registration of the grant.

  (3) The Registrar shall file the copies of registered grants of liens on crops in the order of their numbers.

  (4) The Registrar shall keep an index of the names of persons entered in the register of grants of liens on crops specifying, with respect to each name —

(a) the place or places in the register where it appears; and

(b) whether it so appears as grantor or grantee.

  (5) The index referred to in subsection 15(4) shall be arranged in divisions corresponding with the letters of the alphabet so that the names of all persons whose surnames begin with the same letter (and no others) are comprised in one division.

Liens not affected by sale, etc, of land

 16. A registered grant of a lien on a crop is not extinguished or otherwise prejudicially affected by the death of the grantor nor by the sale, mortgage or other encumbrance of or upon the land on which the crop is growing.

Sale of crops by grantee

 17. (1) Subject to sections 18 and 19, if the grantor of a registered grant of a lien on a crop has not, on the day specified in the grant —

(a) paid the whole of the amount of the advance together with the interest specified in the grant; or

(b) given up the crop to the grantee for sale by the grantee for the purpose of satisfying the lien,

the grantee may enter into possession of the crop and gather, carry away and sell it and apply the proceeds in paying himself the advance with the specified interest and all expenses of clearing, carrying away, making marketable and selling the crop.

  (2) Where a crop has been sold under subsection 17(1), the grantee shall pay the balance, if any, of the price to the grantor.

Grantee to pay rent of leased land before selling crop

 18. (1) If the grantor is a tenant, the grantee shall, before carrying away or selling the crop under section 17, pay to the landlord of the land on which the crop is growing such sum of money (not exceeding one year’s rent) as is due to him for rent.

  (2) The grantee may repay himself the sum so paid out of the proceeds of the sale of the crop before paying over the balance to the grantor.

Grantee to pay interest to a mortgagee before selling crop

 19. (1) If, at the time of registering a grant of a lien on a crop, there is in force a mortgage of the land on which the crop is growing and the land is at the time of harvesting the crop in the occupation of the mortgagee, the grantee shall, before carrying away or selling the crop under section 17, pay to the mortgagee the amount of interest (not exceeding 12 month’s interest) due upon the mortgage.

  (2) The grantee may repay himself the sum so paid out of the proceeds of the sale of the crop before paying over the balance to the grantor.

Duration of lien

 20. (1) A lien on a crop shall not continue in force for a longer period than one year from the date of registration of the grant of the lien.

  (2) The Registrar shall, at any time, at the request of both parties to a registered grant of a lien on a crop, or on proof to his satisfaction that the debt for which the lien was security has been satisfied or discharged, enter satisfaction on the grant.

PART 4  —  MISCELLANEOUS

Assignments

 21. (1) A registered instrument may be assigned by endorsement by the assignor on the instrument.

  (2) The assignee of a registered instrument or his agent may register the assignment by filing in the registry a true copy of the endorsement relating to the assignment together with a statutory declaration made by the assignee verifying the making of the assignment.

  (3) As between a registered and an unregistered assignment of the same instrument, the registered assignment has priority.

  (4) As between two registered assignments of the same instrument, the assignment first registered has priority.

Time for registration may be extended and mistakes in registers corrected

 22. The Court, on being satisfied —

(a) that the omission to register an instrument or file a statutory declaration on renewal within the time prescribed by this Act; or

(b) that the omission or misstatement in a register or in a statutory declaration of the name or address of any person or of any other matter,

was accidental or due to inadvertence or to causes beyond the control of the grantee, may, if it thinks fit, order the omission or misstatement to be rectified by extending the time for registration, by filing a supplementary statutory declaration or by inserting an entry in, or amending, the register on such terms and conditions as the Court thinks fit.

Search of registers, etc

 23. (1) A person shall have access to any register or index kept under this Act and may search the register or index during the usual office hours upon paying the approved fee for each search.

  (2) A person is entitled to have an office copy of, or an extract from, the copy of a registered instrument, or a document, filed under this Act upon payment of the approved fee for each folio, or part of a folio, of 72 words contained in the copy or extract.

Instruments and affidavits presumed to have been duly executed or sworn

 24. (1) A registered instrument or a statutory declaration filed under this Act shall, if purporting to be duly executed or made, be presumed, unless the contrary is proved, to have been duly executed or made.

  (2) An office copy of, or extract from, the filed copy of a registered instrument (including a schedule to a registered instrument) or a statutory declaration filed under this Act certified by the Registrar and a certificate by the Registrar of the time when an instrument or statutory declaration was filed shall, in all Courts and before all persons having by law or consent of parties authority to take evidence, be received as evidence of the instrument, schedule or statutory declaration, and of the signatures of the grantor of, and the attesting witnesses to, the instrument and of the fact and time of the filing of the instrument, schedule or statutory declaration.

  (3) It is not necessary to prove the handwriting or official position of the person appearing to have certified the office copy or extract or to have given the certificate.

Time for registering instrument executed outside the Territory

 25. Notwithstanding any other provision of this Act an instrument executed outside Norfolk Island may be registered within 30 days after the day on which a copy of the instrument, would, in due course of post, and if despatched with due diligence, have been received in Norfolk Island.

Covenants to be several as well as joint

 26. Where there are 2 or more grantors or 2 or more grantees of a registered instrument, then a covenant, condition, proviso, agreement or power expressed in the instrument and imposing an obligation on the grantors or grantees, or enuring for the benefit of the grantors or grantees, shall, unless the contrary intention appears in the instrument, be deemed to impose the obligation or confer the benefit, as the case may be, severally as well as jointly.

Covenants to bind executors, etc

 27. Unless the contrary intention appears, a covenant, condition, proviso, agreement or power expressed in a registered instrument binds the executors, administrators and assigns of the person, or the successors and assigns of the company or corporation, upon whom it imposes an obligation, and operates for the benefit of the executors, administrators and assigns of the person, or the successors and assigns of the company or corporation, for whose benefit it enures.

 SCHEDULE Section 5(1)

Form 1

BILL OF SALE

In consideration of the sum of                   now paid to me by                                              of                                         (hereinafter referred to as the grantee), the receipt of which I hereby acknowledge,

I                                     of                                   , hereby assign to the grantee all and singular the several chattels specifically described in the schedule annexed to this bill of sale by way of security for the payment of the said sum and interest on the said sum at the rate of     % per annum.  And I further agree and declare that I will duly pay to the grantee the said  sum, together with the interest then due, by   equal  payments of                 on the                day of                               [or whatever else may be the stipulated times or time of payment].  And I also agree and declare that I will [here insert terms as to insurance, payment of rent or otherwise to which the grantor agrees for the maintenance of the security].

Dated this                       day of                                     , 20  .

Signature of witness Signature of grantor

 Form 2 Section 10(2)

MEMORANDUM OF SATISFACTION FOR A BILL OF SALE GIVEN TO SECURE THE PAYMENT OF MONEY

I,                                             of                                               , the grantee, or the                                of the grantee, of the bill of sale given for securing the sum of                    bearing date the                     day of                20  , made by                              of                              in favour of                                        of                             and registered on the           day of                   20  , hereby discharge —

* the chattels comprised in that bill of sale,

* the following chattels, being chattels comprised in that bill of sale:

from

* the moneys secured by that bill of sale.

* an amount of           , being part of the moneys secured by that bill of sale.

Signature of person executing memorandum

Signature of witness

*  Strike out whichever is inapplicable

 Form 3 Section 10(2)

MEMORANDUM OF SATISFACTION FOR A BILL OF SALE GIVEN TO SECURE THE PERFORMANCE OF AN OBLIGATION

I,                            of                              , the grantee, or the                     of the grantee, of the bill of sale given for securing [here insert the nature of the obligation] bearing date the                  day of                  20  , made by                          of                                  in favour of                                        of                             and registered on the              day of                          20  , whereby discharge the chattels comprised in that bill of sale from any claim against, or interest in, them that I may have by virtue of the bill of sale.

Signature of person executing memorandum

Signature of witness

 Form 4 Section 13(1)

GRANT OF A LIEN ON A CROP

In consideration of —

* the sum of              paid to me,

* goods to the value of the sum of          given to me,

by                   of                     (hereinafter referred to as the grantee), the receipt of which I hereby acknowledge, I,                      of

                                   , hereby give to the grantee a lien to the extent of the said sum, and interest on the said sum at the rate of        % per annum, on the crop of [here state the nature of the crop] of this year growing and to grow on the land [here describe the land] in Norfolk Island by way of security for the payment of the said sum and the said interest on or before the            day of                    20  .

Dated this                day of                   20  .

 Signature of grantor

Signature of witness

*  Strike out whichever is inapplicable

NOTES

The Mercantile Law Act 1959 as shown in this consolidation comprises Act No. 1 of 1959 and amendments as indicated in the Tables below.

Table of Amendments