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This is a Bill, not an Act. For current law, see the Acts databases.
1996-97-98
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Cheques and
Payment Orders Amendment (Turnback of Cheques) Bill
1998
No. ,
1998
(Treasury)
A Bill
for an Act to amend the Cheques and Payment Orders Act
1986
9805420—747/6.4.1998—(54/98) Cat.
No. 97 2935 6 ISBN 0644 519800
Contents
A Bill for an Act to amend the Cheques and
Payment Orders Act 1986
The Parliament of Australia enacts:
This Act may be cited as the Cheques and Payment Orders Amendment
(Turnback of Cheques) Act 1998.
(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 of Schedule 1, other than item 6,
commence on a day to be fixed by Proclamation.
(3) If the items to which subsection (2) applies do not commence under
subsection (2) 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) Item 6 of Schedule 1 commences as follows:
(a) if the Australian Prudential Regulation Authority Act 1998
commences before, or at the same time as, the items to which subsection (2)
applies—item 6 commences immediately after the commencement of the items
to which subsection (2) applies;
(b) if the Australian Prudential Regulation Authority Act 1998
commences after the commencement of the items to which subsection (2)
applies—item 6 commences immediately after the commencement of the
Australian Prudential Regulation Authority Act 1998.
Subject to section 2, each Act that is specified in a Schedule to this
Act is amended or repealed as set out in the applicable items in the Schedule
concerned, and any other item in a Schedule to this Act has effect according to
its terms.
1 At the end of paragraph
59(a)
Add “or”.
2 After paragraph 59(a)
Insert:
(aa) if the drawee bank has become a failed bank within the meaning of
subsection 70A(2); or
3 Subsection 66(1)
Omit “section 59”, substitute “sections 59 and
70B”.
4 At the end of section 69
Add:
Note: A cheque may be taken to be dishonoured in certain
circumstances (see section 70A).
5 At the end of Part IV
Add:
(1) A cheque that is lodged for collection with a financial institution
that is not the drawee bank is taken to be dishonoured if the drawee bank
becomes a failed bank:
(a) after the cheque is lodged; and
(b) at a time when the cheque has not been settled.
The dishonour is taken to occur at the time when the drawee bank becomes a
failed bank.
Note 1: For when the drawee bank becomes a failed bank, see
subsection (2).
Note 2: For when a cheque has not been settled, see
subsections (3) and (4).
(2) For the purposes of this section, a drawee bank becomes a failed bank
if, and only if:
(a) the bank becomes a body corporate that is an externally administered
body corporate within the meaning of the Corporations Law because the bank is,
or is likely to become, insolvent; or
(b) someone takes control of the bank’s property for the benefit of
the bank’s creditors because the bank is, or is likely to become,
insolvent; or
(c) the Reserve Bank of Australia:
(i) appoints a person to investigate the affairs of the bank, or assumes
control of the business of the bank, under section 14 of the Banking Act
1959; and
(ii) determines, in writing, that the bank is to be treated as a failed
bank for the purposes of this Division.
(3) For the purposes of this section, a cheque
has not been settled if, and only if:
(a) it has not been exchanged for settlement under a settlement system
that is recognised under subsection (4); or
(b) it has been exchanged for settlement under a settlement system that is
so recognised but the drawee bank’s liability in respect of the settlement
for the exchange that includes the cheque has not been discharged under that
system.
(4) The Reserve Bank of Australia may determine that a settlement system
is a recognised settlement system for the purposes of this section. A
determination:
(a) must be given in writing; and
(b) is a disallowable instrument for the purposes of section 46A of the
Acts Interpretation Act 1901.
The Reserve Bank of Australia is to take the public interest into account
in determining that a settlement system is a recognised settlement system, and,
in doing so, is to have regard to the rules that govern the system.
If a cheque that has been lodged with a financial institution (the
collecting financial institution) for collection is taken to be
dishonoured under section 70A (the deemed dishonour)
then:
(a) the deemed dishonour has the same consequences as if the cheque had
been duly presented for payment and had been dishonoured in accordance with
section 69; and
(b) if the cheque has not been duly presented for payment, the requirement
in section 66 to duly present the cheque for payment does not apply;
and
(c) if the collecting financial institution has made a provisional credit
to an account in respect of the cheque, it may reverse that provisional credit;
and
(d) if the drawee bank has made a provisional debit to an account in
respect of the cheque, the provisional debit is taken to be reversed, by force
of this section, immediately after the deemed dishonour.
Repeal the paragraph, substitute:
(c) the Australian Prudential Regulation Authority:
(i) appoints a person to investigate the affairs of the bank, takes
control of the business of the bank or appoints an administrator to take control
of the business of the bank under section 13A of the Banking Act 1959;
and
(ii) determines, in writing, that the bank is to be treated as a failed
bank for the purposes of this Division.
7 Subparagraph 71(b)(ii)
After “paragraph 59(a)”, insert “or
(aa)”.
8 Subparagraph 73(b)(ii)
After “paragraph 59(a)”, insert “or
(aa)”.
9 Subsection 97(1)
Omit “section 59”, substitute “sections 59 and
70B”.