Cheques Act 1986
3  Interpretation
	(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.
10  Cheque defined 
	(1)	A cheque is an unconditional order in writing that:
	(a)	is addressed by a person to another person, being a financial institution; and
	(b)	is signed by the person giving it; and
	(c)	requires the financial institution to pay on demand a sum certain in money.
Note:	In this Act, financial institution has a restricted meaning—see the definition in subsection 3(1).
	(2)	An instrument that does not comply with subsection (1), or that orders any act to be done in addition to the payment of money, is not a cheque.
11  Order to pay
		An order to pay must be more than an authorization or request to pay.
12  Unconditional order to pay 
	(1)	An order to pay on a contingency is not an unconditional order to pay and the happening of the event does not make the order an unconditional order to pay.
	(2)	An order to pay shall not be taken not to be an unconditional order to pay by reason only that the order is coupled with either or both of the following:
	(a)	an indication of a particular account to be debited by the financial institution to which the order is addressed;
	(b)	a statement of the transaction giving rise to the order.
13  Order addressed to a financial institution
	(1)	An order to pay is not addressed to a financial institution unless:
	(a)	the order is addressed to a financial institution and to no other person;
	(b)	the order is addressed to one financial institution only; and
	(c)	the financial institution is named, or otherwise indicated with reasonable certainty, in the instrument containing the order.
	(2)	An order to pay may be an order to pay addressed to a financial institution notwithstanding that a person other than the financial institution on which the instrument containing the order is drawn, the payee or the drawer is specified in the instrument.
14  Order to pay on demand
	(1)	Subject to subsections (2) and (3), an order to pay is an order to pay on demand if:
	(a)	the order is expressed to require payment on demand, at sight or on presentation; or
	(b)	no time for payment is expressed in the instrument containing the order.
	(2)	Subject to subsection 16(3), an order to pay is not an order to pay on demand if the order is expressed to require, or requires by implication, payment otherwise than on demand, at sight or on presentation.
	(3)	Without limiting the generality of subsection (2), an order to pay is not an order to pay on demand if the order is expressed to require, or requires by implication, payment only:
	(a)	at or before a particular time; or
	(b)	where the instrument containing the order is presented at or before a particular time.
15  Order to pay a sum certain
	(1)	Subject to subsection (2), an order to pay is not an order to pay a sum certain unless the sum ordered to be paid is specified with reasonable certainty in the instrument containing the order.
	(2)	Where more than one sum is expressed to be payable in an instrument containing an order to pay, the lesser or least, as the case may be, of the sums so expressed to be payable shall be taken to be the only sum ordered to be paid by the instrument.
	(3)	An order to pay may be an order to pay a sum certain notwithstanding that the order requires a sum to be paid according to a rate of exchange specified in, or to be ascertained as directed by, the instrument containing the order.
	(4)	Where an instrument contains:
	(a)	an order to pay a specified sum; and
	(b)	an order to pay not more than a specified sum;
the instrument shall be taken to require payment of the lesser of the sums so specified.
16  Date of cheque etc.
	(1)	Where a cheque, or any indorsement of a cheque, is dated, the date shall, unless the contrary is proved, be presumed to be the day on which the cheque was drawn or the indorsement made, as the case may be.
	(2)	A cheque is not invalid by reason only that:
	(a)	it is not dated;
	(b)	it is antedated or post‑dated; or
	(c)	the date it bears is a Sunday.
	(3)	For the purpose of determining whether a post‑dated instrument is a cheque, the fact that the instrument is post‑dated shall be disregarded.
	(4)	A cheque is not incomplete or irregular on its face by reason only that it is post‑dated (whether or not the date has arrived).
18  Inchoate instruments
	(1)	Where the drawer of an instrument that is signed, but is otherwise wanting in a material particular necessary for the instrument to be, on its face, a complete cheque, delivers the instrument to another person in order that the instrument may be filled up as a complete cheque, any person in possession of the instrument shall be presumed, unless the contrary is proved, to have authority to fill up the instrument as a complete cheque in any way the person sees fit.
	(2)	Subject to subsection (4), an instrument to which subsection (1) applies is not enforceable against the drawer or a person who becomes an indorser of the instrument before the instrument is filled up as a complete cheque unless the instrument is filled up within a reasonable time and strictly in accordance with the authority given.
	(3)	Reasonable time, for the purposes of subsection (2), is a question of fact.
	(4)	An instrument of the kind referred to in subsection (1) that has been filled up as a complete cheque shall, as regards a holder in due course, be conclusively presumed:
	(a)	to have been delivered to another person in order that the instrument might be filled up as a complete cheque; and
	(b)	to have been filled up within a reasonable time and strictly in accordance with the authority given.

Division 2—Order and bearer cheques
19  Meaning of specification of person in cheque as payee or indorsee
	(1)	A person shall not be taken to be specified in a cheque as payee or indorsee unless the person:
	(a)	is named, or otherwise indicated with reasonable certainty, in the cheque; and
	(b)	is not a fictitious or non‑existing person.
	(2)	Where the holder for the time being of an office is specified in a cheque as payee or indorsee, the person who is the holder for the time being of the office shall be taken to be named in the cheque as payee or indorsee, as the case may be.
20  Cheques either payable to order or to bearer
		A cheque is either payable to order or payable to bearer.
21  Cheques payable to order 
		A cheque is payable to order if the cheque is expressed, whether originally or by indorsement, to require the drawee institution to pay the sum ordered to be paid by the cheque to or to the order of:
	(a)	a person specified in the cheque as payee or indorsee; or
	(b)	2 or more persons specified in the cheque, jointly or in the alternative, as payee or indorsee.
22  Cheques payable to bearer
		Where a cheque is not payable to order, the cheque:
	(a)	is a cheque payable to bearer; and
	(b)	shall be taken to require the drawee institution to pay the sum ordered to be paid by the cheque to bearer.
23  Conversion of cheque payable to bearer into cheque payable to order
	(2)	Where the only, or the last, indorsement of a cheque requires the drawee institution to pay the sum ordered to be paid by the cheque to bearer, the holder may, using the signature of the indorser, convert the cheque into a cheque payable to order by adding to, or altering, the indorsement so that the cheque is expressed to require the drawee institution to pay the sum ordered to be paid by the cheque to or to the order of:
	(a)	a person specified in the cheque as indorsee; or
	(b)	2 or more persons specified in the cheque, jointly or in the alternative, as indorsee.
30  Capacity to incur liability on cheque
	(1)	Capacity to incur liability on a cheque is co‑extensive with capacity to contract.
	(2)	Subsection (1) does not enable a corporation to incur liability on a cheque if, but for that subsection, it would not have capacity to incur liability on the cheque.
	(3)	Where a cheque is drawn or issued by a person who does not have capacity or power to incur liability on a cheque, the cheque is nevertheless a valid cheque.
	(4)	Where a cheque is indorsed by a person who does not have capacity or power to incur liability on a cheque, the indorsement is nevertheless effective as an indorsement of the cheque.

Division 5—Signature
31  Signature essential to liability on cheque
	(1)	Subject to this section and section 75, a person is not liable as the drawer or an indorser of a cheque unless the person signs the cheque as the drawer or an indorser, as the case may be.
	(2)	Where a person signs a cheque in the person’s business name or trade name or in a name other than the person’s own name, the person is liable on the cheque as if the person had signed it in the person’s own name.
	(3)	The signature of the name of a firm on a cheque shall be deemed to be the signature, by the person signing, of the names of all persons liable as partners in the firm.
	(4)	Nothing in subsection (1) affects the liability, under any other law of the Commonwealth or under a law of a State or Territory, of a person who signs, issues or authorizes to be signed or issued on behalf of a company a cheque, or an indorsement on a cheque, on which the name of the company does not appear in legible characters.
32  Unauthorised signature
	(1)	Where a signature is written or placed on a cheque as that of the drawer without the authority of the person whose signature it purports to be (in this subsection referred to as the relevant person), the signature is wholly inoperative as that of the relevant person unless:
	(a) 	the person against whom it is sought to assert a right on the cheque is estopped from denying the genuineness of the signature or the existence of authority for the signature, as the case requires; or
	(b)	the signature is ratified or adopted by the relevant person;
but the signature operates as the signature of the person who wrote or placed it on the cheque in favour of any person who, in good faith and without notice that it had been written or placed on the cheque without the authority of the relevant person, pays the cheque or takes the cheque for value.
	(2)	Subject to sections 74 and 92, subsection 93(2), section 94 and subsections 95(1) and (3) and 98(1), where a signature is written or placed on a cheque otherwise than as that of the drawer without the authority of the person whose signature it purports to be (in this subsection referred to as the relevant person), the signature is wholly inoperative as that of the relevant person unless:
	(a)	the person against whom it is sought to assert a right on the cheque is estopped from denying the genuineness of the signature or the existence of authority for the signature, as the case requires; or
	(b)	the signature is ratified or adopted by the relevant person;
but the signature operates as the signature of the person who wrote or placed it on the cheque in favour of any person who, in good faith and without notice that it had been written or placed on the cheque without the authority of the relevant person, pays the cheque or takes the cheque for value.
39  Every cheque transferable by negotiation
	(1)	Every cheque may be transferred by negotiation until it is discharged.
	(2)	Subsection (1) has effect in relation to a cheque notwithstanding anything written or placed on the cheque.
	(3)	Without limiting the generality of subsection (2), the crossing of a cheque does not affect the transferability of the cheque by negotiation.
	(4)	Nothing in this section affects the transferability of a cheque otherwise than by negotiation.
40  Transfer of cheque by negotiation
	(1)	The transfer of a cheque by negotiation is the transfer of the cheque from the holder to another person in such manner as to constitute the other person the holder.
	(2)	A cheque payable to order is transferred by negotiation if:
	(a)	it is indorsed by the holder; and
	(b)	the cheque is delivered so as to complete the contract arising out of the indorsement.
	(3)	A cheque payable to bearer is transferred by negotiation if it is delivered by the holder to another person (whether or not the cheque is indorsed by the holder).
50  Holder in due course defined
	(1)	The holder of a cheque is a holder in due course if:
	(a)	the cheque was transferred by negotiation to the holder and, at the time when the holder took the cheque, the cheque:
	(i)	was complete and regular on the face of it;
	(ii)	was not a stale cheque; and
	(iii)	did not bear a crossing of the kind referred to in paragraph 53(1)(b); and
	(b)	the holder took the cheque:
	(i)	in good faith;
	(ii)	for value; and
	(iii)	without notice:
	(A)	of any dishonour of the cheque; or
	(B)	of any defect in the title of the person who transferred the cheque to the holder or that the person who transferred the cheque to the holder had no title to the cheque.
	(2)	Without limiting the generality of paragraph (1)(b), the holder of a cheque shall, for the purposes of that paragraph, be deemed to have taken the cheque with notice of a defect in the title of the person who transferred the cheque to the holder if the holder took the cheque with notice that the person transferred the cheque to the holder in breach of faith or under circumstances amounting to a fraud.
51  Presumption that holder is holder in due course
	(1)	Subject to subsection (2), the holder of a cheque shall, unless the contrary is proved, be presumed to be a holder in due course.
	(2)	Where, in an action or proceeding on a cheque, it is admitted or proved that the drawing or issue, or a transfer by negotiation, of the cheque is affected by fraud, duress or illegality, the holder shall not be presumed, by virtue of subsection (1), to be a holder in due course unless and until the holder proves that, after the alleged fraud, duress or illegality, value was, in good faith, given for the cheque.
52  Holder deriving title through holder in due course
		A holder of a cheque (whether or not the holder took the cheque for value) who:
	(a)	derives title to the cheque through a holder in due course; and
	(b)	is not a party to any fraud, duress or illegality affecting the cheque;
has, as regards the drawer and the indorsers prior to the holder in due course, all the rights of the holder in due course.

Division 3—Crossings
53  Crossing and crossed cheque defined
	(1)	Where a cheque clearly bears across the front of the cheque the addition of:
	(a)	2 parallel transverse lines; or
	(b)	2 parallel transverse lines with the words not negotiable between, or substantially between, the lines;
the addition is a crossing of the cheque, and the cheque is a crossed cheque.
	(2)	Nothing written or placed on a cheque, other than an addition of a kind referred to in subsection (1), is effective as a crossing of the cheque.
	(3)	Without limiting the generality of subsection (2), the addition of the words not negotiable to a cheque otherwise than between, or substantially between, 2 parallel transverse lines across the front of the cheque is not effective as a crossing of the cheque.
54  Effect of crossing on payment of cheque
		A crossing of a cheque has effect as a direction by the drawer to the drawee institution not to pay the cheque otherwise than to a financial institution.
55  Effect of taking cheque crossed not negotiable 
		Where a cheque that bears a crossing of the kind referred to in paragraph 53(1)(b) is transferred by negotiation to a person, the person does not receive, and is not capable of giving, a better title to the cheque than the title that the person from whom the first‑mentioned person took the cheque had.
89  Stale cheque
	(1)	Subject to subsections (2) and (3), the drawee institution may refuse payment of a stale cheque.
	(2)	The drawee institution must not refuse payment of a stale cheque if:
	(a)	the drawee institution is obliged, by an agreement with the drawer, to pay the cheque notwithstanding that it is a stale cheque; or
	(b)	the drawer directs the drawee institution to pay the cheque notwithstanding that it is a stale cheque.
	(3)	The drawee institution must refuse payment of a stale cheque if:
	(a)	the drawee institution is obliged, by an agreement with the drawer, not to pay the cheque after it has become stale; or
	(b)	the drawer directs the drawee institution not to pay the cheque after it has become stale.
90  Countermand of payment and notice of death or mental incapacity
	(1)	Subject to subsection (2), the duty and authority of the drawee institution to pay a cheque are terminated by:
	(a)	countermand of payment;
	(b)	 notice of the drawer’s mental incapacity to incur liability on a cheque; or
	(c)	 notice of the drawer’s death.
	(2)	Paragraph (1)(c) does not apply in relation to a cheque if:
	(a)	not more than 10 days have elapsed since the day on which the drawee institution received notice of the customer’s death; and
	(b)	it has not received a countermand of payment from a person who claims that the person is, or will be:
	(i)	entitled to administer the drawer’s estate; or
	(ii)	a beneficiary of the drawer’s estate.
91  Protection of drawee institution paying improperly raised cheque
		Where:
	(a)	a cheque is fraudulently altered so as to increase the sum ordered to be paid by the cheque;
	(b)	the alteration is the only material alteration of the cheque made fraudulently; and
	(c)	the drawee institution, in good faith and without negligence, pays the cheque to the holder;
the drawee institution may, without prejudice to any other rights that it may have against the drawer, debit the drawer’s account according to the tenor of the cheque as drawn.
92  Protection of drawee institution paying crossed cheque in accordance with crossing
		Subject to subsection 32(1), where the drawee institution, in good faith and without negligence, pays a crossed cheque to a financial institution, the drawee institution is taken to have paid the cheque in due course.
93  Payment of crossed cheque otherwise than in accordance with crossing
	(1)	Subject to subsection (2), where the drawee institution pays a crossed cheque otherwise than to a financial institution, the drawee institution is liable to the true owner of the cheque for any loss the true owner suffers as a result of the cheque having been paid otherwise than to a financial institution.
	(2)	Subject to subsection 32(1), where:
	(a)	a crossed cheque is presented for payment to the drawee institution;
	(b)	the cheque, at the time of presentment, does not appear, on its face, to be, or at any time to have been, a crossed cheque; and
	(c)	the drawee institution, in good faith and without negligence, pays the cheque otherwise than to a financial institution;
the drawee institution:
	(d)	does not, in paying the cheque, incur any liability by reason only of its failure to pay the cheque to a financial institution; and
	(e)	shall be deemed to have paid the cheque in due course.
94  Protection of drawee institution paying cheque lacking indorsement or with irregular or unauthorised indorsement
	(1)	Subject to subsection 32(1), where:
	(a)	the drawee institution, in good faith and without negligence, pays a cheque, whether or not to a financial institution; and
	(b)	an indorsement has been written or placed on the cheque without the authority of the person whose indorsement it purports to be;
the drawee institution:
	(c)	does not, in paying the cheque, incur any liability by reason only of:
	(i)	the indorsement having been written or placed on the cheque without the authority of the person whose indorsement it purports to be; or
	(ii)	its failure to concern itself with the genuineness of, or the existence of authority for, the indorsement; and
	(d)	shall be deemed to have paid the cheque in due course.
	(2)	Subject to subsection 32(1), where:
	(a)	the drawee institution, in good faith and without negligence, pays a cheque to a financial institution; and
	(b)	the cheque is not indorsed or is irregularly indorsed;
the drawee institution:
	(c)	does not, in paying the cheque, incur any liability by reason only of the absence of, or the irregularity in, the indorsement; and
	(d)	shall be deemed to have paid the cheque in due course.

95  Protection of institution collecting cheque for customer or another institution
	(1)	Where:
	(a)	a financial institution (the collecting institution), in good faith and without negligence:
	(i)	receives payment of a cheque for a customer; or
	(ii)	receives payment of a cheque and, before or after receiving payment, credits a customer’s account with the sum ordered to be paid by the cheque; and
	(b)	the customer has no title, or has a defective title, to the cheque;
the collecting institution does not incur any liability to the true owner by reason only of having received payment of the cheque.
	(2)	Where:
	(a)	a financial institution (the collecting institution):
	(i)	receives payment of a cheque for a customer; or
	(ii)	receives payment of a cheque and, before or after receiving payment, credits a customer’s account with the sum ordered to be paid by the cheque;
	(b)	the cheque is a cheque drawn payable to order that has not been transferred by negotiation; and
	(c)	the name specified in the cheque as the name of the payee:
	(i)	is the same as the name of the customer;
	(ii)	is the same as a business name or trade name of the customer; or
	(iii)	is so similar to the name of the customer, or a business name or trade name of the customer, that it is reasonable in all the circumstances for the collecting institution to have assumed that the customer was the person intended by the drawer to be the payee;
the collecting institution shall not be treated, for the purposes of subsection (1), as having been negligent by reason only of its failure to concern itself with the absence of, or irregularity in, an indorsement of the cheque.
	(3) 	Where a financial institution (the collecting agent), in good faith and without negligence:
	(a)	receives payment of a cheque for another financial institution or for an FCA institution; or
	(b)	receives payment of a cheque and, before or after receiving payment, pays another financial institution or an FCA institution the sum ordered to be paid by the cheque;
the collecting agent does not incur any liability to the true owner by reason only of having received payment of the cheque.
	(4)	Where:
	(a)	a financial institution (the collecting agent):
	(i)	receives payment of a cheque for another financial institution or for an FCA institution; or
	(ii)	receives payment of a cheque and, before or after receiving payment, pays another financial institution or an FCA institution the sum ordered to be paid by the cheque; and
	(b)	the cheque is a cheque drawn payable to order that has not been transferred by negotiation;
the collecting agent shall not be treated, for the purposes of subsection (3), as having been negligent by reason only of its failure to concern itself with the absence of, or irregularity in, an indorsement of the cheque.