Bills of Exchange Act (R.S.C., 1985, c. B-4)

Marginal note:Payment for honour under protest

• 152 (1) Where a bill has been protested for non-payment, any person may intervene and pay it under protest for the honour of any party liable thereon or for the honour of the person for whose account the bill is drawn.

• Marginal note:If more than one offer

  (2) Where two or more persons offer to pay a bill for the honour of different parties, the person whose payment will discharge most parties to the bill has the preference.

• Marginal note:Refusal to receive payment

  (3) Where the holder of a bill refuses to receive payment under protest, he loses his right of recourse against any party who would have been discharged by that payment.

• Marginal note:Entitled to bill

  (4) The payer for honour, on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonour, is entitled to receive both the bill itself and the protest.

• Marginal note:Liability for refusing

  (5) Where the holder does not on demand in a case described in subsection (4) deliver up the bill and protest, he is liable to the payer for honour in damages.

Marginal note:Attestation of payment for honour

• 153 (1) Payment for honour under protest, in order to operate as such and not as a mere voluntary payment, must be attested by a notarial act of honour, which may be appended to the protest or form an extension of it.

• Marginal note:Declaration

  (2) The notarial act of honour must be founded on a declaration made by the payer for honour, or his agent in that behalf, declaring his intention to pay the bill for honour, and for whose honour he pays.

Marginal note:Discharge and subrogation

154 Where a bill has been paid for honour, all parties subsequent to the party for whose honour it is paid are discharged, but the payer for honour is subrogated for and succeeds to both the rights and duties of the holder with respect to the party for whose honour he pays, and all parties liable to that party.

Lost Instruments

Marginal note:Holder to have duplicate of lost bill

• 155 (1) Where a bill has been lost before it is overdue, the person who was the holder of it may apply to the drawer to give him another bill of the same tenor, giving security to the drawer, if required, to indemnify him against all persons whatever, in case the bill alleged to have been lost is found again.

• Marginal note:Refusal

  (2) Where the drawer, on request, refuses to give a duplicate bill, he may be compelled to do so.

Marginal note:Action on lost bill

156 In any action or proceeding on a bill, the court or a judge may order that the loss of the instrument shall not be set up, if an indemnity is given to the satisfaction of the court or judge against the claims of any other person on the instrument in question.

Bill in a Set

Marginal note:Bills in set

• 157 (1) Where a bill is drawn in a set, each part of the set being numbered, and containing a reference to the other parts, the whole of the parts constitute one bill.

• Marginal note:Acceptance

  (2) The acceptance may be written on any part, but it must be written on one part only.

Marginal note:Endorsing more than one part

• 158 (1) Where the holder of a set endorses two or more parts to different persons, he is liable on every such part, and every endorser subsequent to him is liable on the part he has himself endorsed as if the parts were separate bills.

• Marginal note:Negotiation to different holders

  (2) Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is, as between such holders, deemed the true owner of the bill, but nothing in this subsection affects the rights of a person who in due course accepts or pays the part first presented to him.

• Marginal note:Accepting more than one part

  (3) Where the drawee accepts more than one part and such accepted parts get into the hands of different holders in due course, he is liable on every such part as if it were a separate bill.

• Marginal note:Payments without delivery

  (4) When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof.

• Marginal note:Discharge

  (5) Subject to this section, where any one part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged.

Conflict of Laws

Marginal note:Requisites of form

• 159 (1) Subject to subsections (2) and (3), where a bill drawn in one country is negotiated, accepted or payable in another, the validity of the bill with respect to requisites in form is determined by the law of the place of issue, and the validity with respect to requisites in form of the supervening contracts, such as endorsement, acceptance or acceptance under protest, is determined by the law of the place where the contract was made.

• Marginal note:Unstamped bills

  (2) Where a bill is issued outside Canada, it is not invalid by reason only that it is not stamped in accordance with the law of the place of issue.

• Marginal note:Conforming to the law of Canada

  (3) Where a bill, issued outside Canada, conforms, with respect to requisites in form, to the law of Canada, it may, for the purpose of enforcing payment thereof, be treated as valid as between all persons who negotiate, hold or become parties to it in Canada.

Marginal note:Law applicable

160 Subject to this Act, the interpretation of the drawing, endorsement, acceptance or acceptance under protest of a bill, drawn in one country and negotiated, accepted or payable in another, is determined by the law of the place where the contract is made, but where an inland bill is endorsed in a foreign country, the endorsement shall, with respect to the payer, be interpreted according to the law of Canada.

Marginal note:Law as to duties of holder

161 The duties of the holder with respect to presentment of a bill for acceptance or payment and the necessity for or sufficiency of a protest or notice of dishonour are determined by the law of the place where the act is done or the bill is dishonoured.

Marginal note:Currency

162 Where a bill is drawn out of but payable in Canada and the sum payable is not expressed in the currency of Canada, the amount shall, in the absence of an express stipulation, be calculated according to the rate of exchange for sight drafts at the place of payment on the day the bill is payable.

Marginal note:Due date

163 Where a bill is drawn in one country and is payable in another country, the due date thereof is determined according to the law of the place where it is payable.

Official Images and Electronic Presentment

Marginal note:Definitions

163.1 The following definitions apply in this section and sections 163.2 to 163.6.

bank

bank has the same meaning as in section 164. (banque)

eligible bill

eligible bill means a bill that is of a class specified by a by-law, a rule or a standard made under the Canadian Payments Act. (lettre admissible)

official image

official image, in respect of an eligible bill, means an image of that eligible bill created by or on behalf of a bank in accordance with by-laws, rules or standards made under the Canadian Payments Act, together with any data in relation to the eligible bill prepared in accordance with those by-laws, rules and standards, and includes a display, a printout, a copy or any other output of that image and that data created by or on behalf of a bank in accordance with those by-laws, rules and standards. (image officielle)

Marginal note:Status of official image

163.2 An official image of an eligible bill may be dealt with and used for all purposes as though it were the eligible bill.

Marginal note:Electronic presentment

• 163.3 (1) Despite anything in this Act, a bank may present for payment an official image of an eligible bill electronically in accordance with by-laws, rules or standards made under the Canadian Payments Act and, if it does so, the requirements of this Act respecting the presentment for payment of the eligible bill are deemed to have been complied with.

• Marginal note:Discharge by payment

  (2) The eligible bill and its official image are discharged if payment in due course is made by or on behalf of the drawee after the electronic presentment for payment of the official image of the eligible bill.

Marginal note:Presumption

• 163.4 (1) In the absence of evidence to the contrary, a document purporting to be an official image of an eligible bill is presumed to be an official image of the eligible bill.

• Marginal note:Admissibility

  (2) An official image of an eligible bill is admissible in evidence for all purposes for which the eligible bill would be admitted as evidence without proof that the official image was created by or on behalf of a bank in accordance with the by-laws, rules or standards made under the Canadian Payments Act.

• Marginal note:True copy of contents

  (3) In the absence of evidence to the contrary, an official image of an eligible bill is presumed to be a true and exact copy of the contents of the eligible bill.

Marginal note:Effect of destruction

163.5 If an eligible bill is destroyed in accordance with by-laws, rules or standards made under the Canadian Payments Act and there is an official image of the bill,

• (a) a person’s rights and powers in relation to the eligible bill are not affected by reason only that the person does not possess it;

• (b) the destruction does not affect any person’s rights, powers, duties and liabilities in relation to the eligible bill; and

• (c) the eligible bill is not considered to be lost or to have been materially altered or intentionally cancelled.

Marginal note:Warranty

• 163.6 (1) A bank that creates or purports to create an official image of an eligible bill, or on whose behalf an official image of an eligible bill is created or purported to be created, warrants that the official image or the purported official image, as the case may be, was created in accordance with by-laws, rules or standards made under the Canadian Payments Act and that it accurately represents the eligible bill.

• Marginal note:Damages

  (2) Any person who has suffered damages as a result of a breach of the warranty has a cause of action for damages against the bank.

PART IIICheques on a Bank

Marginal note:Definition of “bank”

164 In this Part, bank includes every member of the Canadian Payments Association established under the Canadian Payments Act and every local cooperative credit society, as defined in that Act, that is a member of a central, as defined in that Act, that is a member of the Canadian Payments Association.

Marginal note:Cheque

• 165 (1) A cheque is a bill drawn on a bank, payable on demand.

• Marginal note:Provisions as to bills apply

  (2) Except as otherwise provided in this Part, the provisions of this Act applicable to a bill payable on demand apply to a cheque.

• Marginal note:Cheque for deposit to account

  (3) Where a cheque is delivered to a bank for deposit to the credit of a person and the bank credits him with the amount of the cheque, the bank acquires all the rights and powers of a holder in due course of the cheque.

Marginal note:Presentment for payment

• 166 (1) Subject to this Act,

  • (a) where a cheque is not presented for payment within a reasonable time of its issue and the drawer or the person on whose account it is drawn had the right at the time of presentment, as between him and the bank, to have the cheque paid, and suffers actual damage through the delay, he is discharged to the extent of the damage, that is to say, to the extent to which the drawer or person is a creditor of the bank to a larger amount than he would have been had the cheque been paid; and

  • (b) the holder of the cheque, with respect to which the drawer or person is discharged, shall be a creditor, in lieu of the drawer or person, of the bank to the extent of the discharge, and entitled to recover the amount from it.

• Marginal note:Reasonable time

  (2) In determining what is a reasonable time, within this section, regard shall be had to the nature of the instrument, the usage of trade and of banks and the facts of the particular case.

Marginal note:Authority to pay

167 The duty and authority of a bank to pay a cheque drawn on it by its customer are determined by

• (a) countermand of payment; or

• (b) notice of the customer’s death.

Crossed Cheques

Marginal note:Crossed generally

• 168 (1) Where a cheque bears across its face an addition of

  • (a) the word “bank” between two parallel transverse lines, either with or without the words “not negotiable”, or

  • (b) two parallel transverse lines simply, either with or without the words “not negotiable”,

  that addition constitutes a crossing, and the cheque is crossed generally.

• Marginal note:Crossed specially

  (2) Where a cheque bears across its face an addition of the name of a bank, either with or without the words “not negotiable”, that addition constitutes a crossing, and the cheque is crossed specially and to that bank.