Canadian Payments Act
Marginal note:Definition of priority payment instrument
31 (1) In this section, priority payment instrument means a money order, bank draft or similar instrument issued, directly or indirectly, by a member other than a money order, bank draft or similar instrument issued by a member to another member for the purpose of effecting a payment between those members.
Marginal note:Priority on insolvency
(2) Despite any other Act of Parliament but subject to subsection (5) and to the rights of secured creditors with respect to any security interest in or charge on the property of a member, if a bankruptcy order is made against a member or a winding-up order is made in respect of a member (hereinafter in this section referred to as an “insolvent member”) the items set out in paragraphs (a) and (b) shall be paid from the estate of the insolvent member, in priority to any other claim against the estate of the insolvent member, in the following order:
(a) unpaid cheques or orders that had been drawn on the insolvent member and certified by such member prior to the making of the bankruptcy order or winding-up order; and
(b) unpaid priority payment instruments drawn on the insolvent member and issued prior to the making of the bankruptcy order or winding-up order.
(3) [Repealed, 1996, c. 6, s. 163]
Marginal note:Time limit
(4) Despite subsection (2), no payment of an unpaid cheque, order or priority payment instrument shall be made under that subsection in priority to any other claim against the estate of an insolvent member unless a request for such payment is made within sixty days after the making of the bankruptcy order or winding-up order.
(5) Subsection (2) shall not be construed or applied to permit an unpaid cheque, an order or a priority payment instrument to be paid in priority to any other claim
(a) where the cheque or order had been certified by the insolvent member, or
(b) where the priority payment instrument had been issued, directly or indirectly, by the insolvent member,
with a view to giving the drawee of the cheque, order or unpaid priority instrument a preference over the other creditors of the insolvent member.
Marginal note:Definition of preference
Marginal note:Definition of member
(7) For purposes of this section, member includes a local that is a member of a central that is a member of the Association.
- R.S., 1985, c. C-21, s. 31
- 1992, c. 27, s. 90
- 1996, c. 6, ss. 163, 167
- 2004, c. 25, s. 192
- Date modified: