Mercantile Law Act 1962

This Act is the Mercantile Law Act 1962.

The dictionary at the end of this Act is part of this Act.

Note 1 The dictionary at the end of this Act defines certain terms used in this Act, and includes references (signpost definitions) to other terms defined elsewhere in this Act.

For example, the signpost definition ‘mercantile agent, for part 2 (Mercantile agents)—see section 4.’ means that the term ‘mercantile agent’ is defined in that section for part 2.

Note 2 A definition in the dictionary (including a signpost definition) applies to the entire Act unless the definition, or another provision of the Act, provides otherwise or the contrary intention otherwise appears (see Legislation Act, s 155 and s 156 (1)).

A note included in this Act is explanatory and is not part of this Act.

Note See the Legislation Act, s 127 (1), (4) and (5) for the legal status of notes.

Other legislation applies in relation to offences against this Act.

Note 1 Criminal Code

The Criminal Code, ch 2 applies to all offences against this Act (see Code, pt 2.1).

The chapter sets out the general principles of criminal responsibility (including burdens of proof and general defences), and defines terms used for offences to which the Code applies (eg conduct, intention, recklessness and strict liability).

Note 2 Penalty units

The Legislation Act, s 133 deals with the meaning of offence penalties that are expressed in penalty units.

Part 2 Mercantile agents

In this part:

Note A definition applies except so far as the contrary intention appears (see Legislation Act 2001, s 155).

advance includes a payment of money and the delivery of a bill of exchange or other negotiable security.

document of title—see the Sale of Goods Act 1954, dictionary.

mercantile agent—see the Sale of Goods Act 1954, dictionary.

pledge includes a contract pledging or giving a lien or security on goods, whether in consideration of an original advance, a further or continuing advance or a financial liability.

Where—

the owner of goods—

has given possession of the goods to a person for the purpose of consignment or sale and the person has consigned the goods in his or her own name; or

has consigned the goods in the name of a person; and

the consignee of the goods has not had notice that that person is not the owner of the goods;

the consignee has, in respect of advances made to or for the use of that person, the same lien on the goods as if that person were the owner of the goods.

A consignee who has a lien on goods by virtue of subsection (1) may transfer the lien to any person.

Nothing in this section limits or affects the validity of a sale, pledge or disposition by a mercantile agent.

If a mercantile agent is entrusted as a mercantile agent with the possession of goods or documents of title to goods—

a sale, pledge or other disposition of the goods made by the mercantile agent in the ordinary course of business of a mercantile agent to a person acting honestly, and without notice that the mercantile agent does not have authority to make the disposition, is, subject to this part, as valid as if the mercantile agent were expressly authorised by the owner of the goods to make the disposition; and

a sale, pledge or other disposition of the goods to a person that would have been valid if the entrusting had continued is valid, despite the ending of the entrusting, unless the person had, at the time of the disposition, notice of the ending of the entrusting.

For this part—

a mercantile agent in possession of goods or of the documents of title to goods is taken to have been entrusted with the goods or documents as a mercantile agent until the contrary is shown; and

a mercantile agent entrusted as a mercantile agent with, and possessed of, the documents of title to goods, whether derived immediately from the owner of the goods or obtained by reason of the agent having been entrusted with the possession of the goods or of any other document of title to the goods, is taken to be entrusted with the possession of the goods; and

a mercantile agent is taken to be possessed of goods or documents of title to goods whether the goods or documents, as the case may be, are in the actual custody or control of the mercantile agent or are held by another person subject to the control of, or for or on behalf of, the mercantile agent; and

a contract, whether made directly with a mercantile agent or with a clerk, or other person, on behalf of a mercantile agent, is taken to be a contract with the mercantile agent; and

a pledge of the documents of title to goods is taken to be a pledge of the goods.

If—

an advance is made honestly to a mercantile agent entrusted as a mercantile agent with the possession of goods, or documents of title to goods, relying on a written agreement to consign, deposit, transfer or deliver the goods or documents; and

the goods or documents are received by the person making the advance without notice that the mercantile agent was not authorised to make the pledge;

the advance is taken, for this part, to be an advance on the security of the goods or documents even though the goods or documents are not received by the person making the advance until after the advance is made.

This section applies if—

a mercantile agent pledges goods in consideration of the delivery or transfer of—

other goods; or

documents of title to other goods; or

negotiable securities; and

because of the pledge, the person (the pledgee) who delivers or transfers the goods, documents or securities obtains a valid and available lien and security in relation to a previous advance under an agreement made with the mercantile agent; and

the pledgee acts honestly and without notice that the mercantile agent did not have authority to make the pledge.

The pledge is taken to be in consideration of an advance under this part as if there had been an actual advance of money, but the pledgee does not acquire any right or interest in excess of the value of the goods, documents or negotiable securities when they are delivered or transferred.

If a mercantile agent pledges goods as security for a debt or liability that the mercantile agent owes the pledgee before the pledge is made, the pledgee does not acquire any further right to the goods than could have been enforced by the mercantile agent at the time of the pledge.

Nothing in this part—

authorises a mercantile agent to exceed or depart from his or her authority as between himself or herself and his or her principal or exempts him or her from any liability, civil or criminal, for so doing; or

prevents the owner of goods from recovering the goods from a mercantile agent or his or her trustee in bankruptcy at any time before the sale or pledge of the goods; or

prevents the owner of goods sold by a mercantile agent from recovering from the buyer the price agreed to be paid for the goods, or any part of that price, subject to any right of set-off on the part of the buyer against the agent; or

prevents the owner of goods pledged by a mercantile agent—

from having the right to redeem the goods at any time before the sale of the goods on satisfying the claim for which the goods were pledged and paying to the mercantile agent, if by him or her required, any money in respect of which the mercantile agent would by law be entitled to retain the goods or the documents of title to the goods, or any of them, by way of lien as against the owner; or

from recovering from any person with whom the goods have been pledged any balance of money remaining in his or her hands as the produce of the sale of the goods after deducting the amount of the lien.

The provisions of this part enlarge and do not diminish the functions a mercantile agent may exercise.

Part 3 Guarantors and sureties