Mercantile Law Act 1936

This Act may be cited as the Mercantile Law Act 1936.

In this Act, unless the context otherwise requires or some other meaning is clearly intended—

document of title includes any bill of lading, dock warrant, warehousekeeper's certificate, and warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive the goods thereby represented;

goods includes every description of wares and merchandise;

mercantile agent means a mercantile agent having in the customary course of his business as such an agent, authority either to sell goods or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods;

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

wages includes any remuneration, whether in money or in kind paid under a contract of service;

workman means any person in any manner engaged or employed under a contract of service in work or labour of any kind whether his remuneration is to be according to time or by piece work or at a fixed price or otherwise.

A person shall be deemed to be in possession of goods or of the documents of title to goods, where the goods or documents are in his actual custody or are held by any other person subject to his control or for him or on his behalf.

Where a mercantile agent is, with the consent of the owner, in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition of the goods made by him when acting in the ordinary course of business of a mercantile agent, shall, subject to sections 4 to 12 of this Act, be as valid as if he were expressly authorised by the owner of the goods to make that disposition: Provided that the person taking under the disposition acts in good faith, and has not at the time of the disposition notice that the person making the disposition, has not authority to make it.

Where a mercantile agent has, with the consent of the owner, been in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition, which would have been valid if the consent had continued, shall be valid notwithstanding the determination of the consent: Provided that the person taking under the disposition has not at the time thereof notice that the consent has been determined.

Where a mercantile agent has obtained possession of any documents of title to goods by reason of his being or having been, with the consent of the owner, in possession of the goods represented thereby, or of any other documents of title to the goods, his possession of the first-mentioned documents shall, for the purposes of sections 4 to 12 of this Act, be deemed to be with the consent of the owner.

For the purposes of sections 4 to 12 of this Act the consent of the owner shall be presumed in the absence of evidence to the contrary.

This section does not operate to defeat a security interest that is the subject of a financing statement registered under the Personal Property Securities Act 2009 of the Commonwealth.

In subsection (5), security interest and financing statement have the same respective meanings as in the Personal Property Securities Act 2009 of the Commonwealth.

Where documents of title to goods are pledged by a mercantile agent, the pledge of the documents shall be deemed to be a pledge of the goods.

Where a mercantile agent pledges goods as security for a debt due from or liability incurred by the pledgor to the pledgee before the time of the pledge, the pledgee shall acquire no further right to the goods than could have been enforced by the pledgor at the time of the pledge.

The consideration necessary for the validity of a sale, pledge, or other disposition, of goods, in pursuance of sections 4 to 12 of this Act, may be—

a payment in cash; or

the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security; or

any other valuable consideration.

Where goods are pledged by a mercantile agent in consideration of the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, the pledgee shall acquire no right or interest in the goods so pledged in excess of the value of the goods, documents, or security when so delivered or transferred in exchange.

For the purposes of sections 4 to 12 of this Act an agreement made with a mercantile agent through a clerk or other person authorised in the ordinary course of business to make contracts of sale or pledge on his behalf shall be deemed to be an agreement with the agent.

Where the owner of goods has given possession of the goods to another person for the purpose of consignment or sale, or has shipped the goods in the name of another person, and the consignee of the goods has not had notice that that other person is not the owner of the goods, the consignee shall, in respect of advances made to or for the use of that other person, have the same lien on the goods as if that other person were the owner of the goods, and may transfer any such lien to another person.

Nothing in this section shall limit or affect the validity of any sale, pledge, or disposition, by a mercantile agent.

For the purposes of sections 4 to 12 of this Act, the transfer of a document may be by endorsement, or, where the document is by custom or by its express terms transferable by delivery, or makes the goods deliverable to the bearer, then by delivery.

Nothing in sections 4 to 12 of this Act shall authorise an agent to exceed or depart from his authority as between himself and his principal or exempt him from any liability, civil or criminal, for so doing.

Nothing in sections 4 to 12 of this Act shall prevent the owner of goods—

from recovering the goods from an agent or, subject to any Bankruptcy Acts for the time being in force, from his trustee in bankruptcy at any time before the sale or pledge of the goods; or

if the goods are pledged by an agent, from having the right to redeem the goods at any time before the sale thereof, on satisfying the claim for which the goods were pledged, and paying to the agent, if by him required, any money in respect of which the agent would by law be entitled to retain the goods or the documents of title thereto, 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 hands as the produce of the sale of the goods after deducting the amount of his lien.

Nothing in sections 4 to 12 of this Act shall prevent the owner of goods sold by an agent from recovering from the buyer the price agreed to be paid for the same, or any part of that price, subject to any right of set off on the part of the buyer against the agent.

The foregoing provisions of this Act shall be construed in amplification and not in derogation of the powers exercisable by an agent independently of this Act.

For the purpose of removing doubts it is hereby declared that those provisions of Part VII of the Act of the Parliament of the United Kingdom known as The Merchant Shipping Act 1894 which apply to liens for freight, apply in respect of goods landed in the State from any ship wherever registered.