Credit Act 1984

Subject to subsection (2), a credit provider shall not take a bill of exchange or promissory note as security for an amount payable by a debtor, mortgagor or guarantor under, or in relation to, a regulated contract or regulated mortgage unless the face of the bill or note bears the prescribed notice and the notice complies with section 151.

A reference in subsection (1) to the taking of a bill of exchange or promissory note does not include a reference to the taking of a cheque dated on or before the date on which it is taken or an order addressed to a banker requesting payment of specified amounts at specified times to a credit provider.

Where a credit provider takes a bill of exchange or promissory note from a debtor, mortgagor or guarantor in discharge of or as security for an amount payable under, or in relation to, a regulated contract or a regulated mortgage and the payment in due course of the bill or note would result in the payment of an amount in excess of the amount for which the debtor, mortgagor or guarantor would have been liable if the bill or note had not been taken, the credit provider is liable, if the bill or note is paid, to pay to the debtor, mortgagor or guarantor the amount of the excess.