Australian Capital Territory

mercantile law act 1962
This consolidation has been prepared by the ACT Parliamentary Counsel’s Office
Updated as at 9 December 1998
TABLE OF PROVISIONS
Section
Part I—Preliminary
	1.	Short title
	3.	Certain laws to cease to be in force
Part II—Mercantile Agents
	4.	Interpretation
	5.	Consignor and consignee
	6.	Powers of mercantile agent
	7.	Presumptions
	8.	Pledge by way of exchange
	9.	Pledge for antecedent debt
	10.	Saving for rights of true owner
	11.	Saving for common law powers of mercantile agents
Part III—Guarantors and Sureties
	12.	Consideration for guarantee
	13.	Surety entitled to stand in place of creditor whose debt etc. he or she has discharged
Part IV—Usury
	14.	Maximum rate of interest

Part V—Written Memoranda
	15.	Debts and contracts of infants
	16.	Representations of character etc.
Part VI—Warehousemen’s liens
	17.	Interpretation
	18.	Warehouseman to have lien on goods
	19.	Charges covered by lien
	20.	Notice by warehouseman
	21.	Notice by person depositing goods
	22.	Power to sell goods
	28.	Service of notices
	29.	Notice provisions—substantial compliance
	30.	Application of Part
	31.	Rights not to be affected
	32.	Sales otherwise prohibited are not authorised by this Part
The Schedule
Laws ceasing to be in force

Australian Capital Territory

mercantile law act 1962
An Act relating to Mercantile Agents, Guarantors and Sureties, Usury, Written Memoranda and Warehousemen’s Liens
Part I—Preliminary
1. 	Short title
	This Act may be cited as the Mercantile Law Act 1962.1
3. 	Certain laws to cease to be in force
	The laws specified in the Schedule shall cease to be in force in the Territory.
Part II—Mercantile Agents
4. 	Interpretation
	In this Part, unless the contrary intention appears—
“advance” includes a payment of money and the delivery of a bill of exchange or other negotiable security;
“document of title” has the same meaning as in the Sale of Goods Act 1954;
“mercantile agent” has the same meaning as in the Sale of Goods Act 1954;

“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 pecuniary liability.
5. 	Consignor and consignee
(1) 	Where—
	(a)	the owner of goods—
	(i)	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
	(ii)	has consigned the goods in the name of a person; and
	(b)	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.
(2) 	A consignee who has a lien on goods by virtue of subsection (1) may transfer the lien to any person.
(3) 	Nothing in this section limits or affects the validity of a sale, pledge or disposition by a mercantile agent.
6. 	Powers of mercantile agent
	Where a mercantile agent is entrusted as such with the possession of goods or the documents of title to goods—
	(a)	a sale, pledge or other disposition of the goods made by him or her in the ordinary course of business of a mercantile agent to a person acting in good faith and not having at the time of the disposition notice that the mercantile agent had not authority to make the disposition is, subject to the provisions of this Part, as valid as if the mercantile agent were expressly authorised by the owner of the goods to make the disposition; and
	(b)	a sale, pledge or other disposition of the goods to a person which would have been valid if the entrusting had continued is valid, notwithstanding the determination of the entrusting, unless the person had at the time of the disposition notice of the determination of the entrusting.
7. 	Presumptions
	For the purposes of this Part—
	(a)	a mercantile agent in possession of goods or of the documents of title to goods shall be deemed to have been entrusted with the goods or documents as a mercantile agent until the contrary is shown;
	(b)	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, shall be deemed to be entrusted with the possession of the goods;
	(c)	a mercantile agent shall be deemed 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;
	(d)	a contract, whether made directly with a mercantile agent or with a clerk, or other person, on behalf of a mercantile agent, shall be deemed to be a contract with the mercantile agent;
	(e)	a pledge of the documents of title to goods shall be deemed to be a pledge of the goods; and
	(f)	where—
	(i)	an advance is made in good faith to a mercantile agent entrusted as a mercantile agent with the possession of goods or documents of title to goods on the faith of an agreement in writing to consign, deposit, transfer or deliver the goods or documents; and
	(ii)	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 shall be deemed to be an advance on the security of the goods or documents within the meaning of this Part although the goods or documents are not received by the person making the advance until after the advance is made.
8. 	Pledge by way of exchange
	Where a mercantile agent pledges goods in consideration of the delivery or transfer of—
	(a)	other goods;
	(b)	documents of title to other goods; or
	(c)	negotiable securities;
upon which the person so delivering or transferring the goods, documents or securities had at the time a valid and available lien and security for or in respect of a previous advance by virtue of an agreement made with the mercantile agent, the pledge shall, if the pledgee acts in good faith and without notice that the mercantile agent had not authority to make the pledge, be deemed to be in consideration of an advance within the meaning of this Part as if there had been a present 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 so delivered or transferred.
9. 	Pledge for antecedent debt
	Where a mercantile agent pledges goods as security for a debt or liability due from the pledgor to the pledgee before the time of the pledge, the pledgee does not acquire any further right to the goods than could have been enforced by the pledgor at the time of the pledge.
10. 	Saving for rights of true owner
	Nothing in this Part—
	(a)	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;
	(b)	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;
	(c)	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
	(d)	prevents the owner of goods pledged by a mercantile agent—
	(i)	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
	(ii)	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.
11. 	Saving for common law powers of mercantile agents
	The provisions of this Part are in amplification and not in derogation of the powers exercisable by a mercantile agent independently of this Part.
Part III—Guarantors and Sureties
12. 	Consideration for guarantee
	A special promise by a person to answer for the debt, default or miscarriage of another person which is in writing and signed by that firstmentioned person or some other person thereunto by him or her lawfully authorised shall not be deemed invalid to support an action, suit or other proceeding to charge that firstmentioned person therewith by reason only that the consideration for the promise does not appear in writing or by necessary inference from a written document.
13. 	Surety entitled to stand in place of creditor whose debt etc. he or she has discharged
(1) 	Subject to this section, a person who, being surety for the debt or duty of another or being liable with another for a debt or duty, pays the debt or performs the duty, is entitled—
	(a)	to have assigned to him or her or to a trustee for him or her every judgment, specialty or other security held by the creditor in respect of the debt or duty, whether the judgment, specialty or other security is, or is not, deemed at law to have been satisfied by the payment of the debt or the performance of the duty; and
	(b)	to stand in the place of the creditor and to use all the remedies, and, if need be and upon proper indemnity, to use the name, of the creditor in any action or other proceeding at law or in equity in order to obtain from the principal debtor or any co-surety, co-contractor or co-debtor, as the case may be, indemnification for the advances made or loss sustained by the firstmentioned person.
(2) 	The payment of a debt, or the performance of a duty, in the circumstances referred to in subsection (1) does not prevent the bringing of any action or other proceeding by virtue of that subsection.
(3) 	A co-surety, co-contractor or co-debtor is not entitled, by virtue of subsection (1), to recover from another co-surety, co-contractor or co-debtor more than the just proportion for which, as between the parties themselves, the other co-surety, co-contractor or co-debtor is justly liable.
Part IV—Usury
14. 	Maximum rate of interest
	Where the rate of interest for a loan of money or upon any other contract has not been agreed upon by the parties, the rate of interest for that loan or upon that contract that may be recovered in an action or suit shall not exceed 8% per annum.
Part V—Written Memoranda
15. 	Debts and contracts of infants
	An action shall not be brought whereby to charge a person—
	(a)	upon a promise made after full age to pay a debt contracted during infancy; or
	(b)	upon a ratification after full age of a promise or simple contract made during infancy;
unless the promise or ratification is made in writing signed by the party to be charged.
16. 	Representations of character etc.
	An action shall not be brought whereby to charge a person upon or by reason of a representation or assurance made or given concerning or relating to the character, conduct, credit, ability, trade or dealings of another person to the intent or purpose that the other person may obtain credit, money or goods upon the faith of the representation or assurance, unless the representation or assurance is made in writing signed by the party to be charged.
Part VI—Warehousemen’s liens
17. 	Interpretation
	In this Part, unless the contrary intention appears—
“Court” means the Magistrates Court;
“lien” means a lien under this Part;
“warehouseman” means a person lawfully engaged in the business of storing goods as bailee for hire or reward.
18. 	Warehouseman to have lien on goods
	Subject to this Part, a warehouseman has a lien on goods deposited with him or her for storage.
19. 	Charges covered by lien
(1) 	Such a lien shall be for the amount of—
	(a)	all lawful charges of the warehouseman for storage and preservation of the goods;
	(b)	all lawful claims of the warehouseman for insurance, transportation, labour, weighing, packing, coopering and other expenses in relation to the goods; and
	(c)	where default is made in satisfying the lien charged on the goods by virtue of paragraphs (a) and (b)—all reasonable charges of the warehouseman for notice and advertisement of an intended sale of the goods and, if the goods are sold, for the sale of the goods.
(2) 	Where the charges referred to in paragraph (1) (c) are incurred with respect to more than 1 item of goods, those charges shall, with respect to any 1 item, be deemed to be an amount that bears the same proportion to the total charges as the amount of the lien charged on the item by virtue of the other provisions of that subsection bears to the amount of the lien charged on all the items by virtue of those other provisions.
20. 	Notice by warehouseman
(1) 	Subject to this Part, if a warehouseman fails, within the period of three months after the date of the deposit of goods, to give notice, in accordance with subsections (2) and (3), of the lien on the goods, the lien on the goods is void as against the persons to whom he or she failed to give notice.
(2) 	Notice of a lien on goods shall be given to—
	(a)	any person who has before the expiration of the period of two months after the date of the deposit of the goods served upon the warehouseman a notice of his or her claim to be the owner of the goods or an interest in the goods;
	(b)	the grantee, or, where a transfer by the grantee has, not later than two months after the date of the deposit of the goods, been registered in accordance with the Instruments Act 1933, or that Act as amended at any time, the transferee, of a bill of sale relating to the goods which—
	(i)	was granted by the person depositing the goods or by any other person of whose interest in the goods the warehouseman has knowledge;
	(ii)	was, prior to the date of the deposit of the goods, registered in accordance with the Instruments Act 1933 or that Act as amended at any time; and
	(iii)	has not become null and void or had a discharge registered in respect of it; and
	(c)	any other person (not being the person who deposited the goods) of whose interest in the goods the warehouseman at any time before the expiration of the period of 2 months after the date of the deposit of the goods has knowledge.
(3) 	Notice of a lien on goods—
	(a)	shall be in writing; and
	(b)	shall contain—
	(i)	a brief description of the goods;
	(ii)	a statement showing the situation of the warehouse where the goods are stored, the date of their deposit with the warehouseman and the name of the person by whom they were deposited; and
	(iii)	a statement that a lien under this Part is claimed by the warehouseman in respect of the goods.
21. 	Notice by person depositing goods
	A person shall, on depositing goods with a warehouseman for storage, give notice in writing to the warehouseman of the name and, if known, the address of every person who the firstmentioned person knows has an interest in the goods.
Penalty:
	(a)	if the offender is a natural person—5 penalty units;
	(b)	if the offender is a body corporate—25 penalty units.
22. 	Power to sell goods
(1) 	Subject to this Part, a warehouseman may, in addition to any other remedy provided by law for the enforcement of liens or for the recovery of warehousemen’s charges, issue a notice of intention to sell the goods.
(2) 	Notice of intention to sell goods under this section shall be given by the warehouseman to—
	(a)	the person liable as debtor for the charges for which the lien on the goods exists;
	(b)	any person who has served upon the warehouseman a notice of his or her claim to be the owner of the goods or an interest in the goods;
	(c)	the grantee or transferee of a bill of sale relating to the goods, being a person to whom notice of the lien has been given under section 20, unless the bill of sale has become null and void or a discharge has been registered in respect of it; and
	(d)	any other person of whose interest in the goods the warehouseman has knowledge.
(3) 	Notice of intention to sell goods under this section—
	(a)	shall be in writing; and
	(b)	shall contain—
	(i)	a brief description of the goods;
	(ii)	a statement showing the situation of the warehouse where the goods are stored, the date of their deposit with the warehouseman and the name of the person by whom they were deposited;
	(iii)	an itemised statement of the warehouseman’s charges showing the sum due at the date of the notice;
	(iv)	a demand that the amount of the charges as stated in the notice and such further charges as may accrue shall be paid on or before a day specified in the notice, being a day not less than 1 month after the delivery of the notice, if it is personally delivered, or after the time when the notice should reach its destination according to the due course of post, if it is sent by post; and
	(v)	a statement that unless the charges are paid within the time mentioned the goods will be sold by a method, and at a time and place, specified in the notice.
(5) 	This section applies only to cases in which some part of the charges in arrear are in respect of a period more than 12 months prior to the date upon which notice of intention to sell is given.
28. 	Service of notices
(1) 	A notice by a warehouseman under this Part may be given to a person—
	(a)	personally;
	(b)	by registered post addressed to the person at the last address of the person known to the warehouseman; or
	(c)	where the warehouseman does not know an address of the person—by advertisement published twice in a daily newspaper published in the Territory, with an interval of at least 7 days between the advertisements.
(2) 	A notice given by advertisement in accordance with paragraph (1) (c) shall, for the purposes of this Part, be deemed to have been given on the date of the second publication of the advertisement.
29. 	Notice provisions—substantial compliance
	Where—
	(a)	a notice of lien or a notice of intention to sell purports to have been given under this Part but the provisions of this Part with respect to the giving of the notice have not been strictly complied with; and
	(b)	a court before which a question respecting the notice is tried or inquired into considers that—
	(i)	those provisions have been substantially complied with; or
	(ii)	it would be inequitable that the lien or sale should be deemed to be void by reason of the non-compliance;
an objection to the sufficiency of the notice shall not be allowed to prevail so as to release or discharge the goods from the lien or vitiate the sale.
30. 	Application of Part
(1) 	This Part applies to cases in which the goods were deposited for storage before, as well as to cases in which the goods are deposited after, the commencement of this Act, but no notice under section 22 shall be given before the expiration of 3 months after the commencement of this Act.
(2) 	In applying section 20 to a case in which goods were deposited for storage before the commencement of this Act, the goods shall be deemed to have been deposited for storage on the date of commencement of this Act.
31. 	Rights not to be affected
	Nothing in this Part abrogates, limits or in any manner affects—
	(a)	a lien, power of sale or other right (whether arising under contract or by operation of law) that a warehouseman may have apart from this Part with respect to any goods stored by him or her; or
	(b)	the enforcement of such a lien or the exercise of such a power or right.
32. 	Sales otherwise prohibited are not authorised by this Part
(1) 	This Part does not authorise the sale by public auction by a warehouseman of any goods if the sale by public auction of those goods is prohibited by a law in force in the Territory.
(2) 	This Part does not authorise the sale by public auction by a warehouseman of any goods if the sale by the warehouseman of those goods is prohibited by any other law in force in the Territory.

	The Schedule	Section 3
	(a)	The Imperial Act 4 George IV, chapter 83, entitled an Act for the better protection of the property of merchants and others, who may hereafter enter into contracts or agreements in relation to goods, wares or merchandises intrusted to factors or agents, as declared to be in force in the State of New South Wales;
	(b)	The Imperial Act 6 George IV, chapter 94, entitled an Act to alter and amend an Act for the better protection of the property of merchants and others, who may enter into contracts or agreements in relation to goods, wares or merchandise intrusted to factors or agents, as declared to be in force in the State of New South Wales;
	(c)	The Factors Act 1899 of the State of New South Wales;
	(d)	The Usury, Bills of Lading, and Written Memoranda Act 1902 of the State of New South Wales, other than section 11 of that Act.

NOTES
1.	The Mercantile Law Act 1962 as shown in this reprint comprises Act No. 4, 1962 amended as indicated in the Tables below.
	Citation of Laws—The Self-Government (Citation of Laws) Act 1989  (No. 21, 1989) altered the citation of most Ordinances so that after Self-Government day they are to be cited as Acts.  That Act also affects references in ACT laws to Commonwealth Acts.
2.	The Legislation (Republication) Act 1996 (No. 51, 1996) authorises the Parliamentary Counsel in preparing a law for republication, to make certain editorial and other formal amendments in accordance with current legislative drafting practice.  Those amendments make no change in the law.  Amendments made pursuant to that Act do not appear in the Table of Amendments but details may be obtained on request from the Parliamentary Counsel’s Office.
Table 1
Table of Ordinances
Ordinance	Number  
and year	Date of 
notification 
in Gazette	Date of 
commencement	Application, saving or transitional provisions	

Mercantile Law Ordinance 1962	4, 1962	12 Apr 1962	12 Apr 1962		
Ordinances Revision (Decimal Currency) Ordinance 1966	19, 1966	23 Dec 1966	23 Dec 1966	—	
Ordinances Revision Ordinance 1977	65, 1977	22 Dec 1977	22 Dec 1977	—	
Ordinances Revision Ordinance 1978	46, 1978	28 Dec 1978	28 Dec 1978	—	
Magistrates Court Ordinance 1985	67, 1985	19 Dec 1985	1 Feb 1986 (see Gazette 1986, No. G3, p. 265)
	—	
Self-Government day 11 May 1989
Table 2
Table of Acts
Act	Number  
and year	Date of 
notification 
in Gazette	Date of 
commencement	Application, saving or transitional provisions	

Magistrates and Coroner’s Courts (Registrar) Act 1991	44, 1991	20 Sept 1991	Ss. 1 and 2:  20 Sept 1991
Remainder:  25 Sept 1991 (see Gazette 1991, No. S103)	—	
(Reprinted as at 30 September 1991)	
Financial Management and Audit (Consequential and Transitional Provisions) Act 1996	26, 1996	1 July 1996	1 July 1996	—	
Uncollected Goods (Consequential Provisions) Act 1996	87, 1996	20 Dec 1996	Ss. 1 and 2:  20 Dec 1996
Remainder:  19 Mar 1997 (see s. 2 (2) and Gazette 1997, No. S71)	Part III (ss. 7-10)	
(Reprinted as at 31 January 1998)	
Statute Law Revision (Penalties) Act 1998	54, 1998	27 Nov 1998	Ss. 1 and 2:  27 Nov 1998
Remainder:  9 Dec 1998 (see Gazette 1998, No. 49, p. 1078)
	—	

Table of Amendments
ad. = added or inserted      am. = amended     rep. = repealed      rs. = repealed and substituted

Provision	How affected

S. 2	rep. No. 65, 1977
S. 14	am. No. 19, 1966
S. 17	am. No. 67, 1985
S. 21	am. No. 19, 1966; Act No. 54, 1998
S. 22	am. Act No. 87, 1296
Ss. 23, 24	rep. Act No. 87, 1996
S. 25	am. No. 19, 1966
	rep. Act No. 87, 1996
S. 26	rep. Act No. 87, 1996
S. 27	am. No. 19, 1966; Act No. 44, 1991; No. 26, 1996
	rep. No. 87, 1996
S. 29	am. No. 46, 1978