Mercantile Law Act 1962 (ACT)

The Mercantile Law Act 1962 (ACT) sets out discrete, mostly property-and-contract focused rules that (1) define and regulate the legal effects of actions by mercantile agents (parts 2 and the definitions in s 4); (2) adjust formal requirements for guarantees and suretyship (part 3); (3) impose a statutory default cap on recoverable interest where no rate is agreed (s 14); (4) require certain promises and representations to be evidenced in writing (part 5); and (5) create and regulate a statutory warehouse persons’ lien with procedural rules for notice and sale (part 6 and related definitions at s 17). The Act also confirms that offences under it are subject to the Criminal Code general principles (s 3A).

Mechanically, the Act does the following by section:

Recognises consignor/consignee situations and creates a statutory lien for consignees acting in good faith where the consignee has not had notice that the person consigned is not the owner, and allows transfer of that lien (s 5).
Provides that transactions by mercantile agents in possession of goods or documents of title are valid against third parties who act honestly and without notice of lack of authority, and that dispositions valid while entrusting continued are valid even after entrusting ends unless the transferee had notice of the ending (s 6). The Act supplies presumptions about entrustment, possession and the effect of documents of title (s 7).
Treats certain pledges by mercantile agents as equivalent to advances for the purposes of priority or security (s 8 and s 9), while preserving owners’ rights and common-law rights (ss 10-11).
Removes the requirement that the consideration for a guarantee be evidenced in writing provided the guarantor’s promise itself is in writing and signed (s 12), and gives a surety who pays the creditor rights to stand in the creditor’s place and to be assigned securities or judgments to pursue indemnity (s 13).

Australian Capital Territory Mercantile Law Act 1962 A1962-4 Republication No 7 Effective: 30 January 2012 Republication date: 30 January 2012 Last amendment made by A2010-15 Authorised by the ACT Parliamentary Counsel

Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au About this republication The republished law This is a republication of the Mercantile Law Act 1962 (including any amendment made under the Legislation Act 2001, part 11.3 (Editorial changes)) as in force on 30 January 2012. It also includes any commencement, amendment, repeal or expiry affecting this republished law to 30 January 2012. The legislation history and amendment history of the republished law are set out in endnotes 3 and 4. Kinds of republications The Parliamentary Counsel’s Office prepares 2 kinds of republications of ACT laws (see the ACT legislation register at www.legislation.act.gov.au):  authorised republications to which the Legislation Act 2001 applies  unauthorised republications. The status of this republication appears on the bottom of each page. Editorial changes The Legislation Act 2001, part 11.3 authorises the Parliamentary Counsel to make editorial amendments and other changes of a formal nature when preparing a law for republication. Editorial changes do not change the effect of the law, but have effect as if they had been made by an Act commencing on the republication date (see Legislation Act 2001, s 115 and s 117). The changes are made if the Parliamentary Counsel considers they are desirable to bring the law into line, or more closely into line, with current legislative drafting practice. This republication includes amendments made under part 11.3 (see endnote 1). Uncommenced provisions and amendments If a provision of the republished law has not commenced, the symbol U appears immediately before the provision heading. Any uncommenced amendments that affect this republished law are accessible on the ACT legislation register (www.legislation.act.gov.au). For more information, see the home page for this law on the register. Modifications If a provision of the republished law is affected by a current modification, the symbol M appears immediately before the provision heading. The text of the modifying provision appears in the endnotes. For the legal status of modifications, see the Legislation Act 2001, section 95. Penalties At the republication date, the value of a penalty unit for an offence against this law is $110 for an individual and $550 for a corporation (see Legislation Act 2001, s 133).

R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 contents 1 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Australian Capital Territory Mercantile Law Act 1962 Contents Page Part 1 Preliminary 1 Name of Act 2 2 Dictionary 2 3 Notes 2 3A Offences against Act—application of Criminal Code etc 3 Part 2 Mercantile agents 4 Definitions for pt 2 4 5 Consignor and consignee 4 6 Powers of mercantile agent 5 7 Presumptions 5 8 Pledge by way of exchange 6 9 Pledge for existing debt 7 10 Saving for rights of true owner 7 11 Saving for common law powers of mercantile agents 8

Contents Page contents 2 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Part 3 Guarantors and sureties 12 Consideration for guarantee 9 13 Surety entitled to stand in place of creditor whose debt etc surety has discharged 9 Part 4 Usury 14 Maximum rate of interest 11 Part 5 Written memoranda 15 Debts and contracts of children 12 16 Representations of character etc 12 Part 6 Warehouse persons’ liens 17 Definitions for pt 6 13 18 Warehouse person to have lien on goods 13 19 Charges covered by lien 13 20 Notice by warehouse person 14 21 Notice by person depositing goods 15 22 Power to sell goods 15 28 Service of notice by warehouse person 17 29 Notice provisions—substantial compliance 17 31 Rights not to be affected 18 32 Sales otherwise prohibited are not authorised by pt 6 18 Dictionary 19 Endnotes 1 About the endnotes 20 2 Abbreviation key 20 3 Legislation history 21

Contents Page R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 contents 3 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au 4 Amendment history 24 5 Earlier republications 27

R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 1 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Australian Capital Territory Mercantile Law Act 1962 An Act relating to mercantile agents, guarantors and sureties, usury, written memoranda and warehouse persons’ liens

Part 1 Preliminary Section 1 page 2 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Part 1 Preliminary 1 Name of Act This Act is the Mercantile Law Act 1962. 2 Dictionary 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)). 3 Notes 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.

Preliminary Part 1 Section 3A R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 3 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au 3A Offences against Act—application of Criminal Code etc 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 Section 4 page 4 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Part 2 Mercantile agents 4 Definitions for pt 2 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. 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.

Mercantile agents Part 2 Section 6 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 5 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au (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 If a mercantile agent is entrusted as a mercantile agent with the possession of goods or documents of title to goods— (a) 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 (b) 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. 7 Presumptions (1) For this part— (a) 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 (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, is taken to be entrusted with the possession of the goods; and

Part 2 Mercantile agents Section 8 page 6 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au (c) 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 (d) 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 (e) a pledge of the documents of title to goods is taken to be a pledge of the goods. (2) If— (a) 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 (b) 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. 8 Pledge by way of exchange (1) This section applies if— (a) a mercantile agent pledges goods in consideration of the delivery or transfer of— (i) other goods; or (ii) documents of title to other goods; or (iii) negotiable securities; and

Mercantile agents Part 2 Section 9 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 7 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au (b) 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 (c) the pledgee acts honestly and without notice that the mercantile agent did not have authority to make the pledge. (2) 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. 9 Pledge for existing debt 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. 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; or (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; or (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

Part 2 Mercantile agents Section 11 page 8 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au (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 enlarge and do not diminish the functions a mercantile agent may exercise.

Guarantors and sureties Part 3 Section 12 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 9 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Part 3 Guarantors and sureties 12 Consideration for guarantee A special promise by a person (the guarantor) to answer for the debt, liability or failure of someone else is not invalid only because the consideration for the promise is not evidenced in writing if the promise is in writing signed by or on behalf of the guarantor. 13 Surety entitled to stand in place of creditor whose debt etc surety 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.

Part 3 Guarantors and sureties Section 13 page 10 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au (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.

Usury Part 4 Section 14 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 11 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Part 4 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 a proceeding must not exceed 8% per annum.

Part 5 Written memoranda Section 15 page 12 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Part 5 Written memoranda 15 Debts and contracts of children (1) This section applies to— (a) a promise made by a person after becoming an adult to pay a debt contracted by the person when the person was a child; or (b) the ratification by a person after becoming an adult of a promise or simple contract made by the person when the person was a child. (2) The promise or ratification is not enforceable by a proceeding against the person unless it was made in writing signed by the person. 16 Representations of character etc (1) This section applies to a representation or assurance made by a person if it is— (a) about the character, conduct or credit, ability, trade or dealings of someone else; and (b) made so the other person can obtain credit, money or goods by relying on it. (2) The representation or assurance is not enforceable by a proceeding against the person who made it unless it was made in writing signed by the person.

Warehouse persons’ liens Part 6 Section 17 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 13 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Part 6 Warehouse persons’ liens 17 Definitions for pt 6 In this part: Note A definition applies except so far as the contrary intention appears (see Legislation Act 2001, s 155). lien means a lien under this part. warehouse person means a person lawfully engaged in the business of storing goods as bailee for hire or reward. 18 Warehouse person to have lien on goods Subject to this part, a warehouse person 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 warehouse person for storage and preservation of the goods; and (b) all lawful claims of the warehouse person 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 under paragraphs (a) and (b)—all reasonable charges of the warehouse person for notice and advertisement of an intended sale of the goods and, if the goods are sold, for the sale of the goods.

Part 6 Warehouse persons’ liens Section 20 page 14 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au (2) If the charges mentioned in subsection (1) (c) are incurred in relation to 2 or more items of goods, the charges in relation to any of the items is the amount worked out as follows: TSC (3) In subsection (2): ISP means the sale price of the item. TSC means total charges for selling all the goods. TSP means the sale price of all the goods. 20 Notice by warehouse person (1) Subject to this part, if a warehouse person fails, within the period of 3 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 2 months after the date of the deposit of the goods served upon the warehouse person a notice of his or her claim to be the owner of the goods or an interest in the goods; and (b) any person who has a security interest registered under the Personal Property Securities Act 2009 (Cwlth) in relation to the goods; and (c) any other person (not being the person who deposited the goods) of whose interest in the goods the warehouse person at any time before the expiration of the period of 2 months after the date of the deposit of the goods has knowledge. TSP ISP 

Warehouse persons’ liens Part 6 Section 21 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 15 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au (3) Notice of a lien on goods— (a) shall be in writing; and (b) shall contain— (i) a brief description of the goods; and (ii) a statement showing the situation of the warehouse where the goods are stored, the date of their deposit with the warehouse person 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 warehouse person in respect of the goods. 21 Notice by person depositing goods (1) A person commits an offence if— (a) the person deposits goods with a warehouse person for storage; and (b) the person fails to tell the warehouse person in writing the name and, if the person knows it, the address of everyone who the person knows has an interest in the goods. Maximum penalty: 5 penalty units. (2) An offence against this section is a strict liability offence. 22 Power to sell goods (1) Subject to this part, a warehouse person may, in addition to any other remedy provided by law for the enforcement of liens or for the recovery of warehouse persons’ charges, issue a notice of intention to sell the goods.

Part 6 Warehouse persons’ liens Section 22 page 16 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au (2) Notice of intention to sell goods under this section shall be given by the warehouse person to— (a) the person liable as debtor for the charges for which the lien on the goods exists; and (b) any person who has served upon the warehouse person a notice of his or her claim to be the owner of the goods or an interest in the goods; and (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 warehouse person 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; and (ii) a statement showing the situation of the warehouse where the goods are stored, the date of their deposit with the warehouse person and the name of the person by whom they were deposited; and (iii) an itemised statement of the warehouse person’s charges showing the sum due at the date of the notice; and (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

Warehouse persons’ liens Part 6 Section 28 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 17 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au (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 notice by warehouse person (1) If a warehouse person does not know a person’s address, notice by the warehouse person under this part may be given to the person by 2 advertisements, at least 7 days apart, in a daily newspaper. (2) A notice given by advertisement in accordance with subsection (1) is, for this part, taken to have been given on the day the 2nd advertisement is published. 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 noncompliance; 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.

Part 6 Warehouse persons’ liens Section 31 page 18 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au 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 warehouse person 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 pt 6 (1) This part does not authorise the sale by public auction by a warehouse person of any goods if the sale by public auction of those goods is prohibited by a law in force in the ACT. (2) This part does not authorise the sale by public auction by a warehouse person of any goods if the sale by the warehouse person of those goods is prohibited by any other law in force in the ACT.

Dictionary R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 19 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Dictionary (see s 2) Note 1 The Legislation Act contains definitions and other provisions relevant to this Act. Note 2 For example, the Legislation Act, dict, pt 1, defines the following terms:  ACT  daily newspaper  document  function  under  writing. advance, for part 2 (Mercantile agents)—see section 4. document of title, for part 2 (Mercantile agents)—see section 4. lien, for part 6 (Warehouse persons’ liens)—see section 17. mercantile agent, for part 2 (Mercantile agents)—see section 4. pledge, for part 2 (Mercantile agents)—see section 4. warehouse person, for part 6 (Warehouse persons’ liens)—see section 17.

Endnotes 1 About the endnotes page 20 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Endnotes 1 About the endnotes Amending and modifying laws are annotated in the legislation history and the amendment history. Current modifications are not included in the republished law but are set out in the endnotes. Not all editorial amendments made under the Legislation Act 2001, part 11.3 are annotated in the amendment history. Full details of any amendments can be obtained from the Parliamentary Counsel’s Office. Uncommenced amending laws are not included in the republished law. The details of these laws are underlined in the legislation history. Uncommenced expiries are underlined in the legislation history and amendment history. If all the provisions of the law have been renumbered, a table of renumbered provisions gives details of previous and current numbering. The endnotes also include a table of earlier republications. 2 Abbreviation key A = Act NI = Notifiable instrument AF = Approved form o = order am = amended om = omitted/repealed amdt = amendment ord = ordinance AR = Assembly resolution orig = original ch = chapter par = paragraph/subparagraph CN = Commencement notice pres = present def = definition prev = previous DI = Disallowable instrument (prev...) = previously dict = dictionary pt = part disallowed = disallowed by the Legislative r = rule/subrule Assembly reloc = relocated div = division renum = renumbered exp = expires/expired R[X] = Republication No Gaz = gazette RI = reissue hdg = heading s = section/subsection IA = Interpretation Act 1967 sch = schedule ins = inserted/added sdiv = subdivision LA = Legislation Act 2001 SL = Subordinate law LR = legislation register sub = substituted LRA = Legislation (Republication) Act 1996 underlining = whole or part not commenced mod = modified/modification or to be expired

Endnotes Legislation history 3 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 21 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au 3 Legislation history This Act was originally a Commonwealth ordinance—the Mercantile Ordinance 1962 No 4 (Cwlth). The Australian Capital Territory (Self-Government) Act 1988 (Cwlth), s 34 (4) converted most former Commonwealth ordinances in force in the ACT into ACT enactments. This allowed the ACT Legislative Assembly to amend and repeal the laws. This Act was converted into an ACT enactment on 11 May 1989 (self- government day). As with most ordinances in force in the ACT, the name was changed from Ordinance to Act by the Self-Government (Citation of Laws) Act 1989 A1989-21, s 5 on 11 May 1989 (self-government day). Before 11 May 1989, ordinances commenced on their notification day unless otherwise stated (see Seat of Government (Administration) Act 1910 (Cwlth), s 12). Legislation before becoming Territory enactment Mercantile Law Act 1962 A1962-4 notified 12 April 1962 commenced 12 April 1962 as amended by Ordinances Revision (Decimal Currency) Ordinance 1966 Ord1966-19 notified 23 December 1966 commenced 23 December 1966 Ordinances Revision Ordinance 1977 Ord1977-65 notified 22 December 1977 commenced 22 December 1977 Ordinances Revision Ordinance 1978 Ord1978-46 notified 28 December 1978 commenced 28 December 1978 Magistrates Court Ordinance 1985 Ord1985-67 notified 19 December 1985 commenced 1 February 1986 (Cwlth Gaz 1986 No G3)

Endnotes 3 Legislation history page 22 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Legislation after becoming Territory enactment Magistrates and Coroner’s Courts (Registrar) Act 1991 A1991-44 s 7, sch 1 notified 20 September 1991 (Gaz 1991 No S95) s 1, s 2 commenced 20 September 1991 ( s 2 (1)) s 7 (2), sch 1 commenced 25 September 1991 (s 2 (2) and Gaz 1991 No S103) Financial Management and Audit (Consequential and Transitional Provisions) Act 1996 A1996-26 sch pt 18 notified 1 July 1996 (Gaz 1996 No S130) commenced 1 July 1996 (s 2) Uncollected Goods (Consequential Provisions) Act 1996 A1996-87 s 4 notified 20 December 1996 (Gaz 1996 No S328) s 1, s 2 commenced 20 December 1996 (s 2 (1)) s 4 commenced 19 March 1998 (s 2 (2) and see Gaz 1998 No 1997 No S71) Statute Law Revision (Penalties) Act 1998 A1998-54 sch notified 27 November 1998 (Gaz 1998 No S207) s 1, s 2 commenced 27 November 1998 (s 2 (1)) sch commenced 9 December 1998 (s 2 (2) and Gaz 1998 No 49) Legislation (Consequential Amendments) Act 2001 A2001-44 pt 251 notified 26 July 2001 (Gaz 2001 No 30) s 1, s 2 commenced 26 July 2001 (IA s 10B) pt 251 commenced 12 September 2001 (s 2 and see Gaz 2001 No S65) Criminal Code Harmonisation Act 2005 A2005-54 sch 1 pt 1.31 notified LR 27 October 2005 s 1, s 2 commenced 27 October 2005 (LA s 75 (1)) sch 1 pt 1.31 commenced 24 November 2005 (s 2) Statute Law Amendment Act 2005 (No 2) A2005-62 sch 3 pt 3.15 notified LR 21 December 2005 s 1, s 2 commenced 21 December 2005 (LA s 75 (1)) sch 3 pt 3.15 commenced 11 January 2006 (s 2 (1))

Endnotes Legislation history 3 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 23 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Statute Law Amendment Act 2009 A2009-20 sch 3 pt 3.54 notified LR 1 September 2009 s 1, s 2 commenced 1 September 2009 (LA s 75 (1)) sch 3 pt 3.54 commenced 22 September 2009 (s 2) Personal Property Securities Act 2010 A2010-15 sch 3 pt 3.2 notified LR 1 April 2010 s 1, s 2 commenced 1 April 2010 (LA s 75 (1)) sch 3 pt 3.2 commenced 30 January 2012 (s 2 (2) (b))

Endnotes 4 Amendment history page 24 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au 4 Amendment history Name of Act s 1 sub A2005-62 amdt 3.144 Dictionary s 2 om Ord1977-65 ins A2005-54 amdt 1.223 om R5 LA ins A2005-62 amdt 3.144 Notes s 3 orig s 3 om A2001-44 amdt 1.2889 prev s 3 renum as s 3A ins A2005-62 amdt 3.144 Offences against Act—application of Criminal Code etc s 3A (prev s 3) ins A2005-54 amdt 1.223 renum R5 LA Definitions for pt 2 s 4 def document of title sub A2005-62 amdt 3.145 def mercantile agent sub A2005-62 amdt 3.146 def pledge am A2005-62 amdt 3.147 Powers of mercantile agent s 6 sub A2005-62 amdt 3.148 Presumptions s 7 am A2005-62 amdts 3.149-3.151 Pledge by way of exchange s 8 sub A2005-62 amdt 3.152 Pledge for existing debt s 9 sub A2005-62 amdt 3.152 Saving for common law powers of mercantile agents s 11 sub A2005-62 amdt 3.153 Consideration for guarantee s 12 sub A2005-62 amdt 3.154 Maximum rate of interest s 14 am Ord1966-19; A2005-62 amdt 3.155 Debts and contracts of children s 15 sub A2005-62 amdt 3.156 Representations of character etc s 16 sub A2005-62 amdt 3.157

Endnotes Amendment history 4 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 25 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Definitions for pt 6 s 17 am Ord1985-67 def court om A2005-62 amdt 3.158 Charges covered by lien s 19 am A2005-62 amdt 3.159 Notice by warehouse person s 20 am A2010-15 amdt 3.2 Notice by person depositing goods s 21 am Ord1966-19; A1998-54 sch sub A2005-54 amdt 1.224 Power to sell goods s 22 am A1996-87 s 4 Sale of goods to be advertised s 23 om A1996-87 s 4 Stay of proceedings to sell s 24 om A1996-87 s 4 Payment of charges before sale s 25 am Ord1966-19 om A1996-87 s 4 No action by reason of sale s 26 om A1996-87 s 4 Disposition of proceeds of sale s 27 am Ord1966-19; A1991-44; A1996-26 sch pt 18 om A1996-87 s 4 Service of notice by warehouse person s 28 sub A2005-62 amdt 3.160 am A2009-20 amdt 3.143 Notice provisions—substantial compliance s 29 am Ord1978-46 Application of pt 6 s 30 om A2005-62 amdt 3.161 Laws ceasing to be in force sch om A2001-44 amdt 1.2890

Endnotes 4 Amendment history page 26 Mercantile Law Act 1962 Effective: 30/01/12 R7 30/01/12 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Dictionary dict ins A2005-62 amdt 3.162 am A2009-20 amdt 3.144 def advance ins A2005-62 amdt 3.162 def document of title ins A2005-62 amdt 3.162 def lien ins A2005-62 amdt 3.162 def mercantile agent ins A2005-62 amdt 3.162 def pledge ins A2005-62 amdt 3.162 def warehouse person ins A2005-62 amdt 3.162

Endnotes Earlier republications 5 R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 page 27 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au 5 Earlier republications Some earlier republications were not numbered. The number in column 1 refers to the publication order. Since 12 September 2001 every authorised republication has been published in electronic pdf format on the ACT legislation register. A selection of authorised republications have also been published in printed format. These republications are marked with an asterisk (*) in column 1. Electronic and printed versions of an authorised republication are identical. Republication No Amendments to Republication date 1 A1991-44 30 September 1991 2 A1996-87 31 January 1998 3 A2001-44 4 January 2002 4 A2005-54 24 November 2005 5 A2005-62 11 January 2006 6 A2009-20 22 September 2009 © Australian Capital Territory 2012

R7 30/01/12 Mercantile Law Act 1962 Effective: 30/01/12 contents 1 Authorised by the ACT Parliamentary Counsel—also accessible at Australian Capital Territory Mercantile Law Act 1962 Contents Page Part 1 Preliminary 1 Name of Act 2 2 Dictionary 2 3 Notes 2 3A Offences against Act—application of Criminal Code etc 3 Part 2 Mercantile agents 4 Definitions for pt 2 4 5 Consignor and consignee 4 6 Powers of mercantile agent 5 7 Presumptions 5 8 Pledge by way of exchange 6 9 Pledge for existing debt 7 10 Saving for rights of true owner 7 11 Saving for common law powers of mercantile agents 8

The Act rests on a handful of focused legal concepts that determine who acquires rights in goods, when and on what basis, and what formalities govern certain undertakings. Key concepts and the statutory mechanics are:

Mercantile agent and entrustment (s 4, s 6). A mercantile agent in possession of goods or documents of title is treated, for many transactions, as having authority to sell, pledge or otherwise dispose of goods where third parties act “honestly and without notice” of lack of authority (s 6(a)). The law establishes evidential presumptions about entrustment and possession (s 7(1)(a)-(d)), which shift evidential burdens in disputes about title and authority. The effect is to protect bona fide third parties who transact in the ordinary course of business with agents in apparent possession.
Documents of title (s 4). The Act uses the concept of a document of title (as defined in the Sale of Goods Act 1954 dictionary) to link physical or documentary control to the ability to pass title or security. Section 7 treats a pledge of the documents of title as a pledge of the goods themselves (s 7(1)(e)). That converts documentary control into practical priority and disposal powers where third parties rely on documents.
Pledge and exchange (ss 8-9). The Act treats pledges made by mercantile agents in exchange for other goods, documents of title or negotiable securities as equivalent to an advance for the purposes of the mercantile agent provisions if the pledgee acts honestly and without notice (s 8). Pledges by agents to secure an existing debt do not create rights beyond what the agent could have enforced (s 9).
Consignor/consignee lien (s 5). Where goods are consigned and a consignee has not been given notice that the person consigning is not the owner, the consignee acquires a lien for advances made or for their use, and this lien may be transferred (s 5(1)-(2)). The statute treats the consignee in certain respects as if they were the owner for lien purposes.
Written formalities for guarantees and representations (ss 12, 15-16). A guarantor’s special promise to answer for another’s debt is valid if the promise is in writing and signed, even if the consideration is not evidenced in writing (s 12). Promises by former children ratifying earlier contracts, and representations about character or credit intended to procure credit, money or goods, must be in writing and signed to be enforceable (ss 15-16).
Default interest cap (s 14). If parties have not agreed an interest rate for a loan or other contract, recoverable interest is limited to 8% per annum. This is a statutory default, not a statutory maximum for agreed rates.
Warehouse persons’ lien and sale procedure (part 6). A warehouse person lawfully storing goods as bailee for reward acquires a statutory lien for storage and related charges (s 17-19). The statute sets out who must be notified of the lien (s 20(2)), requires written content for notices (s 20(3) and s 22(3)), prescribes time limits (three months to give initial notice in s 20(1)) and sale notice minima (not less than one month after delivery if personally delivered; see s 22(3)(iv)). The statutory lien covers specified charges, related expenses, and sale costs if sale follows default (s 19). The Act provides for apportionment where charges relate to multiple items using an explicit formula (s 19(2)), for substituted service by newspaper advertisement when addresses are unknown (s 28), and for courts to accept substantial rather than strict compliance with notice rules where equity requires it (s 29).
Preservation of owner and common-law rights (ss 10-11, 31). The Act makes express savings for owners’ rights to recover goods from agents and for common-law powers that mercantile agents may exercise (ss 10 and 11). It also preserves other liens, sale rights and enforcement mechanisms available apart from the part 6 regime (s 31).

These concepts operate through determinate statutory steps: possession or documentary control triggers presumptions (s 7); third-party bona fide dealing permits dispositions to be effective (s 6); written formalities condition enforceability in guarantees and representations (ss 12, 15-16); and warehouse persons must follow precise notice and timing procedures (ss 20, 22, 28) if they are to preserve liens and exercise sale powers. The Act therefore trades off some formalism (written signatures, prescribed notice content and timing) against commercial certainty (protection for bona fide third parties, statutory lien for warehouse persons).

The Act identifies and materially affects a defined set of actors involved in mercantile transactions and storage of goods. It does not purport to cover all commercial activity, but it does allocate rights and procedural burdens across several groups:

Owners of goods. Owners are affected in multiple places. Section 10 preserves owners’ rights to recover goods from a mercantile agent or the agent’s trustee in bankruptcy before sale. Owners also face the statutory consequences of an agent’s sale to a bona fide purchaser under s 6 where a third party acts without notice. Owners whose goods are stored with a warehouse person face the risk of a statutory lien and eventual sale if charges are not paid and notice requirements are met (ss 18-22).
Mercantile agents and their principals. The Act defines the legal consequences of entrusting goods or documents of title to mercantile agents (s 4 and s 6). Mercantile agents in possession are taken to be entrusted until the contrary is shown and their possession of documents of title is taken to include possession of the goods (s 7(1)(a)-(c)). Agents gain powers to pledge, sell or otherwise dispose of goods in the ordinary course, subject to the provisos that third parties act honestly and without notice (s 6). At the same time the Act preserves liability for agents who exceed authority (s 10(a)).
Consignors and consignees. Section 5 specifically addresses consignments: consignees who have not had notice that the consignor is not the owner obtain, in respect of advances, the same lien as if the consignee were the owner, and such liens may be transferred (s 5(1)-(2)). Consignors who are not owners remain protected by s 10 and other owner-preserving provisions.
Buyers, pledgees and other third parties. Third parties buying goods or taking pledges from an agent are protected if they act honestly and without notice (s 6(a); s 8). The Act limits the scope of what a pledgee or purchaser may acquire when the pledge results from an exchange or secures an existing debt (ss 8-9).
Warehouse persons (and bailees for hire). Persons lawfully engaged in storing goods as bailee for hire are directly regulated by part 6. They acquire statutory liens for specified charges (s 18-19), must give prescribed notices to specified persons (s 20), may issue notices of intention to sell subject to detailed form and timing requirements (s 22), and may advertise for service when addresses are unknown (s 28).
Persons with security interests. Section 20(2)(b) expressly requires notice to any person who has a security interest registered under the Personal Property Securities Act 2009 (Cth) in relation to the goods. That brings national PPSA registrants into the Act’s notice and priority framework.
Guarantors, sureties and co-debtors. The Act modifies formal requirements for guarantees (s 12) and sets out rights of a surety who discharges the creditor’s claim to be assigned securities or to stand in the creditor’s place to seek indemnification from the principal debtor or co-sureties (s 13). Co-sureties’ recoveries are limited to their just proportions (s 13(3)).
Persons who deposit goods. Depositors bear a duty to notify the warehouse person in writing of known interested parties (s 21). Failing to do so is a strict liability offence carrying a maximum penalty of 5 penalty units (s 21(1)-(2)); penalty unit values are provided in the republication notes.
Courts, trustees and enforcement agents. The Act contemplates court intervention where notice compliance is disputed (s 29), trustees in bankruptcy may become involved when agents are insolvent (s 10(b)), and courts may be required to adjudicate on holders’ rights when lien or sale issues arise.

Who pays, and who decides. Where statutory liens are engaged, the warehouse person holds a lien for storage and related charges and the person liable as debtor for those charges is ultimately the party required to pay or face sale (s 19 and s 22(2)(a)). The warehouse person decides to enforce the lien by issuing notices and, if necessary, by conducting sale processes, but must follow the Act’s notice mechanics (s 22). A mercantile agent’s power to affect ownership or security arises primarily through possession or control of documents; third parties’ state of knowledge (notice) determines whether they have to respond (ss 6-7).

These effects are concrete and narrowly defined. The Act targets particular transactional circumstances rather than imposing economy-wide regulatory programmes.

The Act creates a set of enforceable duties and corresponding rights for the actors identified. Below are the principal statutory duties and rights with their operative mechanics and immediate consequences.

Mercantile agents and associated third parties

Right: Validity of dispositions in ordinary course to bona fide third parties. If a mercantile agent is entrusted with possession of goods or documents of title, a sale, pledge or other disposition made by the mercantile agent in the ordinary course of business to a person acting honestly and without notice that the agent lacked authority is, subject to part 2, as valid as if the agent had express authority (s 6(a)). This protects third-party transactions from being unwound solely because the agent exceeded authority, so long as the purchaser is bona fide and had no notice.
Duty: Third parties must act honestly and lack notice. The protective rule depends on the purchaser or pledgee not having notice; proof of notice defeats the protection (s 6(a)-(b); s 7(2) contemplates advances made honestly relying on consignment arrangements).
Presumptions shifting burdens. The Act presumes a mercantile agent in possession of goods/documents to have been entrusted until contrary is shown, that possession of documents of title equates to possession of the goods, and that contracts with clerks or staff are contracts with the agent (s 7(1)(a)-(d)). These presumptions create evidential burdens for principals challenging dispositions.

Guarantees and suretyship

Duty: Guarantors must ensure a signed written promise for enforceability. Section 12 provides that a special promise by a guarantor to answer for another is not invalid merely because the consideration is not evidenced in writing if the promise itself is in writing and signed by or on behalf of the guarantor.
Right: Subrogation and assignment for sureties who pay. A surety who pays is entitled to be assigned all judgments, specialties or other security held by the creditor and to stand in the creditor’s place to pursue indemnification against the principal debtor or co-sureties (s 13(1)-(2)). Recoveries from co-sureties are limited to their just proportion (s 13(3)).

Interest

Default right: Where no rate agreed, recoverable interest is capped at 8% per annum (s 14). Parties can and should contract an agreed rate to avoid this statutory default.

Written memoranda

Duty: Post-majority ratifications of childhood debts and representations of credit must be in writing and signed to be enforceable (ss 15-16). These are statutory formalities for particular contract categories.

Warehouse persons’ liens and sale powers

Right: A warehouse person has a statutory lien on deposited goods for storage charges and specified related expenses (s 18-19). The lien covers storage/preservation charges, insurance, transportation, labour, weighing, packing, coopering and other expenses, and,if default and sale follow,reasonable notice and advertisement and sale costs (s 19(1)(a)-(c)).
Duty: Timely notices to protect the lien against third parties. A warehouse person must give notice of the lien in accordance with s 20 within three months of deposit, or the lien is void as against the persons to whom notice ought to have been given (s 20(1)). The Act specifies recipients of notice including persons who have served a claim notice within two months of deposit, persons with PPSA-registered security interests (s 20(2)(b)), and others of whom the warehouse person had knowledge (s 20(2)(c)). Notice content is prescribed (s 20(3)).
Right/Duty: Power to sell following prescribed notice. A warehouse person may issue a notice of intention to sell (s 22(1)). The statute prescribes the persons who must receive such notice (s 22(2)) and the content and minimum timing (s 22(3) and s 22(3)(iv)), and limits applicability to cases where some charges in arrears relate to periods more than 12 months prior to the sale notice (s 22(5)).
Service mechanics and judicial oversight. If a warehouse person does not know an address, s 28 allows two newspaper advertisements at least seven days apart as substituted service, with the notice deemed given on the day of the second advertisement. Section 29 gives courts discretion to treat substantial compliance with notice provisions as sufficient where a strict noncompliance would be inequitable.

Savings and limits

Duty: Agents remain liable for acting beyond authority. The Act does not exempt agents from civil or criminal liability when they exceed or depart from authority (s 10(a)).
Right: Owner’s preservation. Owners can recover goods from mercantile agents or trustees before sale (s 10(b)). Owners of goods sold by agents retain remedies against buyers for agreed prices subject to set-off rights (s 10(c)). Owners may redeem pledged goods prior to sale on payment and satisfaction of liens (s 10(d)(i)-(ii)).
Limit: Sales otherwise prohibited remain prohibited. The Act does not authorise sales by warehouse persons that other ACT laws prohibit (s 32).

Enforcement mechanisms and remedies

Assignment and subrogation for sureties (s 13).
Sale under statutory power where notice and timing conditions are satisfied (s 22).
Judicial remedies for notice insufficiency and equitable relief in s 29.
Criminal and civil liability remains subject to general law and the Criminal Code for offences under the Act (s 3A).

These duties and rights are relatively narrow and procedural. Many rights depend on procedural compliance by the actor claiming them; many duties are preventive (notice and writing requirements). The allocation of rights therefore depends heavily on documentary practices and timing.

The Act itself contains a very limited set of penal consequences but integrates with the Criminal Code and the wider legislative framework for sanctions and enforcement. The key enforcement and penalty mechanisms are:

Criminal Code application

Section 3A explicitly provides that offences against the Act are subject to the Criminal Code, chapter 2 general principles, which include definitions of intention, recklessness, conduct, burdens of proof, and general defences. The provision thereby imports the Criminal Code framework into the prosecution of any offences that arise under the Act (s 3A). This affects how mental elements, strict liability and defences are treated.

Specific offence in the Act

Section 21 makes it an offence for a person depositing goods with a warehouse person to fail to tell the warehouse person in writing the name and, if known, the address of everyone the depositor knows has an interest in the goods. This offence is designated a strict liability offence (s 21(2)) and carries a maximum penalty of 5 penalty units (s 21(1)). The republication note provides penalty unit values as at the republication date: $110 for an individual and $550 for a corporation (Legislation Act 2001, s 133), but those statutory penalty unit values may be amended and should be checked current to the time of enforcement.

Civil remedies and enforcement mechanisms

Statutory liens and sales. The Act gives warehouse persons a lien for prescribed charges (ss 18-19) and a statutory procedure for enforcing that lien by giving notice of intention to sell and selling goods where notice and timing conditions are met (s 22). The sale power is an in-built enforcement mechanism for recovering charges owed to the warehouse person.
Assignment, subrogation, and right to use creditor’s remedies. A surety who pays the creditor is entitled to have assigned to them judgments, specialties or other securities and to stand in the creditor’s place to use all remedies to recover from the principal debtor or co-sureties (s 13(1)-(2)). This provides a civil enforcement pathway for sureties seeking indemnity.
Owner remedies. The Act preserves owners’ rights to recover goods from agents and to seek price or other relief against buyers in certain circumstances (s 10(c)-(d)). Those remedies are civil actions enforceable in court.

Judicial discretion and relief

Substantial compliance doctrine. Section 29 allows a court to uphold a lien or sale where notice provisions have not been strictly complied with if the court considers there has been substantial compliance or that inequity would result from voiding the lien or sale. This provision gives courts discretion to balance technical noncompliance against equitable outcomes.
Preservation of other rights. Section 31 expressly preserves other liens and powers of sale a warehouse person may have apart from part 6, and their enforcement. This allows parties to rely on contractual or other statutory rights where available.

Limits on statutory powers

Section 32 makes clear that the sale powers under part 6 do not authorise sales that are otherwise prohibited by any law in force in the ACT. This limits the constructive authorisation of sales by warehouse persons.

Practical enforcement implications

Who decides to enforce: Warehouse persons typically decide to enforce their lien by issuing notices and, if required, selling goods under the Act, but must follow the prescribed notice mechanics (ss 20, 22). Mercantile agents’ disposals can be defended or attacked in court, and third parties’ bona fide status (notice) is often determinative (s 6).
Evidentiary burden: Presumptions in s 7 favour third parties by deeming entrustment and possession until the contrary is shown, so plaintiffs challenging a disposition may bear an evidential burden to overcome those presumptions.
Criminal prosecutions: The strict liability nature of s 21 may make prosecutions for failure to disclose interests by depositors relatively straightforward to prosecute, but sentencing will be in accordance with penalty units and Criminal Code principles.

Overall, enforcement is a mix of civil remedies (liens, sales, assignments), judicial discretion (s 29), and a single explicit statutory offence with a modest penalty (s 21), all operating within the Criminal Code and wider ACT statutory architecture (s 3A and endnote references).

The Act does not operate in isolation. It expressly references and interacts with several other statutory regimes and leaves other laws undisturbed. The primary interactions recorded in the text and endnotes are as follows.

Sale of Goods Act references

Definitions. Section 4 defines “document of title” and “mercantile agent” by reference to the Sale of Goods Act 1954 dictionary. The Act thus imports certain Sale of Goods Act concepts to determine when documentary control or agent status exists for the purpose of parts 2 and 6. That cross-reference means that changes to the Sale of Goods Act definitions or interpretation of those terms may affect how the Mercantile Law Act’s provisions operate.

Criminal Code

Offences. Section 3A explicitly applies the Criminal Code, chapter 2, to offences against this Act. The Criminal Code supplies the general principles of criminal responsibility, including fault elements, strict liability rules and defences. This interaction affects the prosecution and defence of any criminalised conduct under the Mercantile Law Act.

Personal Property Securities Act 2009 (PPSA)

Notice to registered security interests. Section 20(2)(b) requires a warehouse person to give notice of a lien to any person who has a security interest registered under the Personal Property Securities Act 2009 (Cth) in relation to the goods. This clause creates an operational intersection between the statutory lien regime in part 6 and the national PPSA registration and priority system. In practice this means warehouse persons must check PPSA registrations to ensure their notices reach registered secured parties, and registrants may assert their priority rights in subsequent disputes.

Legislation Act 2001

Interpretation and penalties. The Dictionary and s 2 note reference the Legislation Act for general definitions and the application of definitions across the Act. The republication note identifies that penalty unit values are defined under Legislation Act s 133, which affects the monetary value of fines under s 21.

Other ACT laws

Prohibited sales. Section 32(1) and (2) make explicit that part 6 does not authorise sales otherwise prohibited by ACT law. Where other ACT statutes or regulations prohibit sale of certain goods by public auction or by warehouse persons, those prohibitions remain effective notwithstanding the statutory sale power in part 6.

Personal property and bankruptcy law

Trustee and insolvency outcomes. Section 10 preserves the owner’s right to recover goods from a mercantile agent or the agent’s trustee in bankruptcy. The Act therefore interacts with insolvency and trustee processes by preserving property rights notwithstanding agents’ transactions and insolvency events.

National legislation and amendments

The endnotes record that later Commonwealth and ACT enactments have amended this Act, notably the Personal Property Securities Act 2010 amendments (A2010-15 sch 3 pt 3.2) which came into effect in part on 30 January 2012 and which are shown as amending s 20. The legislative history in the endnotes also shows amendments to align with Criminal Code harmonisation (A2005-54) and other statute law revisions. These amendments indicate the Act is designed to operate alongside evolving national regimes such as the PPSA and the Criminal Code.

Practical consequences of these interactions

Compliance with national registration systems. Warehouse persons must monitor PPSA registrations and adjust notice practices accordingly (s 20(2)(b)). Failure to do so risks the statutory lien being void as against registered security holders.
Coherence of definitions. Because key terms are imported from the Sale of Goods Act, interpretative uncertainty or changes in that Act could influence who qualifies as a mercantile agent or what counts as a document of title.
Limits on statutory sale. The statutory sale power is subject to other laws; actors must check other ACT statutes, local by-laws or sector-specific prohibitions before proceeding with auction sales under s 22.
Criminal procedure and defences. The Criminal Code’s application shapes available defences, mens rea issues and burdens of proof for any prosecution under the Act (s 3A).

In sum, the Act prescribes local, procedural rules that are designed to operate in coherence with national frameworks such as the PPSA and the Criminal Code and with other ACT statutory restrictions. Parties must therefore treat the Mercantile Law Act as one node in a broader legal network governing property, security and insolvency.

The republication endnotes provide a detailed legislative history that shows the Act’s origins and subsequent amendments. The key historical and amendment milestones are:

Origins and conversion to ACT enactment

The Act originated as a Commonwealth ordinance, the Mercantile Ordinance 1962 No 4, notified 12 April 1962 and commenced the same day. It was converted into an ACT enactment on 11 May 1989 as part of the transition brought about by the Australian Capital Territory (Self-Government) Act 1988 (Cwlth). The Self-Government (Citation of Laws) Act 1989 renamed ordinances as Acts on the same date (see endnote 3).

Notable amendments and revisions

Ordinances Revision (Decimal Currency) Ordinance 1966 (Ord1966-19) made early amendments, including to s 14 (interest) and s 21 (which the amendment history lists as amended by Ord1966-19).
The Magistrates Court Ordinance 1985 (Ord1985-67) and subsequent ACT court-related amendments appear in the legislative history (endnote 3 records the Magistrates Court Ordinance and later related amendments).
A sequence of statute law revision and consequential amendment Acts updated penalties, drafting, and removed or adjusted provisions: Statute Law Revision (Penalties) Act 1998 (A1998-54) made changes to penalty provisions, while other Statute Law Amendment Acts (A2005-62, A2009-20) made various technical and substantive adjustments (endnotes 3 and 4).
Criminal Code harmonisation. The Criminal Code Harmonisation Act 2005 (A2005-54) inserted s 3A (previously s 3), applying Criminal Code chapter 2 principles to offences under this Act and aligning offences with the national criminal framework (endnote 3; amendment history in endnote 4 lists s 3A insertion).
Personal Property Securities Act interaction. The Personal Property Securities Act 2010 (Cth) and associated ACT amendments (A2010-15 sch 3 pt 3.2) were implemented, with sch 3 pt 3.2 amending the Act and coming into effect on 30 January 2012. Section 20(2)(b) requires notice to PPSA-registered security holders as a direct result of that amendment. The amendment history (endnote 4) records that s 20 was amended by A2010-15 amdt 3.2.

Section-specific amendment notes

Part 2 definitions and provisions were updated by A2005-62 (endnote 4 lists multiple substitutions and insertions to s 4-11).
Part 6 saw a number of changes, including to s 19 (charges covered by lien) by A2005-62, s 20 being amended by A2010-15 (notably to add PPSA-registered security interest recipients), and s 28 (service by advertisement) being adjusted by A2005-62 and A2009-20. Several sections (s 23-27, s 30) were omitted by A1996-87 or later amendments, showing an editorial pruning and consolidation of sale and post-sale disposition provisions over time.

Republications

The document is a republication as at 30 January 2012 (Republication No 7). Endnote 5 lists earlier republications and shows that the Act has been periodically reissued to reflect amendments.

Practical significance of amendment history

The amendment timeline shows an evolution from an earlier ordinance-based framework to an ACT statute aligning with national frameworks (Criminal Code, PPSA). The insertion of PPSA-oriented language in s 20 after national PPSA reform is the clearest substantive interaction and demonstrates legislative intent to integrate local lien notice mechanics with the national personal property security system.
The Act has been subject to both editorial modernisation (Legislation Act 2001 part 11.3 changes) and targeted substantive updates, particularly to align with national reforms and to modernise drafting. Practitioners should consult the endnotes and current consolidated text to ensure they rely on the up-to-date version and to track historical changes that may be relevant to pending matters (for example, transitional provisions when the PPSA was introduced).

The endnotes in the republication are the source for all amendment-history statements and list each amending instrument, commencement dates, and affected sections.

The republication of the Mercantile Law Act 1962 does not include a list of reported judicial decisions that interpret the Act, nor does the text itself name any cases. The Act’s endnotes provide legislative history and amendment details but do not catalogue judicial outcomes. Consequently, there is no litigation history recorded in the statute text or endnotes included in the republication document.

That said, the Act contains multiple provisions that commonly generate litigation in practice; the statute itself draws attention to areas where disputes are likely to arise and where courts are given explicit procedural roles. The Act therefore creates likely focal points for litigation, which practitioners should anticipate and plan for. Those focal points, grounded in the statute, include:

The bona fide purchaser/pledgee question under s 6. Disputes typically turn on whether the third party had notice that the mercantile agent lacked authority. The Act’s presumptions in s 7 shift evidential burdens, but disputes remain over the timing and content of notice and on what constitutes notice in given circumstances. Courts will be asked to resolve whether a person acted “honestly and without notice” and whether a disposition occurred “in the ordinary course of business” under s 6(a).
Presumptions and evidential reversals in s 7. Litigation may focus on whether a mercantile agent was entrusted and whether documents of title equate to possession of goods. A principal seeking to recover goods or set aside dispositions must overcome the statutory presumption of entrustment.
Pledge and exchange limits (ss 8-9). Disputes may arise where agents pledge goods in exchange for other assets or to secure existing debts. Courts must determine whether the pledgee acted honestly and without notice, and whether the pledgee’s rights exceed the value of what was delivered (s 8(2)).
Warehouse notice and sale process (part 6). Section 20’s notice requirements, section 22’s content and timing requirements for sale notices, and section 28’s substituted service by advertisement all present litigation risks. Common issues include whether notice reached the required recipients in time, whether the notice content met the statutory requirements, whether the three-month or one-month periods were satisfied, and whether the sale was authorised where some charges were not yet in arrear for more than 12 months (s 22(5)). Section 29 gives courts express power to validate substantial compliance, so litigants will contest the applicability of that equitable discretion.
PPSA interaction and priority disputes. Section 20(2)(b) requires notice to PPSA-registered security holders. Litigation may involve priority disputes between warehouse liens and prior PPSA-registered security interests, questions about whether the warehouse person complied with s 20, and whether failure to notify affects priority.
Surety rights and assignment (s 13). Where a surety discharges debts, courts may adjudicate on the scope of the assigned securities, the surety’s standing to sue in the creditor’s name, and the apportionment of liability among co-sureties (s 13(3)).
Application of Criminal Code to offences. For prosecutions under the Act, courts will apply Criminal Code chapter 2 principles imported by s 3A. Litigation around evidentiary burdens, mental elements and strict liability issues (s 21 is a strict liability offence) will be governed by the Code’s principles.

Because the republication does not cite cases, practitioners must consult case law databases and subsequent judicial decisions for authoritative interpretations of these provisions. Where precise statutory wording gives courts direct discretion (s 29) or sets clear technical requirements (ss 20, 22), litigation will typically focus on fact-sensitive evidence of compliance, notice, and knowledge.

The Act contains several drafting choices and procedural requirements that create practical traps for unwary parties. The following list highlights concrete pitfalls grounded in specific provisions.

Mercantile agents and notice

Presumption of entrustment. Section 7(1)(a) presumes a mercantile agent in possession of goods or documents of title has been entrusted until the contrary is shown. Owners who permit agents to have possession risk third-party dispositions being validated unless they can prove lack of entrustment. The practical implication is that mere possession is powerful evidence; principals should use contracts, control mechanisms and documentation to limit counterparty claims.
Documents of title operate like goods. Section 7(1)(e) treats a pledge of documents of title as a pledge of the goods. Parties accepting documents of title will, in many circumstances, obtain the same rights as if they had taken the goods themselves. Accepting documents without checking provenance can lead to title disputes.

Consignee lien transferability

Section 5(2) allows a consignee who acquires a lien to transfer that lien to any person. Consignors and owners should be aware that a consignee’s lien once acquired can be disposed of and that transferees may acquire the lien’s enforcement rights.

Guarantees and formalities

Writing requirement for guarantors. Section 12 requires a guarantor’s promise to be in writing and signed. A guarantor who gives an oral promise or an unsigned written promise will find it unenforceable. Practitioners drafting guarantees should ensure signed written documents are executed.
Representations must be signed. Section 16 requires representations of character or credit relied on to obtain credit, money or goods to be in writing and signed. Lenders making reliance-based claims should ensure written, signed representations exist.

Default interest and contract drafting

8% default rate. Section 14 caps recoverable interest at 8% per annum when the parties have not agreed an interest rate. Lenders who fail to specify an agreed rate in writing may be limited to the statutory default, which could be below commercial expectations. Precise contractual drafting of interest terms is therefore essential.

Warehouse persons’ procedures and risk

Three-month lien notice window. Section 20(1) says a warehouse person must give notice of a lien within three months of deposit or the lien is void against persons to whom notice should have been given. Miss this deadline and the statutory lien may be lost. Warehouse operators must maintain robust intake and record-keeping systems to track deposit dates and trigger notices.
Who must be notified. Section 20(2) requires notice to persons who served claims within two months, persons with PPSA-registered security interests, and any other persons of whose interest the warehouse person had knowledge. Failing to identify a PPSA registrant or other interested person can render the lien unenforceable vis-à-vis that party. Warehouse persons should search the PPSA register and obtain depositor disclosures to identify interested parties.
Depositor disclosure offence. Section 21 makes it a strict liability offence for a depositor to fail to tell the warehouse person in writing the names and addresses of people the depositor knows have an interest. Even without fault, a depositor may be fined up to 5 penalty units. Depositors must therefore be careful to disclose known interests at deposit.
Content and timing of sale notice; 12-month arrears limit. Section 22(3)(iv) requires a notice of intention to sell to allow at least one month for payment. Section 22(5) limits the section’s application to cases where some charges in arrear relate to periods more than 12 months prior to the notice date. Warehouse persons who attempt to sell without satisfying these timing and arrears rules risk invalid sales and subsequent liability.
Advertisement service mechanics. Section 28 allows substituted service by two newspaper advertisements seven days apart, with the notice treated as given on the second advertisement day. Relying on advertising without ensuring proper publication timing can cause service defects that render sales vulnerable.

Judicial standard and uncertainty

Substantial compliance safety valve. Section 29 permits courts to validate notices or sales where substantial compliance occurred or where strict noncompliance would be inequitable. This creates uncertainty: parties cannot be sure whether minor defects will be excused. Practitioners should not rely on s 29 as a substitute for strict compliance.

Intersection with PPSA and other prohibitions

Notice to PPSA registrants. Section 20(2)(b) creates an obligation to notify PPSA-registered security holders. Failure to do so may have priority consequences. Warehouse persons and depositors must incorporate PPSA searches into intake processes.
Sales prohibited by other laws remain prohibited. Section 32 preserves the effect of other laws that may bar sale by public auction or sale of particular goods. A warehouse person who sells prohibited goods may have no statutory immunity.

Evidential burdens and retroactive changes

Shifting evidential burden. The statutes’ presumptions (s 7) shift evidential burdens, which can surprise litigants used to common-law positions. Parties should document the chain of entrustment, authority and notice to rebut presumptions.
Amendment history and transitional rules. The Act has been amended repeatedly and integrated with national laws. Practitioners must confirm the current text, especially for provisions that reference other Acts (Sale of Goods Act definitions, PPSA registrations).

These are concrete procedural and evidential pitfalls. The common theme is that documentary control, timing and notice govern whether statutory rights attach; failure to manage these elements creates loss of rights or exposure to liability.

Compliance under the Mercantile Law Act 1962 requires attention to documentary form, timing, notice, and registry searches. For each principal actor the following practical checklist flows directly from the statutory provisions.

For mercantile agents and principals

Document authority. Ensure written agency agreements specify the scope of authority, limit resale or pledge powers where necessary, and provide for immediate written revocation where authority is to end, because s 6 preserves dispositions made while entustment continued unless a purchaser had notice of the ending (s 6(b)).
Control documents of title. Maintain strict chains of custody for documents of title and record who has them. Section 7 treats possession of documents as possession of goods; misplacing documents can lead to third-party claims.
If a principal wishes to avoid the statutory presumptions in s 7, prepare clear written evidence showing the absence of entrustment or limits on agency.

For purchasers and pledgees dealing with agents

Conduct due diligence on title and authority. Before taking goods or documents of title, ascertain whether the agent has authority and whether any owner or security interest might exist. The protection in s 6 only applies to persons acting honestly and without notice.
Rely on documents of title only after verification. Recognise s 7(1)(e) elevates pledges of documents into pledges of goods for many purposes.

For guarantors and lenders

Get signed written guarantees. Ensure the guarantor’s special promise is in writing and signed as required by s 12; do not rely on oral assurances.
Document representations used to induce credit. Section 16 mandates signed written representations of character, conduct or credit where reliance and enforcement are intended.

For warehouse persons and storage businesses

Intake process. On deposit, obtain in writing the name and, if known, the address of everyone the depositor knows has an interest in the goods, per s 21(1). Make this a standard form at intake to avoid the strict liability offence in s 21.
PPSA searches. Conduct a PPSA register search promptly on deposit to identify registered security interests. Section 20(2)(b) requires notice to PPSA-registered security holders.
Track deposit dates. Keep accurate records of deposit dates because s 20(1) imposes a three month window to give lien notice that protects the lien against specified persons.
Prepare notice templates that comply with s 20(3) and s 22(3). Notices must be in writing and include brief descriptions of the goods, warehouse location, deposit date, depositor name, a statement claiming the lien, and for sale notices an itemised statement of charges and a demand for payment with a minimum one month cure period (s 22(3)(iv)). Use time-stamped delivery methods and maintain proof of posting or delivery.
Observe the 12-month arrears rule. Section 22(5) restricts sale notices to cases where some part of the charges in arrear derive from a period more than 12 months before the sale notice; confirm arrears calculations before issuing a sale notice.
Use advertisement service correctly. If addresses are unknown, section 28 permits two newspaper advertisements at least seven days apart. Ensure compliance with the newspaper publication schedule and retain copies for evidentiary purposes.
Account for sale proceeds and apportionment. Section 19(2) prescribes a formula for apportioning sale-related charges across multiple goods where necessary; maintain records of sale prices and compute apportionments using the statutory formula (s 19(2) explains ISP, TSC, TSP).

For depositors and owners

Disclose known interests. Provide written particulars to the warehouse person of anyone known to have an interest to avoid the s 21 offence and to protect interested parties’ rights.
Monitor notices and act quickly. Owners who receive a notice of lien or notice of intention to sell must act promptly to discharge charges or claim their rights. Redemption rights are preserved by s 10(d).

For sureties who pay

Seek assignment promptly. If a surety pays the debt, promptly require assignment of the creditor’s securities and pursue indemnity using the creditor’s remedies as allowed by s 13. Keep records of payments and communications to support entitlement.

For lawyers advising clients

Check concurrent laws. Verify whether other ACT laws prohibit sale of particular goods (s 32) before advising a warehouse person to sell. Also check the current PPSA filings and any recent amendments to the Mercantile Law Act that affect notice requirements.
Anticipate notice disputes. When drafting or litigating, collect evidence showing compliance with s 20 and s 22 or strong reasons for substantial compliance to leverage s 29.
Draft clear interest clauses. To avoid the 8% default in s 14, ensure loan or contract documents specify an agreed interest rate and include default interest mechanisms consistent with other applicable laws.

Record-keeping and evidence

Maintain contemporaneous records of deposits, notices delivered, PPSA searches, communications with interested parties, and sale processes. The Act’s regime depends heavily on timing and content of written notices; documentary evidence is typically decisive.

Periodic review

Because the Act cross-references other statutes and has been amended over time (see amendment history), conduct periodic reviews to ensure compliance with current definitions, PPSA interactions, and any higher-level statutory changes (for example to penalty unit values under the Legislation Act).

Following these concrete steps aligns actors’ practices with the statutory mechanics in the Mercantile Law Act 1962 and reduces the risk of losing statutory liens, encountering avoidable civil liabilities, or triggering criminal exposure under s 21.

Mercantile Law Act 1962

Plain English Summary

Deep Dive

What it does

Current sections

Mercantile Law Act 1962

Source text: opening excerpt

Main concepts

Who it affects

Key duties and rights

Penalties and enforcement

How it interacts with other laws

Amendment history

Litigation history

Gotchas

How to comply