Volume 42 | Number 3 Summer 2007
Recent International Developments in the Law of Negotiable Instruments and Payment and Settlement Systems
VI. Conclusion
The four topics covered in this survey are the transformation of the check payment into an electronic funds transfer, the payroll card as an access and not stored-value device, the emergence of indirect holding for securities and the ensuing evolution of “security entitlement” as a principal form of investment property, and the march towards a Pan-European common payment law covering electronic retail funds transfers. A common theme is the adaptation of the law by statute to accommodate the world of electronic banking as it keeps evolving.
Regarding the electronic presentment of checks, Canada did not proceed to adopt the proposal of the Canadian Payments Association discussed in Part II.D. Rather, it amended the Bills of Exchange Act224 to permit225 a bank to present for payment an “official image” of an “eligible bill”,226 including a check, “electronically in accordance with by-laws, rules or standards made under the Canadian Payments Act” in which case the requirements of the Bills of Exchange Act respecting the presentment for payment of the check “are deemed to have been complied with.”
An “official image” is defined in New Section 163.1 as:
an image of [an] eligible bill created by or on behalf of a bank in accordance with bylaws, rules or standards made under the Canadian Payments Act, together with any data in relation to the eligible bill prepared in accordance with those by-laws, rules and standards, and includes a display, a printout, a copy or any other output of that image and that data created by or on behalf of a bank in accordance with those bylaws, rules and standards.
An official image of a check “may be dealt with and used for all purposes as though it were the [check]”;227 together with the check it is discharged “if payment in due course is made by or on behalf of the drawee after the electronic presentment for payment of the official image . . . .”228 An official image further benefits from presumptions of authenticity229 and of being a true and complete copy of the original check;230 it is also admissible in evidence.231 A properly destroyed check, for which there is an official image, is not considered lost, materially altered or intentionally cancelled; its lawful destruction does not affect the rights, powers, duties and liabilities of any person, by virtue of lack of possession or otherwise.232
Finally, a bank that creates an official image warrants its authenticity, accuracy, and compliance with all requirements and is liable for damages suffered by any person as a result of the breach of this warranty.233
The new provisions do not cover electronic presentment made outside the check clearing system operated by the Canadian Payments Association.
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Footnotes
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