What Is a Notarial Protest of a Bill of Exchange?

A notarial protest is a formal certificate, prepared by a notary, recording that a bill of exchange was presented and dishonoured, meaning it was not accepted or not paid. For foreign bills, protest is usually needed to keep the holder's rights against the drawer and endorsers. It must be done promptly, and the first step is often called noting.

Key takeaways

• A protest is a notary's formal record that a bill was dishonoured by non-acceptance or non-payment.
• For a foreign bill, protest is usually needed to preserve rights against the drawer and endorsers.
• For an inland bill, protest is usually optional, though it can still be useful evidence.
• Noting is the first, short record; the full protest can be drawn up from it later.
• Timing matters: a late protest can cost the holder their rights, so act quickly.

What is a bill of exchange?

A bill of exchange is a written order from one person (the drawer) to another (the drawee) to pay a fixed sum of money to a third person (the payee), or to their order, on demand or at a set future date. Bills have been used in trade for centuries, especially in international sales, because they can be transferred by endorsement and discounted with banks before they fall due.

In Australia, bills of exchange are governed by the Bills of Exchange Act 1909 (Cth). Cheques are dealt with separately under the Cheques Act 1986 (Cth). Bills are less common in everyday business than they once were, but they are still used in some trade finance and commodity transactions, and occasionally in private lending. When a bill is dishonoured, the formal steps the law sets out still apply.

What does "dishonoured" mean?

A bill can be dishonoured in two ways. It is dishonoured by non-acceptance when it is presented to the drawee for acceptance, meaning a written agreement to pay it when due, and the drawee refuses. It is dishonoured by non-payment when it is presented for payment on the due date and is not paid. In either case, the holder usually wants to recover the money from the drawer or from anyone who endorsed the bill along the way.

To do that, the holder generally must give notice of dishonour to those parties, and for a foreign bill, have the bill protested. Protest is the formal, independent evidence that the bill was properly presented and dishonoured, which is why it is prepared by a notary rather than by the holder.

What is the difference between noting and protest?

Noting is the notary's short, initial record of the dishonour. Traditionally, the notary re-presents the bill, records the answer given, and writes a brief minute on the bill itself or on a slip attached to it, with the date, the notary's initials and the reason for dishonour. Noting must be done promptly after dishonour.

The protest is the full, formal notarial certificate, drawn up from the noting. It sets out the bill (often with a copy of it), the presentment, the answer received, and a formal statement that the notary protests against the drawer, endorsers and any other parties for the loss and damage caused by the dishonour. Once a bill has been noted in time, the formal protest can usually be extended later, dated as of the noting.

Step	What it is	When
Presentment	Bill shown to the drawee for acceptance or payment	At the time the bill requires
Dishonour	Drawee refuses to accept or fails to pay	On presentment
Noting	Notary's short minute recording the dishonour	Promptly after dishonour
Protest	Full, formal notarial certificate of dishonour	Can be drawn up later from the noting
Notice of dishonour	Notice to the drawer and endorsers	Within the time the law allows

When is a protest required?

The rules turn on whether the bill is a foreign bill or an inland bill. Broadly, an inland bill is one drawn and payable within Australia, or drawn within Australia on a person resident here. Any other bill is a foreign bill. The exact definitions are in the Bills of Exchange Act, and a lawyer should confirm which applies to a particular bill.

For a foreign bill that appears on its face to be one, protest is generally required on dishonour. If it is not protested, the drawer and endorsers may be discharged, meaning the holder loses the right to recover from them. For an inland bill, protest is generally not required, although a holder may still choose to have it noted or protested as independent evidence of dishonour, which can be useful if the matter goes to court.

Why does timing matter so much?

The law on bills of exchange is strict about time. Presentment, noting, protest and notice of dishonour each have time limits, and missing one can discharge the parties the holder wants to recover from. In broad terms, a dishonoured bill should be noted on the day it is dishonoured, or very soon after, and the formal protest can then follow. The exact rules, including what happens when the last day falls on a weekend or public holiday, are set out in the Act.

Because of this, a holder who expects a bill might be dishonoured should find a notary in advance, rather than after the event. A notary who is unfamiliar with protests may need time to prepare, and delays of even a day or two can matter. If you are unsure of the deadlines for a particular bill, get legal advice straight away.

What does the notary actually do?

In a typical protest for non-payment, the notary, or someone on the notary's behalf, presents the bill again at the place of payment and asks whether it will be paid. The notary records the answer, for example that there are no funds, that the drawee refused, or that no one could be found. The notary then notes the bill and later prepares the formal protest certificate, signed and sealed.

The protest usually includes a copy of the bill and any endorsements, the date and place of presentment, the person to whom it was presented, the answer received, and the notary's formal protest. It is a notarial act, so the notary keeps a record of it in their protocol. Our guide to what a notary public does in Australia describes the wider range of notarial acts.

What if no notary is available?

The Bills of Exchange Act recognises that a notary may not always be available at the place where a bill is dishonoured. In that situation, it allows a substitute form of protest, sometimes called a householder's protest, made by another suitable person in the presence of witnesses, in a set form. This is uncommon in practice, and a lawyer should advise before relying on it, because a protest that does not comply with the Act may not preserve the holder's rights.

Does a protest need an apostille?

If the protest is going to be relied on in another country, for example in proceedings against an endorser abroad, the foreign court may want the notary's signature verified. DFAT can apostille a notarial protest for countries in the Hague Apostille Convention, or authenticate it for others, followed by embassy legalisation. The foreign court may also want a translation. See our guide to DFAT authentication for how that works.

How do you arrange a protest?

1. Get legal advice on whether the bill is foreign or inland, and on the deadlines that apply.
2. Contact a notary early, ideally before the due date if dishonour seems likely.
3. Give the notary the original bill and details of the drawee, place of payment and any endorsements.
4. Let the notary present and note the bill promptly after dishonour.
5. Arrange the formal protest, notice of dishonour and any apostille needed for use abroad.

Common mistakes to avoid

The most common mistake is waiting until after dishonour to look for a notary, then finding that the noting deadline has passed. Others include sending the notary a scan instead of the original bill, assuming an inland bill must be protested when notice of dishonour was the real requirement, or forgetting to give notice of dishonour to every endorser the holder wants to pursue. Each of these can weaken or lose a claim.

What does this look like in practice?

Here is an illustration, not a real case. An Australian exporter holds a bill of exchange drawn on a buyer overseas and endorsed to the exporter's bank. It falls due, but when it is presented, the drawee says there are no funds.

The exporter's lawyer advises that it is a foreign bill and that it should be protested promptly to keep the rights against the drawer. A notary presents the bill again the same day, records the answer, and notes it. The formal protest is drawn up afterwards, apostilled by DFAT, and used in the exporter's claim abroad. Had the bill not been noted in time, the drawer might have argued it was discharged.

In short

A notarial protest is a notary's formal certificate that a bill of exchange was dishonoured by non-acceptance or non-payment. For a foreign bill, it is usually needed to keep the holder's rights against the drawer and endorsers; for an inland bill, it is usually optional. Noting comes first and must be prompt. Get legal advice on the deadlines, and contact a notary early. Our document notarisation services page explains how this works with us.

People also search for

• What is the legal effect of a notarial certificate?
• What is the difference between a notary and a lawyer?
• How are company documents notarised?
• When do contracts need a notary?
• Which documents can be apostilled in Australia?

Holding a bill that may be dishonoured? Tell us about the bill and its due date, and we will explain each step before you book.