LEGAL PRINCIPLE: COMMERCIAL LAW — Bank Drafts — Consideration — Presumption of Value — Rebuttal
PRINCIPLE STATEMENT
Section 30(1) of the Bills of Exchange Act creates a rebuttable presumption of value. The presumption shifts the burden of proof but can be rebutted by evidence; once rebutted, it ceases to operate.
RATIO DECIDENDI (SOURCE)
Per Iguh, JSC, in First African Trust Bank Ltd v. Partnership Investment Company Ltd (2003) NLC-2932001(SC) at pp. 30–31; Paras D–A.
"The effect of the presumption under section 30(1) of the Bills of Exchange Act is that it shifts the burden of proof from the shoulders of the plaintiff who relies upon the instrument to those of the defendant who impugns it. It is, however, necessary to stress that this presumption of value provided under section 30(1) of the Act is not an irrebuttable presumption. It is only a prima facie presumption which may therefore be rebutted in appropriate cases. Once successfully rebutted, the presumption under the said 30(1) of the Act is dislodged and ceases to operate."
EXPLANATION / SCOPE
The presumption of value under the Bills of Exchange Act is rebuttable. The principle applies to negotiable instruments. The burden shifts to the party challenging value. The rule protects the integrity of instruments. Once rebutted, the presumption no longer applies. The principle is well-established.