Hong Kong Ordinances

BILLS OF EXCHANGE ORDINANCE - SECT 29

Holder in due course

(1) A holder in due course is a holder who has taken a bill, complete and
regular on the face of it, under the following conditions, namely-

   (a)  that he became the holder of it before it was overdue, and without
        notice that it had been previously dishonoured, if such was the fact;

   (b)  that he took the bill in good faith and for value, and that at the
        time the bill was negotiated to him he had no notice of any defect in
        the title of the person who negotiated it.

(2) In particular, the title of a person who negotiates a bill is defective
within the meaning of this Ordinance when he obtained the bill, or the
acceptance thereof, by fraud, duress, or force and fear, or other unlawful
means, or for an illegal consideration, or when he negotiates it in breach of
faith or in such circumstances as amount to a fraud.

(3) A holder (whether for value or not) who derives his title to a bill
through a holder in due course, and who is not himself a party to any fraud or
illegality affecting it, has all the rights of that holder in due course as
regards the acceptor and all parties to the bill prior to that holder. [cf.
1882 c. 61 s. 29 U.K.]