Follow by Email

Saturday, April 12, 2014

Potential Pitfalls of Serving Documents Electronically - Service via DropBox Not Lawful

Australian Court Rules that Electronic Service of legal documents via the product "DropBox"  was NOT lawful. 

I believe that at a minimum Consent, Acknowledgment, and Proof of Receipt is a must if eService is agreed to by the parties.  A best practice ought to be that  disinterested Third-Party (process server) that can attest to the facts of the transaction whether physical or electronic is a necessary to ensure that all parties due process rights are protected.  

An excellent assessment by the law firm Hopgood & Ganim of this case can be found here:

If parties want to avoid arguments regarding service by electronic means (including use of facilities such as drop box), then specific provision should be made to this effect in the contract.
Is a dropbox an acceptable electronic communication?
The critical issue is whether, given the use of the drop box facility and the emails, Basetec had duly served the adjudication application.
The contract between the parties did not make provision for the service of documents, nor was there any suggestion that the parties had agreed that the adjudication application could be served as it was (notwithstanding that the parties had used drop box in earlier correspondence).
McMurdo J also held that he did not consider that section 39 of the Acts Interpretation Act allowed for service by email.
However, the Judge was content to allow that section 11 of the Electronic Transactions (Queensland) Act 2001 did allow for the adjudication application to be served by email.

Critically, he nevertheless held that in the circumstances, section 11 did not authorise the service of the adjudication application inclusive of the material within the drop box for two reasons:
  1. CGE had not agreed to be electronically served; and
  2. the material within the drop box was not part of an electronic communication as defined. None of the data, text or images within the documents in the drop box was itself electronically communicated, or in other words, communicated by “guided or unguided by electromagnetic energy”. The Judge found that there was an electronic communication of the means by which other information in electronic form could be found, read and downloaded at and from the drop box site. 
The key issue was that the Judge found that if the material had been attached to the email, rather than delivered by the use of drop box, it would have been an electronic communication and therefore service would have been successful. 

The Judge also held that the documents in the drop box file could not be said to have been left at or sent to CGE’s office (at least until CGE went to the drop box site and opened the file) and probably not until its contents had been downloaded to a computer at CGE’s relevant office.

#jeff karotkin