ELECTRONIC TRANSACTIONS (MISCELLANEOUS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 9 March 2011.)

Ms CHAPMAN (Bragg) (11:40): I rise to speak on behalf of the opposition and to confirm that the opposition will be supporting this bill. The matter has come to the parliament, again, I suggest, without adequate consultation. The reason I place this on the record is that it seems that the Attorney-General is maintaining a position, with precedent already in his short term of delivering legislation this year, of there being little consultation.

After undertaking its own investigation, the opposition accepts the merits of proceeding with this matter. However, it is disappointing that the government's conduct leaves a trail of excluding those in the public arena who ought to be consulted, which consultation should be available to all of us here in the house before we ultimately debate these matters. The reason this is particularly pertinent is that this matter has had a very long history and there has been demonstrably plenty of time for that consultation to have taken place.

The 2005 UN Convention on the Use of Electronic Communications in International Contracts was based on reforms of the 1996 UNCITRAL provisions. In May 2010, the Standing Committee of Attorneys-General (SCAG) agreed to implement those provisions—that, I remind members, was a year ago. Australia acceded to the convention and reflected it in its domestic law, and that is all a proper process. The model law had already been adopted by New South Wales, and other jurisdictions were expected to follow.

The government advised that there was no variation between the UN convention, the model law and the South Australian bill. So, everything is following suit; it is all the same. Then the bill was introduced on 9 March 2011. What happened in between in respect of the consultation is particularly interesting because a number of issues at the time of its introduction had clearly not been resolved and needed to be.

After the introduction of the bill, the opposition at least sought some clarification from the Law Society and the Australian Information Industry Association, among others, as to whether there were going to be problems, particularly in the conveyancing area, with this legislation. It became clear that some others had concerns about these matters and there was very little opportunity for us to then pursue this matter when we necessarily had to deal with it as an opposition. Our joint party indicated that, in the absence of there being problems that could not be overridden, we would support the general thrust of the bill.

I will come to the reasons for that in just a moment, but I just indicate that I am not entirely sure why the government is proceeding with this matter with such haste, but it may be that we are dragging the chain as so often happens in a number of these things where there has been a national agreement. We seem to be limping along and then get somewhat caught out when others have passed us. From the point of view of allowing for the contemporary use of equipment, of which the offering and accepting of contracts, for example, is now conveyed, it is important that we contemporise the legislation to support it, in particular when a contract will become effective if the approval process has been done through electronic transactions.

The signature provisions in the current act state that a signature will 'indicate the person's approval'. In this instance now, the bill provides that the signature indicate the party's intention. This is because documents often require a person to note, but not necessarily approve, the contents of the document, such as a witness to another person's signature. So, the purpose of this legislation is to expand the existing signature reliability test within the act from being reliable in the circumstances to requiring a person to identify the signatory and their intention in respect to the information contained in the electronic communication.

The bill also goes further in that it amends the definition of transaction in the act to clarify that it includes dealings in connection with the formation and performance of the contract; that is consistent with article IV of the UN convention.

Changes in the bill would also mean that proposals to enter into contracts electronically would be treated as an invitation to make offers rather than a contract offer. This used to be known, in the days of the Attorney-General's and my attendance at law school, as the invitation to treat.

Unless there is a clear indication by the trader to be bound by the contract, suppliers would not be bound to supply goods and services to any interested visitor, regardless of an organisation's capacity to provide the nominated goods or services, if for instance there is limited stock. Instead, the provider would only be bound to provide the nominated goods and services once the contract has been entered into and accepted by both parties.

Many electronic ordering systems issue an automated response once an order has been placed, even though no person actually approves the contract from the supplier. The bill, on our understanding, would ensure that the automatic responses are not invalid, simply as a result.

We also have a provision in the bill to allow parties to correct errors made during the creation of a contract, via automated messages, provided that there was no prior opportunity to correct the error, such as the review of purchase details with the opportunity to correct the errors before confirming the order. This is particularly more difficult when we are dealing with the electronic creation and amendment of documents because it is so easy to press the delete button and be able to restore the contract, consistent with the wishes of one of the parties or the person who is the author of the document or its amendment.

The bill also defines the place of business. This is deemed to be the location indicated by the party unless otherwise demonstrated. If a business operates in more than one place, the location which has the closest relation to the relevant contract is deemed to be the place of business. There is also a definition of the relevant time receipt determinants, such as when the dispatch leaves the originator's information system and the time the addressee receives the electronic dispatch.

There has certainly been an advance in the mechanisms by which we transmit documentation. We are clearly way past, of course, the era—a bit like the sort of dinosaur era that the member for Croydon was in—of pre-electronic transmissions. Now, they are not only used for contracts but for the giving and receiving of instructions and the like. We are way past the days of the early trade of ships, when we had bills to enforce the trade arrangements between countries. We have come a long way.

The opposition accepts that we need to modernise this process. We are very disappointed that the government took a year to action the SCAG arrangements. We would be very willing to accept that if there had been some comprehensive consultation on the draft bill at the time. During the time that has elapsed, we would have thought, 'Well, the Attorney-General is busily undertaking his post-election responsibilities. He is making sure that people know about it and they have been able to make a contribution to it.'

I cannot blame the member for Croydon for this, of course, because he was way out of the picture by then. He had already made enough faux pas during the election campaign to put the death knell on his continued contribution. So, he was way out of the picture.

It is disappointing that in the new enlightened era, the Rau era, we have not had this enhancement of consultation, or any at all, in respect of this bill. So, it was not surprising that we had to go out at short notice and have the Hon. Stephen Wade conduct inquiries on behalf of the opposition as to how this would be effected. Sure enough, as often happens with consultation, when you actually ask people who know what they are doing, they often have some good ideas about how you can fix things up or clarify whether there are any potential defects in the legislation.

I think it is reasonable for the government, particularly the Attorney-General who has the carriage of this bill, to explain to the parliament, not just to the opposition, why there has been the necessity to progress this bill prior to the feedback from the stakeholders being received. What is the urgency for progressing it and why is the government contacting stakeholders for feedback if it never intended to give them any time to provide a response? This is fundamental to the consultation process. We, as I have said, are disappointed at best and concerned that this practice will not be continued.

The other aspect, following comments made by the Attorney-General in his second reading explanation, is: can the minister explain to us how these amendments will, in fact, directly improve or increase the protection for consumers? I think it is fairly obvious for contracting parties. I am not sure then what the comments were in relation to consumer protection that is being enhanced in this way. I suppose the extension of that is what public information the government intends to provide to consumers to educate them about whatever these extra rights are.

Regarding the business impact, I think this is one which, sadly, the government either seems to completely ignore or does not think matters; it has simply not addressed any of those aspects. One of the ways you can avoid criticism or complaint is simply not to tell anyone what you are doing, but I think that the minister does need to explain what businesses have, to his knowledge, requested any of these changes—and they may be at a national level—and, more pertinently, what complaints, if any, he has received from industry regarding the current provisions of the act.

There are a number of aspects that relate to where this has gone at the international level. Perhaps that is not within the personal knowledge of the Attorney-General, but we would be interested to know whether any of our neighbouring jurisdictions have declined to progress this and, if so, why. I think that is reasonable.

The final matter I wish to address is the question of how this will affect South Australia; in particular, in the conveyancing world. My understanding is that some reassurances have been received regarding how we might deal with land transactions, for example—particularly whether the interest in land is to be excluded by regulation—and that, if this is implemented, when the regulations will be available and effective to coincide with the commencement of the amendments.

If there is a time-sensitive element to this legislation then I think we need to be clear about what that is, so that if those parties, albeit not having been consulted before, were to read what has happened in this house they would at least have some reassurance on the record to progress this matter, in the absence of receiving that information in writing. With those comments, I look forward to hearing from the Attorney-General on those matters, mostly for the reassurance of South Australians and those in the business world and to satisfy any concerns they may have.

Mr GRIFFITHS (Goyder) (11:58): I commend the member for Bragg for being concise in her contribution; I thought it was a very detailed one. It is not my intention to talk for a long time, but I do wish to make a brief contribution on the Electronic Transactions (Miscellaneous) Amendment Bill.

I am a very old-fashioned person in a way, but I respect the fact that in the modern age in which we all live the electronic transfer of information and data is increasingly becoming the way in which everything is done. So, it seems to me that this is a bit of an obvious step indeed, where legislative requirements are needed to improve that system to ensure that there is an understanding by all parties involved in the purchase or contract of goods about where their obligations and liabilities lie.

The fact that it stems from a 1996 United Nations international contract does mean that it is occurring around the world and within our own nation, on the understanding that New South Wales already has this legislation in place and that the other states will be pursuing it quite soon.

I know in my own life that everything we do involves some form of electronic contract, whether it be for credit card transactions or electronic banking, or using PayPal accounts to pay for things you wish to purchase or booking flights. In everything we do these days, some form of electronic contract is involved, so ensuring that a legislative process is in place which is consistent around the nation and which makes all parties involved actually understand their liabilities is a positive step.

The member for Bragg has certainly given a very detailed outline of the three key areas in which the changes are to occur. I have no concerns with any of those and only commend to the house the fact that the South Australian parliament considering and putting this legislation through will indeed provide some more surety for people out there, and that is what we all want to do.

I am sure that we all have, on a regular basis, constituents coming into our electorate offices to talk to our staff and ourselves about concerns they have whereby they feel aggrieved, in some way, at some form of electronic contract. If this legislation ensures that that concern can be removed, that there can be some surety in the process and that when the final offer of the provision of the product is there it will be delivered as expected and as based around the offer of purchase upon which the original person decided to purchase that good or service, it is a positive step.

I am not sure whether any other members intend to speak to the bill, but I know that the Attorney would like the debate to be finished soon. I look forward to its swift passage through the house.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice, Minister for Urban Development, Planning and the City of Adelaide, Minister for Tourism, Minister for Food Marketing) (12:01): I thank the member for Goyder for his contribution and also the member for Bragg, who was erudite and succinct. I want to say a few things that flow from the remarks that have been made.

I think the member for Goyder explored, in his brief remarks, a very important point—that is, we are now living, whether or not we want to, in a world where transactions occur at a global level. People are sitting in their lounge rooms interacting with people all over the world, and they may be entering into transactions where they buy things. For example, my son decided yesterday that he had saved enough money to buy a particular soccer shirt.

An honourable member interjecting:

The Hon. J.R. RAU: Chelsea, unfortunately. They have a new strip, apparently.

The Hon. M.J. Atkinson: They get a new strip every year so that you buy it!

The Hon. J.R. RAU: That is unfortunately the case, yes. It has cost me a lot of money. Apparently, the only place this shirt can be accessed is Hong Kong, so the simple act of buying a T-shirt or a soccer strip involves an international transaction. So whereas, as the honourable member for Bragg said, years ago you might have been dealing with large shipping lines, international credit and those sorts of things, all that has gone and individuals are now in the global marketplace. That is very important, and we need to put some certainty around that.

From the point of view of Australia being regarded as a safe place to do business, there is much to be said for our having contemporary international commercial rules operating in our country so that people who wish to do business here have some confidence that the rules they are operating within, in Australia, are ones with which they are familiar and which have the overall general acceptance of the international commercial community. I think that is exactly what we are moving towards here.

I was somewhat wounded by the honourable member's criticism of me in relation to consultation on this matter, but I have recovered sufficiently to be able to respond. I think the answer to the honourable member's question about consultation is this: this matter was one that initially came to the attention of the commonwealth government by virtue of the commonwealth's accession to the UN Convention on the Use of Electronic Communications in International Contracts. From that international beginning with the commonwealth government, this then devolved down to SCAG, which was the relevant national body to be looking at this in some detail.

I am happy to advise the parliament, and in particular the member for Bragg, that SCAG then took it upon itself to conduct consultation in relation to this matter. Indeed, a consultation paper dated November 2008 was issued by SCAG and available for public consultation. A number of interested parties did respond to that—a number of federal government agencies responded—and I think it might be of some comfort for the honourable member to know that amongst those organisations that did respond was the Law Council of Australia.

Of course, the Law Council of Australia is a peak body, a constituent body—I think they call themselves 'conbods', which is interesting—of which is the Law Society of South Australia. I would have thought that the legal profession, to which the honourable member referred, would have had a significant interest in this matter, because, after all, most people who are engaged in commercial activity at some point have the privilege of working with a lawyer, and the lawyers who are involved in this from the Law Council point of view were, I believe, the lawyers on their e-commerce committee or such like.

In any event, there were also submissions received from the Australian Information Industry Association. So, the consultation was managed at that SCAG level. The input was then brought back into SCAG. A then draft legislation package for the whole country was put together at that level as a result of that consultation, an object of which was to have a uniform national arrangement, for obvious reasons.

So, the answer about the consultation is: the consultation occurred in relation to the national framework, and to then take the national framework out and consult on that framework in one jurisdiction, presumably with a view to making that jurisdiction different from other jurisdictions, would be quite contrary to the primary objective, which, of course, is to have this as a seamless national arrangement. I am not one who has been standing up here for years and years saying how wonderful it is to have uniformity for its own sake, but this is one instance where it does make sense. This is one instance where it does make a great deal of sense.

The other thing that the honourable member raised was the fact that it has taken a year to get here. Yes, it has. Good things sometimes take a while to emerge, but here it is, nevertheless, after a year, and we are all the happier for it.

In relation to the other questions that the honourable member raised, I am advised that we are not aware of any neighbouring jurisdiction having declined to address this matter. We are not aware of any individual businesses having requested any changes to this matter, but in saying that—and going back to my remarks earlier about the consultation having occurred at a national level and with peak bodies—I am not altogether surprised about that. Nonetheless, I come back to the point: if we are talking about a national scheme, one would have thought, for example, that we would be speaking to the Law Council rather than the individual conbods of the Law Council and so forth, because it is, after all, a national scheme.

The question about consumers: I am advised that the consumer element to this is that, unless the system provides them with an opportunity to correct an error, consumers who order or buy goods and services online can withdraw from the transaction. That is the element of consumer protection in there. The other matter the honourable member raised was the issue of conveyancing, and I am advised that land transactions are excluded from the application of the act already by regulation and there is no intention for that to change.

Ms Chapman: That is what they have asked you for; confirmation of that.

The Hon. J.R. RAU: I can confirm that there is no plan, there is no intention to do anything about changing the exclusion of land transactions from the application. I do not know if the honourable member for Bragg has any other matters, but I think they were the matters raised. I therefore do not have anything further to say at this point.

Bill read a second time.

Third Reading

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice, Minister for Urban Development, Planning and the City of Adelaide, Minister for Tourism, Minister for Food Marketing) (12:10): I move:

That this bill be now read a third time.

Bill read a third time and passed.