Electronic service of legal documents

Last updated 25/08/2015

The use of email communication in everyday businesses must be, by now, almost standard. With the increasing size of email attachments, business and particularly those exchanging large documents with their clients or B2B businesses are now increasingly using cloud technology or third party document exchange systems such as Dropbox.

What is Dropbox?

Dropbox^[1] is an is an internet hosting service specifically designed to host files. It allows users to upload files that can be accessed over the internet from a different computer^[2], by the same user or multiple users after a password or authentication is provided.

How is service of legal documents usually effected?

• Ultimately, it depends on the type of legal process, any relevant legislation governing the subject matter and the jurisdiction.
• Most commonly, service or originating processes commencing a legal action are required to be served personally. All Australian States and Territories have similar requirements for personal service. In Queensland, Rule 106(1) of the Uniform Civil Procedure Rules 1999 (Qld) provides: “To serve a document personally, the person serving it must give the document, or a copy of the document, to the person intended to be served.”^[3]
• Personal service of documents on Corporations is provided for in section 109X of the Corporations Act 2001 (Cth).

Can service by email and Dropbox be effective?

 Conveyor & General Engineering Pty Ltd v Basetec Services Pty Ltd and Anor [2014] QSC 30 (Basetec)

The underlying dispute between CGE and Basetec arose under two construction contracts. The issue for determination in the case was the validity of an adjudication decision[4] in Basetec’s favour. CGE argued the adjudicator’s decision was void for want of jurisdiction. That argument turned on whether Basetec had validly served the adjudication application on CGE.

Basetec purported to serve the application on CGE by email. Importantly, the email communication to CGE contained an earlier email thread sent by Basetec to the relevant Authority[5] which provided: “Please find attached letter, Adjudication Application Forms as well as Dropbox links below for the two Adjudication Applications..” together with the Dropbox links.

The undisputed evidence was that those representatives from CGE who received the email purporting to serve the adjudication application, did not seek to look at the documents within the Dropbox files accessible by the Dropbox links contained in the email until some 7-10 days after receiving the original email of service. This case turned on the question of when the application was validly served. Several statutes relevant to that enquiry were examined, namely, theBuilding and Constructions Industry Payments Act 2004 (Qld), the Acts Interpretation Act 1954 (Qld) and the Electronic Transactions (Queensland) Act 2001 (Qld).

It is not appropriate to recast his Honour’s analysis of the relevant statutory provisions for the purpose of this article. Ultimately, the matter came down to whether and when the documents were served on CGE having regard to case law authorities.

In Capper v Thorpe, it was said that a document will be served “if the efforts of the person who is required to serve the document have resulted in the person to be served becoming aware of the contents of the document”. (emphasis added)

His Honour went on to say: “The purported service by the use of the Dropbox facility may have been a practical and convenient way for CGE to be directed to and to use the documents. But at least until 2 September 2013 (when Mr How became aware of the contents of the Dropboxes), it did not result “in the person to be served becoming aware of the contents of the document”.

Consequently, it was declared that the adjudicator’s decision was of no effect.

Takeaways

• The fundamental flaw in Basetec using Dropbox to serve the application was that CGE had not consented to service of the material via Dropbox.[7]
• In those circumstances, service will not be effected when the recipient receives the email but rather when the recipient accesses the Dropbox material.
• Contractors and sub-contractors might seek to include a term in construction contracts permitting service of adjudication applications by email and Dropbox; Superior-contractors and Principals are perhaps unlikely to agree to include such a term.
• The increasing use of electronic means of service will continue. The law will ultimately catch-up with common business practices. Recent cases authorising the service of documents via Facebook and other electronic means are examples of advances in the courts’ willingness to keep up with commercial and technological developments – an area where “the law” has traditionally been criticised.
• When serving documents, electronically or otherwise, make sure you “cross your T’s and dot your I’s” – this inevitably involves a “back to basics” approach of following the relevant legislative regime and being able to prove that you have done so.

Further information

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Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] And others like it: file hosting service, cloud storage service, online file storage provider, or cyberlocker.

[2] And other devices including tablets, smart phones or other networked devices.

[3] Rule106(2) provides: However, if the person does not accept the document, or copy, the party serving it may serve it by putting it down in the person’s presence and telling him or her what it is; Rule 106(3) provides: It is not necessary to show to the person served the original of the document.

[4] The relevant decision was made by an adjudicator under the Building and Constructions Industry Payments Act 2004 (Qld) – security for payments regime.

[5] The Authorised Nominating Authority under the Building and Construction Industry Payments Act 2004 (Qld).

[6] Capper v Thorpe [1998] HCA 24; (1998) 194 CLR 342 at 352 and continuing Similarly, in Howship Holdings Pty Ltd v Leslie,[11] Young J (as he then was) held that although service of an application for an order under s 459G was not effected by the deposit of the document in a document exchange box, the proof of actual receipt of the document from that box would suffice. Young J said:

[7] The construction contracts contained no such consent; There is nothing in the reported case suggesting Bestec had sought CGE’s consent prior to lodging the adjudication application.

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