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New Zealand

Electronic transactions bill

The New Zealand government plans to introduce an Electronic Transactions Bill this year. It is intended that the Bill, when enacted, will facilitate the use of modern technology and further the move towards a knowledge-based economy no longer dependent on commodity exports.

The purpose of the Bill will be to remove some of the legislative barriers that at present prevent the use of electronic communications and record-keeping and to reduce the uncertainty about the legal status of electronic communications and related uses of technology.

The proposed Bill is to be based on the model law on electronic commerce issued by UNICTRAL (United Nations Commission for International Trade Law). Where possible it will closely follow the Australian Electronic Transactions Act 1999 in order to achieve a degree of Trans-Tasman business law harmonization.

The basic concept underlying the proposed Bill will be "functional equivalence". It relies on a test of whether, given the function of an existing statutory requirement that assumes the use of paper documents electronic technology can perform that function. Therefore, the functional equivalent of "writing", for example, is an electronic record that is "accessible so as to be usable for subsequent reference". If an electronic record meets this test, it will satisfy the requirement for "writing" under any statute.

The Bill will also be technology neutral. To avoid becoming quickly outdated, it will not refer to particular technologies. The focus of the Bill is on the function of the technology and not the technology itself.

Key features of the proposed Bill will be that:

  • no transaction will be denied legal effect merely because it took place using electronic technology;
  • information that must, by statute, be provided "in writing" can be provided in electronic form if the information is accessible so as to be usable for subsequent reference, and if the recipient has agreed to receive the information in electronic form;
  • statutory requirements for a signature can be satisfied by an electronic equivalent if the electronic method used is sufficiently reliable for the relevant purpose;
  • documents that are produced for the purposes of a statute can be produced in electronic form, subject to certain requirements designed to ensure the integrity of the electronic version. This would allow electronic methods to be used where, for example, a statute requires an original document to be produced;
  • records can be made and kept in electronic form, both where the original transaction was electronic and where it was paper-based, subject to requirements designed to ensure the integrity and continued availability of the records;
  • default rules in relation to the time and place of dispatch and receipt of electronic messages will be provided; and
  • the liability of Internet Service Providers (ISPs) - for example, for defamation or breach of copyright - will be limited in respect of information which they store or transmit unless an ISP has actual knowledge of the existence of information which is actionable at civil law or gives rise to a criminal offence, and fails to remove it promptly after becoming aware of it.

The Ministry of Economic Development issued a discussion document on the proposed Bill in May this year, seeking feedback and comments. It is anticipated that a Bill will be introduced into parliament in October this year.James Aitken and Hamish Walker

Buddle Findlay
Tel: +64 4 499 4242
Fax: +64 4 499 4141

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