Australia: Signed in a snap: Claremont 24-7 Pty Ltd v Invox Pty Ltd [NO 2] [2015] WASC 220: email and electronics signatures

Construction Law Update - October 2015
Last Updated: 29 October 2015
Article by Andrew McCormack

KEYWORDS: ELECTRONIC SIGNATURES

KEY TAKEAWAY

The recent Supreme Court decision in Claremont 24-7 Pty Ltd v Invox Pty Ltd confirms that the Electronic Transactions Act 2011 (WA) operates so that an email signature will be sufficient to meet the formal requirements associated with creating interests in land.

The case is of interest to construction professionals as it is a further indication of the Court's preparedness to see through the distinction between formal and informal correspondence and look to the substance of the transaction.

The facts

The dispute concerned the lease over premises in Claremont, Perth, owned by the defendant, Invox Pty Ltd (Invox).

First agreement to lease

In May 2013, Invox and the plaintiff, Claremont 24-7 Pty Ltd (Claremont 24-7), reached agreement for the lease of the premises which Claremont 24-7 planned to operate as a gym trading as a franchisee in the "Snap Fitness" franchise. The agreement for lease was conditional on Claremont 24-7 obtaining council approval for its planned operations. This approval was not granted and accordingly the agreement for lease came to an end.

Second agreement to lease

In September 2014, Claremont 24-7 made a new offer to Invox to lease the premises. Protracted negotiations ensued. Claremont 24-7 sought to secure agreement as to the terms of the proposed lease and Claremont 24-7's exclusivity under the agreement for lease before a council meeting (scheduled for 9 December 2014) at which Claremont 24-7's development application was to be considered for approval.

On 5 December 2014, discussions took place between officers of Claremont 24-7 and Invox over the phone and via email. The parties exchanged versions of the proposed lease. Those discussions culminated in Mr Patel, on behalf of Claremont 24-7, sending an email attaching the terms of a lease in an offer to lease (which had been prepared in a Snap Fitness form) to Mr Cheah, on behalf of Invox and Invox's managing agent, a Mr Santa Maria. The offer to lease had been signed on behalf of Claremont 24-7.

Mr Cheah then sent an email to Invox's agent, copying Mr Patel. That email attached the same terms and stated:

"[the] enclosed terms in the Offer by Snap Fitness is acceptable to both parties. Could you kindly capture the terms inside Alpha Properties standard format offer that was used previously and expeditiously provide Offer and new Disclosure Statement to Amar Patel for his perusal and execution." 122

The email concluded "sincerely James Cheah". 123

Following this there were a series of communications between the parties, over a reasonably protracted period, about the transfer of the terms from one form to the other.

Events culminated on 31 December 2014 when Invox, through its agent, stated to Claremont 24-7 that it had agreed to lease the premises to another party and would "not pursue your proposal further."

Claremont 24-7 sought an injunction preventing Invox from entering into any lease with a third party.

The arguments

Invox defended the injunction on a number of bases. However, the crux of the dispute was a typical Masters v Cameron124 analysis of whether the facts supported the existence of a binding agreement as at 5 December 2014. The judge found that at that date there was a binding agreement (in the Snap Fitness Form) that would be replaced when it was put into Invox's preferred form.125

Invox argued that even if an agreement for lease was in place, it was unenforceable because Invox had not actually signed it and, on the basis of either section 34 of the Property Law Act 1969 (WA) or section 4 of the Statute of Frauds 1677 (UK)126 (the Acts). Each of the Acts requires an instrument in writing and a signature in order to create an interest in land.

In response, Claremont 24-7 argued that section 10 of the Electronic Transactions Act 2011 (WA) (ET Act) operated to overcome the lack of a wet signature by Invox on the Snap Fitness Form.

The Court's decision

The Court agreed with Claremont 24-7's analysis and found that:

  • the requirement under the Acts for an instrument in writing was satisfied by the Snap Fitness Form;
  • each of the Acts required a signature to which section 10(1) of the ET Act applied; and
  • the facts (relevantly the use of an email signature, the words "yours sincerely" by Invox's representative and the evident urgency of the situation given the impending council meeting) were such that the requirements of section 10(1) of the ET Act were met.

Conclusion

This case is the first example in Western Australia of section 10 of the ET Act being applied to overcome the lack of a wet signature on a document. Cases from other jurisdictions indicate that an email will not always meet the requirements of the relevant legislation.127

However, the case is indicative of a pragmatic approach by Parliament (and consequently the courts) to the realities of commercial transactions. For construction professionals, it is a further warning that the distinction between formal and informal correspondence is of diminishing importance: so remember, be careful when clicking "send".

http://www.austlii.edu.au/au/cases/wa/ WASC/2015/220.html

Footnotes

122 At [22]
123 At [83]
124 (1954) 91 CLR 353
125 At [54]
126 See Law Reform Act (Statute of Frauds) 1962 (WA) s 2
127 See, eg, Russells v McCardel [2014] VSC 287; J Pereira Femandes SA v Mehta [2006] 2 All ER 891; cf Stuart v Hishon [2013] NSWSC 766; Stellard Pty Ltd v North Queensland Fuel Pty Ltd [2015] QSC 119

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions