Legal Briefing No. 59

Number 59

18 June 2001

The Electronic Transactions Act 1999

In 1999 the Commonwealth Parliament enacted the Electronic
Transactions Act 1999 (the ETA). This short Act (it comprises
only 16 sections and a Schedule) is intended to provide
a 'light-handed regulatory framework
for the online environment which supports and encourages
business and consumer confidence in the use of electronic

The primary objective of the ETA is to remove impediments
that might prevent a person from using electronic communication
to satisfy obligations under Commonwealth law. To this
end, it enacts a general rule which provides that for the
purposes of a law of the Commonwealth
a transaction is not invalid because it takes place wholly
or partly by means of one or more electronic communications
(section 8).2

The ETA enacts four specific rules (which displace the
general rule) which deal with how a requirement 'under
a law of the Commonwealth' may be met by means of electronic
communications. These specific rules cover requirements

  • give information in writing
  • provide a signature
  • produce a document
  • record or retain information in writing.

The ETA also contains a number of rules which establish
the time and place of dispatch or receipt of electronic
communications, and the attribution of electronic communications
- matters which may be crucial for determining the legal
consequences of a communication (sections 14 and 15).

The most important consequence of the ETA for Commonwealth
bodies is that persons will be able to conduct most transactions
with Commonwealth bodies (for example, making an application
or a request, lodging a return or a certificate, giving
information) by means of electronic communications. Commonwealth
bodies will generally be obliged to accept these electronic

Until 1 July 2001, this obligation will only apply to
transactions under laws specifically identified in regulations
made under the ETA. However, as from 1 July 2001, the ETA
will apply generally to all transactions under all laws
of the Commonwealth, unless the relevant law or transaction
is specifically exempted in the regulations.

This briefing notes some of the issues which arise in
applying the ETA to Commonwealth bodies.

What is an Electronic Communication?

The ETA does not require that any particular form of
electronic communication be used, but is drafted in terms
which will permit the development of new technologies.
The definition of electronic communication in section 5
of the ETA refers to communications in the form of data,
text or images 'by means of guided and/or unguided electromagnetic
energy' or communications in the form of speech by the
same means 'where the speech is processed at its destination
by an automated voice recognition system'. E-mail, communication
over the Internet (for example, entering information on
a form on a web site and submitting that form) and facsimile
messages are all forms of 'electronic communication' for
the purposes of the ETA; conversations between two persons
over the telephone are not.

What is a Law of the Commonwealth?

From 1 July 2001, the ETA will apply to all 'laws of
the Commonwealth'. The ETA does not define what will constitute
a law of the Commonwealth from that date. Acts of Parliament
and regulations made under an Act are clearly 'laws of
the Commonwealth'. Additionally, an instrument or other
document made under an Act may be a 'law of the Commonwealth'
if, in its operation together with the Act, it constitutes
a rule which must be complied with and which creates rights,
obligations or liabilities. For example, guidelines made
by a Minister under a provision in an Act could be, depending
on their specific nature, a 'law of the Commonwealth'.

On the other hand, the common law is not a 'law of the
Commonwealth' for the purposes of the ETA. If the common
law imposes requirements (for example, signature requirements)
in respect of a certain kind of transaction (for example,
agreements under deed), then the ETA will not apply to
those requirements.

However, it is important to note that most states
and territories have enacted mirror legislation that will
apply in respect of the laws of their respective jurisdictions,
including the common law.3 The
relevant state or territory Act is likely to apply to transactions
which take place in accordance with the common law.

In most cases, an agreement made pursuant to the provisions
of a 'law of the Commonwealth' will not itself be a 'law
of the Commonwealth' for the purposes of the ETA. The ETA
will not apply to the requirements or permissions (for
example, the giving of a signed notice in writing) under
the agreement.

What is a Commonwealth Entity?

The ETA imposes particular requirements (discussed briefly
below) on 'Commonwealth entities' and 'persons acting on
behalf of a Commonwealth entity'. It is therefore important
to understand what is meant by these terms.

Section 5 of the ETA defines 'Commonwealth entity' to

  • a Minister
  • an officer or employee of the Commonwealth
  • a person who holds or performs the duties of an office
    under a law of the Commonwealth
  • an authority of the Commonwealth, or
  • an employee of an authority of the Commonwealth.

Significantly, Departments of State and of Parliament
are not 'Commonwealth entities', although officers and
employees within those Departments would fall within the

Other points to note in relation to the definition of
Commonwealth entity are:

  • A Commonwealth Act may establish an 'office' even if
    there is no express mention of an office being created.
    If the Act provides for an appointment, the term of that
    appointment, agreed remuneration, etc, then the traditional
    indicators of an 'office' will be present, and the person
    appointed will be performing the 'duties of an office
    under a law of the Commonwealth' and thus be a 'Commonwealth
    entity' for the purposes of the ETA.
  • There are a number of cases which
    have considered the meaning of 'authority', 'public authority',
    'Commonwealth authority', and similar expressions.4 Ultimately,
    the question of whether a particular body is an authority
    will be a question of fact and degree dependent on all
    the circumstances of the case.
  • The ETA does not define when someone will be 'a person
    acting on behalf of a Commonwealth entity'. However,
    we think that the expression is to be interpreted as
    referring to a person who performs some function (for
    example, receiving information) in place of, and by the
    authority of, a Commonwealth entity.

Potentially, this extends the operation of the ETA to
many situations in which a contractor for a Commonwealth
entity performs functions which involve the receipt of
information from persons who wish to transact with that

Whether or not a contractor will be 'acting on behalf
of a Commonwealth entity' will need to be determined on
a case by case basis.

Writing, Signature, Production and Retention

Sections 9-12 of the ETA are in similar terms: if under
a law of the Commonwealth a person is required or permitted
to give information in writing, required to sign, or required
to produce or retain a document, that requirement can be
satisfied by an electronic communication, if certain conditions
are met.

Where a person is required, for example, to provide information
to a Commonwealth entity, or a person acting on behalf
of a Commonwealth entity, the provision of that information
by means of an electronic communication will be sufficient
to satisfy that requirement. In other words, the Commonwealth
entity, or the person acting on behalf of the Commonwealth
entity, is effectively obliged to accept the provision
of the information by means of electronic communication.

However, the Commonwealth entity may require the person
giving the information to do so by means of a particular
kind of electronic communication (which is in accordance
with particular information technology requirements), and
may also require that a particular action be taken to verify
the receipt of the information.

This means that a Commonwealth entity may specify what
information technology requirements must be satisfied by
those wanting to communicate with the entity by electronic
means. For example, the Commonwealth entity could specify
that it will only receive electronic communications in
the form of facsimile messages, or by submission of a particular
form found on the entity's web site.

Commonwealth bodies should be aware of some key issues
in regard to the specification of information technology

  • An entity cannot specify that no electronic communications
    will be received, or that no electronic signatures will
    be considered. If the entity wishes to be excluded from
    the operation of sections 9-12 of the ETA, it must seek
    an exemption. (Section 13 of the ETA permits the making
    of exemptions under regulations.)
  • An entity cannot specify criteria other than information
    technology requirements. For example, an entity cannot
    specify that only people living in remote areas are permitted
    to submit a given form by fax, while people living in
    urban centres must submit the information by using the
    electronic form on the entity's web site.
  • Although it is not specified as a requirement in the
    ETA, an entity will need to give adequate notice of the
    technology requirements it has set to people who may
    want to communicate with it by electronic means. What
    will constitute adequate notice will need to be determined
    on a case by case basis, and will depend in part on the
    information technology requirements that are set.

If a person receiving information, signatures or documents
is neither a Commonwealth entity nor acting on behalf of
such an entity, the impact of the rules in sections 9-12
is limited by the need for that person to consent to the
use of electronic communications by the person providing
the information, signatures or documents. This means, for
example, that if a Commonwealth body is required to give
information to members of the public and it wishes to do
so by means of electronic communications, it will need
to obtain their consent.

Section 5 of the ETA defines 'consent' to include consent
that can reasonably be inferred from the conduct of the
person concerned. Whether or not consent can be reasonably
inferred will generally depend on the circumstances of
the case and on the relationship between the Commonwealth
entity and that person.


1 Second
Reading Speech, House of Representatives, 30/6/99.

2 The
general rule does not validate a transaction that takes
place by means of electronic communications if that transaction
would otherwise be invalid.

3 As
of 7 June 2001, the Australian Capital Territory, New South
Wales, the Northern Territory, Queensland, South Australia,
Tasmania and Victoria have enacted an Electronic Transactions
Act. It is anticipated that the other states will also
enact mirror legislation in due course.

4 A
useful summary of the propositions arising from the cases
in this area can be found in the judgment of Hill J in Federal
Commissioner of Taxation v Bank of Western Australia (1995)
133 ALR 599.

For further information please contact Kathryn Graham,
Office of General Counsel on tel (02) 6253 7035 or e-mail or
any of the following lawyers:


Leo Hardiman

(02) 6253 7074

Lisa De Ferrari

(02) 6253 7078


Megan Pitt

(02) 9581 7474


Martin Bruckard

(03) 9242 1386


David Durack

(07) 3360 5700


Graeme Windsor

(08) 9268 1102


Sarah Court

(08) 8205 4231


Rick Andruszko

(08) 8943 1400


Peter Bowen

(03) 6220 5474

For other Government Online Legal Issues contact Anne
Caine on tel (02) 6253 7145 or

For policy matters relating to the Electronic Transactions
Act contact Colin Minihan, Attorney-General's Department
on tel (02) 6250 5423 or e-mail

For enquiries regarding supply of issues of the Briefing,
change of address details etc, Tel: (02) 6253 7052 or Fax:
(02) 6253 7313 or e-mail:
A copy of this article is published in the 'For Clients'
section of our web site:

For enquiries regarding supply of issues of the Briefing,
change of address details etc,
Tel: (02) 6253 7052 or Fax: (02) 6253 7313 or e-mail:

ISSN 1448-4803 (Print)
ISSN 2204-6283 (Online)

The material in this briefing is provided
for general information only and should not be relied
upon for the purpose of a particular matter. Please contact
AGS before any action or decision is taken on the basis
of any of the material in this briefing.

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