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Electronic Land Dealings in Canada, New Zealand and the United Kingdom: Lessons for Australia

Author: Sharon Christensen LLB (Hons), LLM
Gadens Professor in Property Law, Queensland University of Technology Faculty of Law
Issue: Volume 11, Number 4 (December 2004)

Contents

    Introduction

    The physical immediacy of paper - its touch and smell - are reassuring proof of our existence and of our past[1]

  1. Electronic commerce offers new ways of conducting commercial transactions. Changes in the way commerce is undertaken nationally and internationally has placed greater reliance on technology and increased the use of the Internet as an interactive medium. The nature of the Internet as "a decentralised, global medium of communication comprising a global web of linked networks and computers"[2] has created issues for the formation of common contracts, given rise to complex jurisdictional problems, ignited debate on privacy and defamation issues, created new intellectual property rights which require protection and created a variety of complex consumer protection issues which may not be covered by present legislation.

  2. Computerisation of land registration or land information systems of each State and Territory of Australia is an inevitable consequence of the global penetration of computers into everyday transactions. External factors such as the push for greater efficiencies in legal transactions, a reduction in legal costs and a desire to maintain security of title and prevent fraud creates a suitable environment for improving the current technology. Although the opportunity for improvement in efficiencies through the use of digital technology was recognised at an early stage, by several commentators[3] the move to a paperless registration system has been slow to gather any pace. One obvious factor that has contributed to this reluctance is the desire to maintain a paper certificate of title as evidence of ownership and mechanism of minimising fraud. Only two Australian jurisdictions have dispensed with the automatic issuing of certificates of title, namely Queensland and the Northern Territory. Despite initial concerns about increased fraudulent activity very few instances of fraud involving an electronic title have been reported, with the great majority still being perpetrated by individuals with access to paper title deeds.[4] Given this experience is it valid to argue that the integrity of the Torrens system can only be preserved by keeping paper certificates of title or is it possible to introduce an electronic system that also retains the hallmarks of the Torrens system as originally conceptualised.

    Technology Advances in Other Jurisdictions

    Ontario, Canada

  3. Several other international Torrens jurisdictions have developed and implemented a range of electronic systems for the lodgement and registration process, of which Ontario, Canada is the most advanced. The development of electronic delivery of land registration services in Ontario began in the late 1980s, when the Ontario Ministry of Consumer and Commercial Relations (MCCR) began building POLARIS (the Province of Ontario Land Registration Information System), with the objective of automating Ontario's land registration system. Following the automation of the land registration records came the introduction of electronic remote search services and later, electronic registration of land titles documents, through software called Teraview. [5] This electronic land registration system was developed by Teranet Inc[6] in consultation with the MCCR, real estate lawyers and other stakeholders. The e-reg system was launched as a pilot project by the government in 1999 and implementation is progressing across the province county by county. [7] In September 2002, Toronto, the largest and busiest Land Registry Office in Ontario, entered the first phase of the electronic registration program.[8] As of April 2004, automated records were available in 28 of the province's 54 land registry offices. In the counties where electronic land registration is available, 95% of all registrations are now submitted electronically.[9]

  4. The system includes an automated land registration database and a web based gateway for registration hosted by a third party provider, Teranet. The web based system allows lawyers, banks, conveyancers and members of the public to register dealings electronically provided they have an account with Teranet. The user must identify the type of document they want to create and register (for example, transfer, mortgage, discharge or document general). Certain fields of information such as the municipal address, the current owner's name and the legal description of the property are automatically pre-populated into the document from the POLARIS database. After preparing the document, the lawyer makes it available electronically to the lawyer representing the other party. Once the authority of the client is obtained[10] the information is certified as complete by the lawyer for each party by attaching their electronic signature.

  5. All titles office fees and stamp duty are paid electronically from nominated accounts. The system aims to allow all dealings to occur electronically and allows users to upload copies of documents, such as declarations, leases and mortgages in electronic form. If the document contains compliance with law statements[11] the e-reg system will only accept a completeness signature from a user who is authorised to practise law in Ontario. Teranet records will show whether a registered user is so authorised. The Law Society of Upper Canada will also provide Teranet with updates on lawyer status so that it can register new lawyers or deny access to retired, disbarred or suspended lawyers.[12]

  6. When the lawyer who has prepared the document is ready to release the document for registration, the lawyer must sign the document for release. The release signature can be added by the lawyer who has prepared the document, by a conveyancer or by another user.

  7. The transfer of funds at settlement occurs in the usual way and should comply with the procedure contained in the Document Registration Agreement.[13] After the transfer of funds documents are electronically submitted for receipt by the system. The registrant is provided with the registration number and a copy of document.

    British Columbia, Canada

  8. In British Columbia, Canada, the Land Title Branch commenced its Electronic Filing System (EFS) [14] on 1 April 2004. The system enables authorised users to electronically submit Land Title documents for registration. Similarly with the Ontario, access is restricted to holders of a BC Online account however, users are required to download forms and have the form signed by the client in paper prior to uploading it as a PDF file for the system to read electronically. The system mirrors to a significant extent the existing conveyancing procedures in British Columbia but allows the parties to upload a document for registration rather than lodging a paper copy over the Titles Office counter. Access to the electronic forms located on BC OnLine is limited to users with a BC Online account.[15] Once a form is downloaded from BC OnLine it must be saved onto the firm's computer system. The forms are in Adobe Acrobat format and are designed to be filled out using Adobe Acrobat 6. The purchaser's lawyer fills in the pre-determined fields. The lawyer can click on the LOCK button[16] which freezes or locks all the data on the form and a unique identifier number is assigned.

  9. The purchaser's lawyer can transmit the package containing the relevant electronic documents to the vendor's lawyer. The vendor's lawyer or notary can view the document and make changes where necessary by unlocking the document. A new version control number will then be assigned.

  10. The vendor's lawyer will then print a copy of the transfer for execution by the vendor. The vendor's lawyer will usually witness execution of the paper copy of the transfer and will sign the transfer as certifying officer. The copy is evidence of the vendor's intention to be bound, has the effect of delivery and is an instruction to his/her lawyer or notary to authorise submission for registration

  11. The vendor's lawyer will then incorporate his or her electronic signature into the electronic form.[17] This incorporation is a certification by the lawyer that:

  12. The vendor's lawyer will then electronically forward the form back to the purchaser's lawyer. Once an electronic signature is incorporated into the form it can be submitted by any party who has access to BC Online, such as the lawyer's staff or third parties such as registration agents.

  13. When the form is received by the Land Title Office, the system will automatically ensure that the electronic signature matches the copy of the certificate on file with the Law Society. As long as the certificate has not been revoked, this authenticates the electronic signature of the lawyer and means that he or she is a member in good standing with the Law Society.

  14. The submitter's BC Online account is then debited for registration fees and property transfer tax is paid by an electronic funds transfer from either a general or trust account. The application is electronically marked up. After markup an email is automatically sent to the purchaser's lawyer or notary which advises that the application is marked up and gives the pending number. The electronic form is converted to image, examined by an examiner and registered as in the paper transaction.

    New Zealand

  15. New Zealand has also introduced a system similar to that in Ontario, Canada. The system is called Landonline, administered by Land Information New Zealand (LINZ).[19] This system contain electronic title records, instruments and plans.[20] In 2002, the Land Transfer Act 1952 (NZ)[21] was amended to support the introduction of electronic lodgement for title transactions with remote electronic lodgement for conveyancers and surveyors with electronic registration of dealings commencing in 2003.[22]

  16. The process of creating and lodging an electronic dealing, called an eDealing, includes the following steps: create dealing, prepare, certify and sign, settle and release, submit and register. An eDealing is created electronically using electronic templates in a shared workspace where many details such as current owner's name, are entered automatically onto the electronic template from the titles register. To submit an edealing, the instruments must be certified and electronically signed using a digital certificate. Only conveyancers[23] who are nominated on the A & I (Authority and Instruction) form can certify and sign eDealings. They must have a digital certificate and appropriate privilege allocated within the firm.

  17. Once both conveyancers are satisfied the eDealing proceeds to the settlement and release stage. This stage allows for the instruments to be released and the eDealing electronically submitted to LINZ with a lodgement priority date assigned. Upon submission, Landonline runs automated checks. If the dealing passes it is registered immediately and the titles register is automatically updated without manual intervention by Land Information New Zealand (LINZ). The submitting conveyancer receives an electronic notice confirming registration.

    United Kingdom

  18. In the United Kingdom the Land Registry has plans to introduce a paperless, system, which provides for electronic contracts of sale and electronic transfer and mortgage deeds, eliminates the registration gap, handles chain sales transparently, is more secure and fraud-resistant than at present, and provides for automatic simultaneous money transfer for settlement.[24] To support these changes, the Land Registration Act 2002 (UK) was enacted and came into force on 13 October 2003. These plans, while progressing, are in their infancy. [25] Only the release of mortgages by financial institutions is occurring at this time, with the successful completion of the Land Registry's pilot of a system (called Electronic Discharges) which allows mortgage lenders to discharge some of their registered charges electronically.

  19. The Land Registry Office are in the final phase of developing a fully operational E-conveyancing system to be hosted by Land Registry. It is envisaged that the system will allow for the creation of an electronic contract, the lodgement of data for a dealing and will include an electronic funds transfer (EFT) system. To meet this vision, E-conveyacing will have 3 service models with LR to provide access either:
    a. Directly to the system
    b. Via a third party provider (NLIS)
    c. Via a dedicated VPN (probably only for larger clients).

  20. Unlike the Canadian models LR are not in favour of outsourcing this shared space and do not want to grant any exclusive licences for access. Although the vision includes an EFT system this part of the system has not been developed. The current view was that LR would contract with an agent bank. The parties would develop settlement statements detailing the payment of funds including payment to LR, agent's commission, lawyers fees and balance purchase monies. The buyer would pay funds to an account with the agent bank prior to the actual settlement, once agent bank receives instructions (ie settlement statement) they are irrevocable.

  21. The other issue LR is grappling with is how the information will be signed by the parties. LR is looking at a type of PKI system and considering setting up as a certifying authority. Obviously there is some reluctance due to cost of such a system. Law Society is also reluctant to take on the role due to cost. Some discussion of the possibility of providing accounts to lawyers firms rather than individual lawyers.

  22. The proposed system is intended to operate in the following way:

    1. The system is accessed using the case management software within the law firm. From the Land Registry Direct system details of the land are accessed and downloaded to a case file.

    2. After collecting the necessary information the user finds the template within the e-conveyancing system and uses the information to populate the draft contract within the system.

    3. User goes to the LR website (e-conveyancing) enters using a user name and password. Submits the documents to the system and keys in the title.

    4. The system will check the information and validate it. If the information does not match the information in the LR system it will be rejected.

    5. The system notifies the solicitor for the buyer that ready.

    6. Seller can amend the details, add special conditions and save.

    7. Once the parties have agreed on the terms the solicitors or the parties can sign.

    8. Solicitor would notify on chain matrix system that contract formed.

    9. The chain matrix system allows all parties in the chain to see what is happening in different parts of the chain.

    10. After contract and before settlement system can create a notional register for the parties to view.

    11. Prior to exchange buyer will check the register

    12. Chain matrix system used to acknowledge exchange

    13. At exchange the register freezes to prevent other activity and enters the beneficial ownership on the register.

    14. Transfer form 1 is populated through the contract and digitally signed by the solicitor.

    15. The chain matrix shows when they are ready for completion.

    16. There will be a facility to withdraw the certification for settlement.

    17. Once settlement is checked by all parties automatic registration will occur.

    Australian Developments

  23. The Registrars of Title throughout Australia have formed a joint collaborative group for the purpose of developing electronic lodgement and registration systems in each Australian State. Victoria is the most advanced in the development of an e-lodgement system, while New South Wales has produced a consultation paper for stakeholders. In Queensland the paper certificate of title was abolished in 1994 and replaced with a computer generated duplicate certificate of title which only issues if requested by the parties. The current system allows parties to search and obtain historical data and to submit completed instruments in electronic form for registration via optical character recognition (OCR). Once received, the imaged documents are acknowledged electronically and scanned to extract essential data for recording on the Register.[26] This is similar to the process operating within the British Columbia registry albeit in a more refined electronic form. Although the register exists in electronic form, this model is not a fully electronic lodgement system. Information is still required to be prepared in a paper format for signing and scanning. Titles Office staff still need to manually record the information on the register which updates the electronic title.

  24. Property transactions in New South Wales still depend on the initial completion and lodgement of paper records. New South Wales has recently released a public consultation document which looks at moving paper based lodgement to electronic lodgement, settlement and automatic registration.[27]

  25. The most advanced proposal for an electronic lodgement system in Australia is Victoria. In 2002, Land Victoria secured $24 million over three years to develop Land Exchange, which is an online market place where parties can exchange land related information and perform transactions via the internet.[28] A central component of the Land Exchange is Electronic Conveyancing Victoria (ECV) project. Victoria is intending to implement electronic settlement and lodgement concurrently and is aiming to have the first stage operational by mid 2005. Victoria is also the first state in Australia to pass legislation enabling the electronic lodgement and registration of electronic documents. The Transfer of Land (Electronic Transactions) Act 2004 (Vic) commenced on 18 May 2004.

  26. The remainder of this article will provide a comparative analysis of the international systems discussed to determine what lessons there are for Australia. The issues to be examined have been selected because of their commonality across each of the jurisdictions and are considered to be threshold issues for the implementation of electronic land dealing systems in Australia.

    Critical Issues for the Australian Context

  27. A number of critical issues emerge from the experiences of other jurisdictions which require examination for the Australian context. A threshold issue for the development of an e-lodgement or e-conveyancing system within Australia is the type of system to be adopted. This decision will impact significantly on the solutions proposed for a range of other issues raised by an electronic system. Each of the jurisdictions examined have systems with different levels of complexity, functionality and access requirements. One of the important driving factors for determining this issue in each jurisdiction has been the compatibility of the system with the existing lodgement and conveyancing processes and feedback from stakeholders on the type of system which would be adopted within the jurisdiction. This threshold issue impacts on decisions in other key areas such as access and security. A decision concerning the extent of a system can take either a minimalist approach or a reformist approach.

  28. An example of the minimalist approach appears in British Columbia where the system allows practitioners to complete the same paper forms in electronic form and lodge for registration using an interface provided by BC online. The Titles Office paid particular attention to feedback from stakeholders indicating a minimal change to their business practices was preferred. This approach has resulted in a high take up by the profession within British Columbia in a short period of time. The advantages of the British Columbia approach is the ability to continue operating a dual paper and electronic system, the ability for practitioners to opt in to the system and the fact that existing conveyancing procedures were taken into account.

  29. An example of the reformist approach appears in Ontario where all dealings are required to be undertaken electronically, information is prescribed rather than forms and dealings involving land are no longer required to be in writing.[29] While this approach provides a flexible technological framework for a range of transactions, greater consideration of the impact of the system on the conveyancing processes, whether the system should be mandated and access rights of individuals was required. Even in this highly electronic environment lawyers are still required to create and retain paper versions of documents for some transactions. Given that there are some documents which will not easily be available in electronic form, is a completely electronic lodgement and conveyancing system possible?

  30. In England the Land Registry is proposing ultimately to have a system that incorporates electronic contracts and electronic funds transfer. In Australia, the current proposal is to limit the system to electronic lodgement and electronic funds transfer.[30] The contract of sale will still need to be in paper form. Even this level of automation requires consideration of:

  31. A central concern when considering each of these issues for the Australian context is the maintenance of the underlying principles of Torrens within an electronic system.

    Key Features of an Electronic Land Registry for Maintaining Torrens

  32. The Torrens system of land registration possess five qualities: certainty and integrity of title, reliability, simplicity and ease of use and economy.[31] The fundamental principle that registration confers an indefeasible title guaranteed by the State arises from the keystone quality of certainty and integrity of title.[32] Thus once title is registered, absolute security of that title is guaranteed to the registered owner. Operating in conjunction with the State guarantee of title is the principle which Ruoff refers to as the "mirror principle". This principle arises from the use of a central register where each parcel of land is recorded in a separate folio in the register. The register should therefore operate as a mirror to accurately and completely reflect all interests in the land material to the owner's title.[33] This provides the other qualities of reliability, simplicity and ease of use by allowing any person to discover all the interests or encumbrances to which the land is subject by searching the registry.

  33. A number of the suggested proposals for electronic lodgement of instruments in the Titles Office impact on the continued relevance of those qualities to the land registry system. In particular the changes to lodging and registration practices may have a fundamental impact on the security of title and therefore the principles of certainty, integrity and reliability. Allowing internet access to a lodging system that provides a gateway to the land registry system opens greater possibilities for computer related fraudulent practices and potentially threatens the security and integrity of the title. It is acknowledged that fraudulent practices have developed in a paper based Torrens system[34] but the use of technology opens opportunities not only to commit the same types of fraud as appear in the paper system but also to invent new methods for defrauding individuals particularly through identify fraud.

  34. Identity fraud or identity theft refers to the "unlawful taking of another person's details without their permission".[35] It "generally involves a person falsely representing himself or herself as either another person or a fictitious person"[36] and using that assumed identity to commit a crime. In the paper world, identity theft relies on information obtained from stolen wallets, stolen mails etc. An important element required for the perpetration of identity fraud in the paper world is the physical proximity between the victim and the thief. With the Internet and electronic data storage systems, the ease in which an individual can 'steal' such personal information is increased[37] as the necessity of physical proximity is no longer an issue. [38]

  35. The problems of identity fraud and the security and integrity of electronic databases are particularly pertinent to an electronic registration system where all dealings are done online and the titles are held in a computerised format in an electronic database. These two problems have the potential to undermine the underlying premise of State guarantee of title. As remarked by Graycar and Smith: In the past, sophisticated paper-based systems were present to reduce the opportunities for fraud involving conveyancing transactions. As we move into on-line registration of titles and electronic transactions, new opportunities arise for people within organisations as well as for external customers to misrepresent themselves and to manipulate electronic transactions for financial gain[39]

  36. The growth of identify fraud presents a potent reason for close examination of the critical features necessary to uphold the existing Torrens qualities. As the register forms an integral part of the Torrens system[40] it is crucial that in a move from a paper based land transactions to an electronic one, the integrity and security of the register is maintained and that the electronic system contains a robust security infrastructure that minimises fraud. The critical features proposed for maintaining security and integrity of the registry will be considered and the experience of other jurisdictions discussed. The proposed features for an Australian system are:

    1. Access limited to registered professionals with appropriate indemnity insurance;

    2. Identification and validation of identity of users through a digital signature system;

    3. Certification by users of the system to the Titles Office in relation to the identity and authority of the parties involved in the transaction;

    4. Requirements for archiving and retention of paper documents needed to support registration for specified period.

    Access to an Electronic Registry - Who, how and on what terms?

  37. Access rights present potential threats to the security of a land registry system if not appropriately implemented and managed. Some of the initial questions raised by the issue of access include, who should have access, how should access be given and what types of conditions should govern the right to access? The approach of other jurisdictions to this issue is mixed. To access Landonline which is operated by the New Zealand governement, users must have a digital certificate.[41] An individual can only obtain and use a digital certificate when associated with a firm that has bought a license to use Landonline. At the time of application for the license, the firm will be asked to provide the names of the people who will be using the Landonline functions available under that licence. [42] The staff members listed on the application form must each have a digital certificate. A digital certificate is an electronic identifier, unique to the user, created and stored on the user's computer. It is usually obtained from a third party certification authority after the individual provides sufficient proof of their identity. The digital certificate can then be used by the individual to sign electronic documents. A detailed access agreement governs the relationship between the lawyers accessing the system and the government.

  38. This can be contrasted with the open system of access in Ontario where any person may lodge electronic documents for registration in the Land Registry provided they have an account with a third party licensed operator, Teranet.[43] A Personal Security Package (PSP) consisting of a personal security disk (floppy diskette with encrypted information) and a pass phrase is also required to access the system[44] A detailed subscriber agreement is entered into between the user and Teranet. There is no direct agreement with the Ontario Land Registry department.

  39. In British Columbia, access to the system is only restricted by the requirement to have a BC Online account but instruments can only be lodged for registration if signed by a lawyer using a Juricert signature.[45] Each individual using the electronic filing system is required to have his/her own user ID. The BC Online user IDs are created at the time of setting up the BC Online account. Access to BC Online can be obtained by keying in the user ID. Therefore, in Ontario and NZ although the legal arrangements between the parties differs, operates on the same principle (ie PKI controls access to systems). This differs from the BC system, which only requires a user ID for access. The Juricert certificate is only required for signing, not to log on to the system.

  40. England has not yet decided how access will be controlled or who will have access to the system although it is envisaged that the system will be opened to "do it yourself" law conveyancers. It may be that such people will be given access to the network possibly by attending at District Land Registries where they can be provided with a computer terminal linked to the network and where Land Registry staff can verify their identity.[46]

  41. It is likely that any Australian based electronic lodgement system will initially be restricted to authorised users who meet certain criteria, the most important of which is the need to be covered by a professional indemnity and regulatory scheme. Lawyers, financial institutions, registered conveyancers and land agents potentially satisfy the criteria. Restriction of access, together with the proposed use of digital signatures for authentication of instruments, is consistent with approaches in other jurisdictions for effectively maintaining a secure and robust system that minimises the opportunities for undetectable fraudulent practices. The use of unique identifying markers for each user allows the operator of the system to monitor and track the usage of the system by individuals which would not be possible if the system was open for public use without any security mechanisms for granting access.

    Improved integrity, security and reliability through a digital signature system

  42. Restricting access rights to an electronic lodgement system has limited potential for minimising fraud unless implemented with other security features. One of the additional security features proposed is a requirement for all instruments to be signed using a digital signature.

    What type of signature system should be used?

  43. There are many ways an electronic document may be signed:[47]

    1. Using a manuscript signature which is scanned as an image into a word processing file so that the document may be printed out for transmission by post or otherwise; or

    2. Typing a name at the bottom of an email or document; or

    3. Using a digital signature which attaches to or is logically associated with the electronic document.

    All of these methods may be generically termed electronic signatures as they are methods of authenticating an electronic document, although they will have varying degrees of effectiveness in protecting the integrity of the electronic document. Digital signatures using public key encryption present the most secure option of those listed.

  44. A digital signature using public key encryption is produced by a computer performing a mathematical function on the document. The digital signature is operated by two keys, a private key and a public key. Each key will decrypt messages encrypted by the other key. This allows one key (private key) to be kept secret while the other is available publicly (public key). This technology will allow the receiver of the signed message, who has access to the signer's public key, to ascertain:

    (i) whether the communication was encrypted using the sender's private key; and

    (ii) whether the message has been altered after the transformation occurred.

  45. The private and public key are referred to as a public key pair. Public keys are held in digital certificates. A digital certificate is a file on a computer system.[48] Private keys may be held in files on computers, on discs or smart cards. The keys will be two large prime numbers[49] which are related to each other mathematically but it will not be possible to determine the private key by simply knowing the public key. The private key should be treated like a pin number and kept secret by the holder of the key. Any document signed by using the private key can only be verified by use of the public key.

  46. The main difficulty with public key cryptography is that it does not prove the sender's identity. When a person receives a digitally signed message from a sender, how would that person know that the public key of the sender contained in the digitally signed message is really the sender's public key? An impostor (X) could have generated a public/private key pair, signed the message, stating that it is from A. The recipient of the digitally signed message, if he/she believes X, would then assume that the message came from A. The recipient would use X's public key in the message to decrypt the digital signature, thinking that it is A's public key.

  47. Public key infrastructure can be used to solve this problem. Systems developed to manage private/public keys are referred to as public key infrastructure (PKI). PKI seeks to ensure that the system for distribution of the keys is made reliable. The PKI systems around the world generally utilise the services of trusted third parties to perform these functions.[50] The trusted third party is generally called a certification authority (CA).[51] Its main function is to verify the relationship between the identity of the sender and the public key of the sender through the issuance of certificates. The certificate issued by the trusted third party certifies that the public key is indeed the valid public key for that sender. The recipient on receiving an encrypted message will receive the sender's public key and also a certificate from the CA certifying that that public key is correct and valid.

    Types of electronic signature infrastructure used in BC, NZ and Ontario

    New Zealand

  48. The New Zealand eDealing model uses a form of PKI infrastructure with (Land Information New Zealand) LINZ as the registration authority (RA) and a third party vendor called beTRUSTed as the CA. The CA provides the PKI infrastructure service responsible for generating digital certificates. To certify and sign an instrument the solicitor must use his/her digital certificate. To obtain a digital certificate, Landonline users must apply to the LINZ Registration Authority using an online form on the Landonline web site. Proof of the person's identity[52] must be provided in one of three forms before a digital certificate is issued. The options are:

    The proof of ID form must be completed on paper. A solicitor, court registrar, justice of the peace or a notary public or any person authorised to take declarations pursuant to the Oaths and Declarations Act 1957 (NZ) (these persons are known as Proof of Identity Certifier) will need to cite this form for verification. The verified Proof of ID form must be faxed or mailed to LINZ RA.

  49. Once the application has been approved, the applicant is notified via email. The email contains the activation codes necessary to generate the digital certificate. During this registration process, the private and public keys are also immediately created from the local Internet browser in the applicant's workstation. The private key that is generated during registration is the key pair that must be kept private. The public key is the revealed part of the key pair. When the public key is generated, the public key is automatically delivered to the CA via email (beTRUSTed). It is then signed by beTRUSTed and returned to the subscriber as a digital certificate. A copy of the public key is also kept by the CA and is posted to the CA Master Directory. So the public key is contained in the digital certificate. The public key is used to verify a digital signature and hence it is made freely available to LINZ who receives digitally signed transactions from the subscriber.

    Ontario

  50. Teraview gateway software also uses public key cryptography as their electronic signature infrastructure. Each user of Teraview is assigned a unique electronic security identity called a Personal Security Package (PSP) consisting of a personal security disk (floppy diskette with encrypted information) and a pass phrase. Teranet acts as both the registration and certification authority. To obtain a PSP system users must be authorised by both Teranet (acting as the Certification Authority)[53] and the Teraview Account Holder (the person at the applicant's firm/company who is ultimately responsible for all users who are granted access to the Teraview gateway). Authorisation is obtained when Teranet accepts the completed application forms[54] and verifies the applicant's identity.[55]

  51. The PSP is able to be used to sign and encrypt documents on the Teraview site. The personal security disk contains information unique to each user that is used to prepare documents, sign statements of law and electronically register documents.[56] As the security diskette is unique to the individual, it would be difficult for an individual to repudiate his/her signature placed on a document using the diskette. Of course the degree of security provided depends upon the personal security exercised by the holder of the diskette.[57] Fraud can still be perpetrated if another person obtains the diskette and password.

    British Columbia

  52. The British Columbia lawyers must obtain a Juricert authenticated certificate for signing electronic instruments. To do this, lawyers must first register with Juricert. [58]

  53. When an electronic form is submitted to the land title office with an electronic signature, the land title system will automatically ensure that the electronic signature matches the copy of the certificate on file with Juricert. As long as the certificate has not been revoked, this authenticates the electronic signature of the lawyer and means that he/she is a member in good standing with the Law Society.

  54. The main difference between the NZ, Ontario and BC system is that in BC, Juricert is merely a credential, not a certificate authority. It is technology neutral, that is, it is not dependant on a single certificate technology. Lawyers must be registered with Juricert and their have credentials verified before the Acrobat signing certificate is issued, however the lawyer could also use other PKI certificates issued by other commercial certification authorities to digitally sign instruments so long as that certificate was issued on the basis of an initial Juricert registration and authentication process. To use those other certificates with the electronic filing system the lawyers must also register the other certificates with the Law Society.[61]

  55. England has yet to decide on the exact technological framework for the use of electronic signatures, although it appears that Land Registry envisage that the electronic signatures will be based on some form of PKI. [62] In the e-conveyancing consultation exercise held between May and August 2002[63] many of the respondents expressed concern over the use of electronic signatures and PKI systems. The general feeling was that technology has not yet been proven and needs to be developed further. As expressed by the Law Society of England and Wales[64]

    The insecurities of the Internet have become widely acknowledged, and PKI has been much promoted as the key enabling technology to allow electronic commerce to proceed safely...the Law Society believes that great caution is needed before a process as sensitive as e-conveyancing can wisely be launched on the basis of a business model of PKI that remains largely untried on any comparable scale.

  56. Many of the respondents to the e-conveyancing consultation exercise also expressed concern regarding certification[65] of electronic signatures. Respondents raised the issue of whether third party certificates should be accepted or whether the Government should develop its own certification authority. Many of the comments made by respondents surrounded the operation of the certification authority to ensure absolute security and the authenticity of electronic signatures.[66]

    Considerations for an Australian context

  57. It is suggested that any consideration of the requirements for signing electronic instruments within the Australian context must take account of the reliability of available technology and existing legal requirements for issuing digital signatures, current conveyancing practice within each jurisdiction, and the purpose of requiring a digital signature on an electronic instrument. The interaction of these factors will determine the criteria for a legal framework underlying the execution of land title instruments.

    (i) Reliability of Australian Public Key Infrastructure

  58. In Australia the Federal government has developed and implemented a PKI framework referred to as Gatekeeper. The Gatekeeper initiative is a key enabler for the delivery of online government services.[67] The Gatekeeper strategy was released in May 1998 with the objective of contributing to the security of electronic transactions, privacy protection and legal assurance of electronic transactions. The framework provides for a variety of parties within the process including certification authorities (CA) and registering authorities (RA). The role of the certification authority is to issue and sign digital certificates, maintain directories of certificates including revoked certificates. A registering authority is responsible for performing identity checks on a person applying for a certificate and linking the proof of identity with the digital certificate received. Both CAs and RAs need to be accredited under the Gatekeeper framework before the digital certificates issued can be used by a holder in a government transaction. At present the Australian Government Information Management Office (AGIMO)[68] has responsibility for accrediting organisations under the Gatekeeper PKI framework although this is currently in the process of being transferred to the National Association of Testing Authorities (NATA).

  59. As part of the Gatekeeper initiative the Australian government has developed a Gatekeeper digital certificate base around the Australian Business Number. The Australian Business Number Digital Signature Certificate (ABN-DSC) was designed to enable business entities to use a single digital certificate that will be accepted for use by all government agencies and is designed to be used in an open PKI system.[69] Only Gatekeeper accredited Certification Authorities are able to issue an ABN-DSC.[70]

  60. One of the current proposals is for Titles Office instruments to be signed using an ABN-DSC. This provides the security benefits of being a Gatekeeper accredited certificate and allows businesses the flexibility of assigning levels of authorisation to authorised users within the firm. Each authorised user will need to be identified (probably through the access agreement with the Titles Office) and liability for unauthorised use will generally lie with the business.

    (ii) Purpose of signing using a digital certificate

  61. The purpose of requiring instruments to be signed using a PKI digital certificate is twofold:

  62. Can these two objectives be achieved using a PKI digital certificate? In theory it is possible to use a private key to encrypt the document so that the receiver when using the public key to open the document can establish if the document has been changed between signing and receipt. Although some commentators have raised concerns about the ability to detect changes[71] it is generally accepted that the receiver of a document signed with a private key will be able to establish the integrity of the documents sent.[72] Can a digital signature establish identity? This is a more difficult issue. Again in theory the recipient of an electronic document signed using a private key may be entitled to assume the document was signed and sent by the person to whom the key was issued. Like a physical signature on a paper document however, a person is entitled to deny the signature was placed on the document by them or with their authority.[73] It could be argued that in fact the potential for forgery or unauthorised use of a private key is greater given the ease with which a key could be used once access to the key and the password had been obtained. Is it feasible therefore to dispense with the requirement of witnessing on the basis the identity of the signing party is established through the key? One approach may be to retain the requirement for witnessing as a method of further minimising the possibility of fraud. The other approach is to place liability either contractually or under legislation[74] upon the holder of the key for unauthorised use of the private key where they have failed to take reasonable care of the key and password.

    (iii) Conveyancing Practice

  63. Will the use of electronic signatures require changes to current conveyancing practice? Different conveyancing practices exist is each State of Australia. Several general questions need to be considered in each jurisdiction:

  64. In BC, Ontario and New Zealand the conveyancing practice prior to the introduction of electronic lodgement was for lawyers to sign titles office instruments on behalf of their clients. In England, the general practice is for clients to sign both contracts and titles office instruments. The transition to an electronic environment in BC, Ontario and New Zealand took account of the current practices related to the execution of documents by continuing the execution of documents by lawyers. In England suggestions that lawyers would sign both contracts and titles office instruments has been met with resistance primarily due to concerns about liability for alleged breaches of authority to sign.

  65. In Australia, the practice is generally that the transferor of a property will sign the transfer form however, a lawyer may be able to sign the form on behalf of a transferee. In jurisdictions where the transferor normally signs resistance similar to that experienced in England is likely, on the basis of increased potential for allegations by clients of a lack of authority to sign. Mechanisms for reducing the potential for this issue to arise in other jurisdictions include:

    Although these procedures rely on the lawyer maintaining a paper copy of an authority this may provide a short term solution for meeting stakeholder concern.

    Certification of authority and identity - Does it improve integrity, reliability or certain of dealings?

  66. Certifications are an essential part of the electronic lodgement landscape in most jurisdictions. The nature of certifications in each jurisdiction differs slightly but generally certifications are given by lawyers or conveyancers who certify the lawyer has been given authority by the client to act, the identity of the client and the capacity of the client to act in the transaction.

    What are the rationales for certifications in other jurisdictions?

  67. One of the primary reasons for requiring certifications, particularly as to identity, is the lack of a paper certificate of title. In New Zealand an eDealing is required to be certified before it is submitted for registration. The Land Transfer Act 1952 (NZ), s 164A requires every electronic instrument to contain a certification that specifies:

    (a) The person giving the certification has authority to act for the party and that party has legal capacity to give such authority;

    (b) The person giving the certification has taken reasonable steps to confirm the identity of the person who gave the authority to act;

    (c) The instrument complies with any statutory requirements specified by the Registrar for that class of instrument; and

    (d) The person giving the certification has evidence showing the truth of the certifications in paragraphs (a) to (c) and that the evidence will be retained for the period prescribed for the purpose by regulations made under this Act.

  68. Rule 3.03 of the Rules of Professional Conduct for Barristers and Solicitors, reinforces a practitioner's obligation to take reasonable steps to ensure that any certificate given under s 164A of the Land Transfer Act 1952 (NZ) is correct and complies with the statutory requirements.[75] The NZLS guidelines for eDealings provide an indication of the rationale for requiring certification. Guideline J provides:

    It is therefore imperative for the protection of both the lawyer and the integrity of the Register to be absolutely satisfied as to the identity and bona fides of the client on whose behalf the certifications are being made. There is no independent checking carried out by LINZ prior to registration and the lawyer's actions directly affect the Register.[76]

  69. This statement is made in the context of a system that allows for automatic updating of the register by lawyers. Within this type of system it is arguably sensible that where the integrity and reliability of the system depends upon the competency of the users that certifications from the users are required.

  70. In Ontario, the Teranet system requires a user to provide a certification of completeness. By indicating the information is complete a lawyer will be certifying that both the information is complete and the lawyer has obtained an Acknowledgement and Direction form from his or her client.[77] The Acknowledgement and Direction contains an authorisation by the client to conduct the transaction electronically, an acknowledgement by the client that the electronic documents were explained and that they agree to be bound as if they signed the documents and finally that the client has not misrepresented their identity to the lawyer. The provision of a completeness certificate by the lawyer through the Teraview system is only confirmation that the lawyer has authority and a signed copy of the Acknowledgement and Direction. There is no certification by the lawyer that the identify of the client has been confirmed or reasonable steps have been taken.

  71. In British Columbia a lawyer certifies the following each time an electronic signature is incorporated into an electronic form:

  72. Again it is notable that a lawyer in British Columbia is only certifying that certain documents are in their possession and are not certifying the identity of the client.

  73. This raises the question of what certifications are necessary to maintain the integrity and reliability of the Torrens register?

    What certifications are necessary for the maintenance of Torrens?

  74. Under current paper based systems lawyers or conveyancers do not generally provide certifications to the Titles office upon lodgement of an instrument for registration. The practice of lawyers certifying instruments correct for the purposes of registration has ceased an in all Australian jurisdictions. If certifications are not required in a paper based system why are certifications necessary to maintain the integrity of an electronic system?

  75. The Transfer of Land (Electronic Transactions) Act 2004 (Vic) provides:

    The Registrar, by notice published in the Government Gazette, may specify
    (a) any matters relating to an electronic instrument that must be certified under this part;
    (b) the method of electronic certification required for those matters; and
    (c) the class or class4es of person who may certify those matters.

  76. The Explanatory Guide[79] indicates that this will relate primarily to certification that particular documents are held by the lodging party. In reality however this provision is broad enough to all the registrar to require certification of both authority and identity.

  77. In New Zealand the suggested rationale for requiring certifications from a lawyer is the maintenance of the integrity of the register due to the removal of independent checking by the registry.

  78. It is appropriate to first examine what safeguards or protections for the integrity of the register currently exist within the Australian land registry systems. Two main safeguards operate in relation to the integrity of the Torrens system, the requirement to produce a certificate of title for each dealing and the examination of instruments by the Titles Office. The most significant safeguard heralded by most commentators is the existence of a paper certificate of title which subject to certain exceptions[80] must be presented each time there is a dealing with the land.[81] Although the certificate of title provides some security in terms of the identity and the capacity of the party to deal with the land, failures to undertake additional checks of the person's identity and capacity have in the past lead to fraudulent dealings with land.[82] For an electronic system to operate effectively certificates of title will need to be abolished[83] producing in the Registrars' minds a belief the certificate of title should be replaced with a mechanism for establishing the identity and capacity of a party to engage in a dealing with the land. The certifications which are suggested include:

  79. These suggested certifications place a greater responsibility on certifying parties as compared to the position in Canada by requiring a positive statement about the identity of the client and the right of the client to deal with the property. Is this necessary or does this provide a greater level of security than a paper transaction? It is obviously prudent practice in a paper based system for a lawyer to establish that a client has a right to deal with a property.[84] Usually this would occur by the client either producing the certificate of title or the client's bank, who holds the certificate, consenting to the transaction. Whilst it is arguable that this may not be sufficient, given the number of cases involving identity fraud particularly by close relatives,[85] a lawyer does not have to certify to the Titles Office in a paper system that the client's identity and right to deal with the property has been confirmed. That being the case, why is the further step of certification necessary in an electronic system. Cogent argument can be made for lawyers being required through legislation or protocols to undertake reasonable steps, in the absence of a certificate of title, to establish the identity of the client and their right to deal but the further requirement for a lawyer to certify this to the Titles Office may be perceived as imposing additional responsibility and liability on lawyers for fraudulent activities of clients. In the writer's view some of the desire to impose extensive certification requirements on lawyer's comes from the constrained view that a certificate of title is a significant security and integrity mechanism. As shown by a number of cases, the fact a paper certificate of title is held by an individual is no assurance of identity or the right to act and in fact can lull other parties into a false sense of security. The fact certificates will not exist in an electronic system will mean that parties will have to undertake checks which are already prudent in the paper environment, but it is not clear whether certifying the outcomes of those inquiries as opposed to certifying that inquiries have been made is necessary?

  80. The second security mechanism, Title Office examination of every instrument for compliance, has the benefit of adding a further quality assurance layer to the process. Mistakes or errors in documents are likely to be established at this point minimising errors in the register. In the writers' view while this is a significant issue for reliability and integrity of the register, the provision of certifications by users of an electronic system will not avoid mistakes that may have been discovered during examination. Efficiencies and improvement in the accuracy of information submitted can be achieved through the development of an electronic system which utilises existing information on the register and establishes system protocols for checking additional information added to instruments.

    Protocols for retention of paper documents

  81. One of the main objectives of an electronic lodgement system is to reduce the number of paper documents held by the Titles Office. Will it still be necessary for parties engaged in the transaction to retain paper copies of documents? An examination of the processes in British Columbia, Ontario and New Zealand reveals that lawyers in each jurisdiction are still required to retain documentation that supports and evidences the registration. Whilst copies of transfer documents and mortgages are not specifically required to be retained, evidence of the lawyer's authority to conduct the transaction and evidence of the identity of the client must be retained.

    Ontario

  82. In Ontario the following documents must be retained by a lawyer:

    British Columbia

  83. In British Columbia the vendor's lawyer or notary prints a copy of Form A and attends on execution by the vendor, that is, the vendor's lawyer witnesses execution of the paper copy of the transfer by the vendor and will sign the transfer as certifying officer. The copy is evidence of the vendor's intention to be bound, has the effect of delivery and is an instruction to his/her lawyer or notary to authorise submission for registration

    New Zealand

  84. In New Zealand the Authority and Instruction Forms (A & I) [88] which must be completed by the client(s) before certification and signing of a transaction is the lawyer's proof of authority to act on behalf of the client in implementing the eDealing and provides protection against later challenges to the transaction. The A & I form and all documents supporting the A&I form must be retained by the firm for a minimum of 10 years.[89]

    Proposed Australian Protocols

  85. The exact requirements to be imposed in Australia have not been settled. Generally, a lawyer will be required to retain all paper documents that support the registration of the instruments lodged. The period of retention will be detailed in legislation and is likely to be 7 years. Although this should not present any great difficulty for lawyers who are already required to retain documentation for 7 years, the fact paper still needs to be retained is not a significant selling point for lawyers/conveyancers wanting a complete transition to an electronic system. In Victoria the Transfer of Land Act 1958, s 44B(2) allows the registrar to determine requirements for the retention of documents supporting or authenticating electronic instruments including the period of retention. The rules for using the e-lodgement system have not been finalised but the draft rules envisage a requirement to maintain certain paper document until registration and a further requirement to retain other documents for 7 years.[90]

  86. In light of the undeveloped nature of rules for the production of electronic evidence it will be necessary for users of an e-lodgement system to retain a certain number of documents albeit reduced. The same rapid changes in technology which allow the development of sophisticated e-lodgment systems contribute significantly to the difficulty faced in maintaining access to and reliability of electronic documents. It is clear that in any transition to an electronic environment evidentiary certainty should not be diminished. This may lead in the short term to paper being retained by private organisations to ensure access to documents for the purposes of the litigation. In the long term however, the cost of retaining documents in paper form may lead many organisations to embrace electronic storage.

  87. The Electronic Transactions Act in each State makes provision for the recording of information, the keeping of written documents electronically and the retention of electronic documents.[91] In keeping with the principle of technology neutrality the legislation does not specify the technology to be used for the retention of documents but allows for regulations to be made to specify particular kinds of date storage devices on which electronic records are to be recorded or kept. In the context of a land registration system where title is acquired through registration, not only is the integrity of the registry and the ability to access that information critical, it is also important that information relevant to title, retained by individuals or their advisers is also accessible. Even in Ontario and New Zealand, users of the electronic systems in those jurisdictions are still required to keep certain documentation relevant to title which is not electronically stored on the register. It is therefore, not only important for documents to be retained but for the documents to be retained in a form that will be accessible in the future. Australian registrars will need to consider two questions:

    (i) What documents should be retained by a user of the electronic system and for how long?

    (ii) How should those documents be retained?

  88. In the case of the first question little dispute should arise about the particular documents to be retained or the period. Under the paper system it is already the practice of lawyers to retain the copies of documentation for 7 years to ensure documents are available in the event of a potential dispute within the usual statutory time period of 6 years. The second question may become more controversial as the cost of retaining paper increases and the cost of electronic space presents a more viable option. It is unclear whether Registrars within Australia will endeavour to proscribe the method for retention or will rely on the Electronic Transactions Act in each State.

  89. To gain the benefits given by the Electronic Transactions legislation certain criteria must be met for the retention of paper documents in electronic form and electronic documents in electronic form. The key requirements in each case are reliability of integrity of the document when stored in electronic form and accessibility of the document for future reference. For example Electronic Transactions (Queensland) Act 2001, s 19 provides that where a State law requires a document in paper form to be retained, that requirement can be met in electronic form where at the time the paper document was generated electronically:

  90. Is this a context in which the user of the system should be left to determine whether the electronic method used is reliable or whether the integrity of the data will be maintained over time? Should information relevant to the land registry system all be maintained in a similar format to make access easier and more likely to enure? These are issues yet to be addressed and which require careful consideration by registrars prior to implementing an electronic system.

    Conclusion

  91. The creation of an electronic registration system is an exciting and challenging development for Australian land registries and presents a significant government investment in electronic commerce. At the beginning of this article the question was asked whether given the amount of fraud perpetrated within a paper system, the integrity of the Torrens system of State guaranteed title could be maintained in an electronic system. The writer's view is that it is possible to maintain a Torrens based electronic registration system provided safeguards aimed at minimising the opportunity for electronic based fraud to occur are implemented. Some of these safeguards, such as limiting access to registered users, requiring certifications of authority and capacity from users and the use of PKI systems for digital signatures, are present in the successful systems operating in other Torrens jurisdictions. Given the experience of other jurisdictions and the lessons learned from them, it should be possible for the Australian registrars to develop a system that fulfils not only legal requirement but also maintains the confidence of users in a land registry system of title by registration guaranteed by the State.

Notes

[1] Faerber CN, "Book versus Byte: The Prospects and Desirability of a Paperless Society" (1999) 17 J Marshall Journal of Computer & Information Law 797, 806.

[2] ACLU v Reno 929 Fsupp 824 (ED Pa 1996).

[3] D Whalan, 'Electronic Computer Technology and the Torrens System' (1967) 40 Australian Law Journal 413 and Kirby, M, 'The computer, the individual and the Law' (1981) 55 Australian Law Journal 443, 455.

[4] See C Hammond, 'The abolition of the duplicate certificate of title and its potential effect on fraudulent claims over Torrens land' (2000) 8 Australian Property Law Journal 115, where the author looked at whether the abolition of the certificate of title increases the potential for fraud to occur and concluded that the "production of a duplicate certificate of title operates as an effective safeguard against third party fraud. The extremely rare cases of fraud by third parties across all three jurisdictions bears this out. However, the existence of a duplicate certificate of title is less effective as a safeguard where 'trusted agents', friends or family are involved in the fraud. In these cases, access to the duplicate certificate of title by the fraudulent party makes it easier for them to perpetrate fraud and to obtain registration of the fraudulent dealing": at 130.

[5] Teraview's website is http://www.teraview.ca

[6] Teranet's website is http://www.teranet.ca

[7] Section 19 Land Registration Reform Act R.S.O 1990 provides: "the Minister responsible for the administration of this Act may by regulation designate all or any part of land that has been designated under Part II as: (a) an area in which documents may be registered in either an electronic format or a written form; (b) an area in which documents must be registered in both an electronic format and a written form; or (c) an area in which documents must be registered in an electronic format alone"."The plan is to introduce electronic registration first on an optional basis and after a transition period, a second Regulation will be filed for the purposes of required the electronic registration of most land titles documents": K Murray, Director of Titles, Ministry of Consumer and Business Services, 'Legislation and Regulations relating to Electronic Registration of Land Titles Documents', April 2003

[8] 'Electronic land registration improves service in Toronto', 23 September 2002, http://www.cbs.gov.on.ca/mcbs/English/5E9QVA.htm

[9] 'Electronic Land Registration hits the three million mark in Ontario', 14 June 2004, http://www.teranet.ca/corporate/news/threemillion.html

[10] Consent from the client is required to be obtained in a particular form. See [5.4] below.

[11] Each electronically registered document must contain prescribed information. Among the types of information which may be included or used are statements which call for an application of legal expertise based on legal judgements. These statements are called "Compliance with Law Statements": Law Society of Upper Canada, Practice Guidelines for Electronic Registration of Title Documents - as approved by Convocation June 28, 2002, Practice Guideline 6 'Use of Compliance with Law Statements', http://www.lsuc.on.ca/news/pdf/july08_eregguidelines.pdf For example, to register a transfer under a power of sale, a statement confirming that all the appropriate requirements have been satisfied for the power of sale to be completed and the transfer registered must be made. Section 40 of O.Reg 19/99 prescribes those documents where a law statement is required. The electronic system will only permit registrants with the proper authority and an active LSUC number to complete these law statements. See also K Murray, 'Legislation and Regulations relating to electronic registration of land titles documents' April 2003, 6 for a list of documents where a law statement would apply to.

[12] Law Society of Upper Canada, 'Electronic registration: Making it work for you - procedures and practice standards for electronic real estate conveyance', August 2000, 9, http://www.lsuc.on.ca/pdf/e-reg_p_and_pstds_rep1.pdf

[13] A copy of this document can be found at http://www.lsuc.on.ca/services/dra_march04.pdf

[14] The website for the project is at http://srmwww.gov.bc.ca/landtitle/EFS_web_site/index.htm

[15] It should be noted however, that only a practising lawyer with a Juricert digital certificate may sign the transfer.

[16] Clicking on the LOCK button on the form will lock key fields on the form and a unique number will be inserted at the top of the form. Locking the document provides an assurance to the lawyers that the content of these key fields cannot be changed without their knowledge. The purpose of the unique identifier is to help lawyers and notaries keep track of changes to a form by providing a new number each the form is locked and unlocked. Thus changes to critical data can be tracked and different versions of a form are not confused. Clicking on the UNLOCK button on a locked form unlocks the frozen data and deletes the unique identifier.

[17] It is not mandatory for the vendor's lawyer/notary to use electronic signatures. If the lawyer or notary does not have one, he/she can FAX a copy of the printed and executed copy of Form A to the purchaser's lawyer or notary who may incorporate his/her electronic signature into Form A.

[18] This Act is available from http://www.qp.gov.bc.ca/statreg/stat/L/96250_00.htm

[19] For more information about the history behind the Landonline project and the personnel involved, see J Greenwood & T Jones, 'Automation of the Register: Issues impacting on the integrity of title', Taking Torrens into the 21st Century: A conference to mark the 50th anniversary of the Land Transfer Act 1952, Faculty of Law, University of Auckland, 19-21 March 2003.

[20] The Land Transfer Act 1952 (NZ) was amended in 1998 to enable the register to be held and maintained in electronic form: .Land Transfer (Automation) Amendment Act 1998 (NZ).

[21] Land Transfer (Computer Registers and Electronic Lodgement) Amendment Act 2002 (NZ).

[22] Information about the Landonline project can be obtained from their website - http://www.landonline.govt.nz

[23] Conveyancers are defined in s 4 of the Land Transfer (Computer Registers and Electronic Lodgement) Amendment Act 2002 as: a) a landbroker licensed by the Registrar under section 229 of the principal Act; or b) a person who holds a current practising certificate under section 57 of the Law Practitioners Act 1982

[24] These plans started in 1998 with a report being published by the Law Commission in conjunction with HM Land Registry on 2 September 1998 entitled 'Land Registration for the 21st Century: A Consultatuve Document, No 254, 1998 to consider methods in which ancient systems of property transfer in England and Wales could be updated. The findings from that consultation document culminated in a report published ni 2001 'Land Registration for the Twenty-First Century: A Conveyancing Revolution' No 271, 2001.The first e-Conveyancing consultation exercise occured in May 2002, with a consultation paper being published to seek industry feedback on an electronic registration system.

[25] E Cooke, 'E-conveyancing in England: Enthusiasms and reluctance', Taking Torrens into the 21st Century: A conference to mark the 50th anniversary of the Land Transfer Act 1952, Faculty of Law, University of Auckland, 19-21 March 2003: "Electronic transactions are some way off, and will be piloted before they become generally available", at 13.

[26] See S Christensen & A Stickley, 'Electronic title in the new millennium' (2000) Flinders Journal of Law Reform 209 which discusses the process of registration under the Land Title Act 1994 (Qld).

[27] Land and Property Information NSW, Electronic Settlement, Electronic Lodgment and Automatic Registration of Real Property Dealings in NSW, Public Consultation Document, May 2004, NSW.

[28] Land Exchange, ECV News, 3 May 2002.

[29] Refer to s 21 Land Registration Reform Act R.S.O 1990: "Despite section 2 of the Statute of Frauds Act, section 9 of the Conveyancing and Law of Property Act or a provision in any other statute or any rule of law, an electronic document that creates, transfers or otherwise disposes of an estate or interest in land is not required to be in writing or to be signed by the parties and has the same effect for all purposes as a document that is in writing and is signed by the parties" and s 22: "If a document is registered in an electronic format and the document exists in a written form that is not a printed copy of the electronic document, the electronic document or a printed copy of the electronic document prevails over the written form of the document in the event of a conflict".

[30] See the outline of the Victorian system at http://www.landexchange.vic.gov.au/ec/index.html

[31] S Birrell, J Barry, D Hall, & J Parker, 'Is the Torrens System suitable for the 21st Century?' http://www.ferris.edu/htmls/academics/course.offerings/burtchr/sure382/other_material/torrens_21st_century.htm and L Griggs, Torrens Title in a Digital World' (2001) 8(3) Murdoch University E Law Journal, [6] http://www.murdoch.edu.au/elaw/issues/v8n3/griggs83nf.html (that the Torrens system is more able to meet these criteria than the old system of conveyancing by deeds).

[32] Whalan, The Torrens System in Australia, Law Book Co Ltd, Sydney, 1982, 19

[33] T Ruoff, 'An Englishman looks at the Torrens System' (1952) 26 (2) Australian Law Journal 118, 118.

[34] At present, fraud costs the Australian community in excess of $3.5 billion annually. A significant part of that relates to land dealings:A Graycar & R Smith, Identifying and Responding to Electronic Fraud Risks, 30th Australasian Registrars' Conference, Canberra, 13 November 2002, 1.

[35] R Massey, 'The growing concern of e-identity theft' (2003) 5 (9) Electronic Business Law 10, 10.

[36] H Pontell, 'Pleased to meet you...won't you guess my name?: Identity fraud, cyber-crime, and white-collar delinquency' (2002) 23 Adelaide Law Review 305, 306.

[37] As pointed out by Rohan Massey: "The increase and proliferation of identity theft is directly linked to the growth of internet use and corporate reliance on the use of electronic data storage systems": R Massey, 'The growing concern of e-identity theft' (2003) 5 (9) Electronic Business Law 10, 10. See also H Pontell, 'Pleased to meet you...won't you guess my name?: Identity fraud, cyber-crime, and white-collar delinquency' (2002) 23 Adelaide Law Review 305, 307: "The Internet has been noted in numerous reports as a major factor in the tremendous growth of identity fraud" and at 313: "...much of the growth in identity fraud, regardless of its exact amount or cost, is a result of the Internet and the corresponding unprecedented access it allows to numerous databases where personal information is stored".

[38] Individuals who use electronic services either actively, by inputting their details on the internet, or passively, by using electronic services that contain their details such as bank cards, supermarket loyalty cards or library membership cards, are exposing themselves to the threat of a criminal anywhere in the world stealing their identity by means of a computer network": R Massey, 'The growing concern of e-identity theft' (2003) 5 (9) Electronic Business Law 10, 10.

[39] A Graycar & R Smith, Identifying and Responding to Electronic Fraud Risks, 30th Australasian Registrars' Conference, Canberra, 13 November 2002, 1.

[40] D Whalan, The Torrens System in Australia, Law Book Co Ltd, Sydney, 1982, 83.

[41] However to digitally sign an eDealing, the user must be a solicitor with current practising certificates or a licensed landbroker. The user must also be nominated on the A & I (Authority and Instruction) form to perform this step (see [5.4] below).

[42] A licence covers as many people as the firm nominates, and each licence only allows one connection at a time with Landonline. Firms which require several people to be using Landonline services concurrently need to apply for as many licences as will suit their needs: http://www.landonline.govt.nz/content/general/licenses.asp

[43] A prospective Teraview user has to complete 4 forms: (1) Licence to use Teraview software; (2) form to obtain PSP; (3) Deposit Account Payment Plan and (4) Electronic Registration Bank Account: See http://www.teraview.ca/purchase/purchase.html It is from this account with Teranet that user fees (access charges and on line charges) will be debited. Registration fees and Land Transfer Tax can be paid from lawyers special trust accounts or general accounts: Law Society of Upper Canada, Practice Guidelines for Electronic Registration of Title Documents - as approved by Convocation June 28, 2002, Practice Guideline 1 'Maintaining Integrity of Access and Accounts, http://www.lsuc.on.ca/news/pdf/july08_eregguidelines.pdf

[44] http://www.teraview.ca/ereg/ereg_PSP.html. Also discussed at para 50

[45] Refer below to discussion of digital signatures.

[46] Land Registry, Frequently Asked Questions, http://www.landregistry.gov.uk/e-conveyancing/content/support/faq/default.asp?id=81

[47] S Christensen, W Duncan & R Low, 'Moving property transactions to a digital age: Can writing and signature requirements be fulfilled electronically?' Centre for Commercial and Property Law, Queensland University of Technology, Brisbane, 2002, (ISBN 1 74107 0066) [4.3.1].

[48] Boyle, K "An Introduction to Gatekeeper: the Government's Public Key Infrastructure" (2001) 11 (1) Journal of Law and Information Science 38, 40

[49] There are several different technologies used to create digital signatures. See A McCullagh, "Legal Aspects of Electronic Contracts and digital Signatures" in Going Digital 2000. Fitzgerald A, Fitzgerald B, Cifuentes C, Cook P (ed), Prospect Media, St Leonards N.S.W, 2000 at 195.

[50] The Australian Gatekeeper framework is discussed below.

[51] It is possible for one entity to be involved in both the issuing of the certificates and the identification process. In some PKI systems, this role is divided between two different entities, with the CA issuing the certificates and another entity called the Registration Authority (RA) which carries out the subscriber identification process.

[52] Proof of ID form is found at: http://www.landonline.govt.nz/registereduser/newforms/registereduser/changeforms/proofofid.htm

[53] Teranet developed its own Certification Authority for the Teraview software in 1998: Teraview, 'Understanding how the personal information your provide in the Personal Security Licence Application is used and protected', http://www.teraview.ca/ereg/downloads/pslbrochurepdf.pdf

[54] There are two forms that must be completed as part of the Personal Security License application Both forms can be obtained at http://www.teraview.ca/purchase/downloads/PSPApplication2004.pdf

[55] Accepted primary ID: valid Canadian's drivers licence; or valid Canadian passport (photo ID required) Accepted secondary ID: valid major credit card & expiry date; bank card; social insurance card; birth certificate; either of the photo ID items noted previously, not used as primary ID ID which cannot be accepted: Retail credit cards; Health card Accepted designated representatives: lawyer; notary public; designated land registry office (LRO) representative; designated Teranet representative; financial institution signing officer

[56] Teraview, 'Understanding how the personal information your provide in the Personal Security Licence Application is used and protected', http://www.teraview.ca/ereg/downloads/pslbrochurepdf.pdf

[57] Law Society of Upper Canada, Practice Guidelines for Electronic Registration of Title Documents - as approved by Convocation June 28, 2002, Practice Guideline 1 'Maintaining Integrity of Access and Accounts, http://www.lsuc.on.ca/news/pdf/july08_eregguidelines.pdf : "law firms must be vigilant to ensure appropriate safeguards are implemented in relation to individual encrypted diskettes and pass phrases. At a minimum, firms should ensure that:

(a) the need to maintain the confidentiality of pass phrases and the need to safeguard encrypted diskettes are emphasized to all users granted access pursuant to their accounts. Firms should take appropriate steps to discourage and prevent sharing of pass phrases;
(b) appropriate guidelines are established in formulating pass phrases to take full advantage of the security afforded by the system;
(c) appropriate steps are taken to destroy/disable and/or replace pass phrases and diskettes when such confidentiality is breached;
(d) appropriate monitoring procedures are implemented to safeguard against unauthorized access to the e- regTM system under their accounts. This should include careful recording and reconciliation of any and all charges incurred with Teranet which may disclose unauthorized access; and,
(e) procedures are implemented which includes the immediate notification of Teranet when the law firm has changes in its membership (whether employees, associates or partners) affecting who the authorized users are under the firm's account. In particular, where an authorized user leaves the firm, the firm should ensure that all copies of the user's encrypted diskette are returned and that Teranet is immediately notified of the termination of access of the specific user.

Rule 5.01(7) of The Rules of Professional Conduct, adopted by the Convocation on 22 June 2000 provides: When a lawyer has a personalized specially encrypted diskette to access the system for the electronic registration of title documents ("e-reg" (tm)), the lawyer: (a) shall not permit others, including a non-lawyer employee, to use the lawyer's diskette, and (b) shall not disclose his or her personalized e-reg (tm) pass phrase to others (http://www.lsuc.on.ca/services/contents/rule5.jsp#5.01).

Rule 5.01 (8) provides: When a non-lawyer employed by a lawyer has a personalized specially encrypted diskette to access the system for the electronic registration of title documents, the lawyer shall ensure that the non-lawyer: (a) does not permit others to use the diskette, and (b) does not disclose his or her personalized e-reg (tm) pass phrase to others (http://www.lsuc.on.ca/services/contents/rule5.jsp#5.01).

[58] Juricert was founded by the Law Society of British Columbia. Information obtained from Law Society of British Columbia, 'Visit Juricert site to register for digital credentials' (2004) No 2 March-April Benchers' Bulletin

[59] Recognised under 1999 Act (Bill 93)

[60] Information on how to apply for an Adobe Acrobat signing certificate. See Land Titles Electronic Filing Reference Manual, Version 1.0, March 2004, 30, http://srmwww.gov.bc.ca/landtitle/EFS_web_site/e_forms.htm

[61] Registration of other certificates is necessary because of the checking mechanisms between the Land Registry and Juricert for each document lodged.

[62] http://www.landregistry.gov.uk/e-conveyancing/content/articles/default.asp?article_id=54

[63] See Land Registry, 'E-Conveyancing: A Land Registry consultation', 5 March 2003 http://www.landregistry.gov.uk/publications/other/consultations/consult_doc.pdf and Land Registry, 'E-Conveyancing: A Land Registry Consultation Report', 17 March 2003 http://www.landregistry.gov.uk/publications/other/consultations/eccir.pdf

[64] Land Registry, 'e-conveyancing: A Land Registry Consultation Report', 17 March 2003, 40, http://www.landregistry.gov.uk/publications/other/consultations/eccir.pdf

[65] Certification means that a third party issues a statement confirming that the signature is, alone or with other evidence, a valid means of establishing that the message comes from the person who purports to send it. In this regard, the quality and reputation of the trusted provider is crucial.

[66] Land Registry, 'e-conveyancing: A Land Registry Consultation Report', 17 March 2003, 40, http://www.landregistry.gov.uk/publications/other/consultations/eccir.pdf

[67] http://www.agimo.gov.au/infrastructure/gatekeeper

[68] Australian Government Information Management Office website: http://www.agimo.gov.au/

[69] For the specifications for an ABN-DSC refer to ABN-DSC Broad Specifications at www.govonline.gov.au

[70] For a directory of accredited/recognised Service Providers, see http://www.agimo.gov.au/infrastructure/gatekeeper/accredited

[71] McCullagh A, Caelli W, Little P, "Signature Stripping: A Digital Dilemma" 2001 (1) Journal of Information, Law and Technology http://elj.warwick.ac.uk/jilt/01-1/mccullagh.html

[72] See L Brazell, 'Electronic security: Encryption in the real world' (1999) 21 European Intellectual Property Review 17; YF Lim, 'Digital signature, certification authorities and the Law' (2002) 9 (3) Murdoch University Electronic Journal of Law http://www.murdoch.edu.au/elaw/indices/author/229.html, J Murray, 'Public Key Infrastructure, digital signatures and systematic risk' (2003) (1) Journal of Information, Law and Technology http://elj.warwich.ac.uk/jilt/03-1/murray.html

[73] Electronic Transactions Act 2000 (NSW), s14; Electronic Transactions (Victoria) Act 2000 (Vic), s14; Electronic Transactions (Queensland) Act 2001 (Qld), s 26; Electronic Transactions Act 2003 (WA), s14; Electronic Transactions Act 2000 (SA), s14; Electronic Transactions Act 2000 (Tas), s12; Electronic Transactions (Northern Territory) Act 2000 (NT), s14; Electronic Transactions Act 2001 (ACT), s14; Electronic Transactions Act 1999 (Cth), s15.

[74] Under legislation the ability to make a person liable is limited by the Electronic Transactions Act in each State to documents sent with the authority of the person either actual or ostensible: Electronic Transactions Act 2000 (NSW), s14(2); Electronic Transactions (Victoria) Act 2000 (Vic), s14(2); Electronic Transactions (Queensland) Act 2001 (Qld), s 26(2); Electronic Transactions Act 2003 (WA), s14(2); Electronic Transactions Act 2000 (SA), s14(2); Electronic Transactions Act 2000 (Tas), s12(2); Electronic Transactions (Northern Territory) Act 2000 (NT), s14(2); Electronic Transactions Act 2001 (ACT), s14(2); Electronic Transactions Act 1999 (Cth), s15(2).

[75] The Authority and Instruction Forms (A & I) which must be completed by the client(s) before certification and signing of a transaction is the lawyer's proof of authority to act on behalf of the client in implementing the eDealing and provides protection against later challenges to the transaction. Sample A&I forms can be downloaded from http://www.lawyers.org.nz/memregissuesedealing.asp

[76] New Zealand Law Society Guidelines for the Use of Landonline for an Electronic Transaction (eDealing) available at http://www.lawyers.org.nz/memregissuesedealing.asp .

[77] The Law Society recommends that the appropriate form of Acknowledgement and Direction for each electronic document to be registered under e-reg be printed form the e-reg system for signature by the lawyer's client before each electronic document is released for registration: Law society of Upper Canada, Practice Guidelines for Electronic Registration of Title Documents - as approved by Convocation June 28, 2002, Practice Guideline 3 'Acknowledgment and Direction', http://www.lsuc.on.ca/news/pdf/july08_eregguidelines.pdf A sample Acknowledgement and Direction form can be found at http://www.teraview.ca/resupgrades/downloads/ADR.pdf

[78] http://www.qp.gov.bc.ca/statreg/stat/L/96250_00.htm

[79]Explanatory Guide to Transfer of Land (Electronic Transactions) Bill 2004.

[80] Refer to Land Title Act 1994 (Qld), s 154, Real Property Act 1900 (NSW), s 33(4); Transfer of Land Act 1958 (Vic), s 27E; Real Property Act 1886 (SA), s 98; Transfer of Land Act 1893 (WA), s 86; Land Titles Act 1925 (ACT), s 75; Land Title Act 2000 (NT), s 153.

[81] C Hammond, 'The abolition of the duplicate certificate of title and its potential effect on fraudulent claims over Torrens land' (2000) 8 Australian Property Law Journal 115; L Griggs, 'Torrens Title in a Digital World' (2001) 8 (3) Murdoch University Electronic Journal of Law, http://www.murdoch.edu.au/elaw/issues/v8n3/griggs83.html; S Christensen & A Stickley, 'Electronic title in the new millennium' (2000) Flinders Journal of Law Reform 209.

[82] Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 (Son had the certificate of title and other documents relating to the property. Mother and son used another person to impersonate the father. The impersonator was able to produce the certificate of title and other documents. Bank prepared the mortgage document and the impersonator signed the document); Young v Hoger [2000] QSC455 (Daughter forged her parents' signature, the mother assisted with the forgery. Solicitor did not have any direct dealing with the father, dispensed with the standard verification procedures to ensure that the signatures on the mortgage instrument were genuine); Eade v Vogiazopoulos [1993] 3 VR 889 (husband had responsibility of the business. He forged his wife's signature on the mortgage. Solicitor acting for husband and wife did not consult the wife to ensure that the mortgage documents were duly executed by her).

[83] Refer for example to Land Transfer Act 1958 (Vic), s 44I.

[84] Lawyers have previously been held liable in negligence to mortgagee for failing to assure the identity of mortgagors: Yamada v. Mock 29 OR (3d) 731 (Canadian Supreme Court); Eade v Vogiazopoulos [1993] 3 VR 889.

[85] Eade v Vogiazopoulos [1993] 3 VR 889 (husband forged wife's signature on the mortgage); Frazer v Walker [1967] 1 All ER 649 (wife forged husband's signature on the mortgage); Young v Hoger [2001] QSC 455 (daughter, with mother's assistance, forged father's signature on the mortgage); National Commercial Banking Corporation of Australia Limited v Hedley (1984) 3 BPR 9477 (husband forged wife's signature on the mortgage); Russo v Bendigo Bank Ltd [1999] 3 VR 376 (son-in-law forged Mrs Russo's signature on the mortgage); Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 (mother and son used another person to impersonate the father).

[86] Law Society of Upper Canada, Practice Guidelines for Electronic Registration of Title Documents - as approved by Convocation June 28, 2002, Practice Guideline 3 'Acknowledgement and Direction, http://www.lsuc.on.ca/news/pdf/july08_eregguidelines.pdf

[87] Law Society of Upper Canada, Practice Guidelines for Electronic Registration of Title Documents - as approved by Convocation June 28, 2002, Practice Guideline 6 'Use of Compliance with Law Statements', http://www.lsuc.on.ca/news/pdf/july08_eregguidelines.pdf

[88] Sample A&I forms can be downloaded from http://www.lawyers.org.nz/memregissuesedealing.asp

[89] Land Transfer Act 1952 (NZ), s 164C and Land Transfer Regulations 2000 (NZ), s 14.

[90] Draft Rules for using Electronic Conveyancing Victoria are available at http://www.landexchange.vic.gov.au/ec/download/ECSystemRules.pdf

[91] Electronic Transactions (Queensland) Act 2001 (Qld), ss 19-21; Electronic Transactions Act 2000 (NSW), s11; Electronic Transactions (Victoria) Act 2000 (Vic), ss 10-11; Electronic Transactions Act 2003 (WA), ss 10-11; Electronic Transactions Act 2000 (SA), ss 10-11; Electronic Transactions Act 2000 (Tas), ss 8-9; Electronic Transactions (Northern Territory) Act 2000 (NT), ss 10-11; Electronic Transactions Act 2001 (ACT), ss 10-11; Electronic Transactions Act 1999 (Cth), ss 11-12.

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