Secure Document Exchange (SDX) in New Zealand

ssIf you’re involved in property transactions and receiving mortgage instructions from banks such as Kiwibank and ASB Bank you are already receiving instructions via a secure web document exchange. Their systems are online, secure and enable your communication with the lender to be safe, secure, instant, and paperless.

But electronic B2B communication is not just about security – it’s also about timing.

When time is of the essence and communication is critical to determine if a transaction has occurred, you need to know that what you send, the recipient receives.  There can be no manipulating of the means of delivery by one party to their advantage.

Your client can’t afford to get caught out in another Larsen v Rick Dees Ltd situation where fax delivery of a notice fails and a contract is cancelled due to a failure to settle by the specified time.  And you can’t afford to face a potential negligence claim because you chose the wrong method of delivery of a notice.

Clause 1.3(4)(f) of the 9th ed. provides that a notice is deemed to be served when sent by SDX:
at the time when in the ordinary course of operation of that secure web document exchange, a notice posted by one party is accessible for viewing or downloading by the other party.

The vendor doesn’t have access to pull the plug on the ordinary course of operation of a secure web document exchange.  And that ordinary course of operation means that as soon as the document is “posted” it is available for viewing or downloading.

The committee reviewing the changes for the 9th edition of the agreement considered the issue sufficiently important to lawyers that it was worth including provision for an SDX in the revised form, even if one wasn’t available at the time.  The technology is not rocket science and sooner or later it would be made available.  The benefits to lawyers are so obvious that the committee wanted lawyers to be able to use it as soon as one was available.

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