Electronic Signatures

Transcription

1 Electronic Signatures Prepared For: Association of Corporate Counsel Alberta Presented by: Jay F. Krushell Witten LLP Edmonton, Alberta For Presentation in: Edmonton February 29, 2016 Calgary- March 9, 2016

2 - 2 - Table of Contents 1. Introduction Legislation and Regulations dealing with Electronic Signatures... 3 (a) Brief Summaries of the Legislation and Regulations... 4 (i) The ETA and its Regulations... 4 (ii) The AEA... 4 (iii) The LTA... 5 (iv) The ABCA... 5 (v) The FOIP... 5 (vi) The FOIP Reg... 6 (vii) The PIPEDA... 6 (viii) The SES Reg... 6 (ix) The CEA... 7 (x) The CBCA, the TLCA, the BA, the ICA, the CCAA, and the CNCA... 7 (xi) The TLCA, the BA, the ICA, and the CCAA Regs... 8 (xii) The DESDA and its Reg... 8 (b) Comparing Provincial and Territorial Electronic Legislation Enforceability of Electronic Signatures in Alberta...11 (a) Original Documents Required...11 (b) Electronic Signatures...12 (c) Statutory Rules for Electronic Signatures...12 (i) Application of Evidence Law Principles...13 (ii) Proving the Identity of the Signatory...14 (iii) Proving the Association of the Electronic Signature with the Record...14 (d) Treatment of Electronic Signatures in Jurisprudence...15 (e) Federal Regulated Entities...17 (f) Guarantees Acknowledgement Act Contracting Out of the ETA s Exceptions Steps Taken by the Provincial Government of Alberta...19

3 Introduction There have been uncertainties in law regarding whether electronic communications would satisfy statutory rules that require writing, or signatures, or the use of original documents. The General Assembly of the United Nations in November 1996 tried to resolve these uncertainties by establishing an international standard, the United Nations Model Law on Electronic Commerce (the Model Law ). The Model Law sought to make the law media neutral (i.e. equally applicable to paper and electronic based communications) by proposing functional equivalents to paper. However, the Model Law did not purport to improve the quality of documents on paper when they were replaced by electronic documents. (Canada Uniform Electronic Commerce Act Consolidation 2011 (the Consolidation )) The Canada Uniform Electronic Commerce Act (the UECA ) was drafted by the Uniform Law Conference of Canada and designed to implement the principles of the Model Law in Canada. The UECA goes beyond the scope of commerce and applies to almost any legal relationship that may require documentation, subject to certain exceptions (the Consolidation). The federal government and most provinces have adopted the UECA into their own governing legislation relating to electronic documentation and signatures. 2. Legislation and Regulations dealing with Electronic Signatures Depending on the parties and the type of transaction, the following legislation and regulations may apply for electronic documentation antd signatures in Alberta: 1. Electronic Transactions Act, SA 2001, c E-5.5 (the ETA ); 2. Electronic Transactions Act General Regulation, AR 34/2003 (the General Reg ); 3. Electronic Transactions Act Designation Regulation, AR 35/2003 (the Designation Reg ); 4. Alberta Evidence Act, RSA 2000, c A-18 (the AEA ); 5. Land Titles Act, RSA 2000, c L-4 (the LTA ); 6. Business Corporations Act, RSA 2000, c B-9 (the ABCA ) 7. Freedom of Information and Protection of Privacy Act, RSA 2000, c F-25 (the FOIP ); 8. Freedom of Information and Protection of Privacy Regulation, AR 186/2008 (the FOIP Reg ); 9. Personal Information Protection and Electronic Documents Act, SC 2000, c 5 (the PIPEDA ); 10. Secure Electronic Signature Regulations, SOR (the SES Reg ); 11. Canada Business Corporations Act, RSC 1985, c C-44 (the CBCA ); 12. Canada Business Corporations Regulations, 2001, SOR (the CBCA Reg ); 13. Canada Evidence Act, RSC 1985, c C-5 (the CEA ); 14. Trust and Loan Companies Act, SC 1991, c 45 (the TLCA ); 15. Electronic Documents (Trust and Loan Companies) Regulations, SOR (the TLCA Reg );

4 Bank Act, SC 1991, c 46 (the BA ); 17. Electronic Documents (Banks and Bank Holding Companies) Regulations, SOR (the BA Reg ); 18. Insurance Companies Act, SC 1991, c 47 (the ICA ); 19. Electronic Documents (Insurance and Insurance Holding Companies) Regulations, SOR (the ICA Reg ); 20. Cooperative Credit Associations Act, SC 1991, c 48 (the CCAA ); 21. Electronic Documents (Cooperative Credit Associations) Regulations, SOR (the CCAA Reg ); 22. Canada Not-for-profit Corporations Act, SC 2009, c 23 (the CNCA ); 23. Canada Not-for-profit Corporations Regulations, SOR (the CNCA Reg ); 24. Department of Employment and Social Development Act, SC 2005, c 34 (the DESDA ); and 25. Electronic Documents and Electronic Information Regulations, SOR (the DESDA Reg ). (a) (i) Brief Summaries of the Legislation and Regulations The ETA and its Regulations The ETA is Alberta s only electronic commerce legislation and it is based on the UECA. The purpose of the ETA is to confirm that electronic documents may be used and relied upon to the same extent as paper-based documents for most purposes. Where an electronic transaction involves a public body (defined in the ETA) or the creation and transmission of certain types of documents, the ETA imposes additional security measures on parties providing or accepting those documents in electronic form. Certain documents are also exempt from the application of the ETA. These documents may require handwritten signatures to become enforceable documents unless another enactment or law expressly authorizes or requires them to be in electronic form. The General Reg prescribes which records and/or information is exempt under the ETA. The Declaration Reg prescribes which bodies will be designated as a public body under the ETA. (ii) The AEA The AEA states that it does not modify any common law or statutory rule relating to the admissibility of electronic records, except the rules relating to authentication and best evidence (Section 41.2(1)). In proving the authenticity of electronic records, the party introducing it must provide evidence capable of showing that the electronic record is what the person claims it to be (Section 41.3). Subject to Section 41.4(3), the Best Evidence Rule in respect of an electronic record is satisfied on proof of the integrity of the electronic records system, for which there is a presumption of integrity if the requirements under Section 41.5 are met (Sections 41.4(1) and 41.5). Section

5 (3) states that if an electronic record is in the form of a printout and it has been manifestly or consistently acted on, relied on or used as the record, then it will be the record for the purposes of the Best Evidence Rule (Section 41.4(3)). (iii) The LTA The LTA provides a mechanism that would allow for electronic documents to be submitted to the LTO for registration. To do so, the electronic document requires the digital signature (secure signature that is authorized by a certificate of the Registrar) of a subscriber (individual authorized by a certificate to incorporate their digital signature into an electronic application) and a paper version of the submitted documents must also be executed (Section 56.2). In addition, the LTA states that despite any enactment or rule of law to the contrary, an electronic application submitted to the LTO that is in accordance with the LTA will be conclusively deemed to be the equivalent of a paper version of that application (Section 56.3). (iv) The ABCA The ABCA states that a notice or document required to be sent or delivered under the ABCA may be sent by electronic means in accordance with the ETA, including the consent of a person that is entitled to waive the requirement for sending of a notice or document or to waive or abridge the time for the notice or the document (Sections 255(5) and 258(2)). (v) The FOIP The FOIP Act governs public bodies and prescribes certain rules relating to the access and protection of public information. Section 17(1) of the FOIP restricts a public body from disclosing public information where disclosure of same would lead to an unreasonable invasion of a third party s personal privacy. However, if the third party has consented to or requested the disclosure, in the prescribed manner, then the disclosure would not be an unreasonable invasion of the third party s personal privacy (section 17(2)(a)). The FOIP Act only allows a public body to use and/or disclose personal information in certain circumstances (sections 39 and 40). One of these circumstances is where the individual, which the information is about, has identified the information and has consented, in the prescribed manner, to its use and/or disclosure (sections 39(1)(b) and 40(1)(d)). In regards to notices or other documents being delivered to a person under the FOIP Act, section 83(1)(e) states that such is to be given in electronic form other than facsimile telecommunication if the person to whom the notice or document is to be given has consented to accept the notice or document in that form. To determine whether a person has consented under section 83(1)(e), section 83(2) of the FOIP states that this determination may be made in accordance with section 8(2) of the ETA (i.e. consent may be inferred from a person s conduct).

6 - 6 - (vi) The FOIP Reg Section 7 of the FOIP Reg prescribes how a third party and/or an individual should consent to a public body s use or disclosure of their personal information under sections 17(2)(a), 39(1)(b), and 40(1)(d) of the FOIP. Section 7(5) of the FOIP Reg prescribes certain requirements for such consent to be in electronic form, including the inclusion of an electronic signature. A third party and/or individual s electronic signature must: 1. be reliable for the purposes of identifying the person giving the consent (section 7(5)(f)(i)); 2. meet the information technology standards and requirements as to the method of making the signature and as to the signature s reliability, if any, as established by the public body (section 7(5)(f)(i)); and 3. the association of the electronic signature with the consent is reliable (section 7(5)(g)). (vii) PIPEDA The purpose of PIPEDA is similar to the ETA, which is to confirm that electronic documents may be used and relied upon to the same extent as paper-based documents for most purposes relating to specified federal laws and/or provisions listed in Schedule 2 or 3 of the PIPEDA. As of January 12, 2016, Schedule 2 of PIPEDA applies to sections 3, 5 to 7, 11, and 16 of the Federal Real Property and Federal Immovables Act as well as subsection 254(1) of the Canada Labour Code. As of January 12, 2016, Schedule 3 of PIPEDA applies to sections 9 and 11 of the Federal Real Property Regulations (SOR , s.2, and SOR ). The relevant sections of the PIPEDA are as follows: 1. Section 36 signed original documents as evidence or proof from a minister/public officer; 2. Section 39 a person s seal on a document; 3. Section 42 documents being in their original forms; 4. Section 43 signatures; 5. Section 44 statements made under oath; 6. Section 45 statements declaring truth; and 7. Section 46 witnessed signatures. Most of the above areas will require an individual s secure electronic signature (electronic signature that results from the application of a technology or process prescribed by the SES Reg). (viii) The SES Reg The SES Reg states what is required for a secure electronic signature to be valid and prescribes an evidentiary presumption for secure electronic signatures (sections 2-5). The SES Reg was created under the PIPEDA and the CEA.

7 - 7 - (ix) The CEA The CEA is very similar to the AEA in relation to how it applies to electronic documents and signatures. However, the CEA has some distinct differences from the AEA: 1. It only applies to criminal proceedings and to those proceedings to which Parliament has jurisdiction (section 2); 2. Banks are included in its definition of a corporation ; 3. It does not affect any rule of law relating to the admissibility of evidence, except for the rules relating to authentication and best evidence, while the AEA deals with modifying the same. The Court in R v Avanes, 2015 ONCJ 606 at paras 55-60, held that the use of affect instead of modify codifies the common law instead of modifying it; 4. It applies to secure electronic signatures; and 5. It allows the Governor in Council to make regulations that would establish evidentiary presumptions in relation to secure electronic signatures section 5 of the SES Reg contains an evidentiary presumption regarding secure electronic signatures. The CEA has been cited by several cases, mainly criminal, dealing with the standards that need to be met in order for an electronic record to be admissible in Court. (x) The CBCA, the TLCA, the BA, the ICA, the CCAA, and the CNCA The CBCA, the TLCA, the BA, the ICA, the CCAA, and the CNCA all contain almost identical provisions to each other relating to electronic documents and signatures. Firstly, each act expressly states that nothing requires a person to create or provide an electronic document. Secondly, each act has certain requirements when dealing with statutory declarations and affidavits (i.e. execution requires secure electronic signatures). Thirdly, they each require the following for an electronic signature to be valid, subject to the requirements for statutory declarations and affidavits: 1. prescribed requirements relating to each Act s signature provisions are met; and 2. the signature results from the application by a person of a technology or process that permits the following to be proven: a. the signature is unique to the person; b. the technology/process is used to incorporate/attach/associate the person s signature to the electronic document; and c. the technology/process can be used to identify the person that used same. In addition, the CBCA states that a director may establish the content and form of its corporation s notices and documents that would allow the director s electronic signature to have the same effect under the CBCA as their signature (section 258.1(c)). This provision is similar in the other Acts but in particular in the BA, the Minister, Superintendent, Commissioner or the Bank of Canada may establish the content and form of the notices and documents sent/issued by them under the

8 - 8 - BA or its regulations that would allow their signature in electronic form to have the same effect under the BA as their signature (section 1004(c)). All of the above legislation have regulations dealing with electronic documents except for the CBCA Reg. Please note that although the CNCA Reg does prescribe certain requirements for electronic documents (sections 9-14), none of these requirements deal with electronic signatures. The use of secured electronic signature in the above legislation is defined pursuant to PIPEDA and the SES Reg. (xi) The TLCA, the BA, the ICA, and the CCAA Regs All of these regulations contain the identical requirements for electronic signatures, which are that an electronic signature must consist of: one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to or associated with an electronic document. (section 12) (xii) The DESDA and its Reg Under the DESDA, a requirement under certain acts and regulations, those that are listed under section 70.1 of the DESDA (e.g. the Canada Pension Plan, Old Age Security Act, Employment Insurance Act, Canada Student Financial Assistance Act, Canada Student Loans Act, Apprentice Loans Act, Canada Labour Code), for a signature is satisfied by an electronic signature if that signature is reliable, linked with the electronic document, and meets the prescribed requirements, if any (section 72(4)). The DESDA Reg prescribes additional requirements for a signature under the DESDA. The DESDA Reg defines an electronic signature as follows: (a) a signature that consists of one or more letters, characters, numbers or other symbols in digital form that is incorporated in, attached to or associated with an electronic document or electronic information; (b) a secure electronic signature, which has the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act; or (c) a signature that results from the application of any technology or process that is determined by the Minister or the Commission as able to provide the same level of security as a secure electronic signature. (section 1(1)) The DESDA Reg requires an electronic signature to reliably link the identity of the signatory with the electronic signature for the purposes for which the signature is required and indicate the signatory s intention with respect to the electronic document or information (section 7).

9 - 9 - To establish reliability of electronic signatures under the DESDA Reg, the following factors need to be considered: (a) the purpose for which the electronic signature is required; (b) the use of a suitable method by the Minister or the Commission to identify the signatory and to link his or her identity to the electronic document or the electronic information in respect of which the signature is required; and (c) the ability of the Minister or the Commission to verify whether any alteration has been made to (i) the electronic signature and the electronic document or the electronic information after the time of signing, and (ii) the link between the electronic signature and the electronic document or the electronic information. (b) Comparing Provincial and Territorial Electronic Legislation The Provincial and Territorial legislation dealing with electronic documents and signatures are very similar in nature but they contain several differences. Firstly, the definition of electronic signature differs slightly across the Provinces and Territories, with the major differences coming from Nunavut and Prince Edward Island. In Alberta, British Columbia, Manitoba, Ontario, New Brunswick, Newfoundland and Labrador, and the Northwest Territories, the definition is as follows: "electronic signature" means electronic information that a person creates or adopts in order to sign a document and that is in, attached to or associated with the document [record is replaced for document in Alberta and British Columbia]; However, in Saskatchewan, Nova Scotia, and the Yukon, electronic signatures are defined as information in electronic form that a person has created or adopted in order to sign a document and that is in, attached to or associated with the document. Nunavut defines electronic signature as a signature that consists of one or more characters or symbols in a digital form which are incorporated in, attached to or associated with the document[.] (section 1(1) of the Electronic Commerce Act, S Nu 2004, c 7) Prince Edward Island defines electronic signatures as: information in electronic form that a person has created or adopted in order to sign a document and that is in, attached to or associated with the document, and has the following characteristics: (i) it is uniquely linked to the signatory; (ii) it is capable of identifying the signatory; (iii) it is created using means that the signatory can maintain under his sole control; and

10 (iv) it is linked to the data to which it relates in such a manner that any subsequent change of the data is detectable. (Electronic Commerce Act, RSPEI 1988, c E-4.1 at s 1(1)(b)) Another key difference is the types of matters that these legislation do not apply to. In Alberta, British Columbia, Saskatchewan, Nova Scotia, the Yukon, Nunavut, and the Northwest Territories, the legislation generally does not apply to: 1. wills, 2. trusts created by wills, 3. power of attorneys related to the financial affairs or personal care of an individual (Nunavut s power of attorney only extends to the financial affairs of an individual), 4. documents that create or transfer interests in land and that require registration to be effective against third parties (in Alberta, this extends to any records that create or transfer interests in land, including interests in mines and minerals), 5. negotiable instruments subject to exceptions in the specific legislation, and 6. any other exceptions as prescribed by regulations. However, in Prince Edward Island, Newfoundland and Labrador, Ontario, Manitoba, and New Brunswick, the above limitations of the legislation are different. For example, in all of these Provinces, including Quebec, there is nothing in these acts to limit it from applying to transfers of land (i.e. electronic signatures are allowed for real estate deals) (E-Signatures Can Now Be Used On Ontario Real Estate Documents by Kirsten Thompson at McCarthy Tetrault LLP). In addition, the legislation between the Provinces and Territories treat the requirements for electronic signatures somewhat differently. The majority of the Provinces and Territories have the same requirements for electronic signatures subject to minor differences, such as: 1. not requiring express consent of a public body/government (Electronic Transactions Act, SBC 2001, c 10; Electronic Transactions Act, RSNB 2011, c 145); 2. not requiring the electronic signature to meet the prescribed requirements imposed by the public body/government regarding method, information technology, and/or reliability standards of the signature (Electronic Transactions Act, SBC 2001, c 10; The Electronic Information and Documents Act, 2000, SS 2000, c E-7.22; Electronic Transactions Act, RSNB 2011, c 145); 3. requiring the electronic signature to meet the generally prescribed requirements regarding the method and information technology standards of the signature (Electronic Transactions Act, SBC 2001, c 10; Electronic Commerce Act, S Nu 2004, c 7; Electronic Commerce Act, 2000, SO 2000, c 17; The Electronic Information and Documents Act, 2000, SS 2000, c E-7.22; Electronic Transactions Act, SNWT 2011, c 13); 4. allowing electronic documents to be deemed as sealed if certain requirements are met (Electronic Commerce Act, S Nu 2004, c 7 at s 13(3); Electronic Commerce Act, 2000, SO 2000, c 17 at s 11(6));

11 allowing documents to be endorsed through an electronic signature/endorsement (Electronic Commerce Act, 2000, SO 2000, c 17 at s 11(2); Electronic Commerce Act, SNL 2001, c E-5.2 at s 11(4)); and 6. allowing an electronic document that is not signed to satisfy a designated law that requires a signed document to be provided to a public body if certain requirements are met (Electronic Commerce and Information Act, SM 2000, c 32 at s 13(2)); Further, the Electronic Transactions Act, RSNB 2011, c 145 at s 11(2), is the only legislation that expressly states that an electronic signature may be: (a) (b) an electronic representation of the manual signature of the person signing the document, or electronic information by which the person signing the document (i) provides his or her name, and (ii) indicates clearly that the name is being provided as his or her signature to the document. Please note that neither the prescribed regulations for the above legislation, subject to the ETA s prescribed regulations, nor the legislation for Quebec that governs electronic documents and/or signatures were reviewed in preparing for this presentation. 3. Enforceability of Electronic Signatures in Alberta (a) Original Documents Required Section 7 of the ETA limits what types of documents can be executed by electronic signature or in electronic form (unless another law has provided express authorization). Section 7 of the ETA provides that: The Act does not apply to (a) wills and codicils; (b) trusts created by wills or codicils; (c) enduring powers of attorney under the Powers of Attorney Act; (d) personal directives under the Personal Directives Act; (e) records that create or transfer interests in land, including interests in mines and minerals; (f) guarantees under the Guarantees Acknowledgment Act; (g) negotiable instruments; (h) records that are prescribed, or that belong to a class that is prescribed, as records or a class of records to which this Act does not apply; (i) documents of title (except where a contract activity is for the carriage of goods).

12 In addition, the General Reg prescribes additional exceptions for which the ETA does not apply to, such as: i. records connected with an employee-employer relationship, ii. records under the Alcohol and Drug Abuse Act this act has been repealed and replaced with the Emergency Health Services Act, iii. certificates issued under the Mental Health Act (or the Public Health Act), iv. notices issued under the Residential Tenancies Act or Mobile Home Sites Tenancies Act, or v. records in respect of court proceedings. (b) Electronic Signatures An electronic signature is defined by the ETA as electronic information that a person creates or adopts in order to sign a record and that is in, attached to or associated with the record[.] (section 1(1)(c)). Examples of an electronic signature would include the following: (a) (b) (c) Signatures that are handwritten and transmitted electronically; The click of an I accept button on an e-commerce site; A typed name at the end of an . An electronic signature does not require the use of an encryption measure to validate the signature. Some authors have advocated that the best practice for using electronic signatures is to encrypt or code them using a digital signature as a means of authentication. However, this practice is not a legal requirement. (Chris Lofft, Michael Laurie, eds. Electronic Signatures in Canadian Law, November 2014 (online) [Electronic Signatures]) Notwithstanding, there is a presumption under the SES Reg that if a secure electronic signature is used, then it is presumed to be signed by the person who is identified in the digital signature certificate, subject to contrary evidence. Although, the SES Reg is a regulation under the PIPEDA and the CEA, it may be useful in establishing the identity of the signor in Alberta. (c) Statutory Rules for Electronic Signatures The ETA sets out three rules for dealing with electronic signatures. The first rule confirms that electronic signatures are valid signatures in law. Section 16(1) states: Subject to subsection (2) and section 22, a legal requirement that a record be signed is satisfied by an electronic signature. There is nothing in the ETA that requires a person to use, provide, or accept information or a record in electronic form without the person s consent. The ETA provides that consent in most cases can be inferred from a person s conduct, but consent of a public body can only be given by explicit communication.

13 The second rule limits the application of section 16(1). If a record is prescribed (meaning prescribed by regulation) for the purposes of section 16(2) the electronic signature is legally effective only where there is evidence to verify the authenticity of the signature. Section 16(2) reads: If a record is prescribed for the purposes of this subsection or belongs to a class prescribed for those purposes, the legal requirement that the record be signed is satisfied by an electronic signature only if in light of all the circumstances (a) the electronic signature is reliable for the purpose of identifying the person, and (b) the association of the electronic signature with the relevant record is reliable for the purpose for which the record was created. There are currently no prescribed records for the purposes of section 16(2). The third rule is that, where the electronic signature is provided to a public body, the signature must comply with any signature standards or requirements set by the public body. Section 22 states: A legal requirement for a signature that is to be provided to a public body is satisfied by an electronic signature only if (a) the electronic signature meets the information technology standards, if any, established (i) in the case of a public body referred to in section 1(1)(h)(i) or (ii), by the Minister, and (ii) in the case of a public body referred to in section 1(1)(h)(iii) to (vii), by the public body, and (b) the electronic signature meets the requirements, if any, of the public body as to the method of making the signature and as to reliability of the signature. (i) Application of Evidence Law Principles A court will assess the reliability of an electronic record based on whether the person tendering the record can demonstrate the record is what the person claims it to be (section 41.3 of the AEA). There is no provision in the AEA that provides similar guidance for how the court will review the reliability of an electronic signature. The CEA authorizes the Governor in Council to make regulations to establish evidentiary presumptions regarding electronic signatures. The only regulation created by the CEA dealing with such is the SES Reg, which creates a presumption that if the prescribed technology/process as set out in section 2 of the SES Reg is used then the data contained in the electronic document is presumed, subject to contrary evidence, to have

14 been signed by the person identified in the prescribed digital signature certificate. However, the SES Reg seems to only apply to specified federal legislation, such that in Alberta there is no such presumption and a Court s analysis on this issue may be based on whether the subject electronic signature meets the objectives of a traditional signature. It has been said that the primary function of a signature is to authenticate the identity of the signatory, and confirm that signatory adopts the contents of that document (Stephen Mason, Electronic Signatures in Law (London: LexisNexis, 2003) at pp 70-71). It follows that a court s reliability analysis of an electronic signature may be based on two questions: 1. Is the signature identifiable? 2. Are there indications the signatory felt bound by the agreement? (ii) Proving the Identity of the Signatory In Delisle, Stuart, Tanovich, Evidence: Principles and Problems, 9 ed (Toronto: Carswell, 2010) [Evidence] the authors describe the process a party may follow to identify a document. See p 402: [Identification of a document] may be established by calling the suggested writer, by calling one who saw him write the document or has an awareness of his handwriting, by direct comparison of the handwriting with handwriting known to be that of the suggested writer, [or] by the testimony of experts A court considering whether an electronic signature identifies the signatory may assess identification based on similar evidence. In addition, the use of a secure electronic signature in accordance with the SES Reg may be helpful in further establishing the identity of the signor. (iii) Proving the Association of the Electronic Signature with the Record The Best Evidence Rule requires that when a party seeks to prove the terms of a contract the terms must be produced in their original form. The purpose behind this rule is to ensure that the document tendered as evidence is authentic (and can be relied upon for its contents). See Evidence at p 404. However, this rule has been adjusted by statute so that electronic documents do not need to be tendered in their original form. Section 41.4(3) of the AEA provides that: (3) An electronic record in the form of a printout that has been manifestly or consistently acted on, relied on or used as the record of the information recorded or stored on the printout is the record for the purposes of the best evidence rule. This section still preserves the principle behind the Best Evidence Rule because if the document is proved to have been consistently acted on or relied on, then that is evidence authenticating the document.

15 The legal interpretation for whether the association of an electronic signature with the document is reliable, then, could be whether the tendering party can prove that the signatory felt bound by the contents of the document in other words, that the party consistently acted on or relied on the terms of the document. (d) Treatment of Electronic Signatures in Jurisprudence The Court in Beatty v First Exploration Fund 1987 & Co (1988), 40 BLR 90 (BCSC) ( Beatty ), had to determine whether faxed proxies for a meeting of the board of directors was valid. It was acknowledged by the Court that [t]he faxed proxies were not themselves signed, but they bore the photographic reproduction of the original signature of the limited partner who executed the particular proxy. (para 18) The Court held that the faxed proxies met the requirements in the agreement with respect to the proxies being signed and being in writing. (para 20) The Court went on to say that: [t]he law has endeavoured to take cognizance of, and to be receptive to, technological advances in the means of communication. The development of that approach may be observed in a number of cases, including the following. (para 21) The line of thinking in Beatty seems to be evident in the cases discussed below. The Court in Gryckiewicz v Ironside, 2015 ABQB 284, had to determine whether the s in this case met the requirements of an acknowledgment under the Limitations Act. An acknowledgement under the Limitations Act must be in writing and signed by the person adversely affected by it (para 26). One of the s in question attached a handwritten note that was signed by three people, including the person adversely affected by a possible finding of an acknowledgement (para 30). In reaching its decision, the Court referred to the decision in Nikel Investments Ltd v Gallaher, 2012 ABQB 276 ( Gallaher ), and that it did not stand for the proposition that s constitute acknowledgments because it was conceded in Gallaher that the s would constitute as a written and signed acknowledgement (para 31). The Court also referred to the decision in Fleisher Ridout Partnership Inc v Tai Foong International Ltd (2012), 220 ACWS (3d) 835 (ONSC) ( Fleisher ), whereby the Justice held that s can constitute as a written and signed acknowledgment when there is additional evidence showing who authored them (para 32). As a result, the Court held that the attached note to the constituted as an acknowledgement under the Limitations Act because it was written and it was signed by the party adversely affected by it (para 36). The Court in Fleisher also had to determine whether s constitute as an acknowledgment under the Limitations Act. Two s were exchanged by the parties in this case, one of which had the name of the defendant s authorized representative printed in the body of the (paras

16 and 13). The Court held that the s constituted a written and signed document or record (para 14). The Court in Buckmeyer Estate, Re, 2008 SKQB 141, had to determine whether an was sufficient as a declaration to constitute a change of designation of beneficiary for a deceased s insurance policy under the Saskatchewan Insurance Act (para 19). The Saskatchewan Insurance Act provides that a designation in an instrument purporting to be a will is not invalid by reason of the document being found invalid as a will (para 21). A declaration under the Saskatchewan Insurance Act must be in writing and signed by the insured (para 22). The definition of a declaration under the Alberta Insurance Act and under the Saskatchewan Insurance Act are identical (para 24). The Court held that the signature of the deceased in the was an effective signature and it was not caught by the wills exclusion under the Electronic Information and Documents Act, 2000, SS 2000, c E-7.22 since the did not need to be a will or testamentary document for the purposes of the Court s analysis regarding whether the was sufficient to meet the definition of a declaration under the Saskatchewan Insurance Act (paras 42 and 43). The Court in Leoppky v Meston, 2008 ABQB 45 ( Meston ), had to determine whether an exchange of s was sufficient to meet the Statute of Fraud requirements regarding an agreement dealing with the sale of land. One of the s were signed by the Defendant (para 7) [seems to have been signed by her printing her name in the body of the ]. The address used by the defendant was not hers (it was her sisters) but she invited replies to that address and replied from this address as well (para 7). The Court stated that agreements dealing with the sale of land must be in writing per the Statute of Frauds and held that although the writing of this agreement was computer generated and in s, it was sufficient to meet this requirement (paras 34 and 35). In addition, the Statute of Frauds requires the writing to be signed by the party devising the lands, which the Court held was met by the ed signature of the defendant (para 42). The Court did acknowledge that the address was shared by more than one party but held that because the defendant did not argue that the s relating to the agreement were from anyone else and that they were signed by her (there was no argument that the signature was not hers), the s were sufficient to meet the requirements under the Statute of Frauds (paras 45, 46, and 49). Please note that the Court did not discuss the limitation under the ETA regarding records that create or transfer interests in land. The parties in this case originally purchased the lands as joint tenants and were trying to negotiate the sale of the lands to one of them. Meston was cited by the Alberta Provincial Court in Roberts v Legge, 2009 ABPC 80. The Court in this case held that the decision in Meston was not applicable because it was dealing with a settlement agreement which was not an action to charge a person upon a contract or sale of lands (para 9). As a result, the Court held that the settlement agreement did not need to be in writing (para 9).

17 Meston was also cited by three Ontario cases: Carttera Management Inc. v Palm Holdings Canada Inc., 2011 ONSC 4573 ( Carttera ); Bedell v Kidder (2011), 11 RPR (5 th ) 132 (ONSC) ( Bedell ); and Bain v Morton (2014), 248 ACWS (3d) 97 (ONSC) ( Bain ). In Carttera, the Court had to determine whether to grant a certificate of pending litigation granted where the plaintiff is able to establish that there is a triable issue (para 5). One of the issues was whether the agreement entered into by the parties was valid pursuant to the Statute of Frauds since the parties exchanged s back and forth in reaching it. The defendant s authorized representative would print his name at the bottom of each of his s. In addition, the s from the defendant s authorized representative contained a boilerplate clause that stated that the transmission was not a digital or electronic signature and could not be used to form a contract. (para 12) The Court held that the presence of the ed signature and the boilerplate clause raised a possible triable issue in this case (para 13). Also, the Court commented that the boilerplate clause contained in the s may not be sufficient to engage the Statute of Frauds which is to be given a fair and liberal interpretation. (para 13) In Bedell, the Court referred to Meston in that s can be sufficient to meet the writing requirements under section 4 of the Statute of Frauds for agreements concerning land but held that the s in this case did not meet the Act s signature requirements (para 13). Please note that the Court did not discuss why the s were not signed and it was unclear how the parties in their s identified themselves and/or signed their names in same. In Bain, the Court had to determine whether an acknowledgment was valid because it was done through text messages. The Court stated that text messages may be viewed as being in writing pursuant to Meston (which dealt with s), but held that this acknowledgment failed because it was not signed (para 8). Like in Bedell, the Court did not discuss why the text messages were not signed and it was unclear how the parties in their texts identified themselves and/or signed their names in same. (e) Federal Regulated Entities While most transactions will be governed by provincial law, corporations regulated by federal statute, including banks, will have to comply with additional rules to execute documents in electronic form. Under the BA, for an electronic signature to be valid, the following must be met: i. It must meet the BA s prescribed requirements, which currently requires an electronic signature to consist of one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to or associated with an electronic document. (section 12); and ii. It results from the application of a technology/process that provides proof that the signature is unique to the signor and that the technology/process is used to incorporate/attach/associate the signature to the electronic document and it can be used to identify the signor.

18 The above factors suggest that the use of a secure electronic signature would be sufficient to meet the BA s requirements for an electronic signature. However, the BA also requires that the electronic document be received through a designated information system and with the consent of the recipient. Please note that there are different requirements for an electronic signature when it is part of an affidavit or statutory declaration under the BA. Section 1001 of the BA states: A statutory declaration or affidavit required under this Act or the regulations may be created or provided in an electronic document if (a) the person who makes the statutory declaration or affidavit signs it with their secure electronic signature; (b) the authorized person before whom the statutory declaration or affidavit is made signs it with their secure electronic signature; and (c) the requirements of sections 994 to 1000 are complied with. (f) Guarantees Acknowledgement Act Section 7 of the ETA specifically states that it does not apply to guarantees under the Guarantees Acknowledgment Act, RSA 2000, c G-11 (the GAA ). In the result, an original version of the guarantee should be kept on the file. 4. Contracting Out of the ETA s Exceptions In consideration of the law moving toward a paperless system, there is a need to waive the requirements that originals need to be kept in regards to the exceptions listed under section 7 of the ETA, specifically guarantees under the GAA and records that create or transfer interests in land. The general rule regarding waiving and/or contracting out of a statute is that parties are unable to do such if the applicable statute makes it clear that it is to prevail notwithstanding any contrary agreement or it would be incapable of being waived as a matter of overriding public policy. It has been consistently held that it is against public policy to permit contracting out of legislation which is enacted in the public s interest (Potash v Royal Trust Co, [1986] 2 SCR 351; Central Trust Co v Stastny (1992), 134 AR 93; Private Career Training Institutions Agency v Prana Yoga Teacher College Inc, 2013 BCSC 17). Section 7 of the ETA clearly states that guarantees under the GAA are not subject to the ETA. The GAA defines a guarantee as a deed or written agreement whereby a person, not being a corporation, enters into an obligation to answer for an act or default or omission of another (section 1(a)). A deed is defined by the Barron s Canadian Law Dictionary as [a]n instrument in writing that conveys an interest in land from the grantor to the grantee; an instrument used

19 to effect a transfer of realty. Its main function is to pass title to land. (Quicklaw) In addition, the GAA requires the guarantor to meet with a lawyer, acknowledge their signature in the guarantee to the lawyer, and sign the prescribed GAA Certificate in front of the lawyer. The GAA is silent in regards to whether it would prevail notwithstanding any contrary agreement, such that the interested parties could enter into an agreement that waives the requirements for the guarantee to be a deed or a written agreement on paper and instead allow for an electronic version of it, such that the electronic version would have the same force and effect as a guarantee executed on paper. However, notwithstanding an agreement by the interested parties, there is a risk that a Court may find this sort of agreement to go against public policy. This risk may not be substantial considering the trend in the jurisprudence surrounding electronic documents and signatures (especially if a secure system is used to create, retain, and execute the guarantee), but there is still a risk that a Court may find it unenforceable. Section 7 of the ETA also states that records that create or transfer interests in land are not subject to the ETA. However, the ETA states that: 1. it does not limit the operation of any enactment or other law that authorizes, requires, prohibits or regulates the use of information or records in electronic form (section 2(1)(a)); and 2. it does not apply to a legal requirement that is prescribed, or that belongs to a class that is prescribed, as a legal requirement or class of legal requirement to which this Act does not apply. (section 4). The LTA has now prescribed a system whereby they will allow for records that will create or transfer interests in land in electronic format, notwithstanding section 7 of the ETA. Although, the LTA has this new system in place, the LTA will still require the records to be signed in person and the originals retained in accordance with the regulations no such regulations have been enacted as of yet. 5. Steps Taken by the Provincial Government of Alberta (the Government ) The Government has taken several steps in moving our paper-reliant system to a more modern and electronic system. The first step that the Government took was when they introduced the ETA, which took effect on April 1, The ETA confirmed that electronic documents may be used and relied upon to the same extent as paper-based documents except in limited circumstances. Simultaneously with the introduction of the ETA, the Government made sure to amend the AEA, such that the use of electronic documents could be relied on for evidentiary purposes. The amendments to the AEA also came into force on April 1, The Government also passed amendments in FOIP to allow for notices and documents under that Act to be sent electronically in accordance with the ETA. These amendments were incorporated in FOIP on May 16, 2003.

20 In addition, the Government amended the ABCA to allow for notices or documents under several sections of this Act to be sent by electronic means, along with a person s waiver of sending such notices and documents, in accordance with the ETA. These amendments came into force on May 17, On February 8, 2006, the Lieutenant Governor in Council made several amendments to the FOIP Regs, including the prescription of requirements for public bodies to obtain consent from individuals and/or third parties through electronic means. Further, the Government passed amendments to the LTA that would allow the Land Titles Office in Alberta (the LTO ) to accept electronic documents using digital signatures (i.e. electronic signatures) instead of manually signed documents, notwithstanding section 7(e) of the ETA. These amendments came into force on March 30, The LTO and the Law Society of Alberta (the Law Society ) have implemented a pilot program with several law firms in Alberta to test this new way to deal with transfers of land. However, the LTO and the Law Society will still require lawyers to keep the originally signed documents in their offices after the electronic versions of these documents have been submitted to the LTO. It is unclear how long lawyers would have to keep these documents; such that lawyers may be prevented from ever destroying these documents on the chance that the LTO or the Law Society of Alberta requests the receipt of same.