E-conveyancing funds not wasted, says Victoria

Chris Merritt, Legal affairs editor | November 07, 2008 | The Australian

THE Victorian Government believes the millions of dollars it has spent building a state-based electronic conveyancing system have not been wasted.

The system stands a good chance of being used nationally, it says.

The e-conveyancing system, which cost about $40 million to develop, has been used for just one property settlement since its launch last November and is about to be replaced by a national system.

Victorian Environment Minister Gavin Jennings told state parliament last week the money that had been spent on the state system was not a "sunk investment".

This was because the software and intellectual property that had been developed for Victorian transactions also had been developed with the intention that the Victorian system would become the national system, Mr Jennings said.

He said there were "very good prospects" of the Victorian system, which was known as ECV, being endorsed as the national system.

"We think this is intellectual property and a system that will be in a prime position to be adopted as a national model," Mr Jennings told parliament.

"We are very happy for the model that has been established in Victoria to be considered through the Council of Australian Governments process."

He was responding to questions from Opposition frontbencher David Davis about what steps he had taken to ensure that "the obvious conflict of interest" inside his department "will not lead to further losses on top of the tens of millions" that had already been spent on the project.

While the Victorian system has been in place for a year, most conveyancing in the state is still undertaken using traditional paper-based systems.

Increases in government charges have failed to drive transactions to the new system, because the Government has been unable to persuade the Law Institute of Victoria that the system is safe to use.

The LIV has advice that ECV could expose solicitors to increased potential liability.

The major banks have also refused to use ECV because they do not wish to encourage the use of state-based e-conveyancing systems.

The Council of Australian Governments has agreed that the organisation that will run the proposed national system will assess ECV and "to the extent that it is suitable" use it as the basis for the underlying software for the national system.

The federal Opposition's legal affairs spokesman, George Brandis, told the Senate estimates committee last month there were serious and credible allegations that the process of selecting the national e-conveyancing system had been "corrupted by a conflict of interest within the state of Victoria".

Senator Brandis's allegations were based on reports in The Australian about the links between the Victorian Government and computer contractor Ajilon, which managed the development and implementation of ECV.

Ajilon managing director Giles Nunis said the company's consultants had attended inter-governmental meetings at the request of the Victorian Government to provide briefings onECV.

"Ajilon is not aware or has taken part in any future tender discussions by any state or federal government for the development of an electronic conveyancing system," Mr Nunis said.

In the Victorian parliament, Mr Davis said an Ajilon employee held a decision-making role in Mr Jennings' department.

Mr Davis asked if all tenders between the department and Ajilon had met conflict of interest provisions and been subject to reports by probity auditors. He also asked for any reports to be made public.

Mr Jennings said he had been involved in "sustained conversations" with his department about the probity of of its decisions.

"I continue to be advised by the department that it has satisfied probity considerations through its probity control group," Mr Jennings said.

The department's tendering procedures satisfied the standard procedures that would be expected across the government, he said.

But the additional requirements that had been referred to by Mr Davis were not standard practice and had not been undertaken.

"The department is well satisfied with the probity processes that have been in place -- that a conflict as alleged does not exist," Mr Jennings said.

"In fact there is great confidence within the department in this matter.

"This continues to be the advice that I have sought to verify, to validate, and I continue to be provided by my department in relation to this matter."

Conflict conveyed

HERE'S one to watch. The Victorian Government has confirmed it has an enormous financial incentive in having its flawed electronic conveyancing system transformed into the promised national system.

If that happens, it might save some financial embarrassment for the state Government. But without a radical overhaul, Victoria's system would expose the nation's solicitors to avoidable potential liability.