This article was updated: 9 June 2021
1.1 2020 was a year punctuated by continual change for many businesses but, on the up-side, brought about Federal and state governments introducing temporary measures to allow for the electronic signing and witnessing of documents which have carried on into 2021 and – for Victoria – beyond.
(a) Victoria is leading the charge, making permanent changes to its key pieces of legislation to adopt electronic signing and remote witnessing. New South Wales’ temporary relief through its amendments to its Electronic Transactions Act is due to expire at the start of 2022.
(b) Meanwhile, South Australia and Queensland’s temporary relief is due to expire in September this year, with Western Australia’s relief due to expire at the end of the year.
(c) We hope that the other states will follow Victoria’s lead in permanently modernising their legislation to allow for laws around signing and witnessing to embrace and keep stride with evolving technology in this space.
(a) At a Federal level, the Treasurer’s temporary electronic signing relief determination expired in March 2021. This determination authorised companies signing under section 127(1) of the Corporations Act 2001 (Cth) to sign documents (including deeds) electronically.
(b) However the government has demonstrated its intent to also make these measures permanent, although this endeavour has so far stalled in parliament.
(c) The proposed Treasury Laws Amendments (2021 Measures No. 1) Bill 2021 would include the capacity to engage in virtual meetings, electronic execution and split execution of documents (including deeds), and electronic witnessing of certain documents. While this bill passed the House of Representatives, debate and consideration by the Senate has been adjourned until the first Senate sitting day of August 2021.
(d) The effect of this adjournment, in combination with the expiry of the Treasurer’s determination, is that the relief afforded to businesses by the above measures is currently unavailable at the Federal level. Further, the Treasurer’s powers to make temporary orders under the Corporations Act have been exhausted.[1]
(e) At least until the proposed bill passes into law, companies for the time being should adopt the traditional method of placing physical signatures on a single static counterpart of the document.
3.1 Parties may be able to use electronic methods to enter into contracts depending on their jurisdiction, with certain exclusions applying depending on which jurisdiction applies to the contract.
3.2 Generally, if your document needs to be witnessed (for example, a deed or power of attorney) then it cannot be signed electronically and must be signed in wet ink.[2] The witness must be physically present (and it is debatable whether they can electronically sign the document). NSW, Victoria, Queensland and Western Australia are the exceptions here (see the changes above).
3.3 Until further judicial guidance becomes available, caution should be exercised to ensure that all formalities to validly form a deed are met.
4.1 Where there is any confusion or uncertainty about whether a document can be executed electronically, for caution we recommend you consider:
(a) being cognisant of when these changes cease in your state: the legislative changes are temporary (though note certain changes have been made permanent in Victoria).
(b) utilising digital signing platforms which contain means to verify the identity of the signatories, such as DocuSign or AdobeSign.
(c) agreeing and stipulating the method of signing in the document itself.
(d) being prepared to provide evidence of actual authority of the electronic signature being placed, or the affixing being authorised by, the signatory (such as by board minutes).
(e) changing your deed into an agreement if you can. You may not need the agreement to be in the form of a deed (e.g. there may not be any lack of consideration or limitation issues that need to be addressed via a deed).
(f) printing out a deed after it has been electronically signed by a company (to satisfy the traditional requirement that deeds be on paper). This is not required in Queensland under its temporary statutory rules.
(g) if you are in NSW, Victoria, Queensland and Western Australia and the signing and witnessing is happening remotely, having a suitable and stable audio-visual platform so that the witness can see the act of signing, and ensure that the proper statutory wording recently introduced is used next to their signature (as outlined above). Further, consider if a certain person acting as a witness is required (see Queensland or Victoria) or if only particular documents can be witnessed (see Western Australia).
[1] Section 1362A.
[2] See Queensland, South Australia and Western Australia’s electronic transactions legislation.