2020 has been a year of many changes, perhaps most notably, many of us are now working from and at certain times not allowed to leave the house. Furthermore, social distancing laws have limited the number of people allowed in rooms and offices, leading to difficulties in signing documents. Consequently, it is essential to know the general and COVID specific rules around electronic signing of documents.

General rules around contracts:

Generally, standard contracts by individuals can be signed electronically. This means individuals can sign with a personal electronic signature without the need for a ‘wet ink’ signature or witness.

Similarly, companies can generally also sign a simple contract electronically, but this law is less settled. If clear intent can be demonstrated, then it will still likely be valid at common law under s127 of the Corporations Act 2001 (Cth) however the Electronic Transactions Act 1999 (Cth) that allows individuals to sign electronically explicitly does not apply to the Corporations Act.

General rules around deeds:

At common law it is required that a deed must be written (on paper, parchment or vellum), signed, sealed and delivered. The exception to this is New South Wales who introduced s38A of the Conveyancing Act 1919 (NSW) to permit deeds made by natural persons in electronic form with electronic signatures and attestation. The witness is still required to be physically present and must sign the same document at the same time as the signatory. It may still be prudent to continue requiring deeds to be signed on paper, and this exception does not apply to companies.

Rules during the pandemic:

New South Wales (expires 22 October 2020 unless extended): Witnessing can now validly occur remotely through an audio-visual link for example Zoom.[1] As long as the witness sees the signatory signing the document in real-time and is reasonably satisfied the document they saw signed is the actual document (or a copy of it) then they can witness that document by signing the document if they endorse it with a statement of the method used to sign and that it was done so in accordance with the NSW COVID Regulation.

The Act covers documents including wills, power of attorney or an enduring power of attorney and deeds or agreements.

Australian Capital Territory: The ACT provisions mirror NSW. These provisions cease to have effect three months after there ceases to be a COVID-19 state of emergency in force. At the time of writing the state of emergency in Canberra extends until 19 November 2020.

Victoria (expires 25 October 2020 unless extended)[2]: Individuals are permitted to electronically sign deeds and have similar remote witnessing provisions to NSW. 

The Victorian regulation also expressly contemplates the signing of a document electronically in counterparts if each person whose signature is required receives a copy of each signed counterpart. This seems to be in regards to multiple wet signatures rather than electronic signatures.

Queensland (expires 31 December 2020): allows for the electronic signing of deeds, including other enduring documents such as wills, enduring powers of attorney and advance health directives, and the witnessing of certain documents by way of audio-visual link.[3]

South Australia: enacted omnibus legislation that mirrors the above.

Tasmania: their changes primarily apply to councils, general rules still apply to individuals.

Northern Territory and Western Australia: neither have enacted Covid-19 specific electronic signing and witnessing legislation. The general rules still apply here.

Companies (expires 21 March 2021). In May 2020, the Determination[4] was issued, which amends section 127 of the Corporations Act to enable companies to execute documents electronically. The amendment essentially mirrors the Electronic Transactions Act. It provides that if the person signing can be reliably identified and can indicate their intention to sign through a method that is appropriate in the circumstances, then it will be accepted as valid.

Key Points: 

Most states have made amendments to ease the difficulties in signing documents during the pandemic. These amendments have been executed on a state by state case. With the consent of all parties, it may be a good idea to record the audio-visual signing to ensure evidence of capacity, volition and identity of the persons involved.

Although these regulations expand the use of electronic signatures, companies and individuals should limit risks by using reliable digital systems to provide additional authentication to the executing parties.

If you are unsure about the requirements in your situation, talk to your law firm where a solicitor can provide more specific advice. 

 

[1] Electronic Transactions Amendment (Covid-19 Witnessing of Documents) Regulation 2020 (NSW).

[2] Covid-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations (2020) (Vic).

[3] The Justice Legislation (Covid-19 Emergency Response – Wills and Enduring Documents) Regulation 2020 

[4] Corporations (Coronavirus Economic Response) Determination (No. 3) 2020

 

**Assisted by; Jacqueline Healy**