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A guide for the electronic execution of documents

Shaun Backhaus, DBA Lawyers
30 July 2020 — 10 minute read

The legislation for the electronic execution of documents is complex and varies between different jurisdictions. SMSF professionals and their clients, therefore, need to be careful. 

Introduction

This guide can assist in the electronic execution of documents. It is general information only and does not take into account the situation in jurisdictions outside New South Wales (NSW), Victoria and Queensland (Qld), or the facts of each case and is no substitute for expert advice. This is a moving area of the law and anyone seeking to execute documents electronically should seek advice.

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Executing a deed electronically

A deed is a very special type of document. Traditionally, deeds had to be made on paper. However, some jurisdictions have been passing their own unique legislation to allow for more documents to be signed and witnessed electronically, including deeds.

Currently, only NSW and Victoria have passed legislation authorising deeds to be made electronically. However, this legislation is complex and is only temporary and you should not attempt to make a deed electronically after:

  • under NSW law – 22 October 2020
  • under Victorian law – 24 October 2020
  • under Queensland law – 31 December 2020

Best practice is still not to attempt to execute a deed electronically, regardless of any new laws. Rather, best practice is still to execute a full “hard copy” version of the deed with traditional “wet” signatures and an independent witness physically present for each individual signatory.

Electronic execution by individuals

The NSW, Victorian and Queensland governments have introduced regulations authorising signatures on deeds and certain other documents to be witnessed via audio-visual link up to 22 October 2020, 24 October 2020 and 31 December 2020, respectively. See Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 (NSW) (“NSW Regulations”), COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 (Vic) (“Vic Regulations”) and Justice Legislation (COVID-19 Emergency Response — Wills and Enduring Documents) Regulation 2020 (Qld) (“Qld Regulations”). Note that the Qld Regulations were later amended by the Justice Legislation (COVID-19 Emergency Response — Wills and Enduring Documents) Amendment Regulation 2020 and these must be read together.

While the ACT has passed legislation relating to the audio-visual witnessing of documents, this does not include deeds. See the COVID-19 Emergency Response Act 2020 (ACT). South Australia has passed regulations that remove the witnessing requirement for the signing of an instrument in accordance with s 267 of the Real Property Act 1886 (SA). See the COVID-19 Emergency Response (Section 16) (No 1) Variation Regulations 2020 (SA). For Tasmania, while the COVID-19 Disease Emergency (Miscellaneous Provisions) Act 2020 (Tas) allows the relevant minister to declare that requirements under legislation for various actions can be made electronically, such a declaration has only been made in respect of local councils exercising functions.

A person executing a deed or witnessing execution electronically must also endorse the document with a written statement providing that the document was executed/witnessed in accordance with the relevant regulations.

There are slight differences in the electronic signing or witnessing of documents between NSW, Victoria and Queensland as outlined below. You should follow the criteria in each jurisdiction closely to ensure you make a valid and legally effective document if electronic execution/witnessing is required.

1. New South Wales

For electronic witnessing by audio-visual link to be effective and done in accordance with the NSW Regulations, witnesses must:

  • Observe the person signing the document (the signatory) in real time;
  • Confirm the signature was witnessed by signing the document or a copy of the document; 
  • Be reasonably satisfied the document the witness signs is the same document, or a copy of the document signed by the signatory; and
  • Endorse the document, or a copy of the document, with a statement:
    • specifying the method used to witness the signature of the signatory; and
    • that the document was witnessed in accordance with the NSW Regulations (see suggested wording below).

2. Victoria

For witnessing to be done in accordance with the Vic Regulations, witnesses should be satisfied that:

  • They have endorsed the document with a statement that they observed the signatory signing by audio-visual link in accordance with the Vic Regulations; and
  • The document was electronically signed in accordance with the Vic Regulations and correctly endorsed (see suggested wording below).

The Vic Regulations also authorise deeds to be signed and witnessed in counterparts, with the requirements being met even if signatures appear in only some of the copies of the documents, provided those copies include the entire contents of the document (i.e. not simply the execution page).

The requirements are taken to be met so long as every signatory or party whose consent is required under the Vic Regulations receives every copy of the document on which a signature appears.

While witnessing is not a strict legal requirement for deeds under Victorian law, it is best practice to have a witness attest to the execution of a deed as most people expect this to occur. However, a deed remains valid under Victorian law despite there being no witnesses. Witnesses are required, however, for a deed to be legally effective in most other jurisdictions including NSW.

3. Queensland

The Qld Regulations expressly deal with the common law position by removing the need for a deed to be written on paper or parchment. Further, the Qld Regulations also remove the witnessing requirements; however, it does provide for documents to be witnessed by audio-visual link.

For witnessing to be done in accordance with the Qld Regulations, witnesses should be satisfied that:

  • If using a substitute signatory, the witness observes the signatory direct the substitute signatory to sign the document;
  • the audio-visual link enables the witness to be satisfied, by the sounds and images made by the link, that the signatory or substitute signatory is signing the document;
  • the witness observes the signatory or substitute signatory signing the document in real time;
  • the signatory or substitute signatory signs each page of the document; 
  • the witness must be satisfied that the signatory is making the document freely and voluntarily;
  • the witness must confirm that they are satisfied that the document: 
    • is signed by the signatory or substitute signatory; or
    • is a true copy of the document signed by the signatory or substitute signatory.
  • the witness must confirm the document as soon as practicable after witnessing, which may or may not be on the same day the document is witnessed;
  • the witness must sign each page of the document;
  • after the witness confirms a document witnessed by audio-visual link, the witness must give the document:
    • if the document is to be confirmed by the witness — to the other witness; or
    • otherwise — to the relevant person for the document.

The Qld Regulations authorise deeds to be signed and witnessed in counterparts or true copy and provide that the counterpart of true copy does not need to include the signature of any other signatory or party to the deed. Further, they provide that there is no need to include material in the deed about the method used for electronically signing the deed. 

The Qld Regulations also provide that a deed can be executed electronically without the consent of any other person who is to sign or be a party to the deed.

While witnessing is not a strict legal requirement for deeds under Qld Regulations, it is best practice to have a witness attest to the execution of a deed as most people expect this to occur. 

Electronic execution by companies

The federal government temporarily modified the Corporations Act 2001 (Cth) by way of a legislative instrument that permits companies to execute documents, hold meetings and provide notices via technology for the period commencing on 6 May 2020 and ending on 5 November 2020. See the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) (“Determination”).

Under the Determination, director and shareholder meetings may be held using one or more forms of technology to enable all persons entitled to attend to participate without being physically present in the same place. The Determination provides that:

  • Electronic notices of meetings must include information about how those entitled to attend can participate in the meeting (e.g. how they can vote and speak at the meeting).
  • Every person participating in the meeting is taken for all purposes to be present at the meeting (i.e. the quorum requirement will be met).
  • Votes taken at meetings must be taken using an electronic poll and not on a show of hands to give each person entitled to vote the opportunity to participate in real time or to record their vote prior to the meeting (if technology permits).
  • All persons attending the meeting must be given an opportunity to speak and this can be achieved via audio connection. Chat systems or written functions may not be sufficient under the determination as the word “speak” appears to require oral communication.
  • A proxy may be appointed using one or more technologies specified in the notice of the meeting.

Companies can validly execute a document where the persons able to sign documents on behalf of a company:

  • Sign a copy or counterpart of the document that is in a physical form and includes the entire contents of that document (e.g. not simply the execution page); or
  • Sign a document using an electronic communication method, where that method reliably identifies the person and indicates their intention in respect of the contents of the document.

However, a number of law firms including our firm are of the view that there still remains some uncertainty on the extent the Determination supports the valid execution of a deed. Accordingly, until this uncertainty is clarified and subject to our recommended best practice under heading 2 above (i.e. not to rely on electronic execution at all), that companies which nevertheless seek to rely on electronic execution should only attempt to make a deed electronically if:

  • The parties are comfortable that NSW law applies – execution is before 22 October 2020; or
  • The parties are comfortable that Victorian law applies – execution is before 24 October 2020; or
  • The parties are comfortable that Queensland law applies – execution is before 31 December 2020; and
  • The deed is not subject to the law of the Australian Capital Territory, the Northern Territory, Queensland, Tasmanian, South Australia or Western Australia as these jurisdictions have not yet enacted legislation for the electronic execution of deed. (Note that these jurisdictions may still issue their own legislative fix for the electronic execution of deeds.)

Examples of endorsements/statements BY INDIVIDUALS

Below we provide some suggested wording to use in such endorsements/statements in NSW and Victoria for individuals executing documents. Advice must be sought before relying on: 

Suggested wording for person SIGNING electronically

  • Victoria 

I, [insert full name] of [insert address], confirm that this document was electronically signed by me in accordance with the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 (Vic).

  • New South Wales

No particular additional wording is needed for the person signing.

  • Queensland

No particular additional wording is needed for the person signing.

Suggested wording for person WITNESSING execution electronically

  • New South Wales

I, [insert full name of witness] of [insert address of witness], confirm that I witnessed [insert full name of person who signed] of [insert address of person who signed] (“Signatory”) signing this document by audio-visual link [insert the method used to witness the signature of the signatory] in accordance with the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 (NSW). I further confirm:

  • I observed the Signatory signing the document in real time;
  • The Signatory’s signature was witnessed by signing the document or a copy of the document; and
  • I am satisfied the document I signed is the same document, or a copy of the document signed by the signatory.

Signed by the witness as a true and correct record.

 

------------------------------------------------------------------     Date:          /     / 2020

  • Victoria

I, [insert full name of witness] of [insert address of witness], confirm that I witnessed [insert full name of person who signed] of [insert address of person who signed] (“Signatory”) signing this document by audio-visual link [insert the method used to witness the signature of the signatory] in accordance with the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 (Vic).

Signed by the witness as a true and correct record.

 

------------------------------------------------------------------     Date:          /     / 2020

For more detail on what is required to make a deed electronically, please refer to the relevant legislation. If there is any doubt as to whether a person can execute or witness a deed electronically, they should seek advice prior to signing or executing a document.

  • Queensland

I, [insert full name of witness] of [insert address of witness], confirm that I witnessed [insert full name of person who signed] of [insert address of person who signed] (“Signatory”)

or 

… [insert full name of person who signed] of [insert address of person who signed] (“Substitute Signatory”) signing this document as a substitute signatory for [insert full name of party] of [insert address of party]  

… by audio-visual link [insert the method used to witness the signature of the signatory] in accordance with the Justice Legislation (COVID-19 Emergency Response — Wills and Enduring Documents) Regulation 2020 (Qld). I further confirm:

  • The identity of the Signatory as set out above;
  • [if applicable] I observed the Signatory direct the Substitute Signatory to sign the document;
  • I observed the Signatory or Substitute Signatory signing the document in real time;
  • The Signatory or Substitute Signatory signed each page of the document;
  • The Signatory or Substitute Signatory’s signature was witnessed by signing the document or a true copy of the document; 
  • I am satisfied that the Signatory is freely and voluntarily signing the document or directing the Substitute Signatory to sign the document; and
  • I am satisfied the document I signed is the same document or a true copy of the document signed by the Signatory or Substitute Signatory.

Signed by the witness as a true and correct record.

 

------------------------------------------------------------------     Date:          /     / 2020

For more detail on what is required to make a deed electronically, please refer the relevant legislation. If there is any doubt as to whether a person can execute or witness a deed electronically, they should seek advice prior to signing or executing a document.

Conclusions and sundry

The following should also be noted:

  • We recommend you avoid electronic execution wherever possible.
  • If you do proceed with electronic execution, make sure that you carefully follow the criteria of each jurisdiction and ensure execution occurs prior to the deadlines described above (e.g. 22 October 2020 for NSW and 24 October 2020 for Victoria). In particular, advisers forwarding documents to clients for execution should follow up before the relevant deadline to confirm proper execution has been effected.
  • Where there is any doubt, we recommend you seek the assistance of your lawyer.
  • There may be various other obligations on a person witnessing that must be taken into account, such as ensuring no undue influence, duress or unconscionable conduct is apparent and that the person signed freely and voluntarily.
  • The summary above was last updated on 7 July 2020 and further changes are expected especially in jurisdictions other than NSW, Victoria and Queensland.

Shaun Backhaus, lawyer, DBA Lawyers

Miranda Brownlee

Miranda Brownlee

 

Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

A guide for the electronic execution of documents
shaun backhaus
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