January 5, 2021

Go ahead for electronic signing of documents into 2021

2020 has been a year of continual change for businesses and, in response, the Federal and state governments - to varying degrees - have introduced temporary measures to allow the electronic signing and witnessing of documents.

As we head into 2021, we are pleased to see that the various governments have allowed these measures to continue into 2021, with the Federal government considering extending the ability for companies to electronically execute their documents permanently.

At a Federal level, under the Corporations (Coronavirus Economic Response) Determination (No.3) 2020 (Cth), companies and their officers can temporarily use electronic software, such as DocuSign or AdobeSign, to execute their documents under s 127 of the Corporations Act and engage in ‘split execution’ of documents (that is, signing of different counterparts by the officers of a company).[1] This extends to a company executing a deed electronically. These temporary powers are due to expire at the end of 21 March 2021, having been extended from the original expiry date of 5 November 2020.

On 19 October 2020, the Federal government released the Exposure Draft Corporations Amendment (Virtual Meetings and Electronic Communications) Bill 2020 which proposed to make this temporary relief permanent by amending the Corporations Act.

On a State level:

(a) on 9 April 2020, South Australia published legislation and regulations allowing for meetings to be held remotely in a limited range of circumstances. These are now due to expire on 6 February 2021, having been extended from their original end date of 8 October 2020;

(b) on 22 April 2020, New South Wales published regulations allowing for remote witnessing of a range of different documents, which are due to expire on 26 March 2021. Further, remote witnessing of documents has also been incorporated into the Electronic Transaction Act, with these amendments due to be repealed on 1 January 2022;

(c) on 12 May 2020, Victoria published comprehensive regulations authorising electronic execution and remote witnessing of a range of documents. These are now due to expire on 26 April 2021, having been extended from their original end date of 24 October 2020;

(d) on 15 May 2020, Queensland followed suit with detailed regulations allowing for electronic signing and remote witnessing of a multitude of documents. These are due to expire on 30 April 2021, having been extended from their original end date of 31 December 2020; and

(e) on 12 September 2020, Western Australia published regulations permitting the use of remote witnessing as well as allowing additional persons to witness affidavits made under a COVID emergency declaration. These are due to expire on 31 December 2021.

While at a State level these changes are considered temporary only, we hope that the States will follow the Federal government’s lead in seeking to permanently modernise their legislation to allow for laws around signing and witnessing to embrace and keep up with evolving technology in this space.

What changes has the Commonwealth and the states made to signing, witnessing or attending to documents?

See our below table of the changes by jurisdiction.

What should I do with my contracts, agreements or deeds if the position hasn’t changed?

The Commonwealth and each state have passed legislation authorising electronic transactions.[2]

This means that parties can use electronic methods to enter into contracts, unless their transaction or document is excluded by the statute.  These exclusions differ depending on which jurisdiction applies to the contract.  

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.[3] 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).

While the recent Federal determination extends to a company executing a deed electronically, until further judicial guidance is available, caution should be exercised to ensure that all formalities to validly form a deed are met.

Things to consider

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.

(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 if only particular documents can be witnessed (see Western Australia).

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

[2] Such as Electronic Transactions Act 2000 (VIC), Electronic Transactions Act 2000 (NSW), Electronic Communications Act 2000 (SA), Electronic Transactions (Queensland) Act 2001 (QLD) and Electronic Transactions Act 2011 (WA).

[3] See Queensland, South Australia and Western Australia’s electronic transactions legislation.