Restrictions on business activity and movement throughout the country has led to significant short-term legislative reform in relation to the execution of documents. This article will outline each States’ amendment to their electronic transaction legislation to accommodate for these business restrictions. Amendments to the Corporations Act 2001 have also been introduced to allow directors greater flexibility to attend meetings and pass resolutions. These will also be examined.
What is an electronic signature?
Traditionally, documents are signed using pen and paper, which is otherwise known as a ‘wet ink signature’. An electronic signature is a signature used on an electronic document or transmission.
Generally, both parties must agree that the use of electronic signatures is permitted for execution of the document. The electronic signature must, as we will discuss later, do the same things wet ink signatures do.
The electronic signature can consist of a person typing their name on to the document, pasting an image of their signature or using a touch screen to scribble or mark the document.
Electronic Transactions Acts
The Electronic Transactions Act 2000 (Cth) (“ETA”) facilitates the execution of certain documents electronically at the federal government level. These documents must be in relation to a transaction and where a signature is required on the document by law. The electronic signature must have a reliable method for execution and both parties must consent to the use of the electronic signature.
Each State has different ETA regulations, but electronic signatures cannot be used for documents such as affidavits and other documents to be lodged with a judicial body, or documents which require verification, authentication, attestation or witnessing. In 2020, amendments to these regulations were rolled out in each State.
For some time now electronic signatures have been allowed in New South Wales, Victoria, Queensland, South Australia and Western Australia for certain types of documents.
Section 9 of the Electronic Transactions Act 2000 (NSW) allows the use of electronic signatures where a reliable method is used to identify the person and to acknowledge that the signature was to be relied upon.
Section 14 of the Electronic Transactions Act 2001 (Qld) allows for electronic signatures.
Victoria under the Electronic Transactions Act 2000 (Vic) allows for the use of electronic signatures. There are limits however which apply for deeds and where witnessing is required. The witnessing requirements have been loosened during the Covid-19 period.
In South Australia, section 9 of the Electronic Transaction Act 2000 (SA) allows for electronic signatures.
Section 10 of the Electronic Transactions Act 2011 (WA) allows for the electronic signatures in Western Australia.
New South Wales
Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 (NSW)
This regulation was introduced on 22 April 2020 and allows the witnessing of documents via audio visual link. This regulation does not relate to documents being physically required to be signed. As this regulation only applies to witnessing of documents, the documents included in the scope of this regulation are documents which require witnessing.
Documents which can be witnessed over audio visual technology are:
The amendment applies to wills, powers of attorney, enduring powers of attorney, appointments of enduring guardianship, deeds or agreements, affidavits and statutory declarations.
Process with witnessing documents
- Observe the signature in real time – the witness must view the execution of the document in real time. No recordings of the signature viewed after the fact are allowed.
- Attest or confirm that the signature was witnessed and that they are executing a scanned copy or counter part to the document after the fact.
- Endorse the document or a copy of the document – the signature block must state that the document was witnessed over audio visual link in accordance with clause 2 of Schedule 1 of the Electronic Transactions Regulations 2017.
How long do this amendment last for?
This amendment lasts for 6 months after 22 April 2020. NSW Parliament can extend these rules for an additional 6 months.
Justice Legislation (COVID-19 Emergency Response – Wills and Enduring Document) Regulation 2020 under the COVID-19 Emergency Response Act 2020 was introduced to allow greater flexibility with remote witnessing via audio visual links. The legislation refers to a ‘range of communication technologies’.
These regulations apply to wills, enduring and general powers of attorney, affidavits, declarations, deeds and mortgages in particular circumstances.
Wills executed between 1 March 2020 and 30 September 2020 will be caught within this new amendment.
COVID 19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020.
This regulation amends the Oaths and Affirmations Act 2018 (Vic). It deals with the execution and witnessing of documents under this Act. It does not relate to the execution of Deeds.
The Regulation applies to documents, statutory declarations, powers of attorney and enduring powers of attorney. The process for executing and witnessing these documents is the same as provided in New South Wales.
Evidence can also be submitted to the Court where the witnessing requirements referred above were not capable of being followed.
COVID-19 Emergency Response (Section 17) Regulations 2020 (SA)
This regulation does not change the need for the witness to be physically present at the execution of the document.
However, the SA Courts have issued a Practice Note explaining that health or logistical reasons may be taken into account for witnesses not being physically present at the execution of the document. The solicitor overseeing the transaction on the relevant party should submit a sworn affidavit which exhibits the unsworn (in the case of an oath, affirmation or declaration) affidavit.
COVID-19 Disease Emergency (Miscellaneous Provisions) Act 2020
This amendment was introduced on the 27th March 2020. It allows the Minister to declare that documents or signatures evidenced through electronic means be permitted. The Minister, to our knowledge, has not declared any notice at the time of writing.
Corporations Act 2001
The Corporations (Coronavirus Economic Response) Determination (No 1) 2020 is in effect from 6 May 2020 to 6 November 2020. The determination permits meetings to be held without the directors being physically present in the same location and at the same time. Technology can be used to participate in the meeting and requirements for voting at the meeting.
Section 127(1) Corporations Act 2001 permits companies who do not execute documents under a common seal to have each company director sign either a copy or a counterpart of the document in physical form. The electronic signature can have a method of identifying the person and to state that the execution on the document is on behalf of the company. The determination provides practical ways of executing documents electronically. There are pasting a copy of a signature onto a document, signing a PDF document on a tablet, smartphone or laptop using a stylus or finger, and software such as DocuSign. The same physical document does not need to be executed under these amendments.
Areas of Concern
Sufficient certainty of a person’s identity or authority to sign is made difficult without being physically present at the execution of the document. The method used to identify a person must satisfy basic evidentiary requirements, essentially satisfying evidentiary requirements that the contract or agreement was entered into.
Retention of Documents
Where a document has been signed using counter parts or copies of documents have been executed, it is crucial that these separate documents are stored preferably together, but necessarily in a safe place.
Use of Electronic Document Platforms
Sufficient consideration of the various security measures of each platform used should be undertaken to avoid breaches of confidentiality and fraud. This is a difficult task, but basic due diligence of each platform in terms of website security and customer reviews should give a sufficient idea of the safety of the platform. SMS verification and knowledge-based questionaries should also be used to verify the identity of the executing party or witness. Some of the platforms commonly used, but not recommended necessarily by us, are DocuSign, SignNow or PandaDoc.
This is an experimental time for each State in terms of execution and witnessing of documents moving forward. We hope that these measures remain in some form after the expiration of each States time limits.