Execution of contracts using electronic signing and witnessing – the status of temporary COVID-19 law reforms
The government has issued draft legislation to extend temporary reforms to s127 of the Corporations Act and has indicated the changes will be made permanent.
Blog written by King & Wood Mallesons.
In the wake of the COVID19 pandemic, a welcome development has been legislation passed by the Commonwealth and in NSW, QLD and VIC (“COVID-19 legislation”) to facilitate the execution of contracts using electronic signatures and audio-visual witnessing. This legislation overcomes uncertainties in the law on electronic execution of deeds, and remote witnessing. These measures have or will become permanent.
The focus of this blog, and our other white papers, is contracts (ie deeds and agreements). We have not discussed other documents such as affidavits, statutory declarations and court documents. There is some COVID-19 legislation which allows for electronic execution and audio-visual witnessing of such documents but the table below only includes legislation which allows for the execution and audio-visual witnessing of contracts. We also do not discuss the issues around registration of land mortgages and other dealings with land which are registrable with land titles offices over the counter or through the electronic platform Property Exchange Limited (“PEXA”) as this raises technical and procedural issues which vary across jurisdictions.
Latest developments on COVID-19 legislation
We're pleased to announce that the Commonwealth, State and Territory Treasurers have agreed to prioritise working together towards a common approach for document execution. The Federal Government has completed a consultation on possible reforms to modernise execution of deeds and statutory declarations across Australia - see consultation paper at Modernising Document Execution.
In the meantime:
The temporary measures introduced under COVID-19 legislation have been made permanent in NSW and VIC and will be made permanent in QLD.
Temporary measures were also re-introduced by the Commonwealth government to overcome uncertainties in the law on electronic execution by companies under s127 of the Corporations Act 2001 (Cth) (“Corporations Act”). A bill has been introduced to Federal Parliament which provides for permanent reforms to the Corporations Act for the use of technology to execute documents,
While developments in NSW, VIC and QLD and the anticipated passage of s127 legislative reform are encouraging reaffirmations of the broad acceptance of electronic signatures in Australia, the Australian Banking Association, together with other organisations including King & Wood Mallesons and Docusign, continue to engage with the Commonwealth and the States and Territories, to advocate for further broad and consistent adoption throughout the country of electronic signatures.
Status of COVID-19 legislation
The current COVID-19 legislation which allows for the electronic execution of contracts and audio-visual witnessing is set out below. Further information can also be found at http://docusign.com.au/electronic-contracts and https://www.docusign.com.au/white-papers/promoting-greater-usage-of-electronic-contracts-and-electronic-signatures-under-australian-law.
Legislation | Amendments | Expiry date of amendments | |
|---|---|---|---|
CTH | s127 of the Corporations Act | Temporarily amended by the Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (Cth) to permit split execution, modified split execution and electronic execution of deeds and agreements by company officers | 31 March 2022 A bill has been introduced to Federal Parliament which provides for permanent reforms to the Corporations Act for the use of technology to execute documents: see the Corporations Amendment (Meetings and Documents) Bill 2021 (Cth). |
NSW | Conveyancing Act 1919 (NSW) Electronic Transactions Act 2000 (NSW) | Section 38A of the Conveyancing Act allows deeds to be in electronic form and an individual (including an individual attorney signing for a company) to sign a deed electronically. This section was recently amended to clarify that a deed executed by a corporation may also be in electronic form and electronically signed: see the Customer Service Legislation Amendment Bill 2021 (NSW). The Electronic Transactions Act 2000 (NSW) has been permanently amended by the Electronic Transactions Amendment (Remote Witnessing) Act 2021 (NSW)) to permit witnessing of a broad range of documents (including deeds and agreements) by audio visual link | No expiry date |
QLD | Justice Legislation (COVID-19 Emergency Response— Documents and Oaths) Regulation 2020 (Qld) | Validates electronic deeds, electronic signatures on deeds and permits witnessing of a limited range of documents by audio visual link | 30 April 2022 However, the QLD government has passed legislation to make these reforms permanent (to commence on a day to be fixed by proclamation): see the Justice and Other Legislation Amendment Act 2021 (Qld). |
VIC | The Electronic Transactions (Victoria) Act 2000 (Vic) | Permanently amended by the Justice Legislation Amendment (System Enhancements and Other Matters) Act 2021 (Vic) to validate electronic deeds, electronic signatures on deeds and permit witnessing of a broad range of documents by audio visual link | No expiry date |
QLD
Justice Legislation (COVID-19 Emergency Response— Documents and Oaths) Regulation 2020 (Qld)
Validates electronic deeds, electronic signatures on deeds and permits witnessing of a limited range of documents by audio visual link
30 April 2022
However, the QLD government has passed legislation to make these reforms permanent (to commence on a day to be fixed by proclamation): see the Justice and Other Legislation Amendment Act 2021 (Qld).
VIC
The Electronic Transactions (Victoria) Act 2000 (Vic)
Permanently amended by the Justice Legislation Amendment (System Enhancements and Other Matters) Act 2021 (Vic) to validate electronic deeds, electronic signatures on deeds and permit witnessing of a broad range of documents by audio visual link
No expiry date
As noted above, the table lists all relevant COVD-19 legislation that allows for the electronic execution and audio-visual witnessing of contracts. The legislation listed in the table, and legislation in other jurisdictions, may cover other types of documents such as affidavits, statutory declarations and court documents. For example:
In ACT, the COVID-19 Emergency Response Legislation Amendment Act 2020 (ACT) permits witnessing and attestation of a limited range of documents by audio-visual link. These documents are affidavits, wills, health directions under Medical Treatment (Health Directions) Act 2006 and general powers of attorney or an enduring powers of attorney. They do not include contracts.
In WA, the COVID-19 Response and Economic Recovery Omnibus Act 2020 (WA) allows witnessing of documents under certain legislation to take place by audio-visual means (eg affidavits) and various other processes to take place by electronic means (issue of certain notices, lodgement of these or the giving of evidence).
In SA, the COVID-19 Emergency Response (Section 16) (No 1) Variation Regulations 2020 (SA) has suspended the witnessing requirement for land mortgages.
In NT and TAS, as of the date of this blog, no regulations have been passed impacting the validity of electronic signatures.
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