Execution of contracts using electronic signing and witnessing – the status of temporary COVID-19 law reforms

King and Wood Mallesons

Blog written by DocuSign and King & Wood Mallesons.

In the wake of the COVID-19 pandemic, a welcome development has been temporary legislation passed by the Commonwealth and some States (“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, electronic execution by companies under s127 of the Corporations Act 2001 (Cth) (“Corporations Act”) and remote witnessing.

The focus of this blog, and our other white papers, is contracts (i.e. 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.

The COVID-19 legislation in each jurisdiction, has been extended before it was due to expire.  However, the extensions will start to expire shortly.  The Commonwealth government has issued draft legislation to extend the temporary reforms to s127 of the Corporations Act and has indicated that the changes will be made permanent before this extension expires.  The Victorian government has also issued draft legislation to make their temporary reforms permanent.  These are positive developments as the Australian Banking Association, together with other organisations including King & Wood Mallesons and DocuSign, are engaging with the Commonwealth and the States and Territories, to advocate for the temporary COVID-19 legislation to be made permanent.  It is hoped that that these developments will provide further momentum for reform in each State and Territory.

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

Temporary amendments

Expiry date

CTH

Corporations (Coronavirus Economic Response) Determination No. 3 2020 (Cth)*

Modifies s127 of the Corporations Act to permit split execution, modified split execution and electronic execution of deeds and agreements by company officers

21 Mar 2021

NSW

Stronger Communities Legislation Amendment (Courts and Civil) Act 2020 (NSW)

Includes provisions in the Electronic Transactions Act 2000 (NSW) to permit witnessing of a broad range of documents (including deeds and agreements) by audio visual link

Note that since November 2018, the Conveyancing Act 1919 (NSW) has permitted a deed signed by an individual to be in electronic form and electronically signed and witnessed.  However, it also requires that a deed signed by an individual must be witnessed and the legislation does not clarify how the signing of an electronic document should be properly witnessed.  The regulations allow witnessing to take place by audio-visual link.

31 Dec 2021

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 2021

VIC

COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 (Vic)**

Modifies the application of the Electronic Transactions (Victoria) Act 2000 (Vic) and other legislation to validate electronic deeds, electronic signatures on deeds and permit witnessing of a broad range of documents (including deeds and agreements) by audio visual link

26 April 2021

*Note: Draft legislation to extend these temporary measures until 16 September 2021 has been released: see the Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (Cth).

**Note: Draft legislation to make these temporary measures permanent has been released: see the Justice Legislation Amendment (System Enhancements and Other Matters) Bill 2021 (Vic).

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 contacts.
  • 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 at the date of this blog, no regulations have been passed impacting the validity of electronic signatures.
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