this product is unavailable for purchase using a firm account, please log in with a personal account to make this purchase.

LIV Library & Bookshop are open.

Limited access and COVIDSafe rules apply. Click the link for essential information:

Find out more
Select from any of the filters or enter a search term
Calendar
Calendar

Technology: Move to e-signing

Technology: Move to e-signing

By Mark Burrows

COVID-19 Practice & Procedure Practice Management Technology 

0 Comments


One of few upshots from the COVID-19 pandemic is that, with a large part of the country being required to work from home, governments were forced to respond to concern about e-signatures.

Snapshot
  1. Section 127(1) of the Corporations Act has been modified. It now expressly permits companies to sign documents electronically (including deeds).
  2. NSW, Queensland, Victoria and the ACT now have temporary facilitative regulations which allow documents (including deeds) to be remotely witnessed.
  3. Currently, these changes are temporary, but stakeholders are lobbying government bodies to ensure that at least some of these changes become permanent. 

In the April LIJ Technology and Innovation special edition (“Redesigning signing”) this year I wrote that e-signatures are treated no differently from any other form of signature at common law. Provided signatories have the requisite intent, directors and secretaries could electronically sign documents, including deeds, under s127(1) of the Corporations Act 2001 (Cth), and provided that appropriate precautions were observed and the common law formalities were understood, individuals could electronically sign deeds under the relevant state-based legislation.

A lot has changed since then. In April, Australia’s response to the COVID-19 pandemic was reaching fever pitch. Victoria’s stay at home directions had just come into effect and most law firms in Melbourne had begun working from home. Australia Post’s delivery times were starting to blow out and clients were increasingly asking their lawyers how they could keep their business running, and sign day-to-day documents securely, while working remotely. 

With a new way of working and demand for certainty regarding the use of e-signatures, legislatures were quick to respond with reforms that were long overdue but that until then, had lacked sufficient impetus.

NSW was already an e-signature friendly jurisdiction with express provision for deeds to be created in electronic form and electronically signed and witnessed.1 Impliedly, however, a witness needed to be physically present to watch a signatory e-sign a deed. On 22 April 2020, NSW became the first jurisdiction to remove the logistical impediment for in-person witnessing and to allow for a witness to watch a signatory sign a document using an audio-visual link (remote witnessing).

On 5 May the federal government enacted the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020. The Determination modified s127(1) of the Corporations Act to clarify that: 

  • split execution is permitted (ie, so that two officeholders of one company can each sign a different counterpart, resolving the dispute arising from Pickard)2
  • a company could also execute a document under s127 using electronic signatures.

To obtain the benefit of s127, the method of electronic execution needs to identify the signatory and indicate the signatory’s intention in respect of the document. A digital signing platform can meet this standard.

The determination has been extended to expire on 22 March 2021.

On 12 May, Victoria followed suit but took a different tack to NSW. Victoria’s regulations expressly permit the e-signing and remote witnessing of deeds and mortgages, statutory declarations, powers of attorney (POAs) and wills. For each class of document, relatively prescriptive criteria need to be followed to obtain the benefit (and safety net) of the regulations.3

The ACT also enacted legislation to allow remote witnessing on 14 May.

As at 15 May Queensland’s regulations initially related to wills and POAs, but on 22 May they were extended to apply to deeds, statutory declarations and affidavits. Queensland’s regulations are the most progressive, and helpfully, clarify that deeds do not need to be witnessed, made on paper or parchment, or expressed to be sealed.4

The legislation is only temporary?

Given the urgency required to enact the emergency legislation, the opportunity for input from the legal community was minimal, and while each jurisdictions’ regulations address similar matters, they are significantly different in their operation and application. The need for harmonisation is obvious. 

Despite the differing approach between jurisdictions, anecdotally the changes have been welcomed by clients and positively received by those in the profession who, before COVID-19, had viewed e-signatures as inherently riskier and therefore inferior to wet-ink signing. 

The need to rapidly adapt to remote working, combined with the comfort of state and federal emergency reforms, has led to growing confidence within the profession regarding the use of e-signatures. 

This momentum must be maintained. Since the emergency legislation was implemented, stakeholders, including the LIV, continue to work with government departments to make the changes permanent, encourage consistency across jurisdictions and broaden their scope. 

The lessons and experiences of this year must be built on to ensure lasting reforms strike the right balance between pragmatism and risk management and keep up with the demands of modern commerce. ■


Mark Burrows is a property lawyer in the real estate and projects team at Lander & Rogers and an executive committee member of the LIV Technology and Innovation Section.

  1. Conveyancing Act 1919 (NSW), s38A.
  2. Note 1 above – “a single, static document” and explanatory statement.
  3. See for example reg 9(4) in relation to the remote witnessing of deeds and mortgages.
  4. See regs 12N(2), 12O and 12S.

Views expressed on liv.asn.au (Website) are not necessarily endorsed by the Law Institute of Victoria Ltd (LIV).

The information, including statements, opinions, documents and materials contained on the Website (Website Content) is for general information purposes only. The Website Content does not take into account your specific needs, objectives or circumstances, and it is not legal advice or services. Any reliance you place on the Website Content is at your own risk.

To the maximum extent permitted by law, the LIV excludes all liability for any loss or damage of any kind (including special, indirect or consequential loss and including loss of business profits) arising out of or in connection with the Website Content and the use or performance of the Website except to the extent that the loss or damage is directly caused by the LIV’s fraud or wilful misconduct.

Be the first to comment