Summary of legislative changes to remote witnessing and electronic execution of documents in response to COVID-19
- Newsletter Article
- Published 15.07.2020
Whilst the life insurance industry has adjusted relatively smoothly to remote working during the current medical emergency, one aspect of dealing with disputes that does not sit well with this new way of doing things is the execution and witnessing of formal documents such as defences, deeds and affidavits.
In response, the Commonwealth and the larger states have implemented temporary regulations to permit remote witnessing and in some cases, electronic execution of documents.
Below is our summary of the key changes.
The Corporations (Coronavirus Economic Response) Determination (No.1) 2020 (Cth) modified the Corporations Act 2001 (Cth) (the Corporations Act) to expressly permit the electronic execution of documents under s127 and allow persons dealing with companies to assume that documents signed electronically have been duly executed.
In circumstances where execution requires signatures of multiple company officers, such signatures can be provided in counterpart. Unfortunately, there remains some controversy as to whether the Determination permits the electronic execution of deeds by corporations. This stems from the long-standing common law rule that requires deeds to be written on paper, parchment or vellum.
New South Wales
The Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 amended the Electronic Transactions Regulation 2017 (NSW Regulation) to permit remote witnessing of the execution of documents via audio visual link (AV link) and electronic attestation of documents required to be witnessed under NSW law, such as affidavits and deeds.
In order to witness a document via AV link, the NSW Regulation requires the witness to:
- observe the signing (whether electronically or by wet signature) of the document in real time via AV link; and
- sign a scanned copy or identical counterpart of the document; and
- endorse the witnessed copy or counterpart of the document with a statement specifying the method used to witness the signatory’s signature and that the document was witnessed in accordance with the Regulation. For example, the endorsement can use words to the following effect: ‘This document was signed in counterpart and witnessed over audio-visual link in accordance with clause 2 of Schedule 1 to the Electronic Transactions Regulation 2017’.
The NSW Regulation does not limit the ways in which a witness can confirm the signature was witnessed. Our view is that this means that confirmation of witnessing may occur via electronic signature, provided the signature satisfies the conditions required by the NSW Regulation.
It is important to note that the NSW Regulation does not alter the current law with respect to the electronic execution of documents. Regardless, NSW law permits the electronic execution of a deed by an individual or any other entity that is not regulated by the Corporations Act, pursuant to s38A of the Conveyancing Act 1919 (NSW).
The law with respect to affidavits is less clear, as it does not expressly permit or preclude the electronic execution of affidavits. However, it is our view that it is permitted and in practice, for example, the NSWSC has been accepting electronically executed affidavits.
The NSW Regulation will expire on 26 September 2020, unless this date is changed by further regulation or resolution of the parliament.
In Queensland, the Justice Legislation (COVID-19 Emergency Response—Wills and Enduring Documents) Regulation 2020 and the Justice Legislation (COVID-19 Emergency Response—Wills and Enduring Documents) Amendment Regulation 2020 (the Queensland Regulations) permit among other things, electronic execution and witnessing of affidavits and other documents requiring witnessing. Remote witnessing can be done via AV link provided it complies with the method required by the Queensland Regulations, which includes the requirement that a document be witnessed by a ‘special witness’ (which is defined to include an Australian legal practitioner or a notary public).
In order to witness a document via AV link, the Queensland Regulations require:
- the witness to observe the signatory signing the document in real time; and
- the signatory to sign each page of the document (affidavits excluded); and
- the witness, upon verifying the signatory and being satisfied that the signatory is freely and voluntarily signing, sign each page of the document signed by the signatory or each page of a true copy of the document signed by the signatory; and
- the witness sign a certificate stating the process used to sign and witness the document, the steps used to verify the identity of the signatory and that the document was signed and witnessed in accordance with this regulation.
The Queensland Regulations permit an affidavit to be made and signed electronically provided it complies with the requirements set out in the Queensland Regulations. It also provides that the Court may admit an affidavit that does not comply with the Oaths Act 1867 (Qld) or another law.
Further, and unlike other state jurisdictions, the Queensland Regulations have explicitly removed the requirement for a deed to be created on paper or parchment. This means that a deed can be created in the form of an electronic document and signed electronically. Further, the legislation removes the requirement for a deed to be witnessed.
The regulations will expire on 31 December 2020.
In Victoria, the COVID-19 Omnibus (Emergency Measures) Act 2020 (VIC) (the Victorian Act) amended certain acts for the purpose of responding to COVID-19 and created temporary regulation making powers for the same purpose.
Relevantly, it amended the Oaths and Affirmations Act 2018 (VIC) to permit the electronic signing, initialling, witnessing (via AV link) and attestation of affidavits. The affidavit taker is permitted to sign a scanned hard copy or an electronic copy of the affidavit. The affidavit taker must also include a statement specifying the method used to sign, initial and witness the affidavit and confirm that it complies with the Oaths and Affirmations Act 2018 (VIC).
For example, the statement might include words to the following effect: ‘This affidavit was signed and initialled by electronic means and witnessed over audio visual link in accordance with ss49E of Division 2, Part 5A of the Oaths and Affirmations Act 2018 (VIC)’. Additionally, the amendments provide that the Court may admit unsworn or purported ‘affidavits’ if it is satisfied that it was not reasonably practicable to file a compliant affidavit.
In addition to the Victorian Act, the Victorian parliament has implemented the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 (the Victorian Regulation) which temporarily permits remote witnessing via AV link of transactions and other documents that require witnessing under Victorian law. The Victorian Regulation also expands the list of documents which can be electronically executed under the Electronic Transactions Act 2000 (VIC), by expressly including deeds. It is important to note that deeds are not required to be witnessed under Victorian law.
The relevant parts of the Victorian Act will be repealed six months after commencement date, being 25 October 2020. All regulations made under it, including the Victorian Regulation, are impliedly revoked on that same date.
States And Territories Without Temporary Remote Witnessing Regulations
Northern Territory, Western Australia and South Australia have not implemented temporary regulations in light of COVID-19 to allow for electronic execution or witnessing of documents. However, as noted above, companies that fall within the Corporations Act, irrespective of where they are based within Australia, may (noting the countervailing views discussed above) still be able to electronically execute documents (including deeds) in compliance with s127 of the Corporations Act.
Filing Documents With The Court
The FCA has released the practice note Special Measures in Response to COVID-19 (SMIN-1) which states that to the extent possible, all documents must be lodged to Court electronically. The Court will accept electronically signed documents and unsworn affidavits on the understanding that, if required, these will later be sworn or affirmed when possible. This practice note continues until revoked or replaced.
At a state level, the NSWSC requires where possible, all Court documents to be provided by electronic means, as does the WASC and the SASC. The VSC also accepts electronic filing of all Court documents in civil cases. Meanwhile, the QSC does not have an avenue for electronic filing of Court documents.
Practically speaking, a company regulated by the Corporations Act can electronically execute documents, including agreements. As noted above however, the position with respect to electronic execution of a deed is not without debate. Owing to this, companies may instead choose to electronically sign an agreement to execute a deed and proceed to executing the deed physically, when possible.
In any event, there is no requirement for the execution of a deed by a company to be witnessed. Meanwhile, deeds can be electronically executed by individuals or other bodies that are not bound by the Corporations Act and remotely witnessed via AV link, provided the deeds are made under the laws of Queensland, NSW or Victoria (in which case, witnessing is not required).
Generally speaking, most other documents (including affidavits) can be electronically executed under the law of NSW, Victoria or Queensland and where document witnessing is required under these states’ respective laws, this can also be done remotely via AV link.
Our life experts will of course be able to assist with all of this as the need arises.