Welcome to the new age of executing documents remotely
As a result of COVID-19, the governments in each state and territory have introduced a number of measures to allow for certain documents to be executed remotely during the pandemic. Documents such as wills, powers of attorney, the majority of land title documents and statutory declarations are now allowed to be signed electronically and witnessed via online platforms such as Facetime, Zoom, Microsoft Teams. However, the question still remains: Is there a possibility that documents signed remotely may be contested in future?
Prior to the pandemic, the process by which individuals sign documents electronically was governed by the Electronic Transactions Act 2000 (Cth) (“ETA”) (and its counterparts in each state). Originally, the Regulations made under the ETA differ in each state and could not be used for:
- Affidavits and other documents required to be signed before being lodged in a legal proceeding; or
- Any requirement for a document to be verified, authenticated attested or witnessed.
In Victoria, the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 (Vic) allowed for affidavits, deeds and mortgages, statutory declarations, powers of attorney, wills, codicils and other testamentary instruments to be witnessed remotely. These documents can now be witnessed using any “audio-visual” link such as Facetime, Zoom, Microsoft Teams and Facebook Messenger.
With the adoption of extreme measures currently in place to fight COVID-19, another way of executing documents is by electronic document platforms such as Docusign and HelloSign. These platforms made it easier to facilitate electronic execution of contracts and provide for security measures demonstrated by authentication of the signature using a code sent by SMS to the mobile phone of the signatory or a two-factor question. They also record IP addresses where the signing process occurred. However, these platforms do not typically allow for witnessing of documents. Although witnessing is required only for evidentiary purposes, it is important to follow the guidelines, such as the use of audio-visual links, to establish that the signatory signed the document.
On 5 May 2020, Companies incorporated under the Corporations Act 2001 (Cth) are now allowed to execute documents using electronic software by virtue of the Corporations (Coronavirus Economic Response) Determination (No 1) 2020 issued by the Federal Treasurer Josh Frydenberg MP. However, this change is only for 6 months. Originally, under section 127 of the Corporations Act 2001 (Cth), companies cannot validly execute a document electronically. It may still be valid at common law, but the other party would not be able to rely on the statutory assumption due to the method of execution. Now, under the Determination, execution of documents is allowed electronically if the company is represented by:
- Two (2) directors of the company; or
- A director and a company secretary of the company; or
- For sole director/secretary of a proprietary company – that director.
The determination makes it clear that the following methods of execution are now permitted under section 127:
- Split execution – where officers of the company sign different copies of the document.
- Modified split execution – where an officer of the company signs a copy and faxes or emails a PDF copy to another officer at a different location for the other officer to sign.
- Electronic Execution – where electronic signatures are applied to the electronic version of the document.
Interestingly, the explanatory memorandum of the determination states that a document can be electronically executed by either pasting a copy of a signature into a document, signing a PDF on a tablet, smartphone or laptop using a stylus or finger and by cloud-based signature platforms like Docusign.
With COVID-19 still on the move, transactions are now conducted electronically to address the limitations created by the extreme measures observed in each jurisdiction.
Individuals can execute documents provided they follow the regulations and if witnesses are required, the use of electronic platforms where the signatory’s identity is established is extremely important.
Companies can execute their documents by electronic means provided that they adhere to the regulation issued by the Federal Treasurer.
The team at Midwinters Lawyers are ready to assist you with all legal matters.