Australia: Signing documents electronically – COVID measures update for Queensland

In light of ongoing lockdowns and work from home arrangements making it impractical for legal documents to be signed and witnessed in 'wet' ink, the Federal and State Governments have passed temporary laws for signing documents electronically. The initial temporary measures have been extended through to 2022.

However, this article will focus on the Federal laws as to execution of documents by companies, and the laws in Queensland as to execution of deeds. The information in this article is current as at 24 September 2021.

Execution by a Company under s127 of the Corporations Act

The default requirements for execution of documents by a company, being for execution by two directors, or one director and one secretary (or a sole director if the company only has one director), is governed across Australia by section 127(1) of the Corporations Act 2001 (Cth) (s127 Execution). There are other ways a company can execute a document (ie. by a power of attorney or another way permitted by its constitution), but s127 Execution is the most common and reliable way for execution by a company.

Under the Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (Cth), temporary measures are in place until 1 April 2022 to allow electronic s127 Executions. This Act allows for:

• a copy or a counterpart of the document to be signed. This means that signatories do not need to sign the same physical document. For example, a document can be signed and scanned by the first signatory (including two different directors or company secretary for the same company) and then printed and signed by the second signatory, or separate electronic signatures could be applied to electronic versions of the document. The copy signed by each person does not need to include the signature of the other person;

• a document can be signed electronically if the following are satisfied:

• a method is used to identify the person signing electronically and to indicate that person's intention in relation to the contents of the document (e.g. an intention to be legally bound); and
• the method used to electronically sign the document is reliable taking into account the circumstances and the nature of the document (digital signatures using cryptographic authentication technology such as DocuSign or Adobe Sign assist in achieving this); and

• a document being signed using the above methods above must include the entire contents of the document and not just the signing page.

Signing Agreements and Deeds in Queensland

While execution by companies is dealt with above, where a deed or an agreement also needs to be signed by an individual, such as a deed that usually will also need to be witnessed, temporary measures for electronic signing have been put in place in Queensland.

The Justice Legislation (COVID-19 Emergency Response – Documents and Oaths) Regulation 2020 (Qld) (the Qld Regulation) deals with how a deed governed by Queensland law can be signed. However, it does not change who should sign a deed for it to be valid.

The measures under the Qld Regulation are in place until 30 April 2022.

Under the Qld Regulation:

• a true copy or a counterpart of the deed can be signed. The same examples provided in the s127 Execution companies section above also apply to deeds;

• a deed can be in the form of an electronic document and signed electronically, rather than the usual requirement for deeds to be signed in hard copy;

• the consent of the other party/s to the deed is not required for the deed to be signed electronically; and

• a deed does not need to be signed in the presence of a witness as long as the deed is signed in accordance with the requirements of the regulation. This is relevant if the other party signing the deed is an individual.

In addition, the following special requirements apply to any deeds to be deposited in the land registry:

• if the deed is signed in counterparts, each counterpart must be deposited in the land registry; and

• if the deed or counterpart of the deed in the form of an electronic document, a printed and certified copy of the deed or counterpart must be deposited in the land registry. The regulation prescribes certain requirements for certifying the deed or counterpart.

What about other documents that still require a witness?

The Qld Regulation also provides for the witnessing of signatures via an audio visual link (AV link) as long as the witness is a lawyer, a notary public, a justice of the peace or commissioner of declarations who is specifically authorised to witness a signature in this way under the Qld Regulation, or the public trustee in the case of a will or an enduring document.

The following general requirements apply for witnessing via an AV link:

• the AV link enables the witness to be satisfied, by sounds and images, that the signatory is signing the document;

• the witness observes the signatory signing the document in real time;

• the signatory signs each page of the document; and

• the witness must be satisfied that the signatory is making the document freely and voluntarily.

The Qld Regulation also deals with the signing and witnessing of mortgages, general powers of attorney, affidavits and statutory declarations.

Electronic Transactions Acts

Also the Electronic Transactions Act 1999 (Cth) (Commonwealth ETA) and the Electronic Transactions (Queensland) Act 2001 (Qld) (Qld ETA) govern electronic transactions, including the use of electronic signatures for signing documents (and apply irrespective of the temporary COVID measures).

The requirements under those Acts are:

• a method is used to identify the person signing electronically and to indicate that person's intention in relation to the contents of the document (e.g. an intention to be legally bound);

• the method used to electronically sign the document is reliable taking into account the circumstances and the nature of the document (digital signatures using cryptographic authentication technology such as DocuSign or Adobe Sign assist in achieving this); and

• the person to whom the signature is to be given must consent to the use of an electronic signature and the method to be used e.g. all parties to an agreement must provide consent. Accordingly, you should engage with the other party early to agree on an approach for electronic signatures. A clause should be included in the document to reflect this.