Australia: COVID-19: The deed can now be done, electronically!

COVID-19: The deed can now be done, electronically!

The High Level

What are the changes? Documents (including deeds) can now be signed and witnessed electronically.

Who do they apply to? Individuals and companies.

When do they apply? Now, until 31 December 2020.

Background

On 15 May 2020, Queensland passed new temporary regulations that modify the requirements for the making and use of documents during the COVID-19 pandemic, particularly in relation to witnessing and signing requirements in Queensland. The Justice Legislation (COVID-19 Emergency Response – Wills and Enduring Documents) Regulation 2020 (Qld) was borne out of the Queensland Government's COVID-19 Emergency Response Bill 2020 (Qld), which seeks to ease particular regulatory requirements to reduce physical contact between people during the pandemic.

Last Friday, the Queensland Government also passed the Justice Legislation (COVID-19 Emergency Response – Wills and Enduring Documents) Amendment Regulation 2020 (Qld) (collectively, the Regulations) to expand the class of documents able to be witnessed by audio-visual link, and to allow certain documents to be made and signed electronically. The Regulations are due to expire on 31 December 2020.

We have summarised some of the key changes below.

Changes to executing and witnessing documents

Deeds

It will come as a relief that the Regulations have explicitly done away with the requirement that a deed had to be on paper, effectively requiring wet signatures on all deeds. The temporary rules confirm that a deed will have effect even if it is made in the form of an electronic document and signed electronically. The changes also allow for deeds to be signed in counterpart and do away with any requirement for the deed to be signed in the presence of a witness.

Importantly, counterparties or other persons may be restricted from disputing the enforceability of a deed that is made or signed electronically under the Regulations. The Regulations confirm that such a deed will have effect even where a counterparty does not consent to it being made or signed electronically.

The Regulations have also dispensed with the requirement for companies to use their company seals to sign deeds. While Australian companies already have the flexibility to execute documents under section 127(1) of the Corporations Act 2001 (Cth), this relaxation will be beneficial for foreign companies who may wish to sign deeds electronically.

General Powers of Attorney

Under the modified rules, a corporation can make a general power of attorney without the need for it to be witnessed. However, the witnessing requirement remains for individuals making general powers of attorney who can now facilitate witnessing via audio-visual link.

All general powers of attorney can now also be made as electronic documents and signed electronically. As is the case with deeds, the general power of attorney will take effect even without the consent to electronic formation or signing from the witness or a person who will sign the document.

These modified rules apply equally to documents that revoke, rather than make, general powers of attorney.

Mortgages

The Regulations state that mortgages can be electronically signed, and do not necessarily need to be witnessed, if:

• the mortgage document is lodged under the Electronic Conveyancing National Law (Qld) (e.g. lodged with PEXA), and
• the mortgagee holds a mortgage in writing on the same terms and conditions as the one lodged.

Affidavits, declarations and wills

Under the modified rules, affidavits and declarations can be made in the form of an electronic document, signed electronically and witnessed through audio-visual link. Where an affidavit or declaration is to be witnessed through audio-visual link, the signatory's oath or affirmation must be administered by a 'special witness' (such as an Australian legal practitioner or a justice of the peace).

For wills and enduring documents (such as enduring powers of attorney), the Regulations allow the document to be witnessed through audio-visual link by a 'special witness'.

Key takeaways

The temporary Regulations provide much needed relief in respect of signing requirements, particularly as they apply to deeds which have historically required wet ink signatures to avoid the risk of a court finding them ineffective. The relaxation of the rules around execution are especially welcome at a time when social distancing requirements have created hurdles for individuals and companies doing business in Australia.

Witnessing of a signature can now be achieved through audio-visual link, so long as the document provided matches that witnessed in the video conference. In all situations where a 'special witness' witnesses the document, the witness must sign a statement to the effect that the document was signed and witnessed in accordance with the Regulations.

Directors of companies should review their constitution to ensure that their execution of documents in accordance with their regulations is permitted under their constitution. This is also particularly important in relation to the execution of agreements electronically where older constitutions may not provide for this.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.