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14 May 2020

Victoria allows electronic deeds and signatures to be witnessed via audio-visual link; NSW passes further legislation

Victoria has now passed regulations purportedly to facilitate the execution of deeds electronically. It has also enacted similar powers to those made in NSW and the ACT to permit the witnessing of signatures via audio-visual link. NSW has today also passed additional regulation-making powers to, among other things, alter arrangements for the making of a document in a particular form or way.

The new laws will be welcome relief for many businesses and individuals seeking to sign and rely on documents such as deeds, mortgages, statutory declarations, powers of attorney and wills during the COVID-19 pandemic. At this stage, the changes will only have temporary effect.

Key points

  • On 24 April 2020, the COVID-19 Omnibus (Emergency Measures) Act 2020 established regulation-making powers in relation to "the witnessing, execution or signing of legal documents".
  • On 12 May 2020, the Victorian Government made the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 to modify the Electronic Transactions (Victoria) Act 2000 (ETA) and legislation regulating statutory declarations, powers of attorney and wills to provide for electronic signatures and witnessing of documents via audio-visual link.
  • The regulations will have a maximum 6 month duration and will be limited to having effect in Victoria.

Electronic execution of deeds and mortgages

The regulations purport to remove the common law requirement that a deed be written on paper, parchment or vellum (the "paper rule"). It does this by modifying the “no invalidity” provision in the ETA to expressly include a transaction in the nature of a deed. The "no invalidity" provision provides that "…a transaction is not invalid because it took place wholly or partly by means of one or more electronic communications". The provisions apply in the same way to mortgages.

While the regulations are clearly intended to abrogate the paper rule, it is not free from doubt that it achieves this in all circumstances. For example, the “no invalidity” provision in the ETA depends on a deed itself being a "transaction" or the transaction being invalid if it is not deed. In other words, if the underlying transaction embodied by the deed remains valid as an agreement, the “no invalidity” provision may not operate because it has no work to do. It would have been more helpful if the regulations used express words (eg a deed is not invalid because it took place wholly or partly by means of one or more electronic communications) or words akin to those expressed in section 38A of the NSW Conveyancing Act.

Unlike NSW and other Australian jurisdictions, there is no statutory requirement for the attestation of signatures on deeds by individuals (including attorneys). Therefore, questions about what is required for effective witnessing by electronic means will not be an issue for deeds governed by the laws of Victoria while the regulations remains in place.

Remote signing and witnessing of documents

The regulations also make it easier to sign and witness documents remotely by modifying the ETA and permitting:

  • witnessing via audio-visual link provided the witness writes a statement accompanying their signature that indicates they observed the signing by audio-visual link in accordance with the regulations; and
  • persons to sign different copies of a document (ie. counterparts) provided that each person whose signature is required on the document receives every copy on which a signature appears.

There is one curious provision in the regulations which appears to limit a party's right not to accept electronic signatures by modifying the ETA to state that "the fact that a person proposes to use… an electronic signature is not of itself sufficient reason to refuse to give the consent".

Statutory declarations, powers of attorney and wills

The regulations also purports to modify the Oaths and Affirmations Act 2018, Powers of Attorney Act 2014 and Wills Act 1997 to provide for the electronic execution and remote witnessing of statutory declarations, powers of attorney and wills.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.