Since 22 April 2020, in a legal milestone, legal documents can be witnessed and signed over the Internet. On this date, the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 (NSW) came into effect. The Regulation is designed to overcome the restrictions the NSW Government’s response to the COVID-19 pandemic has placed on gatherings, including legally necessary meetings. It allows remote witnessing and attestation of legal documents via an audio visual link.
Electronic signatures on Contracts
Since 2000, contract negotiations and forming binding contracts via electronic communication has been possible, with the Electronic Transactions Act 2000 (NSW) and updated with the Electronic Transactions Regulation 2017 (NSW). These laws also allow electronic means to be used for legally required information and document transfer and storage.
For an electronic signature to be valid under the Electronic Transactions Act 2000 (NSW), it must comply with section 9 with the following:
- Identity – a method is used to identify the person and to indicate the person’s intention in respect of the information communicated, and
- Reliability – the technique used must be as reliable as appropriate for the purpose, and
- Consent – the parties must agree to the use of electronic signatures and the method used.
It is possible to apply an electronic signature via a digital signing platform. Still, before accepting an electronic signature from someone else, it is prudent to consider if the correct person signing the document and the reliability of the method used.
Witnessing documents via an audio visual link, including Wills
Fast forward to 2020, and the COVID-19 pandemic has presented challenges to all businesses and arrangements that rely on people being in the same room.
In legal matters like Will signing, it is customary to have the solicitor and client meet to execute a valid Will with two witnesses. The pandemic has made that impossible, so the NSW Government has made amendments via the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 (NSW) (“the Regulation”). The Regulation allows for ‘remote witnessing’ of legal documents via video camera. Also, it enables a more extensive range of people legally entitled to witness NSW statutory declarations than just the traditional Justices of the Peace.
The Regulation allows documents to be witnessed and attested via an audio visual link, including the following:
• a Will,
• a power of attorney or enduring power of attorney,
• a deed or agreement,
• an enduring guardianship appointment,
• an affidavit,
• a statutory declaration.
For those rushing out to make their Will electronically, take note. The Regulation will expire on 21 September 2020 unless the NSW Parliament decides otherwise. The Regulation does not allow a YouTube free-for-all where you swap videos. The people involved must have their faces visible to each other and be recorded via an audio visual link, not a still camera, in real-time. The witnesses must then sign the duplicate of the document and make a record of the circumstances on the document and, where possible, a paper copy sent to the signer afterward. The witnesses must also endorse the signed duplicate with a statement that it was witnessed as per the Electronic Transactions Regulation 2017 (NSW).
Although it is not legally required, making an audio visual recording of the transaction is probably advisable, with the participant’s consent, of course.
Electronic execution of documents by company directors
The Federal Government’s Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) came into effect on 6 May 2020. The Determination temporarily modifies, up until 6 November 2020, the operation of section 127 of the Corporations Act 2001 (Cth) relating to the execution of documents by companies including amending the meaning of “Document” to include a document in electronic form.
Please contact Stevensen Business Lawyers for further advice on 02 8065 8810. We can also offer access to DocuSign, an e-signature service.