Changes to signing and witnessing procedures during COVID-19
Has COVID-19 changed the way we witness documents? See our breakdown of key legal procedures.
COVID-19 has seen many changes to the way we work, with many of us now working from home or making the most of cloud and conferencing software that helps us to stay connected.
However, there are some things that cannot be changed so easily.
For example, how do you get a document witnessed if either you or your lawyer are in self-isolation? Can a document be witnessed over Zoom, for example? If a company needs to sign a document, is it OK if company officers sign copies from different locations?
We’ve broken down some of these key procedures for you, as they stand right now in viral times.
Witnessing documents
To witness documents, the following requirements must be met:
- The witness needs to be physically present at the time the document is signed by the signatory;
- The witness and signatory need to sign the same document, not separate copies of it; and
- The witness needs to sign at the time they witness the document being signed by the signatory.
Because of this, the Law Society of NSW currently advises that most technology will not meet these witnessing requirements. For example, if your witness ‘witnesses’ you signing over Skype, they are not actually physically present for the signing. And if you use an online document signing service, then it’s likely that you will both not be signing the same copy – rather, the witness will probably sign an altered copy.
Documents that are filed in court for legal proceedings must still be signed and witnessed in person, subject to any new rules introduced by the courts themselves.
However, the NSW Government has recently passed the COVID-19 Legislation Amendment (Emergency Measures) Bill 2020 which means there is now a power to make regulations in the Electronic Transactions Act 2000 (NSW) (“ETA”) that could provide for altered arrangements for the signature, witnessing or attestation of documents.
As no such regulations have been made yet, it is important to follow the normal witnessing requirements above.
UPDATE as of 23 April 2020: This power has now been used to make the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020. The regulation amends the ETA to allow the following documents to be witnessed over audio visual link technology:
- A will
- A power of attorney, or an enduring power of attorney
- A deed or agreement
- An appointment of enduring guardian
- An affidavit, and annexures and exhibits to the affidavit
- A statutory declaration.
So common videoconferencing technology like Skype, FaceTime, Zoom and more can all now be used to witness documents and help reduce face-to-face contact between lawyers and clients in accordance with national health guidelines.
All parties should still ensure that regular witnessing procedure is followed as much as possible. Improperly witnessed documents could mean that the document doesn’t have legal effect or could be misleading or dishonest conduct by the witness, resulting in unsatisfactory professional conduct.
Electronically signing contracts generally
Most contracts can be electronically signed under section 9 of the ETA if a method that is reliable and appropriate for the purpose of signing, having regard to all of the circumstances. All parties must agree to the chosen electronic method of signature. The method should also identify the signatory and clearly indicate their intention to sign electronically.
In light of the possibility of fraud through the use of electronic signatures, there should be clear evidence of the signatory’s intention and authorisation to sign electronically.
Contracts signed by companies
Section 127 of the Corporations Act requires two officers of the company (or the sole director where the company has a sole director who is also the sole company secretary) to sign a document on behalf of a company.
Case law suggests that the ETA expressly precludes execution of contracts in accordance with section 127 of the Corporations Act – so a company cannot validly execute a document electronically.
The courts are also unclear as to whether signing of counterparts constitutes valid section 127 execution – so wet ink signatures on different copies of the documents would not satisfy the requirements of section 127. However, you can satisfy section 127 if an officer of the company signs the document with ink and then sends a copy of it to the other officer, personally intending the signature on the copy to be treated as their signature. Once again, evidence of this intention should be obtained.
Deeds
At common law, deeds must comply with certain formalities, including that they be on paper. This physical requirement means that deeds require wet ink signatures, unless an exception under the Conveyancing Act 1919 (NSW) applies.
Are some organisations changing their rules?
Yes!
For example, Screen Australia is temporarily allowing producers to send their projects to Screen Australia digitally. Declarations for cost reports also do not need to be witnessed at the moment. Instead, they can be digitally signed as an informal declaration and emailed in along with the rest of the project. You can see Screen Australia’s new arrangements at their COVID-19 resource directory here.
IP Australia has also moved to accept electronic signatures on certain documents, in accordance with the Electronic Transactions Act 1999 (Cth). However, signatories will need to provide clear supporting evidence to confirm that they personally authenticated the placement of their signature on the document. Any signatory should also inform IP Australia if a colleague or assistant will be placing their electronic signature on their behalf. However, some other documents still require the signature of a JP and the regular process will still apply to these. The organisation is providing COVID-19 updates on their website here.
NSW courts have also updated their procedures to accommodate pandemic measures:-
As nearly all organisations now have COVID-19 pages that provide rolling updates, it is best to keep an eye out for any new developments on these pages. In the meantime, evidence of unequivocal intention to electronically sign documents should be kept as best practice.
During these challenging times, more than ever, von Muenster Legal is with you all the way. Please don’t hesitate to get in touch with a legal enquiry, and we will try to help you as best we can.