COVID-19 | Executing Documents Electronically and Serving under the Security of Payment Act

The Australian construction and property industry is experiencing unprecedented uncertainty in respect of COVID-19. Practical challenges arise in relation to executing, lodging and serving documents by traditional means.

Executing and lodging formal documents electronically

The Australian states and territories have dealt with electronic signature and electronic lodgement differently. A summary of the electronic signing of documents and electronic lodgement which is permitted is contained in the table below.

Electronic Signing Permitted

Importantly, a company can sign documents using any method approved by the company.  Consequently, there is no general barrier to a company using an electronic signature to sign a document.

Agreement / Contract (not in the form of a Deed)

In all of the Australian jurisdictions identified above, an electronic signature is capable of satisfying the requirement for a contract to be signed. This requirement is only met if the presumptions of the Electronic Transactions Act are satisfied:

• the electronic signature identified the signatory and their intention to be bound to the contract; and
• the parties have consented to the use of the particular signature method.

A typed name, an email signature footer, a facsimile of a signature and a technology based signature (for example, using DocuSign) will all identify the signatory.

Consent to the use of an electronic signature may be expressly given prior to the contract being entered into, implied from the conduct of the parties or included as a term of the contract.

There is no formal requirement for a signature to be witnessed.  Removing the witnessing provisions from a contract may therefore make electronic signing simpler.

Deed

The formal requirements for a deed are that it must be:

• written on paper, vellum or parchment (paper requirement);
• sealed / signed;
• delivered; and
• executed with an intention on the part of the executing party that it should take effect as a deed.

The position in the eastern seaboard states and Western Australia is as follows:

• New South Wales: under a new temporary regulation made under section 17 of the Electronic Transactions Act 2000 (NSW), an individual is permitted to witness a signature via video conferencing technology such as Skype. The temporary regulation also permits the witnessing individual to execute their signature on the document or a copy of the document.
• Queensland: the electronic creation and signing of deeds is probably not permitted. The Queensland parliament has not expressed any statutory provision for a requirement that a deed be written on paper nor any legislation doing away with the paper requirement. Until there has been specific judicial consideration, or amendment of the State legislation, there is some risk in creating and signing deeds electronically.
• Victoria: the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 came into effect on 12 May 2020 and allows deeds to be executed electronically in Victoria until 24 October 2020. A person may witness the execution of a deed by audio visual link and must write a statement accompanying their signature that indicates that the witnessing of the deed occurred in accordance with the regulations.
• Western Australia: the electronic creation and signing of deeds is probably not permitted. The Western Australian parliament has also not introduced any legislation expressly removing any requirement that a deed be written on paper, and accordingly there is a significant lack of clarity as to whether the paper requirement applies which would permit or prohibit the electronic creation of deeds.

Guarantees

In Queensland, a guarantee is only enforceable if in writing and signed by the guarantor.  There is no such requirement in New South Wales, Victoria or Western Australia, although having a guarantee in writing and signed is preferable to ensure it is enforceable.

Service under the Security of Payment Acts

The Australian federal and state governments are yet to introduce amendments or new legislation in any of the states and territories which would affect the current provisions or means of service under SOPA. Traditional means of serving a payment claim, payment schedule or adjudication application on another party under the SOPA equivalents include:

New South Wales is the only jurisdiction to identify email as a means of service under the SOPA. Service by email may nevertheless be effective in the other states if it is provided under the relevant contract.

For details of all our COVID-19 tips and updates, visit the Gadens COVID-19 Hub.

Authored by: 

Michael Bampton, Partner