FAQ Electronic Signatures (E-Signatures) and Other Remote Mechanisms

 

An Electronic Signature (e-Signature or Digital Signature) is the electronic version of a "wet-ink", i.e., handwritten signature. There are various forms of the e-Signature - Docusign, for example, is a secure and convenient third-party digital platform for e-signing (and a newly integrated feature of the Class platform).

The pandemic has also brought about developments in remote and electronic means for executing agreements and other documents. This article addresses some of the frequently asked questions regarding such mechanisms for income tax returns, financials, minutes and resolutions, pensions and estate planning documents, legal agreements. 

Question

Can documents be witnessed remotely?

Answer

Witnessing requirements differ between states due to varying state legislation. 

 

NSW

QLD

VIC
Legislation

Electronic Transactions Act 2000 No 8 (NSW)

Justice Legislation (COVID-19 Emergency Response - Documents and Oaths) Regulation 2020 (QLD) 

Electronic Transactions (Victoria) Act 2000 (VIC), as amended by Justice Legislation Amendment (System Enhancements and Other Matters) Act 2021 (VIC) s 67

Rule

Yes!

s 14G(1) provides that a "document" (defined in s 14F, please see below) may be witnessed via audio-visual link.

 

Section 14F defines "document" as including the following: 

(a) a will,

(b) a power of attorney or an enduring power of attorney,

(c) a deed or agreement,

(d) an enduring guardianship appointment,

(e) an affidavit, including an annexure or exhibit to the affidavit,

(f) a statutory declaration.

This list is intended to be exhaustive. 

Yes!

s 16 provides that a "document" (defined in Schedule 1) may be witnessed via audio-visual link only if the witness is a special witness (s 5) for the document.

 

Note, this Regulation expires on the COVID-19 Legislation Expiry Day i.e. 30 April 2022

Yes!

s 12 provides that a requirement for the presence of a witness, signatory or other person may be met by the witness, signatory or other person being present via audio-visual link.

Requirements

 Refer to s 14G

Refer to s 17 - 20 Refer to s 12(2)

Question

Can Estate Planning Documents be executed electronically? 

Answer

Please note: It is best practice to execute estate planning documents by traditional methods (i.e. hardcopy with "wet signature" and in-person witnessing) despite the following provisions allowing for electronic execution. Care should be taken due to differences in the law, and associated requirements, between jurisdictions. As the following is for general information purposes only, please seek your own legal advice for your specific situation before making any decisions and note that the laws are subject to change at any given time. 

  NSW QLD VIC
Legislation 

Electronic Transactions Act 2000 (NSW) 

N/A

Wills Act 1997 (VIC), as amended by Justice Legislation Amendment (System Enhancements and Other Matters) Act 2021 (VIC)

and Powers of Attorney Act 2014 (VIC), as amended by Justice Legislation Amendment (System Enhancements and Other Matters) Act 2021 (VIC)

Rule

Wills, Powers of Attorney/Enduring Powers of Attorney, Enduring Guardianship Appointments are included in the term "Document" as per s 14F, noted above, and therefore may be electronically executed/witnessed via audio visual link.

E-signatures by the signatory, however, is not possible for these documents. 

Note, The amendments to the Act are due to expire on 1 January 2022. 

The temporary provisions allowing for the electronic execution of Wills, Enduring Powers of Attorney and Advance Health Directives have been repealed.

Wills, powers of attorney and related documents may be electronically signed and/or witnessed (via audio visual link).

This is a permanent amendment. 

Requirements

Please refer to s 14G as above. 

As for Wills, there are additional requirements - e.g. pursuant to s 6(1)(c) of the Succession Act 2006 (NSW) the signatory will need to be able to see the face and signing hand of each witness simultaneously. 

From 1 July 2021, the documents above must be executed via handwritten, "wet ink" signature with an in-person witness. 

For wills, please refer to s 8A of the relevant Act. Note, for example, that one of the witnesses must be a "special witness".

For a power of attorney and other relative documents, please refer to s 5A of the relevant Act. Note additional requirements such as: one of the witnesses must be a "special witness" and the remote witnessing procedure must be carried out on the same day and within Victoria. 

 

Question

Can Income Tax Returns be signed electronically?

Answer

The ATO requires that when lodging an approved form (such as an income tax return) on behalf of a client, you must first attain a declaration signed by the client pertaining to:

  1. your authority to lodge the document on the client's behalf; and
  2. the truthfulness and correctness of the information within the form.

The ATO is very accepting of electronic signatures in satisfying this requirement and also acknowledges declarations that have been sent via email or fax. In fact, if your client is sending their declaration to you from their email address, they do not need to include a scanned version of their signature - the mere sending and subsequent acceptance (by you) of the information via email can be used as the basis for lodging the approved form. 

However, certain requirements do need to be met when providing an electronic declaration e.g. your express or implied consent to your client's signature being sent to you electronically.

More information is available here.  

Question

Can financials be signed electronically? 

Answer 

As you may know, there are documents (i.e. forms and, if required, statutory reports or attachments) that are required to be lodged with ASIC pursuant to the Corporations Act 2001 (Cth) and the National Consumer Credit Protection Act 2009 (Cth). 

ASIC accepts digital signatures based on public/private key encryption or AUSkey for documents that are lodged via Electronic Company Registration (ECR) and SBR enabled software (please refer to Schedule 1 of the Electronic Lodgment Protocol - ELP). 

There are also documents (in Part B Schedule 1 of the ELP) that may be lodged electronically but require a Personal Identifier as an electronic signature - for example, documents that are lodged by AFS authorised licensee or corporate authorised representative or Agent. 

You can refer to the ELP for further information on procedures and special conditions. 

Question

Can Pension (SMSF) documents be signed electronically?

Answer 

The documents necessary to start a pension depend on the specific rules set out in the Trust Deed that entitles members to draw money from the Fund.

Lawyers most often see: a request from the member (i.e. commencement letter); a resolution from the trustee under which it approves the member's request; and a pension agreement setting out the terms of the pension. 

With regards to the trustee resolution/minutes, if the SMSF Trustee is a corporate trustee then such documentation may be recorded using electronic means or alternative technologies until 31 March 2022: Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (Cth). To execute in accordance with the Act (s 127(3B) of the Corporations Act 2001 (Cth)):

  • the electronic communication method must identify the person and indicate their intention to sign the document;
  • the copy or counterpart must include the entire contents of the document; and
  • the method must be as reliable as appropriate for the purpose of the document, in light of the circumstances, or it must be proven in fact to have fulfilled that purpose. 

As for individual trustees, the laws regarding electronic signatures differ among states: 

 

NSW

QLD

VIC
Legislation

Electronic Transactions Act 2000 No 8 (NSW)

Electronic Transactions (Queensland) Act 2001 (Qld)

Electronic Transactions (Victoria) Act 2000 (VIC)

Rule

Section 9 provides for the use of digital signatures, as long as three criteria are met: signature must identify a person and indicate their intention; signature must be as reliable as appropriate for its purpose or proven in fact to have fulfilled that purpose; person receiving the document must consent to receiving a signature in electronic form. 

 

Section 14 provides for the use of digital signatures, as long as three criteria are met: signature must identify a person and indicate their intention; signature must be as reliable as appropriate for its purpose or proven in fact to have fulfilled that purpose; person receiving the document must consent to receiving a signature in electronic form.

Schedule 1 outlines exclusions regarding the use of digital signatures. 

Section 9 provides for the use of digital signatures, as long as three criteria are met: signature must identify a person and indicate their intention; signature must be as reliable as appropriate for its purpose or proven in fact to have fulfilled that purpose; person receiving the document must consent to receiving a signature in electronic form. 

As for pension agreements, please refer to the below question. 

Question

Can Legal Agreements be signed electronically?  

Answer

Contractual documents can be categorised into agreements or deeds.

Generally, legal agreements can be signed electronically. 

As for deeds, on the other hand, most lawyers tend to suggest a more cautionary approach to be taken - i.e. to wet sign and witness in person - despite temporary legislation that allows for electronic execution. 

To clarify, a deed is a document that is usually titled by that name or which states it is executed (signed) as a deed. It is often used for particularly important binding promises or commitments to do something. One distinguishing factor is that a deed does not require the passing of consideration. 

As for companies, signatures under s 127 must be in "wet ink" by all directors signing in the presence of one another on the same document. 

Disclaimer: The information provided above is to be considered as general legal information. Legal advice should be sought prior to applying the relevant provisions to your specific circumstances.

Note: Legislations are subject to change at any time. 

 

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