The COVID-19 pandemic has given rise to much reflection on the ever-present topics of execution and witnessing of documents. 

In short, can these acts be done electronically and with remote witnessing? Or does the law require “wet signatures” and the physical presence of required witnesses?

By way of general observation, electronic signatures are valid at general law.  This position was established by the Electronic Transactions Act 1999 (Cth) (ETA) and the various similar (but not identical) versions of that legislation in force across all States and Territories. Specifically, section 10 of the ETA provides that if the signature of a person is required under a law, that requirement is met in relation to an “electronic communication” if certain conditions are satisfied.

Unfortunately, there are a number of exceptions to the various collective ETAs of the Commonwealth and States and Territories. Importantly, for financial services many provisions in the Corporations Act and other financial services laws, such as the Life Insurance Act 1995 (Cth.) and the Superannuation Industry (Supervision) Act 1993 (Cth.) require wet signatures or do not appear to contemplate electronic signatures.

A detailed technical paper could be written on this topic and that of remote witnessing. Invariably, the various jurisdictions take different approaches. We have discussed various developments in our FSC Policy Updates.

However, some salient points are:

  • Remote witnessing of documents is permitted in jurisdictions, subject to differing sunset provisions;
  • Ss127(1) and s129(5) of the Corporations Act has been modified by the Treasurer to allow for electronic execution and split execution, subject to sunsetting. These provisions permit a company to sign documents by two directors or a director and a secretary.

 Other parties can rely on an assumption in section 129(5) that the document has been properly executed;

  • There is some debate as to whether this permits execution of a Deed in these ways;
  • A Deregulation Taskforce is to report to the Assistant Minister to the Prime Minister and Cabinet- a focus of this Taskforce will be the ETA of the Commonwealth and other legislation and how this can be made technology neutral. Complementary reforms will be explored with the States and Territories;

The Treasury continues to receive submissions on cutting red tape in the life insurance context.

It is to be hoped that one outcome of the current situation will be a uniform treatment of the law of execution and witnessing in all Australian jurisdictions. It is hardly efficient if one Australian jurisdiction requires witnessing of a Deed but another does not. It is understandable that Australian jurisdictions could have conflicts of law issues under private international law with ex-Australian jurisdictions, but it is hardly consistent with the concept of Federation if these issues emerge between the constituent parts of the Federation.


OPINION PIECE - by Paul Callaghan, General Counsel & Company Secretary 


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