June 24, 2020

the Queensland GOVERNMENT has passed regulation which temporarily permits the electronic signing of deeds

In response to COVID-19 and the expectation for people to maintain appropriate social distancing measures, the Queensland Government has introduced the Justice Legislation (COVID-19 Emergency Response – Wills and Enduring Documents) Amendment Regulation 2020 (Qld) (Amending Regulation) which permits the electronic signing of deeds.
The Amending Regulation is, for now at least, a temporary measure which is currently legislated to be in effect until 31 December 2020.

 

SO what is the difference?

The old position
Prior to the Amending Regulation for a document to satisfy the formalities of a deed it was required to be:
  • made on parchment, paper or vellum;
  • with a personal seal placed on the document; and
  • delivered to the counterparty.

In Queensland, the Property Law Act 1974 (Act) provides some guidance on the latter two requirements.

Under the Act, a deed is considered to be sealed where it is stated to be sealed and has been signed and attested to by at least 1 witness who is not party to the document. This requirement is part of the reason why execution clauses in deeds commonly include the phrase “Signed, Sealed and Delivered”.

To complicate matters (and by extension help keep lawyers in their jobs), delivery is not necessarily considered to be the act of providing the counter party with the document as one might assume. Rather, the Act defines delivery to be the intention to be legally bound either immediately or subject to fulfilment of a condition.

To complicate matters even further, the Act specifically stipulates that execution of a deed alone (an action many would likely consider indicative of an intention to be bound) is not necessarily sufficient for delivery to be presumed, unless it appears the execution was intended to constitute Delivery of the document. This concept of intent has been subject to a considerable amount of litigation in recent years and is ultimately a question of fact which turns on an individual’s circumstances.

The new position

Under the Amending Regulations:
  • the document is to have effect as a deed even if it is not written on paper or parchment;
  • the document is to have effect as a deed and may be made in the form of an electronic document;
  • there is no requirement for the document to be witnessed; and
  • a deed is not required to be sealed or stated to be sealed.

As such, electronic documents can finally be electronically signed and still be effective as a deed. This is undoubtedly good news for those of us who don’t have much parchment or vellum lying around!

Although the Amending Regulation removes the requirement for a deed to be witnessed and sealed, it is important to bear in mind that delivery is still required.

thinking about your delivery

Permitting the electronic signing of deeds will undoubtedly make certain types of transactions easier. A prime example of this is a contracts with multiple parties based in different locations.
Despite this, cases such as Bendigo and Adelaide Bank Limited v Pickard [2019] SASC 123 remind us that a degree of caution should be afforded when documents are electronically signed. In this case the directors of a finance company showed that the electronic signatures which were affixed by an unnamed staff member were properly authorised by the directors. This was despite the directors passing a resolution which authorised the provision of the loan. One of the key matters here was whilst the directors appeared to authorise the loan, it did not appear that the authorisation extended to having their signatures affixed on the document by an unnamed administrative staff member.

As the documents deemed to be improperly executed, the documents including the guarantees were held to be unenforceable.

This shows that in situations where a document has been electronically signed, it may be prudent to confirm the intention of the person who has purported to have signed the document to avoid the risk of a person claiming delivery was not effected on the basis they were not the person who affixed their signature to the document.

how can we help you?

We can assist with a whole host of commercial matters, including but not limited to:
  • advising whether your agreement with another party should be documented by way of Contract (often referred to as an agreement) or Deed (there are important consequences to understand);
  • negotiating the terms of and drafting agreements and deeds (i.e. business sales, loan agreements, license agreements, service agreements etc.); and
  • advising on whether the formalities of “delivery” (intention of the signing party) has been met in a particular circumstance.