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  • Writer's pictureJasmine Murray

Are electronic signatures the way of the future?

In Australia, electronic transactions are governed by the Electronic Transaction Acts (ETA) existing at Commonwealth level as well as in each state and territory. While the Acts are largely uniform, there are some differences between jurisdictions, and therefore the law varies depending on the type of agreement, its subject matter and where the parties are located.

Recent reforms to E-Conveyancing in NSW

In NSW, recent reforms to the Conveyancing Act NSW 1919 (“the Act”) have been introduced to provide certainty into the realm of e-signing in conjunction with the shift towards electronic property transactions.

These reforms are the first in Australia, and will hopefully promote a nation-wide shift.

Prior to these reforms in November 2018, it was a general rule that any deed requiring a witness’s signature needed to be signed with a physical signature. Further, the traditional requirement for any deed to be printed on “paper, parchment or vellum” still stood, hindering the ability for documents to exist solely in electronic form.

The most notable amendments to the Act include:

  1. the addition of Section 38A, which now allows documents to be electronically signed and witnessed in NSW;

  2. the addition of Section 23C(3), which allows for instruments to be in electronic form, signed by way of electronic signature; and

  3. the addition of Section 6C, which states that the Act applies to electronic contracts and deeds the same way it applies to all contracts and deeds.

Basically, all contracts for sale of land, leases, caveats, mortgages and other deeds can now exist electronically and be signed by way of e-signature. This was not previously allowed under the NSW ETA, and indeed, NSW is the first state to adopt these changes. When transacting with a party in another state, hard copies and physical signatures may still be required.

These changes are not limited solely to to property and conveyancing documents either, and cover all NSW deeds. Section 38 of the Act is widely drafted to state “every deed, whether or not affecting property”.

Companies and electronic signatures

Despite the recent reforms to the Conveyancing Act in NSW, there is still much ambiguity surrounding the ability for a company to sign any document electronically, and it is therefore still very much the status quo (and prudent) that a company would follow standard practice in executing any document.

Interestingly, Section 38 of the Act does not extend to the execution of deeds by corporation and it is unclear as to whether this also applies to the newly adopted Section 38A.

Further, the Corporations Act 2001 is wholly excluded from the Commonwealth ETA and therefore many lawyers see this as a legislative intention to prevent corporations from being able to sign by way of electronic signature at all.

What can we take from this?

Whilst the laws in relation to electronic signatures are somewhat haphazard, we are seeing a gradual shift away from paper. There is no doubt that the recent NSW reforms have been well received within the industry, and will hopefully have a rapid follow on effect with the other states and territories, but the requirement for paper deeds has long been ingrained into the Common Law and therefore this practice will not simply dissipate.

At Jenkins Legal Services, we pride ourselves on being forward thinking and technologically savvy. We are in the process of adapting our signing procedures so that we can offer an electronic signing service to all our valued clients.

Please contact our experienced team if you have questions about electronic signing in NSW.



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