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eSignature Legality Guide

eSignature Legality in Australia

Australia has legally recognized e-signatures since 1999, with the passage of the Electronic Transactions Act.

Yes

Summary

The general position is that, provided the following requirements under the electronic transaction legislation (see below) are satisfied, e-signatures are legal, admissible, and enforceable:

  • a method (i.e., a particular type of electronic signature) is used to identify the person making the communication and to indicate the person's intention in respect to the information communicated;
  • the method used is "as reliable as appropriate" for the purposes of the communication (taking into account all the circumstances); and
  • the person to whom the signature is required to be given consents to the method used (whether that consent is express or inferred by conduct).

Laws directly governing e-signatures 

  • Electronic Transactions Act 1999 (Cth) (ETA) applies to transactions governed by Commonwealth laws;
  • Electronic Transactions Regulations 2000 sets out which transactions and Commonwealth laws are exempt from all or part of the ETA; and
  • corresponding ETAs and regulations in each state and territory.1 The ETA for each jurisdiction sets rules to recognise e-signing applying the ETA rules except to the extent that part of the relevant ETA is identified as not applying to a law in that jurisdiction. Note that when an Australian jurisdiction is expressed as the governing law for a contract, it will be an Australian State or Territory, so the relevant ETA for that jurisdiction will apply to determine the rules for executing a contract using an e-signature.

Temporary legislation 

  • Corporations (Coronavirus Economic Response) Determination (No.3) 2020 (Cth) (COVID Determination). Agreements executed by corporations are generally done in accordance with section 127 of the Corporations Act 2001 (Cth) (CA), which provides additional protections by way of assumptions of validity. There remains at least some doubt in Australia as to whether electronic execution methods, such as e-signatures, are effective to provide the benefit of the section 127 assumptions. To overcome this issue during the current COVID-19 pandemic, the Commonwealth Treasurer has enacted the COVID Determination to temporarily modify the operation of section 127 of the CA to recognise remote and electronic execution of documents by companies. The operation of the COVID Determination is currently set to expire in March 2021. 
  • As expanded upon in the below responses, there are several other pieces of temporary laws in response to COVID-19 allowing use of e-signatures for a specified period (the periods differ).

Notable case law examples where relevant regarding e-signatures

Various case law reinforces the validity of e-signatures by acknowledging the legislative environment relating to electronic signatures. Notably, these include:

  • Getup Ltd v Electoral Commissioner (2010) 189 FCR 165. A signature was made by an online facility that enabled signatures to be made by digital pen, a finger, or a mouse. It was held that e-signatures created through the online signature tool were a reliable method of identifying a person and satisfied the requirements in ETA for giving a signature in relation to an electronic communication.
  • Stuart v Hishon (2013) NSWSC. In this case, a name in an email was accepted as intending to be a person’s signature acknowledging a debt: “in the modern day of exchange of electronic correspondence, there must be some recognition that a signature cannot mean only just a physical scrawl” (at [22]).

1 - Electronic Transactions Act 2000 (NSW); Electronic Transactions (Victoria) Act 2000; Electronic Transactions (Queensland) Act 2001; Electronic Communications Act 2020 (SA); Electronic Transactions Act 2011 (WA); Electronic Transactions Act 2001 (ACT); Electronic Transactions (Northern Territory) Act 2011; Electronic Transactions Act 2000 (TAS).

 

Are there certain documents that cannot be e-signed in Australia?

Yes

Generally, the following cannot be e-signed:

  • documents required to be witnessed – although there are a range of temporary laws passed in response to COVID-19 to allow remote witnessing; and
  • documents required to be registered – for example, real estate documents required to be lodged with the relevant land registries. The general position (and common practice) is that leases need to be physically executed. While some jurisdictions permit electronic execution of leases (such as Victoria where leases are not typically registered). Other jurisdictions require physical signatures due to land registry requirements. 

Where particular legislation is expressly excluded from an ETA or parts of an ETA (such as the partial exclusion of the Commonwealth ETA from the Corporations Act 2001 (Cth)) and that legislation requires a document to be signed, any rules around signing applying to that document will need to be checked to see if e-signing is allowed. That is, just because an ETA or part of an ETA does not apply to certain legislation does not of itself mean that documents required to be signed under that legislation cannot be e-signed. For example, the COVID Determination contains rules to temporarily allow e-signing for the purposes of section 127 of the Corporations Act.

Depending on the Australian state or territory (as the requirement’s formalities for execution differ across jurisdictions) the following are common examples of exempt documents:

  • powers of attorney;
  • documents required to be witnessed, attested, verified, or authenticated under the signature of a person other than the author of the document;
  • deeds;
  • wills;
  • court documents.

Please note: Temporary laws have been enacted in response to COVID-19 which alter the legal position of electronic signatures when executing the above documents. For example, Queensland has enacted the Justice Legislation (COVID-19 Emergency Response—Documents and Oaths) Regulation 2020 (Qld) which permits the electronic witnessing and signing of deeds. Such arrangements have expiry dates, and it is unclear whether they will be extended temporarily or permanently. Therefore, any electronic execution of documents after the current permitted temporary arrangement expiry dates should be carefully assessed at that time to determine viability and enforceability.
 

Does local regulation govern the use of digital IDs and/or digital certificates for e-signatures in Australia?

No

There are no laws enacted for the use of digital IDs / certificates for e-signatures.

A national digital identity scheme is being developed. As part of this, there is a Commonwealth government administered scheme called the Trusted Digital Identity Framework (TDIF). It provides the rules and accreditation criteria that providers of Digital Identity services are accredited against. There are no specific regulations that govern the use of electronic signatures under this framework. Only government departments or government-owned corporations are currently accredited, however there are plans to allow private sector bodies to be accredited.  See: https://www.dta.gov.au/our-projects/digital-identity/trusted-digital-identity-framework 

Are there any documents that require use of digital certificates for e-signatures?

In contrast to the EU eIDAS, Australian law contains a broad definition of electronic signatures (see the test in the response to question 1 under "Summary") and does not distinguish between SES, AES, and QES. However, under the ETA, Commonwealth government bodies can specify the electronic signature method to be used in accordance with specific information technology requirements in order to be a permitted electronic communication under the Electronic Transactions Act 1999 (Cth).  

 

 

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Last updated: November 2020