Unfair Contract Terms in Construction Contracts: Are you aware of the risks?

Unfair Contract Terms in Construction Contracts: Are you aware of the risks?

Unfair Contract Terms in Construction Contracts: Are you aware of the risks?

If you work in the construction industry as a developer, builder or subcontractor, it is highly likely that the newly expanded unfair contract term (UCT) regime will apply to you. The introduction of the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (Cth) (the Act) heavily expanded the scope of the UCT regime and created new, heavier penalty provisions. The penalty provisions set out in the act amend those found in Schedule 2 of the Competition and Consumer Act 2010 (Cth). 

 The construction industry’s use of standard contracts, engagement of small businesses through subcontractors and regular interaction with consumers means that the risk of liability from the UCT regime is high. 

The Unfair Contract Term Regime

The amendments to the UCT regime by the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (Cth) commenced on 9 December 2023. 

As set out in the Act, a contract term is unfair if:  

  1. it would cause a significant imbalance in the parties’ rights and obligations arising under the contract;
  2. it is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term; and
  3. it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

All three elements must be proved by an applicant for a court to find the term unfair. The court is allowed to consider any factors it deems relevant but must consider the extent to which the term is transparent and the contract as a whole. Following the Act’s introduction, the maximum penalties for corporations that enforce an unfair contract term is now the greater of $50,000,000, three times the value of the benefit received or 30% of the company’s adjusted turnover during the breach period. 

What is a standard form contract?

The Act clarifies that a person contravenes the UCT regime if the unfair contract term applied, or relied on, is a term of a standard form contract. 

In order to define what a standard form contract is, the court is able to take into account any factor. However, they must consider the following factors: 

  1. the balance of bargaining power;
  2. whether the contract was prepared by one party;
  3. whether the other party was required to accept or reject the contract in the form presented;
  4. whether the other party was permitted to negotiate the contract; and
  5. whether the terms take into account any specific transaction or party details.

For example, if you are a low volume residential home builder then the home building contracts that your clients sign may still constitute a standard contract despite only being used every so often. 

Now, courts are permitted by law to determine a standard form contract despite the existence of:  

  1. an opportunity for a party to negotiate changes to terms of the contract that are minor or insubstantial;
  2. an opportunity for a party to select a term from a range of options determined by another party; or
  3. an opportunity for a party to another contract to negotiate terms of the other contract.

As an example from a builder’s perspective, even if your home building contract allows for the homeowner to select from a range of terms, or if you give one homeowner the power to negotiate but another home owner does not have power to negotiate, your contract may still be a standard term contract. 

Who does the UCT regime apply to and what’s changed?

The UCT regime applies to small business contracts and consumer contracts. 

A contract is a consumer contract if the contract is for a supply of goods or services or a sale or grant of an interest in land, and the individual who is acquiring the good, service or interest acquires it predominantly for personal, domestic or household use or consumption. Examples may include residential leases, home building insurance contracts or home building contracts. 

Following the Act coming into effect, the definition of small business contract was changed to a far wider scope. The definition of a small business is now a business that employs fewer than 100 persons or has a turnover of less than $10,000,000. There is no longer a price cap on the contract price, meaning that any contract regardless of the price may be subject to the UCT regime

Next Steps

As a result of these changes, it is highly likely that even if you or your company are not a small business, the party on the other side may be. This means that the UCT regime along with its associated penalty provisions may apply to your contractual arrangements. For example, in subcontractor – head contractor relationships where the subcontractor is likely a small business 

In the alternative, you may be one of these small businesses who have previously been affected by unfair contract terms, and these amendments may provide some additional leverage to ensure that your contracts remain fair. 

To ensure that you as a business are protected from these changes, we recommend: 

  1. reviewing your contracts that fit the standard term contract definition for any unfair contract terms; and
  2. reviewing your client or customer base to assess whether they (or you) have less than 100 employees or an annual turnover of less than $10,000,000.00.

 

If you have any questions, please contact the team at Keighran Legal + Advisory.

 

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Off-the-plan unit sales: Don’t be accused of misleading conduct

Off-the-plan unit sales: Don’t be accused of misleading conduct

Off-the-plan unit sales: Don’t be accused of misleading conduct

In the case of Lonergan v JQZ Eleven Pty Ltd [2022] NSWSC 14 the NSW Supreme Court determined whether an off-the-plan seller engaged in misleading conduct and considers whether the purchaser is entitled to receive a reduction in the purchase price due to (alleged) misleading representations. 

How did this issue arise? 

In November 2016, David and Victoria Lonergan (the buyers) entered into a contract with JQZ Eleven Pty Ltd (the seller) to purchase a three-bedroom unit ‘off the plan’ on level 18 of the development for $1,518,000. Shortly prior to entering into the contract to purchase the unit, the buyers inspected a completed display suite with the seller’s sales agent. On completion of construction of the unit three years later and prior to completion of the contract of sale, the buyers inspected the completed unit.  

As a design feature, the units on every third floor of the unit complex were to have black privacy shutters installed on their balconies. This feature was particularly attractive to the plaintiffs due to sun exposure health concerns. The buyers relied on information provided by the seller’s agent that privacy screens would be installed on Levels 18 (which on completion, were not). There was also a 50 square centimetre column that encroached on living room space and amenity and two columns on the balcony that were not included in the display suite the buyers had originally inspected nor was it disclosed in the contract of sale.  

After the buyers’ inspection, a notice to complete was issued by the seller and the buyers subsequently requested an extension of the settlement date and a reduction in purchase price of 2% in consideration of the issues raised with the unit. The seller refused and argued that the buyers had contractually acknowledged that the display suite was merely “indicative of the general style, quality and finish” and that plans “are not final, [and] are for marketing and illustrative purposes only”. 

 

What did the Court decide? 

The critical issue for the Court to determine was whether the seller engaged in misleading in relation to failure to include the privacy shutters and the construction of the column structure, when considered against the contract of sale and the display suite. The Court found that the substantial structural columns located in the living areas, in places that impede on living space, are the kind of feature a potential buyer would assume would be included in the display suite or floor plan if they were in fact needed. 

The Court found that the draft strata plan had been prepared before structural engineering input but “it is probable that its technical employees would have expected the likely need of structural columns” that would diminish their amenity to purchasers. The Court accepted the buyers’ evidence that they entered into the contract believing the unit would be constructed with no substantial columns in the living room or on the balcony. The Court accepted that if the buyers had known the truth, they would not have entered into the contract for the purchase of the unit.  

The Court advised that a “clear and prominent warning” that columns would or may be constructed should have been included in the contract. The seller was ordered to refund the deposit plus interest and was also required to pay the buyers’ cost of the proceedings.

Schedule of Finishes 

In relation to the representations of the inclusion of the black privacy screens made by the agent, the Court was not satisfied that the provision of the black privacy screens ought to have been understood by the purchasers as a “finish” that should have been specified in the Schedule of Finishes, as the Schedule of Finishes did not ordinarily deal with the exterior structure of the development. The buyers were entitled to believe, that as the intention was that the black privacy screens would only be installed on the balconies on every third level, they were not a feature intended to be set out in the Schedule of Finishes.  

What does this decision mean for developers? 

In order to minimise the risk of exposure to claims of misleading conduct, there is a clear obligation on developers to ensure that all written and oral representations and statements are accurately disclosed to a buyer in the contract of sale. Any failure to provide a clear and prominent warning of issues that may arise in the completed form may gives rise to claims for misleading conduct. 

If you have any questions, please contact the team at Keighran Legal + Advisory.

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Rare High Court decision handed down:  Guidance for community and government housing providers and residential landlords

Rare High Court decision handed down: Guidance for community and government housing providers and residential landlords

Rare High Court decision handed down: Guidance for community and government housing providers and residential landlords

Background

A rare decision regarding compensation for non-pecuniary loss has been recently handed down from the High Court of Australia. The case considers whether recovering compensation for distress and disappointment is limited to damages caused by physical inconvenience. The landmark decision will potentially have significant implications for government and community housing providers in all Australian jurisdictions, as well as private residential landlords.

 

What happened?

Ms Young (the Applicant), an elderly Indigenous woman and public housing tenant in the remote Aboriginal community of Ltyentye Apurte, near Alice Springs, had been residing in a property that did not have a back door for a period of 68 months. The Applicant instead relied on a mesh-steel door she had installed herself which was not secure. It was submitted that the landlord, a statutory housing corporation established under the Housing Act 1982 (NT), failed to take reasonable steps to provide and maintain the security devices and ensure the property was reasonably secure. The Residential Tenancies Act 1999 (NT) (the Act), requires the premises to be secure, and this requirement had been incorporated as a term in the prescribed tenancy agreement. On this basis, the Applicant applied to the Civil and Administrative Tribunal of the Northern Territory (the Tribunal) seeking compensation damages for the landlord’s failure to comply with a statutory imposed term of a residential tenancy agreement, which caused distress and disappointment to the Applicant.

 

The elements to prove

For a successful claim of compensation for distress and disappointment caused by a breach of contract, the prior law required that an applicant must satisfy the common law elements that the loss;

  • resulted from physical inconvenience caused by the breach; or
  • the object of the contract is to ‘provide enjoyment, relaxation or freedom from molestation’.

In this instance, the Applicant challenged the established common law principles that cater only to applicants who suffer physical (not mental) inconvenience. The Applicant argued that compensatory damages should be awarded for tangible and intangible loss suffered by a party due to another party’s broken contractual promise.

 

The findings

The Tribunal dismissed the application, holding that the back door was not a “security device” within the meaning of the Act. On appeal, the Supreme Court of the Northern Territory overturned the decision of the Tribunal and found that the landlord breached the term of the tenancy agreement by failing to ensure there was a back door fixed in the external doorway of the property. The Supreme Court held an external door is indeed a security device, awarding the Applicant $10,200 in compensation for distress or disappointment. The landlord subsequently appealed this decision, and the Court of Appeal set aside the compensation awarded, holding that section 122(1) of the Act did not entitle the tenant to damages for distress or disappointment, the Court of Appeal held that a central objective of a residential tenancy agreement was not to provide pleasure, entertainment, or relaxation, and therefore compensation was not available unless it was consequential upon physical inconvenience. The Applicant then made a final appeal to the High Court of Australia.

 

The final decision

In a majority decision, the High Court rejected the Court of Appeal’s interpretation, and held that the relevant term of the residential tenancy agreement was to provide the tenant with the peace of mind that comes with secure premises. The High Court ruled that the landlord breached that obligation and acknowledged that the Applicant had a right to seek compensation because of that breach, which includes compensation for disappointment and distress. The High Court finally awarded $10,200 in compensation and ordered that the respondent pay the costs of the first and second grounds of the appeal, in favour of the Applicant.

 

The New South Wales position

For comparative purposes, in New South Wales, section 191(3) of the Residential Tenancies Act 2010 (NSW) outlines the possible considerations the NSW Civil and Administrative Tribunal (the NSW Tribunal) may apply when determining whether a landlord has satisfied their obligation to ensure the residential premises is reasonably secure. The NSW Tribunal must consider the physical characteristics of the premises, insurance of property, likelihood of break-ins and unlawful entry, and the action taken or those that should have reasonably been taken by the tenant and landlord in the security of the premises.

 

What does this decision mean for landlords?

This case is now the leading authority in respect of non-pecuniary loss and will have significant implications for the residential tenancy sector. The legal development in this case has already prompted a class action investigation to review over housing conditions for Indigenous tenants living in public housing in remote communities. We expect more cases like this will emerge in the near future.

 

Final thoughts

Considering this landmark decision, large scale public and government housing providers must be aware that the assessment of damages for breach of residential tenancy terms may be subject to determination against common law principles. A breach of contract may cause the aggrieved party to suffer disappointment and distress arising from a breach of a tenancy agreement, and under the guidance of this leading authority, seek compensation for non-pecuniary loss.

 

 

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Approval Conditions & Sunset Clauses – Is there a difference?

Approval Conditions & Sunset Clauses – Is there a difference?

Approval Conditions & Sunset Clauses – Is there a difference?

Transformer Development Group Pty Ltd v Tait Street Investments Pty Ltd [2023] VCC 878.

In Victoria, the recent case of Transformer Development Group Pty Ltd v Tait Street Investments Pty Ltd [2023] VCC 878 confirms that pre-conditions to completion of an off the plan development are not necessarily to be interpreted as sunset clauses. The case considers the extent to which section 10 in the Sale of Land Act 1958 (Vic) (the SLA) applies in such circumstances.

Transformer Development Group Pty Ltd (the Purchaser) entered into 18 contracts of sale with Tait Street Investments Pty Ltd (the Vendor) for 18 lots in an off-the plan development in Bonshaw, Victoria. All contracts were materially the same, and each provided that the contract was subject to and conditional upon the vendor obtaining approval from any necessary authority to construct services such as electricity, gas, water, and sewerage within each lot in the subdivision.  The dispute arose when the Vendor was unable to procure such approvals and required the contracts be rescinded pursuant to the contractual terms.

 

The Vendor’s right to rescind

The special conditions made provisions for the Vendor’s right to rescind. Specifically, special condition 5.2 stated that construction approval was required to be “on terms acceptable to the Vendor in its absolute discretion” and procured within 24 months from the day of sale and if it was not procured in such time, the Vendor had the right to rescind. The Vendor engaged in ongoing and continued discussions with relevant authorities to obtain approval to construct services to enable completion of Stage 8 as per the Plan of Subdivision. The original intention was to provide services via construction of infrastructure within the development, and at the time of entering into the sale contracts with the Purchaser, the relevant authorities were supportive of this. The authorities later indicated they would not approve this approach and on this basis the Vendor was ultimately unable to procure such service approvals and would have the right to rescind under the contracts.

 

The Purchaser’s position

The Purchaser contended that the Vendor was unable to rely on the contractual right to rescind as it was wholly inconsistent with section 10 of the SLA, which restricts a developer’s ability to rescind a residential off the plan contract without either consent from the Purchaser or approval from the Supreme Court. The Purchaser also argued that special condition 5.2 had the effect of shortening the sunset date by a year and sidestepping the rescission scheme mandated by section 10 of the SLA.

 

The Court’s decision

The Court held that the SLA and the contract were not inconsistent. The Court affirmed that the definition of a sunset clause is strictly a provision in a residential off the plan contract which allows for the contract to be rescinded if the plan of subdivision has not been registered by the nominated sunset date. In contrast, the contractual provisions in contention relate to the requirement to obtain approvals from authorities to allow developments to proceed, not a failure to register the plan of subdivision by a certain date. As a result, the subject matter of the special conditions and the definition of “sunset clause” are different and there are no inconsistencies between the two.

 

What does this mean for developers?

This is fantastic news for developers in Victoria and may be encouraging for developers in NSW as well. It confirms that the sunset clauses legislation in Victoria is specifically for dealing with sunset clauses, and pre-conditions such as clauses pertaining to obtaining necessary approvals are not covered by the sunset clauses legislation and parties are therefore permitted to negotiate contractual provisions. As the legislation in NSW and Victoria is relatively similar on this point, the courts in NSW may use this case as a guide to interpret the similar s 66ZS contained in the Conveyancing Act 1919 (NSW).

As a final note of caution, this judgement may be overturned in the future by superior courts with differing interpretations. But for now, and with an impeding increase in development projects, this case provides developers with comfort that they may launch projects with off-the plan contracts which are subject to conditions being met without the fear that Courts will hold such provisions unenforceable.

 

If you have any questions, please contact the team at Keighran Legal + Advisory.

 

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Electronic Signing in Australia – Where is it up to?

Electronic Signing in Australia – Where is it up to?

Electronic Signing in Australia – Where is it up to?

A legislative comparison of electronic signing regimes in Australia

Background

In 2020, temporary changes to the Corporations Act 2001 (Cth) (the Act) were made as a COVID safety measure, which allowed for the electronic execution of documents. This article provides insights on how the changes have now been made permanent in the respective State and Territories.

Following on from the Corporations Amendment (Meetings and Documents) Act 2022 (Cth), companies are now able to execute contracts, deeds, and other documents electronically. This has prompted the States and Territories to follow suit, by amending State and Territory legislation to enact similar provisions that replicate the amendments made to the Corporations Act 2001 (Cth).

The amendments to both Commonwealth and State laws have sought to strike a balance between providing sufficient security in the identification of signatories as well as affirming the intention to create legal relations and facilitating more efficient and cost-effective practices of conducting business through broadening the means of executing documents in a post-pandemic era. One of the main benefits of electronic conveyancing is the speed and convenience it offers, allowing transactions to be completed without the need of paper-based documents reducing the risk of error and delays, and saving resources for all parties involved.

Commonwealth Legislation 
The Corporations (Coronavirus Economic Response Determination (No. 1) 2020 was the Commonwealth’s first amendment to electronic execution law. This modified the operation of provisions of the Corporations Act 2001 (Cth) and the Corporations Regulations2001 (Cth), to allow for meetings to be held online, and documents to be executed electronically.

To solidify the permanency of these laws, the Corporations Amendment (Meetings and Documents) Act 2022 (Cth)was introduced, not only affirming the electronic execution of documents, but more specifically establishing that: 

    • documents (including deeds) may be signed electronically by any method that identifies both the identity and intentions of the party, in accordance with sections 110A(2) and 110A(3) of the Act;
    • an agent can execute a document (including a deed) on behalf of a company electronically, in accordance with section 126;
    • a sole director proprietary company that does not have a company secretary can now also execute a document (including a deed) in accordance with section 127(1) or section 127(2);
    • for a company executing a document under seal under section 127(2) of the Act, the witness can observe the witnessing of the seal by electronic means; and
    • for the execution of a deed, delivery is not necessary if a company executes a deed in accordance with section 127(1) or section 127(2).

New South Wales
New South Wales was one of the first of the States to implement provisions for electronic execution in April 2020. Throughout 2020 and 2021, New South Wales made numerous changes, and introduced new laws expanding the types of documents that can be executed electronically.
These changes namely allowed for:

    • the remote witnessing of signatures through an audio-visual link;
    • the electronic signature of a client authorisation;
    • paper land dealings to be signed and witnessed electronically; and
    • owners’ corporations and community associations to vote and execute documents electronically, without having an affixed seal.

While most of these amendments did not have an expiration date, all have since become permanent. The Electronic Transactions Act 2000 (NSW) was amended through the Electronic Transactions Amendment (Remote Witnessing) Act 2021 (NSW) establishing permanency for the electronic execution, remote witnessing, and attestation of documents. These amendments further allowed for a signatory or a witness of a signatory to be located outside of the jurisdiction for any document being executed in accordance with the of Laws of New South Wales.

Victoria 

Alongside New South Wales, Victoria implemented provisions for electronic execution in April 2020. The COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 (Vic) allowed for deeds to be electronically executed and permitted the remote witnessing of transactions and other documents that had previously required in-person witnessing under Victorian law. This was repealed and replaced with the Justice Legislation Amendment (System Enhancements and Other Matters) Act 2021 (Vic) which amended the Electronic Transactions Act 2000 (Vic), providing that:

    • electronic signatures are sufficient and may be witnessed through an audio-visual link;
    • a deed may be created in electronic form and may be signed, sealed, and delivered by electronic communication; and
    • a mortgage may be in electronic form.

The Justice Legislation Amendment (System Enhancements and Other Matters) Act 2021 (Vic) further amended the execution and witnessing requirements under the Powers of Attorney Act 2014 (Vic). However, electronic execution must adhere to ‘remote execution procedure’ as set out in sections 5A to 5D.

Queensland
Following New South Wales and Victoria, Queensland made amendments to various legislation including the Property Law Act 1974 (Qld), Oaths Act 1867 (Qld) and the Power of Attorney Act 1998 (Qld) now allow individuals to sign documents electronically including deeds, oaths, affidavits, general powers of attorneys and declarations.

At the end of 2021, the Justice and Other Legislation Amendment Act 2021 (Qld) was introduced, in an attempt to make some of these temporary measures permanent. However, while the Act was assented to on 24 November 2021, the relevant provisions in the Act were only to take effect on a day to be fixed by proclamation.

Now, pursuant to Proclamation No 2 of the Justice and Other Legislation Amendment Act 2021 which was signed on 17 March 2022, the relevant provisions (commenced on 30 April 2022), which permit:

    • affidavits and statutory declarations being in electronic form, electronically signed and witnessed through an audio-visual link;
    • general powers of attorney (POA) for businesses being in electronic form, signed electronically without a witness and made in counterparts/by split execution;
    • corporations executing a POA without using a common seal;
    • deeds being made or signed electronically, without a witness and without needing to be sealed; and
    • mortgages being in electronic form and signed electronically by the mortgagor or the mortgagee, without the need for any witnesses.

Australian Capital Territory (ACT)
As amended in 2012 by the Electronic Transactions Amendment Act 2012 (ACT), the Electronic Transactions Act 2001 (ACT) had already facilitated the electronic execution for certain documents (provided that execution is conducted in accordance with section 9). 

In 2020, the ACT introduced the COVID-19 Emergency Response Act 2020 (ACT), as a temporary measure, permitting for certain documents to be witnessed by an audio-visual link. The documents that are generally included under section 4 of COVID-19 Emergency Response Act 2020 (ACT) are POAs and enduring Powers of Attorney, health directions, wills, and affidavits.

For remote witnessing to be considered valid in the ACT, the legislative amendments required the witness to:

    • observe the signatory sign the document in ‘real time’;
    • provide confirmation through signing the document or a copy of the document;
    • be reasonably satisfied that the document signed by the signatory is the same document (or a copy of the same document) as signed by the witness in confirmation; and
    • endorse the document by providing a statement that specifies the method used to witness the document, and that the signature was witnessed in accordance with section 4 of the COVID-19 Emergency Response Act 2020 (ACT).

However, this legislation expired on 31 December 2022, following the end of the penultimate COVID-19 emergency period, and the ACT is still yet to legislate any provisions for remote witnessing post-COVID.

Western Australia
Western Australia introduced the COVID-19 Response and Economic Recovery Omnibus Act 2020 (WA) in its response to the COVID-19 pandemic. Under this act, witnesses can witness signatories signing certain documents, such as affidavits and statutory declarations (under the Oaths, Affidavits and Statutory Declarations Act 2005 (WA)), remotely through an audio-visual link, using technology that facilitates continuous and simultaneous audio and visual communication (e.g., FaceTime, Zoom or Microsoft Teams).

Division 4 of Part 2 of the Act was extended until 31 December 2022, pursuant to the COVID-19 Response and Economic Recovery Omnibus Act 2020 Postponement Proclamation 2021 (WA). However, in 2023, Western Australia has made no advancements towards instituting legislation to provide avenues for permanent electronic witnessing.

South Australia
In 2020, South Australia introduced temporary measures, extending the list of persons who could witness statutory declarations, as well as suspending the requirement for land registry instruments to be witnessed.

From 20 April 2020, pursuant to the COVID-19 Emergency Response (Section 16) Regulations 2020 (SA)(Regulations), the list of persons who could witness statutory declarations in South Australia under the Oaths Act 1936 (SA) was extended to include all the persons listed in Schedule 1 of the Regulations.

The South Australian Government has made regulations under the Oaths Act 1936 (SA) as amended by the Oaths (Miscellaneous) Amendment Act 2021, to allow, from 14 October 2021, affidavits to be witnessed remotely over audio-visual link. Also commencing on 20 April 2020, the COVID-19 Emergency Response (Section 17) Regulations 2020 (SA) provided that section 17 of the COVID-19 Emergency Response Act 2020 does not apply when a person is required to be physically present to witness the signing, execution, certification or stamping of a document or to take any oath, affirmation or declaration in relation to a document.

Northern Territory
The Northern Territory introduced the Land Legislation Amendment Bill 2022 in November 2022, and it was successfully passed by the Northern Territory Government in February of 2023. The Land Legislation Amendment Bill 2023 purpose was to has amended the Electronic Conveyancing Act 2013. The key provisions to provide that documents may take the form of electronic conveyancing documents, references to signing or executing of documents are references to documents that are electronically signed, requirements for clients authorisations for electronic conveyancing and requirements for verification of identity.

Tasmania
The Tasmanian government enacted the COVID-19 Disease Emergency (Miscellaneous Provisions) Act 2020 (Tas) as its response to COVID-19. The Act was assented to on 27 March 2020 and consolidated on 3 September 2022. The COVID-19 Disease Emergency Notice 18/2020, made under section 17 of the COVID-19 Disease Emergency (Miscellaneous Provisions) Act 2020 further allowed for the remote witnessing of certain types of documents, provided that:

    • the intended recipient of the document must agree to the method of signature, by way of supplying the producer of the document with their email address or telephone number for the purpose of receiving the document as being sent through email or facsimile;
    • the witness must observe the signatory sign the document through an audio-visual link in ‘real time’; and
    • the witness must be satisfied the document being signed by the signatory is the same document, as the document the witness is attesting to observing the signatory sign.

Subsequently, Disease Emergency Notice 2/2021 and Notice 12/2021 have been made to further allow for documents to be served, signed and witnessed through electronic means as authorised under section 17 of COVID-19 Disease Emergency (Miscellaneous Provisions) Act 2020 (Tas), provided they are signed in accordance with section 7 of the Electronic Transactions Act 2000 (Tas). Nevertheless, wet-signatures and in person witnessing are still required for certain categories of documents, including the valid execution of deeds.

Final Thoughts

The amendments made to the Commonwealth law, as well as the amendments that many of the States and Territories have made to their own legislation has actively assisted in enhancing the practical aspects of executing documents in Australia.  These laws improve both the cost and time efficiency of signing and witnessing documents, by incorporating the technology that has been both developed and relied upon during the COVID-19 pandemic. This has led to efficiencies in practice in completing transactions, which has had positive impacts in the time it now takes and the cost of completing transactions.

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