Peter Townsend is recommending that SMSF trust deeds signed electronically in the eastern states are revisited and signed with a wet signature on an actual deed document as required by law.
While advancements in technology now allows the application of digital signatures, the application of the law does not agree, specifically:
• In NSW, VIC and QLD it is not possible to digitally sign a deed in purely electronic format
• Even if it were, in some jurisdictions it is not possible to witness a document by digital signature.
“We think that they are risking the assets of the SMSF trust deed if signed digitally in some states.
“Townsends Lawyers believe that the law still requires a signature of a deed on paper that has been witnessed, certainly in the major Australian states,” said Peter Townsend, Principal, Townsends Lawyers.
“We are now reviewing the existing trust deeds of new clients to ensure that their creation and signatures match the letter of the law,” said Mr Townsend.
| Definitions – Signatures and signing documents
An electronic signature is any method of electronically indicating that a certain person has acknowledged a document. A scanned signature attached to a Word document is an electronic signature. A digital signature on the other hand is an electronic signature that can be verified using a specific process that effectively validates and connects the signature to a specific person (see note 1). Like a handwritten signature which can be forged, a digital signature can be forged if the person does not protect their personal key thereby allowing used use and the ability to impersonate the alleged signer. But the risk is no greater than manual forgery and provided sensible precautions are adopted to safeguard the key digital signatures can generally be relied on. What do ‘signing’ and ‘signature’ mean? 2. In the context of establishing legal relations a ‘signature’ serves three purposes: 3. A comparison of a number of dictionary definitions suggests that the verb ‘to sign’ means to affix or apply one’s signature for the purposes of identification or authorisation. In this context the noun ‘signature’ can best be defined as a person’s name written in a distinctive way to authorise an instrument or identify oneself as the writer. Note 1: For a technical explanation of how a digital signature works see paras 20 and following of “The Statute of Frauds in the Digital Age – Maintaining the Integrity of Signatures” by Christensen, Duncan and Low |
