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<\/p>\nThere are six simple rules that will ensure a deed is executed properly in every Australian state, says a leading superannuation legal consultant.<\/p>\n
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Bryce Figot, special counsel for DBA Lawyers, said each Australian jurisdiction has its own laws that govern the proper execution of deeds.<\/p>\n
\u201cWhile it could be possible to execute a deed without following all of these six steps, why take unnecessary risks?\u201d he asked.<\/p>\n
\u201cYou never know which Australian jurisdiction might apply to a deed\u201d.<\/p>\n
For example, in\u00a0Booth v Cantor Management Services Pty Ltd (Unreported, Supreme Court of South Australia, Bochner J, 18 March 2016),<\/em>\u00a0a deed provided: \u201cThis Deed is governed by the laws of the State or Territory of Australia in which this Deed is executed and all interested persons accept the jurisdiction of the Court of that State or Territory\u201d.<\/p>\n \u201cThe deed was executed in Queensland. Therefore, one might think that this would have been a Queensland case. However, the case was heard in the South Australian court system,\u201d Mr Figot said.<\/p>\n Instead, however, Judge Bochner J decided that the clause quoted above was: \u201c\u2026 non-exclusive. It does not expressly provide that any action in relation to the fund must only be commenced in the State in which the deed was executed\u201d.<\/p>\n \u201cThe case illustrates that unexpected outcomes can occur. It is difficult to predict with real confidence which jurisdiction will apply. Therefore, it is best to have a practice that will satisfy ALL jurisdictions,\u201d said Mr Figot.<\/p>\n RULE 1<\/strong>: Don\u2019t try to execute a deed electronically<\/p>\n Up until recently, no Australian jurisdiction allowed for a deed to be executed electronically. Instead, they all included the general law requirement that a deed must be on paper (or parchment or vellum).<\/p>\n Some Australian jurisdictions have updated their legislation to allow for electronic execution of deeds. However, there is still risk involved.<\/p>\n Namely, the\u00a0Victorian Electronic Transactions (Victoria) Act 2000<\/em>\u00a0(Vic) allows a deed to be executed electronically. However, it includes ambiguous requirements such as that the method used was \u2018as reliable as appropriate\u2019. This is yet to be interpreted by the courts.<\/p>\n Similarly, where a corporation executes a deed under the\u00a0Corporations Act 2001<\/em>\u00a0(Cth) (CA), equivalent requirements apply. For example, under s 110A(2)(b)(i) of the CA, an electronic method of signing can only be used if it is \u2018as reliable as appropriate for the purpose for which the information was recorded, in light of all the circumstances, including any relevant agreement.\u2019<\/p>\n Furthermore, most Australian jurisdictions do not even have legislation that allows for deeds to be executed electronically. As it stands today, this includes the ACT, NT, SA, Tasmania and WA. Therefore, a problem could arise where there are signatories to the deed that are currently located in those Australian jurisdictions.<\/p>\n RULE 2<\/strong>: Ensure the deed says \u2018executed as a deed\u2019 and \u2018signed, sealed and delivered.\u2019<\/p>\n At general law, in order to constitute a deed, among other things, a document must be sealed.<\/p>\n Sealing means affixing a wax or wafer seal, a rubber stamp or any other impression as a seal\u00a0\u2013\u00a0<\/em>see\u00a0Electronic Rentals Pty Ltd v Anderson\u00a0<\/em>(1971) 124 CLR 27 [18].<\/p>\n Naturally, it is rare to see literal sealing in modern times. However, the absence of literal sealing is not necessarily a problem. This is because each jurisdiction has legislation providing that deeds no longer require sealing so long as additional criteria are satisfied. Therefore, it is important to satisfy those additional criteria.<\/p>\n However, the exact additional criteria vary in each Australian jurisdiction.<\/p>\n For example, in NSW, \u2018[e]very instrument expressed to be \u2026 a deed \u2026, which is signed and attested in accordance with this section, shall be deemed to be sealed.\u2019 (See s 38(3) of the Conveyancing Act 1919 (NSW).) This requires, among other things, wording such as \u2018executed as a deed\u2019.<\/p>\n In Victoria, different additional criteria apply. In Victoria, \u2018[a]n instrument executed by an individual \u2026 expressed to be sealed by that individual \u2026 shall \u2026 take effect as if it had been so sealed.\u2019 (See s 73A of the\u00a0Property Law Act 1958<\/em>\u00a0(Vic).)<\/p>\n Therefore, it is best practice to include both phrases \u2018executed as a deed\u2019 and \u2018signed, sealed and delivered.\u2019 This helps ensure that the document is taken to be sealed, and thus can constitute a deed.<\/p>\n RULE 3<\/strong>: Ensure that each individual executing the deed has an adult independent witness<\/p>\n In general law, there is no requirement for a deed to be witnessed.<\/p>\n However, many Australian jurisdictions have legislation requiring a deed to be witnessed. For example, in NSW, \u2018A deed is sufficiently signed by a person if \u2026 the signature is attested by a person who is not a party \u2026 to the deed \u2026\u2019 (See s 38(1A) of the\u00a0Conveyancing Act 1919<\/em>\u00a0(NSW).)<\/p>\n Therefore, it is best to ensure that each individual executing the deed has an adult independent witness.<\/p>\n RULE 4<\/strong>: When printing a PDF before signing, print the ENTIRE document<\/p>\n The leading Australian book on deeds is\u00a0Seddon On Deed<\/em>s. This book is now in its second edition. In the first edition, the author wrote:<\/p>\n The practice in the United Kingdom appears to be to separate the text of the deed and the execution page but to keep them together in all correspondence. The final version would comprise two PDF documents. It is possible that an Australian court could hold that such a practice is not sufficient for proper execution. A safer practice in Australia is to send the whole deed electronically as one document, and for it to be printed out as a whole and executed as a counterpart.<\/em><\/p>\n The second edition does not repeat this warning. Instead, it describes a more complex alternative that the United Kingdom Law Society approves.<\/p>\n However, it seems unclear if the UK alternative would be sufficient in Australia. Also, the UK alternative involves having law firms involved in the execution. Therefore, we still heed the warning from the first edition.<\/p>\n RULE 5<\/strong>: Put the date on the deed<\/p>\n There is no need to date a document for it to constitute a deed. This has been well established for over 400 years. See\u00a0Goddard's Case\u00a0<\/em>(1584) 2 Co Rep 4b\u00a0and a more recent case such as\u00a0Juric-Kacunic v Vaupotic\u00a0<\/em>[2013] NSWSC 41 [49].<\/p>\n Nevertheless, there are practical reasons to put the date on the deed. Financial institutions like to see the date of execution on a deed. For stamping purposes, some Australian jurisdictions require that a deed be dated. Also, having the date on a deed helps to evidence of when a deed was in force. As such, dating the deed is prudent when executing.<\/p>\n STEP 6<\/strong>: Keep the full original deed<\/p>\n A trustee\u2019s most fundamental duty is to comply with the terms of the trust. Those terms are typically contained in a deed. Therefore, a trustee needs to be able to produce those terms if questioned. The simplest way to produce those terms is to show the full original deed.<\/p>\n Many are surprised to learn that a photocopy or a scan of a signed deed still constitutes a lost deed. Naturally, the photocopy or scan typically constitutes good evidence of what the lost deed provided. However, it is still a lost deed. For example, in\u00a0Sutton v NRS(J) Pty Ltd\u00a0<\/em>[2020] NSWSC 826\u00a0a photocopy of the signed deed existed. However, the original signed deed was lost. Therefore, a court application was necessary in order for the trustee to be justified in administering the trust on the basis of the photocopy.<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n There are six simple rules that will ensure a deed is executed properly in every Australian state, says a leading superannuation legal consultant.<\/p>\n","protected":false},"author":1,"featured_media":1674,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1673"}],"collection":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=1673"}],"version-history":[{"count":1,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1673\/revisions"}],"predecessor-version":[{"id":1675,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1673\/revisions\/1675"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media\/1674"}],"wp:attachment":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=1673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=1673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=1673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n\nBryce Figot, DBA Lawyers
\n26 September 2023
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