Execution of deeds

Individuals

Execution block
Click here to download an execution block for a deed to be executed by an individual.

Use of this execution block
This is an execution block for an individual to execute a deed. It should be used in conjunction with the important notes which follow below.

Use this block for executing deeds only
This execution block should only be used for executing deeds.

While the courts take the view that a document can still be classified as a deed even if it is not expressly stated to be a deed, with the parties’ intention for a document to be a deed able to be inferred from all the surrounding circumstances (see the recent cases of Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [67]-[68] and Bendigo and Adelaide Bank Ltd v DY Logistics Pty Ltd [2018] VSC 558, [23]), to avoid any doubt, the document should be expressed to be a deed in the execution block.

For executing agreements instead of deeds, please refer to the Execution of Agreements section of this app.

Do not use this execution block outside Australia or where the laws of another country may apply
This execution block has been drafted for use within Australia only, and for deeds that are subject to Australian law. If the law of the deed is that of another jurisdiction and/or the deed is to be executed outside Australia, specialist advice should be sought.

The signature must be witnessed
This execution block provides for the individual who is executing the deed to have their signature witnessed. The witness must be present when the deed is executed.

The execution block has been drafted so that it complies with the laws relating to execution of deeds by an individual in all states and territories in Australia. While witnessing is not strictly necessary under the laws of Victoria, it is recommended that the requirement not be removed for Victoria as witnessing serves an evidentiary as well as a legal purpose. Witnessing is necessary in all other states and territories as a matter of statute as opposed to the common law – see Brown v Tavern Operator Pty Ltd [2018] NSWSC 1290.

Where a person is required to witness signatures on a deed, the witness must not be a party to the deed.  Ideally, a witness should also not be a representative, relative or employee of a party to the deed.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Sealing is not required
This execution block states that the document is a deed and that it is sealed. The purpose of these statements is to engage statutory provisions which deem the document to be sealed when this language is used. It is therefore not necessary to actually seal the deed when using this execution block.

Delivery
A deed will take effect from the time it is delivered rather than when it is simply dated or executed. ‘Delivery’ does not mean physical delivery but rather the point at which the executing party intends to be bound.

This is ultimately a question of fact to be determined objectively in each individual case with reference to ‘the words and conduct of the executing party and the circumstances surrounding the execution of the deed’ – see the decision of the NSW Court of Appeal in Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253, [59]-[60], recently cited with approval in Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [71].

There is no general presumption that a party intends to be immediately bound simply by executing a deed. Indeed, it is common for the surrounding circumstances to indicate an intention that the parties do not intend to be bound until all executed counterparts of a deed have been exchanged, and typically there is an express clause in the parties’ deed which provides for this.

A deed can also be delivered ‘in escrow’. Escrow is a form of conditional delivery, the condition being to delay the operation of the terms until the condition is satisfied. For example, a deed may be delivered in escrow for another party to sign.

With a delivery in escrow, the party that delivers the deed is bound by and cannot resile from the deed until the condition is fulfilled. However, if the condition is not fulfilled in the contemplated time then the party can seek equitable relief for the deed to be delivered up and cancelled.

Where there is any doubt about when delivery is to take effect (including the terms of any escrow), this should be explicitly stated, preferably in the deed itself.

Electronic signatures and electronic deeds
Usually electronic signatures should not be used to execute deeds. The reasons for this are discussed in detail in the Electronic Execution section. However, eSignatures are (temporarily) permitted during the COVID-19 pandemic under some circumstances.  Please refer to Can I use an eSignature to sign documents during COVID-19?

Do not pre-sign signature pages
Signature pages should never be ‘pre-signed’ and attached to a deed. Instead the whole deed should be printed, the pages securely fastened and then the deed executed.

Stamp duty
Stamp duty may be payable on the execution of a deed. Consider seeking specialist tax advice.

Disclaimer
This execution block and accompanying explanatory notes are general information and are not intended as advice on any particular matter.  They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material.  Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Individuals as attorneys

Click here to download an execution block for a deed to be executed by an individual as attorney.

Use of this execution block
This is an execution block for an individual to execute a deed as an attorney. The execution block can be used for an individual executing a deed as attorney for either an individual or a company. It should be used in conjunction with the important notes which follow below.

Use this block for executing deeds only
This execution block should only be used for executing deeds.

As noted earlier in the Execution of Deeds section in the context of the execution of a deed by an individual in his or her own capacity, while it is possible for a document to be taken to exist as a deed even if that is not expressly stated (see Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [67]-[68] and Bendigo and Adelaide Bank Ltd v DY Logistics Pty Ltd [2018] VSC 558, [23]), to avoid any doubt, the document should be expressed to be a deed in the execution block.

For executing agreements rather than deeds please refer to the Execution of Agreements section of this app.

Do not use this execution block outside Australia or where the laws of another country may apply
This execution block has been drafted for use within Australia only, and for deeds that are subject to Australian law. If the law of the deed is that of another jurisdiction and/or the deed is to be executed outside Australia, specialist advice should be sought.

Attorney must be appointed by deed
You should review the authorising deed to ensure that it has been validly executed and that the attorney who will be executing the deed has authority under the authorising deed to do so.

Importantly, an attorney may only execute a deed (rather than an agreement) on behalf of another person (individual or company) if he or she has been appointed by deed (rather than by a verbal or written agreement or other acknowledgement) to do so – see MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636.  The usual way to do this is by the principal granting a power of attorney in the form of a deed.

It follows that a board resolution appointing an officer to execute a deed on behalf of the company would not, of itself, be sufficient to confer authority on the officer and to validate any deed later executed by the officer – see Torrens Redevelopment & Research Pty Ltd v Oakworth Developments Pty Ltd [2008] NSWSC 1096.

Attorney signs their own name
This execution block provides for the attorney to sign their own name. An attorney can sign in their own name if either:

  • the power of attorney expressly permits them to do so; and/or
  • the power of attorney is governed by the law of a jurisdiction which has a statutory provision allowing the attorney to sign in their own name (currently NSW, NT (unless a contrary intention appears in the power of attorney), Qld, Tas, Vic and WA).

Outside these circumstances, the attorney may not be able to sign in their own name and specialist advice should be sought.

Statutory assumptions of due execution where attorney signs for company
Where a company executes a deed by an attorney, the important presumptions of due execution under ss 128-129 of the Corporations Act 2001 (Cth) are not available in relation to the deed itself as the execution is not in accordance with ss 127(1) or 127(2).  However, those presumptions  will be available in relation to the execution of the underlying power of attorney if it has been executed under s 127.

Sections 127-129 of the Corporations Act are discussed in further detail later in the Execution of Deeds section of this app.

Registration of powers of attorney
There is a statutory requirement in most jurisdictions that any power of attorney authorising dealings with land must be registered to give validity to those dealings. The only exceptions to this general rule are Western Australia (although a power of attorney may be deposited with the Land Information Authority) and Victoria (where no power of attorney is required to be registered although a certified copy of the power of attorney must be lodged with the Land Titles Office).

In Tasmania, all powers of attorney are required to be registered. In the ACT, there are additional registration requirements for powers of attorney which are created in respect of conveyances or deeds.

The registration requirements in the various jurisdictions (including the precise circumstances in which registration is required) fall outside of the scope of this app. If registration of the power of attorney may be required, specialist advice should be sought. This execution clause may not be appropriate where registration is required.

As a general rule, if an instrument is executed under an invalid power of attorney or a power of attorney that post-dates the signed instrument, registering the power of attorney will not validate the instrument.

The signature must be witnessed
This execution block provides for the individual who is executing the deed as an attorney to have their signature witnessed. The witness must be present when the deed is executed.

The execution block has been drafted so that it complies with the laws relating to execution of deeds by an individual in all states and territories in Australia. While witnessing is not strictly necessary under the laws of Victoria, it is recommended that the requirement not be removed for Victoria as witnessing serves an evidentiary as well as a legal purpose. Witnessing is necessary in all other states and territories.

Where a person is required to witness signatures on a deed, the witness must not be a party to the deed.  Ideally, a witness should also not be a representative, relative or employee of a party to the deed.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Sealing is not required
This execution block states that the document is a deed and that it is sealed. The purpose of these statements is to engage statutory provisions which deem the document to be sealed when this language is used. It is therefore not necessary to actually seal the deed when using this execution block.

Delivery
As noted earlier in the Execution of Deeds section of this app in the context of the execution of a deed by an individual in his or her own capacity, execution by an attorney will only take effect from the time the deed is delivered rather than when it is dated or executed.

Again, ‘delivery’ refers to the time at which a party intends to be bound and this is an objective question of fact to be determined in all the circumstances of an individual case, without any presumption of an intention to be bound merely by execution of the deed – see Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253, [59]-[60] and Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [71].

Where there is any doubt about when delivery is to take effect (including the terms of any escrow), this should be explicitly stated, preferably in the deed itself.

Electronic signatures and electronic deeds
Usually electronic signatures should not be used to execute deeds. The reasons for this are discussed in detail in the Electronic Execution section. However, eSignatures are (temporarily) permitted during the COVID-19 pandemic under some circumstances. Please refer to Can I use an eSignature to sign documents during COVID-19?

Do not pre-sign signature pages
Signature pages should never be ‘pre-signed’ and attached to a deed. Instead the whole deed should be printed, the pages securely fastened and then the deed executed.

Stamp duty
Stamp duty may be payable on the execution of a deed. Consider seeking specialist tax advice.

Disclaimer
This execution block and accompanying explanatory notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

General partnerships

Execution block
Click here to download an execution block for a deed to be executed by an individual on behalf of a general partnership.

Use of this execution block
This is an execution block for an individual partner to execute a deed on behalf of a general partnership. It should be used in conjunction with the important notes which follow below.

Use this block for executing deeds only
This execution block should only be used for executing deeds.

As noted earlier in the Execution of Deeds section in the context of the execution of a deed by an individual in his or her own capacity, while it is possible for a document to be taken to exist as a deed even if that is not expressly stated (see Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [67]-[68] and Bendigo and Adelaide Bank Ltd v DY Logistics Pty Ltd [2018] VSC 558, [23]), to avoid any doubt, the document should be expressed to be a deed in the execution block.

For executing agreements instead of deeds, please refer to the Execution of Agreements section of this app.

Do not use this execution block outside Australia or where the laws of another country may apply
This execution block has been drafted for use within Australia only, and for deeds that are subject to Australian law. If the law of the deed is that of another jurisdiction and / or the deed is to be executed outside Australia, specialist advice should be sought.

Partner executing on behalf of partnership must be appointed by deed
You should review the authorising deed to ensure that it has been validly executed and that the partner who will be executing the deed has authority under the authorising deed to do so.

Importantly, a partner may only execute a deed (rather than an agreement) on behalf of a general partnership if he or she has been appointed by deed (rather than by a verbal or written agreement or other acknowledgement) to do so.

The existence of a partnership deed is not sufficient unless that deed expressly provides that an individual partner has the power to execute a deed so as to bind the partnership.

If the partnership deed does not provide for one partner to execute a deed to bind the partnership, then a power of attorney to that effect which is executed as a deed will be a sufficient authorising document. However, that power of attorney must itself be validly executed as a deed by the partnership.

There are narrow exceptions where the above criteria are not satisfied by which a partnership can sign a deed. They are:

  • in the absence of a deed authorising one partner to execute a deed on behalf of the partnership, all of the partners must execute the deed for it to be valid; and
  • the general law also allows one partner to sign the deed if done so in the presence of all of the other partners.

This execution block is not appropriate for those situations which are outside the scope of this app.

Registration of powers of attorney
There is a statutory requirement in most jurisdictions that any power of attorney authorising dealings with land must be registered to give validity to those dealings. The only exceptions to this general rule are Western Australia (although a power of attorney may be deposited with the Land Information Authority) and Victoria (where no power of attorney is required to be registered although a certified copy of the power of attorney must be lodged with the Land Titles Office).

In Tasmania, all powers of attorney are required to be registered. In the ACT, there are additional registration requirements for powers of attorney which are created in respect of conveyances or deeds.

The registration requirements in the various jurisdictions (including the precise circumstances in which registration is required) fall outside of the scope of this app. If registration of the power of attorney may be required, specialist advice should be sought. This execution clause may not be appropriate where registration is required.

As a general rule, if an instrument is executed under an invalid power of attorney or a power of attorney that post-dates the signed instrument, registering the power of attorney will not validate the instrument.

The signature must be witnessed
This execution block provides for the individual partner who is executing the deed on behalf of the partnership to have their signature witnessed. The witness must be present when the deed is executed.

The execution block has been drafted so that it complies with the laws relating to execution of deeds by an individual in all states and territories in Australia. While witnessing is not strictly necessary under the laws of Victoria, it is recommended that the requirement not be removed for Victoria as witnessing serves an evidentiary as well as a legal purpose. Witnessing is necessary in all other states and territories.

Where a person is required to witness signatures on a deed, the witness must not be a party to the deed.  Ideally, a witness should also not be a representative, relative or employee of a party to the deed.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Sealing is not required
This execution block states that the document is a deed and that it is sealed. The purpose of these statements is to engage statutory provisions which deem the document to be sealed when this language is used. It is therefore not necessary to actually seal the deed when using this execution block.

Delivery
As in the case of the execution of a deed by an individual in his or her own capacity (see Execution of Deeds section), execution on behalf of a general partnership will only take effect from the time the deed is delivered rather than when it is dated or executed.

Again, ‘delivery’ refers to the time at which a party intends to be bound and this is an objective question of fact to be determined in all the circumstances of an individual case, without any presumption of an intention to be bound merely by execution of the deed – see Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253, [59]-[60] and Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [71].

Where there is any doubt about when delivery is to take effect (including the terms of any escrow), this should be explicitly stated, preferably in the deed itself.

Electronic signatures and electronic deeds
Usually electronic signatures should not be used to execute deeds. The reasons for this are discussed in detail in the Electronic Execution section. However, eSignatures are (temporarily) permitted during the COVID-19 pandemic under some circumstances. Please refer to Can I use an eSignature to sign documents during COVID-19?

Do not pre-sign signature pages
Signature pages should never be ‘pre-signed’ and attached to a deed. Instead the whole deed should be printed, the pages securely fastened and then the deed executed.

Stamp duty
Stamp duty may be payable on the execution of a deed. Consider seeking specialist tax advice.

Disclaimer
This execution block and accompanying notes are general information and are not intended as advice on any particular matter.  They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material.  Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Company (with common seal)

Execution block
Download here an execution block for a deed to be executed by a company by fixing its common seal, as witnessed by:

  • two directors or a director and a company secretary; or
  • a sole director who is also the company secretary (in the case of a proprietary company).

Use of this execution block
This is an execution block for a company to execute a deed by fixing its common seal in the presence of either:

  • two directors or a director and a company secretary; or
  • a sole director and company secretary (in the case of a proprietary company).

The execution block should be used in conjunction with the important notes which follow below.

Use this block for executing deeds only
This execution block should only be used for executing deeds.

While it is possible for a document to be taken to exist as a deed even if that is not expressly stated (see Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [67]-[68] and Bendigo and Adelaide Bank Ltd v DY Logistics Pty Ltd [2018] VSC 558, [23]), to avoid any doubt, the document should be expressed to be a deed in the execution block.

For executing agreements rather than deeds, please refer to the Execution of Agreements section of this app.

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories
This execution block provides for execution pursuant to ss 127(2)(a), 127(2)(b) and 127(3) of the Corporations Act.  Under those provisions, a company (whether a proprietary company or a public company) can execute a document as a deed if the document is expressed to be executed as a deed the company’s common seal is fixed to the document and the fixing of the seal is witnessed by either:

  • two directors; or
  • a director and a company secretary.

The requirements of ss 127(2)(a), 127(2)(b) and 127(3) will not be satisfied if only one person witnesses the fixing of the company’s seal, even if that person is both a director and company secretary. Further, those provisions do not permit two company secretaries to witness the fixing of the company’s seal if neither is a director – at least one witness must be, or must also be, a director.

Importantly, a company can execute a deed in accordance with ss 127(2)(a), 127(2)(b) and 127(3) of the Corporations Act even if its constitution only provides for execution by an alternative method or is otherwise silent altogether as to the manner in which execution can occur.

Further, if a deed merely appears to have been executed in accordance with those provisions, a counterparty to the deed may make an assumption that the deed has been duly executed under ss 128 and 129(6) of the Corporations Act (provided the counterparty does not know or suspect the assumption is incorrect under s 128(4)).  In practice, because of the significant benefit this assumption provides to a counterparty (avoiding the need to have to prove authority as a threshold matter in the event of a dispute arising between the parties), counterparties will typically insist on execution pursuant to ss 127(2) and 127(3), or otherwise by way of signature in the manner contemplated by s 127(1).

Execution pursuant to the Corporations Act – one signatory
This execution block provides for execution pursuant to ss 127(2)(c) and 127(3) of the Corporations Act.  According to those provisions, a proprietary company (but not a public company) can execute a document as a deed if the document is expressed to be executed as a deed, the company’s common seal is fixed to the document and the fixing of the seal is witnessed by the sole director and secretary of the company. This method of execution can only be used by proprietary companies because public companies must have a minimum of three directors under s 201A(2) of the Corporations Act.

As noted in the Execution of Deeds section in relation to witnessing by two directors or a director and company secretary, it remains best practice to expressly state in the execution clause that a document is being executed as a deed to avoid any doubt as to the validity of the execution.

The requirements of ss 127(2)(c) and 127(3) will not be satisfied if the sole director of a proprietary company executes a deed in circumstances where the company has not appointed any company secretary (this is permitted by s 204A(1) of the Corporations Act). In that event, the only way to ensure the deed is properly executed under ss 127(2)(c) and 127(3) is for the director to appoint himself/herself as the company’s sole secretary as well.

Again, execution can take place under ss 127(2)(c) and 127(3) even if a company’s constitution provides for execution by an alternative method or is otherwise silent altogether as to the manner in which execution can occur.  The same presumption of regular execution referred to in the Execution of Deeds section in the context of witnessing of the fixing of a company’s common seal by two directors or a director and company secretary also applies in the case of witnessing by a sole director and company secretary of a proprietary company.

Ensure the correct people witness the fixing of the seal
Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are witnessing the fixing of the seal.

Do not use this execution block outside Australia or where the laws of another country may apply
This execution block has been drafted for use within Australia only, and for deeds that are subject to Australian law. If the law of the deed is that of another jurisdiction and/or the deed is to be executed outside Australia, specialist advice should be sought.

Use this execution block only for an Australian corporation
This execution block should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act. It should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act).

Specialist advice should be sought in relation to the execution of deeds by foreign corporations.

Delivery
As with other forms of execution of a deed, where a deed purports to have been executed under ss 127(2) and 127(3) of the Corporations Act, it will only take effect from the time it is delivered rather than when it is dated or executed.

‘Delivery’ refers to the time at which a party intends to be bound and this is an objective question of fact to be determined in all the circumstances of an individual case, without any presumption of an intention to be bound merely by execution of the deed – see Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253, [59]-[60] and Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [71].

A deed can also be delivered ‘in escrow’. Escrow is a form of conditional delivery, the condition being to delay the operation of the terms until the condition is satisfied. For example, a deed may be delivered in escrow for another party to sign.

With a delivery in escrow, the party which delivers the deed is bound by and cannot resile from the deed until the condition is fulfilled. However, if the condition is not fulfilled in the contemplated time then the party can seek equitable relief for the deed to be delivered up and cancelled.

Where there is any doubt about when delivery is to take effect (including the terms of any escrow), this should be explicitly stated, preferably in the deed itself.

Electronic signatures and electronic deeds
Usually electronic signatures should not be used to execute deeds. The reasons for this are discussed in detail in the Electronic Execution section. However, eSignatures are (temporarily) permitted during the COVID-19 pandemic under some circumstances. Please refer to Can I use an eSignature to sign documents during COVID-19?

Do not pre-sign signature pages
Signature pages should never be ‘pre-signed’ and attached to a deed. Instead, the whole deed should be printed, the pages securely fastened and then the deed executed.

Stamp duty
Stamp duty may be payable on the execution of a deed. Consider seeking specialist tax advice.

Disclaimer
This execution block and accompanying notes are general information and are not intended as advice on any particular matter.  They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material.  Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

 

Company (without common seal)

Execution block
Download here an execution block for a deed to be executed by a company without affixing its common seal if the deed is signed by:

  • two directors or a director and a company secretary; or
  • a sole director who is also the company secretary (in the case of a proprietary company).

Use of this execution block
This is an execution block for a company to execute a deed without affixing its common seal if the deed is signed by:

  • two directors or a director and a company secretary; or
  • a sole director and company secretary (in the case of a proprietary company).

The execution block should be used in conjunction with the important notes which follow below.

Use this block for executing deeds only

This execution block should only be used for executing deeds.

As noted earlier in the Execution of Deeds section, while it is possible for a document to be taken to exist as a deed even if that is not expressly stated (see Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [67]-[68] and Bendigo and Adelaide Bank Ltd v DY Logistics Pty Ltd [2018] VSC 558, [23]), to avoid any doubt, the document should be expressed to be a deed in the execution block.

For executing agreements rather than deeds, please refer to the Execution of Agreements section of this app.

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories
This execution block provides for execution pursuant to ss 127(1)(a), 127(1)(b) and 127(3) of the Corporations Act. According to those provisions, a company can execute a document as a deed without using a common seal if the document is expressed to be executed as a deed and it is signed by:

  • two directors of the company; or
  • one director and one company secretary.

The requirements of ss 127(1)(a), 127(1)(b) and 127(3) will not be satisfied if only one person signs a deed on behalf of a company, even if that person is both a director and company secretary. Further, those provisions do not permit two company secretaries to sign a deed on behalf of a company – rather, at least one signatory must be, or must also be, a director.

A company can execute a deed in accordance with ss 127(1)(a), 127(1)(b) and 127(3) of the Corporations Act even if its constitution only provides for execution by an alternative method or is otherwise silent altogether as to the manner in which execution can occur.

Further, if a deed merely appears to have been executed by signature in accordance with ss 127(1)(a), 127(1)(b) and 127(3), a counterparty to the deed may make an assumption that the deed has been duly executed under ss 128 and 129(6) of the Corporations Act (provided the counterparty does not know or suspect the assumption is incorrect under s 128(4)).  In practice, the availability of this statutory presumption usually causes a counterparty to insist on execution by a company under s 127 of the Corporations Act.

Execution pursuant to the Corporations Act – one signatory
This execution block provides for execution pursuant to ss 127(1)(c) and 127(3) of the Corporations Act.  Under those provisions, a proprietary company (but not a public company) can execute a document as a deed if the document is expressed to be executed as a deed and is signed by the company’s sole director and secretary.

Again, it remains best practice to expressly state in the execution clause that a document is being executed as a deed to ensure compliance with section 127(3).

The requirements of ss 127(1)(c) and 127(3) will not be satisfied if the sole director of a proprietary company executes a deed in circumstances where the company has not appointed any company secretary (this is permitted by s 204A(1) of the Corporations Act). In that event, the only way to ensure the deed is properly executed under ss 127(1)(c) and 127(3) is for the director to appoint himself/herself as the company’s sole secretary as well.  Execution can take place under ss 127(1)(c) and 127(3) even if a company’s constitution provides for execution by an alternative method or is otherwise silent altogether as to the manner in which execution can occur.  Again, where a deed merely appears to have been signed by a sole director and company secretary of a proprietary company, there will be a presumption of due execution under ss 128 and 129(6) of the Corporations Act.

‘Split executions’ should be avoided
A so-called ‘split execution’ arises when the two officers of a company executing a deed under s 127(1) of the Corporations Act each sign on different physical copies of the document, usually because they are located in different places. There is an unresolved issue as to whether this constitutes valid execution of the document as a deed under s 127.

Only one published decision has considered the issue – Re CCI Holdings Ltd [2007] FCA 1283. In that case, Emmett J held that a deed poll was validly executed by a split execution. However, the issue was not dealt with at length in the judgment. Views amongst practitioners and academics vary as to whether a deed can validly be created under s 127 by a split execution.

A further issue is whether references to ‘the document’ in s 129(5) of the Corporations Act are satisfied where execution is split across two physical copies of a document.  If not, then the statutory assumption as to due execution in s 129(5) will not be available and this means that, in practice, a counterparty may not accept a split execution.

Given there are differing views on this issue (with some taking a more conservative view), in practice split execution should be avoided when executing deeds.

If parties are contemplating the execution of a deed under s 127 and there is a chance that split execution may be unavoidable, they should discuss at the earliest opportunity a position which is acceptable to all concerned. At the least, a wide counterparts clause should be included which states that signatures on behalf of a party may be on different counterparts. However, this provides no guarantee that split execution will be effective.

Ensure the correct people sign the deed
Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are signing the deed on behalf of the company.

Do not use this execution block outside Australia or where the laws of another country may apply
This execution block has been drafted for use within Australia only, and for deeds that are subject to Australian law. If the law of the deed is that of another jurisdiction and/or the deed is to be executed outside Australia, specialist advice should be sought.

Use this execution block only for an Australian corporation
This execution block should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act. It should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act.

Specialist advice should be sought in relation to the execution of deeds by foreign corporations.

Delivery
As with other forms of execution of a deed, where a deed purports to have been executed under ss 127(1) and 127(3) of the Corporations Act, it will only take effect from the time it is delivered rather than when it is dated or executed.

This requires an assessment of when a party intends to be bound, an objective question of fact to be determined by examining all the surrounding circumstances and without any presumption of an intention to be immediately bound merely by executing a deed – see Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253, [59]-[60] and Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [71].

Where there is any doubt about when delivery is to take effect (including the terms of any escrow), this should be explicitly stated, preferably in the deed itself.

Electronic signatures and electronic deeds
Never use electronic signatures to execute deeds. The reasons for this are discussed in detail in the Electronic Execution section.

Do not pre-sign signature pages
Signature pages should never be ‘pre-signed’ and attached to a deed. Instead the whole deed should be printed, the pages securely fastened and then the deed executed.

Stamp duty
Stamp duty may be payable on the execution of a deed. Consider seeking specialist tax advice.

Disclaimer
This execution block and accompanying notes are general information and are not intended as advice on any particular matter.  They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material.  Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Company by authorised signatory

An Australian company most likely cannot execute a deed (as opposed to an ordinary agreement) by ‘mere’ authorised signatory. For the reasons explained below, the law requires more.

In Australia, an attorney may only execute a deed (rather than an ordinary agreement) if he or she has been appointed by deed (rather than a verbal or written agreement) to do so – see MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636. This embraces the common law principle that authority to execute a deed must be given by deed.

As a result, a board resolution appointing an officer to execute a deed (as opposed to an ordinary agreement) as an authorised signatory for a company would not, of itself, be sufficient to ensure the validity of a deed later executed by the officer – see Torrens Redevelopment & Research Pty Ltd v Oakworth Developments Pty Ltd [2008] NSWSC 1096.

The usual way for a company to authorise an individual to execute a deed is by the corporate principal granting a power of attorney in the form of a deed. For execution by a duly appointed attorney under a power of attorney, see the detailed notes earlier in the Execution of Deeds section (which apply to the execution of a deed by an attorney on behalf of either an individual or a company).

It is sometimes suggested that s 126 of the Corporations Act may be employed to permit an authorised signatory to execute a deed for a company as agent, without a power of attorney in the form of a deed having been formally used to appoint the person as an authorised signatory. Although there is no definitive law on the point, this is thought unlikely for the following reasons:

  • s 126 refers only to contracts and not deeds; and
  • even if the section could be construed to include contracts in the form of deeds, the formal requirements for execution of deeds are probably preserved by s 126(2) which states that ‘[t]his section does not affect the operation of a law that requires a particular procedure to be complied with in relation to the contract.’

For these reasons, the execution of deeds on behalf of a company by mere authorised signatories, without a formal power of attorney having been previously granted to appoint the signatory as the company’s agent, is not recommended in Australia and may cause the deed which has been executed to be invalid.

Trusts – individual as trustee

Execution block
Click here to download an execution block for a deed to be executed by an individual as trustee.

Use of this execution block
This is an execution block for an individual to execute a deed as a trustee. It should be used in conjunction with the important notes which follow below.

Execution by trustees
Consider obtaining a certified up-to-date copy of the trust deed. There is no ‘indoor management rule’ which external persons can rely on when dealing with trusts.  Anyone dealing with a purported trustee will need to ensure that the trust is properly constituted, the trustee has been properly appointed and that they have power to execute the document.

If the trustee is not being required to give warranties about their authority then consider amending the execution block by adding the words ‘and in accordance with the trust deed dated [#]’ after inserting the name of the trust.

Use this block for executing deeds only
This execution block should only be used for executing deeds.

As noted earlier in the Execution of Deeds section in the context of the execution of a deed by an individual in his or her own capacity, while it is possible for a document to be taken to exist as a deed even if that is not expressly stated (see Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [67]-[68] and Bendigo and Adelaide Bank Ltd v DY Logistics Pty Ltd [2018] VSC 558, [23]), to avoid any doubt, the document should be expressed to be a deed in the execution block.

For executing agreements rather than deeds, please refer to the Execution of Agreements section.

Do not use this execution block outside Australia or where the laws of another country may apply

This execution block has been drafted for use within Australia only, and for deeds that are subject to Australian law. If the law of the deed is that of another jurisdiction and/or the deed is to be executed outside Australia, specialist advice should be sought.

The signature must be witnessed
This execution block provides for the individual who is executing the deed as trustee to have their signature witnessed. The witness must be present when the deed is executed.

The execution block has been drafted so that it complies with the laws relating to execution of deeds by an individual in all states and territories in Australia. While witnessing is not strictly necessary under the laws of Victoria, it is recommended that the requirement not be removed for Victoria as witnessing serves an evidentiary as well as a legal purpose. Witnessing is necessary in all other states and territories.

Where a person is required to witness signatures on a deed, the witness must not be a party to the deed.  They should also not be a beneficiary of a trust executing the deed. Ideally, a witness should also not be a representative, relative or employee of a party to the deed.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Sealing is not required
This execution block states that the document is a deed and that it is sealed. The purpose of these statements is to engage statutory provisions which deem the document to be sealed when this language is used. It is therefore not necessary to actually seal the deed when using this execution block.

Delivery
As with other forms of execution of a deed, where a deed is executed by an individual trustee, it will only take effect from the time it is delivered rather than when it is dated or executed.

This requires an assessment of when a party intends to be bound, an objective question of fact to be determined by examining all the surrounding circumstances and without any presumption of an intention to be immediately bound merely by executing a deed – see Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253, [59]-[60] and Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [71].

Where there is any doubt about when delivery is to take effect (including the terms of any escrow), this should be explicitly stated, preferably in the deed itself.

Electronic signatures and electronic deeds
Usually electronic signatures should not be used to execute deeds. The reasons for this are discussed in detail in the Electronic Execution section. However, eSignatures are (temporarily) permitted during the COVID-19 pandemic under some circumstances. Please refer to Can I use an eSignature to sign documents during COVID-19?

Do not pre-sign signature pages
Signature pages should never be ‘pre-signed’ and attached to a deed. Instead the whole deed should be printed, the pages securely fastened and then the deed executed.

Stamp duty
Stamp duty may be payable on the execution of a deed. Consider seeking specialist tax advice.

Disclaimer
This execution block and accompanying notes are general information and are not intended as advice on any particular matter.  They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material.  Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Trusts – company as trustee (with common seal)

Execution block
Click here to download an execution block for a company to execute a deed as trustee using its common seal in the presence of either:

  • two directors or a director and a company secretary; or
  • a sole director who is also the company secretary (in the case of a proprietary company).

Use of this execution block
This is an execution block for a company to execute a deed as a trustee using its common seal in the presence of either:

  • two directors or a director and a company secretary; or
  • a sole director, who is also the company secretary (in the case of a proprietary company).

The execution block should be used in conjunction with the important notes which follow below.

Use this block for executing deeds only
This execution block should only be used for executing deeds.

As with the execution of deeds in other cases, where a deed is executed by a company in its trustee capacity, it is best practice for the document to be expressed to be a deed in the execution block.

For executing agreements rather than deeds, please refer to the Execution of Agreements section of this app.

Execution by trustees
Consider obtaining a certified up-to-date copy of the trust deed. There is no ‘indoor management rule’ which external persons can rely on when dealing with trusts.  Anyone dealing with a purported trustee will need to ensure that the trust is properly constituted, the trustee has been properly appointed and that it has power to execute the document.

If the trustee is not being required to give warranties about its authority then consider amending the execution block by adding the words ‘and in accordance with the trust deed dated [#]’ after the reference to the Corporations Act.

Execution pursuant to the Corporations Act– two signatories or one signatory
The same considerations apply here as those raised earlier in the Execution of Deeds section of this app in the context of execution by a company in its own (non-trustee) capacity by fixing its common seal, witnessed by two signatories or the sole director and secretary of a proprietary company.  Reference should be made to that commentary if you are seeking to rely on ss 127(2) and 127(3) to allow execution of a deed by a company in its trustee capacity by fixing its common seal.

Ensure the correct people witness the fixing of the seal
Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are witnessing the fixing of the seal.

Do not use this execution block outside Australia or where the laws of another country may apply
This execution block has been drafted for use within Australia only, and for deeds that are subject to Australian law. If the law of the deed is that of another jurisdiction and/or the deed is to be executed outside Australia, specialist advice should be sought.

Use this execution block only for an Australian corporation
This execution block should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act. It should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act.

Specialist advice should be sought in relation to the execution of deeds by foreign corporations.

Delivery
As with other forms of execution of a deed, where a deed is executed by a corporate trustee, it will only take effect from the time it is delivered rather than when it is dated or executed.

This requires an assessment of when a party intends to be bound, an objective question of fact to be determined by examining all the surrounding circumstances and without any presumption of an intention to be immediately bound merely by executing a deed – see Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253, [59]-[60] and Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [71].

Where there is any doubt about when delivery is to take effect (including the terms of any escrow), this should be explicitly stated, preferably in the deed itself.

Electronic signatures and electronic deeds
Usually electronic signatures should not be used to execute deeds. The reasons for this are discussed in detail in the Electronic Execution section. However, eSignatures are (temporarily) permitted during the COVID-19 pandemic under some circumstances. Please refer to Can I use an eSignature to sign documents during COVID-19?

Do not pre-sign signature pages
Signature pages should never be ‘pre-signed’ and attached to a deed. Instead the whole deed should be printed, the pages securely fastened and then the deed executed.

Stamp duty
Stamp duty may be payable on the execution of a deed. Consider seeking specialist tax advice.

Disclaimer
This execution block and accompanying notes are general information and are not intended as advice on any particular matter.  They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Trusts – company as trustee (without common seal)

Execution block
Click here to download an execution block for a company to execute a deed as a trustee without using a common seal by the signature of either:

  • two directors or a director and a company secretary; or
  • a sole director and company secretary (in the case of a proprietary company).

Use of this execution block
This is an execution block for a company to execute a deed as a trustee using its common seal in the presence of either:

  • two directors or a director and a company secretary; or
  • a sole director and company secretary (in the case of a proprietary company).

The execution block should be used in conjunction with the important notes which follow below.

Use this block for executing deeds only
This execution block should only be used for executing deeds.

As noted earlier in the Execution of Deeds section in relation to execution by other parties, where a deed is executed by a company in its trustee capacity, it is best practice for the document to be expressed to be a deed in the execution block.

For executing agreements rather than deeds, please refer to the Execution of Agreements section of this app.

Execution by trustees
Consider obtaining a certified up-to-date copy of the trust deed. There is no ‘indoor management rule’ which external persons can rely on when dealing with trusts.  Anyone dealing with a purported trustee will need to ensure that the trust is properly constituted, the trustee has been properly appointed and that it has power to execute the document.

If the trustee is not being required to give warranties about its authority then consider amending the execution block by adding the words ‘and in accordance with the trust deed dated [#]’ after the reference to the Corporations Act.

Execution pursuant to the Corporations Act – two signatories or one signatory
The same considerations apply here as those raised earlier in the Execution of Deeds section of this app in the context of execution by a company in its own (non-trustee) capacity by the signature of two directors, a director and company secretary or a sole director and secretary of a proprietary company.  Reference should be made to that commentary if you are seeking to rely on ss 127(1) and 127(3) to allow execution of a deed by a company in its trustee capacity by the signature of those persons.

‘Split executions’ should be avoided
As noted in the case of execution by a company in its own (non-trustee) capacity, it is desirable for ‘split executions’ involving two officers signing different physical copies of the same deed to be avoided to ensure compliance with ss 127(1) and 127(3) of the Corporations Act.

If split execution is unavoidable, the parties should discuss at the earliest opportunity a position which is acceptable to all concerned. At the least, a wide counterparts clause should be included which states that signatures on behalf of a party may be on different counterparts. However, this provides no guarantee that split execution will be effective.

An ‘authorised signatory’ cannot execute a deed for a company
As noted earlier in the Execution of Deeds section in relation to the execution of a deed by a company in its own (non-trustee) capacity, the better view is that an authorised signatory cannot execute a deed (as opposed to an ordinary agreement) for a company as its agent if the signatory has only been appointed by board resolution, as distinct from a formal power of attorney expressed as a deed.  It is unlikely that s 126 (1) of the Corporations Act can be used to by-pass the ordinary execution requirements for deeds as it refers only to contracts and not deeds and the  formal requirements for deeds are expressly preserved by s 126(2).

As a result, if a company wishes  to execute a deed by signature and without fixing its common seal, to ensure validity of the deed it either needs to:

  • execute under s 127 of the Corporations Act by using an execution block such as this one; or
  • formally appoint an attorney to execute the deed under a power of attorney (see the execution block and notes for a deed executed for a company by an attorney earlier in the Execution of Deeds section).

Ensure the correct people sign the deed
Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are signing the deed.

Do not use this execution block outside Australia or where the laws of another country may apply
This execution block has been drafted for use within Australia only, and for deeds that are subject to Australian law. If the law of the deed is that of another jurisdiction and/or the deed is to be executed outside Australia, specialist advice should be sought.

Use this execution block only for an Australian corporation
This execution block should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act. It should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act.

Specialist advice should be sought in relation to the execution of deeds by foreign corporations.

Delivery
As noted, where a deed is executed by a corporate trustee, it will only take effect from the time it is delivered rather than when it is dated or executed, a matter requiring assessment of when a party intends to be bound based on all the objective circumstances.

Where there is any doubt about when delivery is to take effect (including the terms of any escrow), this should be explicitly stated, preferably in the deed itself.

Electronic signatures and electronic deeds
Never use electronic signatures to execute deeds. The reasons for this are discussed in detail in the Electronic Execution section.

Do not pre-sign signature pages
Signature pages should never be ‘pre-signed’ and attached to a deed. Instead the whole deed should be printed, the pages securely fastened and then the deed executed.

Stamp duty
Stamp duty may be payable on the execution of a deed. Consider seeking specialist tax advice.

Disclaimer
This execution block and accompanying notes are general information and are not intended as advice on any particular matter.  They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.