In a recent decision in the Supreme Court of Western Australia,[1] the court dismissed an application to extend the operation of a caveat because there was insufficient evidence to demonstrate that the agreement containing the relevant charging clause was signed by way of “Docusign”.
In Western Australia, one of the traditional interests that supports the lodgement of a caveat is a charge created by a written instrument signed by a registered proprietor.[2] It is possible for a registered proprietor to sign such an instrument electronically, provided that there is compliance with the requirements for a valid electronic signature set out in section 10 of the Electronic Transactions Act 2011 (WA) (“Electronic Transactions Act”).
In the Prospa case, after the caveat was lodged, the registered proprietor applied for a 21-day notice to be issued which would cause the caveat to lapse unless the caveator applied for, and obtained, and order of the Supreme Court of Western Australia extending the operation of the caveat.[3]
The caveator applied to extend the operation of the caveat but the application was dismissed because there was insufficient evidence to demonstrate the caveator’s claim that the agreement containing the charging clause was actually signed by the registered proprietor by way of “Docusign”.[4]
The obvious question is, what evidence would have been sufficient?
In a previous decision of the Supreme Court of Western Australia which was said to bear a striking resemblance to the Prospa case, it was held that “some steps should have been taken by the [caveator] to verify that the [registered proprietor’s] electronic signature was applied with her consent. There is no evidence before me that this is the case”.[5]
A less obvious question is what are the obligations on a legal practitioner, who is instructed to lodge a caveat based on an electronically signed document, to consider and advise on whether there is sufficient evidence of compliance with section 10 of the Electronic Transactions Act before lodging that caveat.
Given the increasingly common use of electronic signatures, it will be interesting to see how the law develops in this area.
In the meantime, the lesson from Prospa is to exercise caution when accepting electronic signatures at face value.
How we can help
For assistance in any caveat-related dispute, please contact our Michael Stork.
Disclaimer
This post has been prepared as a general summary only. It is not, and is not intended to be, legal advice with respect to any particular matter. This post should not be relied on with respect to any particular matter without taking legal advice. Stork Davies Legal Advisors disclaims liability to any person who relies on this post without taking legal advice from the firm.
[1] Prospa Advance Pty Ltd v Tasou [2024] WASC 359 (“Prospa”).
[2] Property Law Act 1969 (WA) section 34.
[3] Transfer of Land Act 1893 (WA) section 138B.
[4] Prospa [25].
[5] Bizcap AU Pty Ltd v Sharma [2024] WASC 198 [41].