The Cayman Islands Parliament has passed temporary legislation which facilitates the signing of certain documents by removing the requirement that a witness be in the immediate physical presence of the person signing. This step, which follows previous regulations introduced in April 2020 to allow remote notarisation, seeks to address the challenges arising from social distancing and other measures arising from the COVID 19 pandemic.
Under the Property (Miscellaneous Provisions) Act (2017 Revision) it is a requirement that any deed or instrument under seal executed by an individuals in their own capacity (as opposed to on behalf of a company or other organisation) must be signed either (i) by the individual in the presence of a witness who attests the individual's signature, or (ii) at the individual's direction and in his or her presence and the presence of two witnesses who each attest to the signature of the person signing on the individual's behalf, and that that person was so directed by the individual. Existing jurisprudence clearly indicated that these provisions would be interpreted so as to require immediate physical presence, so that the use of videoconferencing facilities was not available for the purpose of the act of witnessing.
The Property Miscellaneous Provisions (Amendment) Act, 2020 provides that, until at least 16 April 2022, "presence" includes "virtual presence". A person is in the virtual presence of another if, using communication technology (i.e. any electronic device or process that facilitates communication of both visual images and audio in real time), both persons are able to contemporaneously see, hear and speak to each other. For example, this could be via Skype, Zoom, FaceTime or another similar communication system.
Where an individual, or another person at the individual's direction, signs a deed or instrument in the virtual presence of a witness:
- the witness must be able to contemporaneously view the signing of the deed or instrument via the chosen communication technology; and
- the individual shall, if not personally known to the witness, contemporaneously present a valid photo identification to the witness.
In practical terms, we would recommend that witnesses should, wherever possible:
- request an electronic copy of the relevant document in advance of the witnessing process;
- having witnessed the principal's execution of the document, obtain an electronic copy of the document bearing the principal's signature; and
- apply his or her signature (as witness) to the copy of the document bearing the principal's signature.
In this manner, a single electronic record will bear both signatures, providing the clearest evidence possible.
Importantly, the rule change does not apply to the signing of wills. Alternative solutions do exist in those circumstances and our Trusts Advisory Group would be happy to advise.
Nevertheless, this new legislation, along with the broadly equivalent regulations pertaining to remote notarisation is very welcome and will ensure the Cayman Islands' financial services industry continues to operate as efficiently as possible, particularly at a time when travel and meeting in person are difficult.