Correctly executed

Tuesday, 01 December 2009
A look at executing deeds. Amanda Edwards explores what can go wrong when clients (and even practitioners) are signing documents.

We all know that much can go wrong when clients (and even practitioners) are signing documents. One requirement frequently not observed when executing a deed is that of the witness being present when the deed is signed by the executing party. It is not enough for the signatory to acknowledge his signature after the event to the witness.

The requirement is set out in the Law of Property (Miscellaneous Provisions) 1989, Section 1(3) (a), which states as follows:

‘An instrument is validly executed as a deed by an individual if, and only if:

  1. it is signed:
    1. by him in the presence of a witness who attests the signature; or
    2. at his direction and in his presence and in the presence of two witnesses who each attest the signature; and
  2. It is delivered as a deed…’

How often does the failure to comply with these formalities give rise to difficulty in practice? Do the courts allow technicalities to get in the way of enforcing rights under a deed where there is a clear intention to bind the parties?

The role of estoppel

In Shah v Shah ([2001] 4 All E.R. 138) guarantors were asked to sign a deed, undertaking to repay some money. The guarantors took the deed away and signed it. They subsequently asked an individual to add his name as a witness and he did so, although he had not actually seen the guarantors sign the document. The guarantors then handed over the completed document to the solicitors for the lender. When sued for payment under the document, they claimed that they were not bound, as a result of the requirements for execution set out in Section 1 of the Law of Property (Miscellaneous Provisions) Act 1989 not having been met. The main issue before the Court of Appeal was whether estoppel could override the strict requirement of the statute, given that the executing party had initially represented that the document had been properly executed. The Court held that as they had represented the document to its recipient as a duly signed and witnessed deed, they were estopped from claiming it was invalidly executed. Although estoppel applied here, one can, however, envisage circumstances where estoppel would not apply.

Witness must be in person

This means that the client who telephones to ask you to witness his signature on a deed, which he has signed and posted to you, has to be told that this is not possible, because the witness must be present or the deed will not be validly executed. In most cases, where a deed has been witnessed after the event, the failure to comply with the statutory formalities is unlikely to come to light. Such a deed may nonetheless be enforceable between the parties, depending on the facts, but it will not be valid as a deed, as the Shah case demonstrates. For practitioners, the consequences of failing to observe the formalities may be more serious. The reports of the Solicitors’ Disciplinary Tribunal often have cases where the witnessing of deeds without having been present at the signing is among the (usually many other) breaches of the code of professional conduct of the practitioner before the tribunal.

Problems can be avoided by ensuring that documents are executed in the presence of witnesses who can be called on to give the necessary evidence, if required. It is clearly not satisfactory to have uncertainty about the validity of execution or to have to rely on estoppel overriding the strict requirement in the statute.

In relation to wills

The formalities for wills are of course different and must not be confused with the formalities for executing a deed. Under section 9 of the Wills Act 1837:

‘No will shall be valid unless:

  1. it is in writing and, and signed by the testator, or by some other person in his presence and by his direction; and
  2. it appears that the testator intended by his signature to give effect to the will;
  3. the signature is made or acknowledged (emphasis added) by the testator in the presence of two or more witnesses present at the same time; and…’

Best practice is for all the parties, the testator and both witnesses to remain present throughout the whole procedure. However, in contrast to the statutory formalities for witnessing a deed, the statutory formalities for executing a will clearly envisage a testator acknowledging his signature to two witnesses (who must be present together) who were not present when the testator signed, but can then themselves also sign as witnesses.

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Amanda Edwards

Amanda Edwards TEP is a Solicitor with Boodle Hatfield.

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