Mr Justice Pickering, sitting in the High Court, recently considered in the case of Wood v Commercial First Business Ltd (In Liquidation) whether a deed was validly executed by an individual.
The witness had signed it at some point after its execution, but not in the presence of the borrower, Wood.
The case concerned the validity and enforceability of two commercial mortgages as challenged by the borrower on a number of grounds.
These included whether one of the mortgage deeds had been validly executed in accordance with the provisions of the Law of Property (Miscellaneous Provisions) Act 1989.
The Act provides that an instrument is validly executed as a deed by an individual if, and only if, it is signed by the individual in the presence of a witness who attests the signature.
The borrower did not dispute that she had executed the mortgage deed in the presence of a witness. However, she contended that, to satisfy a section of the Act, both the person executing the deed and the witness must sign the deed in each other’s presence.
While the court accepted that the witness had not signed it in the borrower’s presence, it found that this did not invalidate the deed.
The court held that, while it was necessary for the person executing the deed to sign in the presence of a witness, there was no additional need for the witness to sign in the presence of the executing party. Had this been required, the Act would have stated it explicitly.
The case clarifies the duties of a witness when executing deeds. It confirms that, so long as the witness is present when the party entering into the deed signs it, the latter does not then need to be present when the witness signs the attestation clause.
With this in mind, it will be interesting to see what the Law Commission decides in relation to the potential future use of video witnessing for electronic signatures on deeds, which is due to be considered.
Despite the above, on a day-to-day basis we at Bromleys have not noticed a trend towards the increased use of electronic signatures. The Land Registry is currently trialling the use of electronic execution clauses on certain mortgage deeds, and it is expected that this will eventually be rolled out on a larger scale.
Please refer to our recent article on the Law Commission’s report on electronic signatures here for further information https://www.bromleys.co.uk/law-commission-confirms-validity-electronic-signatures/
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