Witness not required to sign in executing party's presence
The High Court has recently had to decide whether a deed was validly executed, where the attesting witness had not signed the deed in the executing party’s (i.e. the borrower’s) presence, but at some time following its execution by the borrower.
A borrower brought claims against a mortgage lender and its assignees, to set aside two commercial mortgages. She sought to challenge the validity and enforceability of the two mortgage deeds on a number of grounds, including that the first mortgage deed had not been properly executed by the borrower because the witness had not signed the deed at the same time as the borrower, and had not done so in the borrower's presence.
Section 1(3)(a)(i) of the Law of Property (Miscellaneous Provisions) Act 1989 (“the Act”) says 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 accepted that she, as the executing party, had signed the mortgage deed in the presence of a witness. However, she argued that in order to satisfy Section 1(3) of the Act, both the person executing the deed and the witness must sign the deed in each other's presence.
Although the High Court accepted that the witness had not signed the mortgage deed in the borrower's presence, it found that this did not invalidate the deed. It held that on the proper interpretation of Section 1(3) of the Act, “while there is a requirement for the person executing the deed to sign in the presence of a witness, it is not a requirement for the witness to sign in the presence of the person executing the deed (or indeed of anybody else).” The Court went on to consider that “if those drafting the [the Act] had wanted it to be a requirement that the witness should sign in the presence of the person executing the deed, it would have been very easy for that to be expressed.” It stated that those drafting the Act had clearly chosen to include the words "in the presence of" in relation to the person executing the deed, but had omitted to include the same words in relation to the witness. As such, the Court concluded that this was unlikely to be an accidental omission on the part of the drafters.
Given the above, the borrower's claim on the grounds of lack of due attestation failed. However, she was successful in other claims based on secret commissions and an unfair relationship under Section 140A of the Consumer Credit Act 1974.
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