Williams & Ors v Redcard Ltd & Ors

For execution under Companies Act 2006 s 44(4), a document must satisfy the signature requirements in s 44(2) and, read as a whole, be expressed to be executed by the company. No fixed formula is required. Express words stating that each signatory acts by or on behalf of the company are unnecessary where the document and its context make the company’s execution clear. This applies where a composite agreement contains the company’s transaction and individuals’ transactions, and the same persons sign in both capacities.

Redcard Limited and individual sellers entered into a composite agreement for the sale of a freehold building and individual leasehold flats. Two authorised signatories of Redcard signed under a heading identifying the signatories as sellers, but the agreement did not expressly state that they signed by or on behalf of Redcard.

Master Price held that the agreement was invalidly executed. Lewison J allowed the sellers’ appeal and held that the agreement complied with Companies Act 2006 s 44 and Law of Property (Miscellaneous Provisions) Act 1989 s 2. The central issue before the Court of Appeal was whether s 44(4) required express words identifying the corporate capacity in which the individuals signed.

1. Appeal dismissed. Mummery LJ gave the principal judgment, with Black LJ and Hughes LJ agreeing. The Supplementary Agreement was validly executed by Redcard.
2. Construction of s 44(4). The words requiring a document to be expressed, in whatever words, to be executed by the company add a requirement to the signature provisions in Companies Act 2006 s 44(2). They do not, however, require an express formula such as by or on behalf of the company. The question is whether the document, read as a whole, expresses execution by the company (paras [23]–[25]).
3. Application. The agreement defined the term Seller to include Redcard and the individual leaseholders. The signatures of two authorised signatories appeared under the heading identifying the signatories as sellers. In that context, the signatures expressed simultaneous execution by Redcard and by the individuals in their personal capacities. The fact that the transactions were contained in one composite document made no legal difference (paras [26]–[29]).
4. The statutory purpose was to expand the formalities capable of constituting execution by a company. The valid execution under s 44 also satisfied the company’s signature requirement for the land-sale contract under s 2 of the 1989 Act (paras [2]–[3], [8], [12] and [29]).
5. The court expressed no view on the construction of s 44(5) or s 44(6), which concerned different situations and did not apply on these facts. The court nevertheless observed that greater care in stating the capacity in which individuals sign can avoid costly litigation (paras [15], [28] and [30]).

1. Court of Appeal (Civil Division): In [2011] EWCA Civ 466, the appeal from Lewison J was dismissed unanimously.
2. High Court of Justice, Chancery Division: On 23 April 2010, Lewison J allowed the appeal from Master Price and held that the Supplementary Agreement was validly executed by Redcard.
3. Master Price: On 18 November 2009, on cross-applications for summary judgment, Master Price held that the Supplementary Agreement was not validly executed by Redcard.