Arrowgame Ltd & Anor v Wildsmith & Ors

For a company’s deed, execution requires both due execution under Companies Act 2006, section 44, and delivery as a deed under section 46. Delivery does not necessarily mean physical handover. It requires an act evincing an intention to be bound, although ordinary conveyancing practice commonly postpones delivery until completion.

Where a consent order requires a transfer to be executed and provides for court execution in default, the obligation may require delivery of the transfer so that registration can occur. A party cannot avoid default merely by signing and retaining the document where the order contains no separate completion stage.

The claim arose from the acquisition by lessees of the headlease of a block of flats under the Landlord and Tenant Act 1987. A consent order required Arrowgame Ltd to execute a specified transfer after the claimants paid money into court. It further authorised court execution in default.

After notification of payment, Arrowgame’s director and secretary signed the transfer, but it was not delivered. HHJ Dight ordered that the transfer be executed by the court. Arrowgame and Mr Goodman sought to reopen that order, arguing that signature alone constituted execution and that there had been no default. The central issue was the meaning of execution in the consent order.

1. Appeal dismissed. Permission to appeal was granted at the rolled-up hearing, but the appeal failed on its merits.

2. The word execution in paragraph 5 of the consent order required more than signature. Under Companies Act 2006, section 46, a company’s deed is validly executed only if it is duly executed under section 44 and delivered as a deed. The reference to execution in paragraph 5 was construed in that technical sense.

3. The order was intended to conclude lengthy litigation and to place the claimants’ company in a position to register as proprietor. Paragraph 5 contained no separate completion stage, while paragraph 6 provided for court execution in default. It would therefore be artificial to construe the order as permitting Arrowgame to sign the transfer and retain it indefinitely.

4. Delivery in this context does not necessarily require physical handover. It means adopting the document as one’s deed by an act evincing an intention to be bound. In ordinary conveyancing, delivery commonly occurs at completion, including by the transferor agreeing to hold the executed document to the transferee’s order. That had not occurred.

5. Section 39 of the Senior Courts Act 1981 supported the same conclusion. Paragraph 6 was intended to avoid a separate application and enabled the court to execute and deliver the transfer so that it could be lodged at the Land Registry.

6. The transferee’s indemnity covenant did not require a counterpart executed by the transferee. The approved transfer contained no provision for such execution, and the covenant went no further in practical effect than the implied covenants referred to in Schedule 2, paragraph 20 of the Land Registration Act 2002.

7. The court declined to decide whether “forthwith” required execution more promptly than the approximately two days taken to obtain signatures, because the transfer had not been delivered in any event.

1. High Court (Chancery Division): permission to appeal granted and appeal dismissed against HHJ Dight’s order of 27 February 2016, which had refused to set aside the court’s execution of the transfer.
2. Central London County Court: HHJ Dight ordered execution of the transfer by the court on 27 October 2015 and later dismissed the defendants’ application to reopen that order.