Euro Securities & Finance Ltd v Stephen Barrett & Ors

For execution of an individual deed under section 1(3)(a)(i) of the Law of Property (Miscellaneous Provisions) Act 1989, the signatory must sign in the physical presence of a witness who observes the signature. The witness must then sign as a witness, but no prescribed form of words is required.

A single witness may validly attest several signatures collectively where the deed clearly shows that all signatures are being witnessed. The witness need not sign in the signatory’s presence. Even if attestation must be contemporaneous, signing on the same day is sufficient.

A party may be estopped from denying a deed’s validity where an apparently valid deed was represented as valid, relied upon, and it would be unconscionable to permit reliance on the defect.

The claimant lender brought proceedings concerning two loans and a guarantee given by the defendants in September 2008 for a loan to Rhombus Properties LLP. The defendants admitted signing the guarantee but disputed whether it had been validly executed as a deed.

The court tried preliminary issues concerning compliance with section 1 of the Law of Property (Miscellaneous Provisions) Act 1989 and whether the defendants were estopped from denying validity. The central questions were whether the defendants signed in the presence of a witness, whether the witness attested their signatures, and whether any defect could be overcome by estoppel.

1. Findings of fact. The claimant proved on the balance of probabilities that all three defendants signed the loan and guarantee on 17 September 2008, probably at Centre Court, together and in the presence of Ms Money. She observed the signatures and signed the guarantee as witness. The contemporary documents were more reliable than the defendants’ speculative recollections.
2. Presence of a witness. Section 1(3)(a)(i) of the Law of Property (Miscellaneous Provisions) Act 1989 requires the witness to be physically present and to observe the signature. Mere presence or recognition of a usual signature is insufficient. The witness need not know the signatory or be familiar with the signature. The requirement that the witness not be a party to the deed was not incorporated into the statute.
3. Attestation. Attestation requires observation of the signature and subscription of the witness’s signature as a witness. No particular attestation wording is required. The wording ‘and witnessed by’, placed beneath the three guarantors’ signatures, validly attested all three signatures collectively. The statute did not require separate attestation clauses for each signature.
4. Timing and presence for the witness’s signature. Section 1(3) does not require the witness to sign in the presence of the signatory. The court agreed with the reasoning in Wood v Commercial First Business Ltd on that point. If contemporaneity were required, attestation on the same day as signing would satisfy it. The court rejected retrospective re-attestation after delivery as the proper method of curing a defect.
5. Estoppel. The guarantee was in fact validly executed. Alternatively, the defendants would have been estopped from denying its validity. The guarantee appeared valid, its delivery represented that it was valid, the claimant assumed and relied on that representation by releasing the loan, and denial after the defendants had taken the benefit would be unconscionable. The claimant’s limited concealment of the director’s status did not bear the necessary immediate and substantial relation to the equity sought.
6. Disposition. The guarantee was a valid deed. Section 8 of the Limitation Act 1980 therefore applied, giving a 12-year limitation period, and the claim on the guarantee was in time. The remaining issues were left for trial.