The First-Tier Tribunal (Property Chamber) has followed the lead given by the Law Commission and held that a deed may not have been validly executed if the witness was not physically present when the signatory signed the deed.
Section 1(3) of the Law of Property (Miscellaneous Provisions) Act 1989 says that an individual executing a deed must do so in the presence of a witness who attests the signature. The law is over 30 years old and technology has progressed considerably in that period. Documents can be executed electronically. People can work remotely over video links. How does section 1(3) accommodate new ways of working?
The Law Commission reviewed the law relating to the electronic execution of documents in a 2019 consultation. Its provisional view was that, in relation to deeds, section 1(3) required the person witnessing the deed to be physically present when the signatory signed the deed. This view has been followed by the First-Tier Tribunal in Yuen v Wong.
The case involved an allegation that a transfer had been forged allowing property to be transferred from joint proprietors into the name of one of them. The applicant claimed that even if the transfer had not been forged, the transfer was not validly executed as his signature had been witnessed remotely over Skype and the witness had not attested his signature until a few days later when the document had been returned to the UK.
The tribunal judge held that the applicant had signed the transfer. Signing had taken place in Hong Kong, in a meeting between the applicant and respondent. The respondent’s solicitor, based in the UK, had joined the meeting by Skype. She had taken steps to verify the applicant’s identity before he signed the transfer and had viewed the signing remotely. When the transfer had been posted to her in the UK, the solicitor then added her own signature and details to attest the signature.
Although the applicant’s claim failed on other grounds, the tribunal judge held that there was an arguable case that the transfer had not been validly executed. In the absence of judicial authority, the tribunal judge decided that, given the views expressed by the Law Commission, the courts might conclude that a deed was not validly executed where the witness viewed the signature remotely.
The later adding of the witness’s signature, however, was not a reason for holding that the deed was invalidly executed. The tribunal judge was bound by recent case in which the court had held that the witness could witness the signature and then add their own signature later. Signing by the witness did not need to be contemporaneous with signing by the person executing the deed.
The prevailing view seems to be that a person witnessing the execution of a deed needs to be physically present. Although the Yuen case involved a wet-ink signature by an individual, the reasoning would be equally applicable to a company executing a deed by one director in the presence of a witness or to documents that are being executed electronically.
Interestingly, one of the reasons why the Law Commission tended to the view that a witness needs to be physically present is to ensure that the witness could immediately attest the signature. However, since the Law Commission made its report, the courts have held that attestation does not need to be cotemporaneous – so the legal position remains uncertain.
Pending a definitive ruling by the court, best practice must be to ensure that a person executing a deed is physically present when the deed is signed to ensure that the deed has been validly executed.
Ultimately, the government needs to bring forward legislation that takes into account technological advances to ensure that deeds can be executed in a straightforward, binding and secure manner.
Man Ching Yuen v Landy Chet Kin Wong First Tier Tribunal (Property Chamber), 2020 (ref 2016/1089)