Redcard Ltd v Williams [2011] EWCA Civ 466

The Appellants had purported to purchase the freehold interest in some residential property from the First Respondent, and the leasehold interest from leaseholders who were directors and shareholders of the First Respondent.

The parties entered into a contract and supplementary agreement which both defined the First Respondent as the “seller” and the Appellants as the “purchasers”. The agreement bore various signatures under the section designated “signed … seller”, including those of two of the First Respondent’s authorised signatories. These two signatories were also, in their own right, defined as sellers of their leasehold interest in part of the property.

The Appellants subsequently refused to complete the purchase, arguing that the agreement was invalid. This argument was based on the fact that the agreement did not expressly state that the signatures of the authorised signatories were made “by or on behalf of” the First Respondent, as required by s.44(4) Companies Act 2006. It could not be said that the agreement had been executed by the First Respondent within the meaning of s.44(4), as there was no precise expression stating that the First Respondent itself was executing the agreement.

At first instance, it was held that a reasonable reader of the agreement would have understood that the signatures were added to the agreement both on the individuals’ and the First Respondents’ account. The Appellants appealed.  

In dismissing the appeal, the Court of Appeal held that s.44(4) did not require the words “by or on behalf of” to be including in the agreement in addition to the signatures of authorised signatories. In this particular case, it was sufficient that the First Respondent was described as a “seller” and that the signatures in question appeared in the section designated “signed … seller”. In such circumstances, it would be “absurd” to say that the contract for the sale of the freehold interest by the First Respondent was not expressed to be executed by that party.