Execution Of Deeds And The Mercury Tax Group Case
The Mercury Tax Group case held that a deed signed by an
individual was not effectively executed because the signed
signature pages had been attached originally to an early,
incomplete draft of the deed, then detached from the draft and
transferred to a later, complete and amended version of the
deed.
The substitution of the signature pages affected the validity of
the deed.
The case illustrates that there are dangers in having a party
sign a draft deed before the final agreed version of the deed is
available. It confirms that, for effective execution of a deed, the
signature (and attestation (if relevant)) must form part of the
same physical document constituting the execution copy.
The case warns against the practice of "recycling"
signature pages. So far as deeds are concerned, one should
avoid:
holding signature pages "in escrow", then attaching
them to final agreed versions
detaching signature pages from an execution copy, sending them
to the signatory, then reattaching scanned copies of the signed
signature page to the execution copy
creating one complete, signed execution copy out of multiple
signed counterparts
correcting a mistake in, or recording changes to, an executed
document by creating a new version and transferring the previously
signed pages into the new version.
The case is an important reminder to observe execution
formalities and to maintain the integrity of execution copies
(including signature pages) as distinct physical entities before,
during and after signing.
Although the case concerned a number of documents that all took
the form of a deed, it may also impact on signing practices adopted
in connection with ordinary contracts.
Reference: Mercury Tax Group case (High Court,
Nov 2008)
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