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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