20
Sep

Doing the Deed: Be there or be square

As many of us have adapted to working almost exclusively from home, we’ve begun to rely more heavily on online methods of communication: signing documents electronically is commonplace; court hearings now occur virtually. Where the law hasn’t adapted yet, though, is in the remote witnessing of deeds – a document used often to record an individual’s legal interest or rights in commercial transactions, and a necessity for property dealings and wills.

Requirements for a valid deed:

The requirements for a deed to be valid under section 1(3) of the Law of Property (Miscellaneous Provisions) Act 1989 are that:

  1. The individual must sign the deed; and
  2. The signature is made in the presence of a witness; and
  3. The witness must attest the signature (i.e. also sign).

Clearly, as this was enacted over three decades ago, the wording is restrictive as it only envisions presence in the flesh: it needs updating.

The Law Commission assessed the possibility of remote witnessing in its Electronic Execution of Documents report in 2019, but concluded that the physical presence of a witness was still required by the current law even where the individual and the witness were using electronic signatures.

The position was considered again last year in Man Chin Yuen v Landy Chet Kin Wong (2020) First Tier Tribunal (Property Chamber) 2016/1089, although the uncertainty of the law meant that the applicant only had to demonstrate a realistic prospect of persuading the court that physical presence is what is required for a valid attestation.

Yuen v Wong

The case concerned a dispute between former spouses over the registered title of a property, where the husband claimed that his signature on the deed transferring the legal title into the sole name of his ex-wife was forged – and that even if he did sign it, the witness was not physically present to attest the signature, making the deed invalid.

The deed itself was executed by the former wife and husband in a meeting held in Hong Kong but witnessed over skype by the wife’s solicitor in London, who then attested the signature a few days later on receipt of the document through the post. The husband later applied to the Tribunal to seek alteration of the register.

The husband’s argument, that the remote witnessing of the transfer deed was not valid, rested on two factors:

  1. The witness attested it remotely; and
  2. The witness’s attestation was not contemporaneous with the execution of the deed.

Citing earlier case law, the judge decided on ii) that the witness’s signature need not be made on the exact same occasion as the executing party: it is permissible for the witness’s attesting signature to be made in the future “to some degree”.

Regarding i), he stated that allowing for remote witnessing via video-conferencing is a matter of policy, a balancing exercise between risk and convenience: on the one hand, we want to make sure that the law adequately safeguards against fraud; on the other, it is not always practical to require physical presence. The policies were not considered, however, since the judge simply followed the conclusion of the Law Commission report.

It’s interesting to note in this case that under the Land Registration Act 2002, the title register can only be altered to correct a mistake affecting one party’s title if the other party caused or substantially contributed to the mistake through fraud or lack of proper care. On the facts, it’s clear that there was some dishonesty on the husband’s part to strengthen the claim to his rights by alleging forgery; and once fraud has been alleged, the issue is tainted: the judge must consider the policies affecting his decision, with more weight attached to the prevention of possible fraud than to the practicality of virtual witnessing. Perhaps if the question had come up in a different context with the absence of fraud, the outcome might have been different.

Conclusion

Fraud is precisely the reason why the language is restrictive in the current law: the intention of the legislators is to ensure the honest execution of the deed by requiring witness attestation. Until the law itself is updated to include the meaning of virtual presence, this can only mean in person. Some might find the law is lagging; but maybe prioritising convenience during the pandemic isn’t wise. After all, as of March last year, cases of fraud have only been going up, with Action Fraud reporting £34.5 million in total since the start of the pandemic.

Should you have any queries arising from this article or need our assistance, please do not hesitate to contact the article author at juliasmith@cardiumlaw.com or by telephone +44 (0) 20 7101 4888.