The court was asked whether certain documents constituting a pension scheme had been effectively executed. They had been signed, but the signatures lacked the necessary witnessing. The scheme members claimed estoppel against the signatories.
Held: There could be no estoppel where the non-compliance where a document does not even appear to comply with the 1989 Act on its face.
Distinguishing Shah v Shah, Newey J said: ‘there are circumstances in which a person can be estopped from denying that a document was executed in accordance with the requirements of section 1 of the 1989 Act. It is also apparent from Pill LJ’s judgment that attestation is less crucial than signature. On the other hand, Pill LJ did not decide that estoppel can be used in response to every sort of failure to comply with the 1989 Act. To the contrary, he expressed his conclusion narrowly: he was unable to detect a statutory intention ‘totally’ to exclude the operation of an estoppel in relation to the application of section 1 or to exclude it ‘in present circumstances’. It seems fair, moreover, to infer that Pill LJ would not have considered estoppel applicable if the defendants had not even signed the ‘deed’. In Pill LJ’s view, ‘a document cannot be a deed in the absence of a signature’ and the public interest lies in the requirement for a signature.’
The failure of the estoppel was explained: ‘i) To state the obvious, Parliament has decided that, for an individual validly to execute a deed, he must sign ‘in the presence of a witness who attests the signature’. That requirement has an evidential purpose: as Pill LJ noted in Shah v Shah, it ‘limits the scope for disputes as to whether the document was signed and the circumstances in which it was signed’ and ‘gives some, but not complete, protection to other parties to the deed who can have more confidence in the genuineness of the signature by reason of the attestation’. As Pill LJ further noted, the requirement also ‘gives some, but not complete, protection to a potential signatory who may be under a disability, either permanent or temporary’. The Law Commission thought, too, that the need for attestation would ’emphasise to the person executing the deed the importance of his act’ (see paragraph 8.3(i) of the Law Commission’s Working Paper No 93: Transfer of Land: Formalities for Deeds and Escrows (1985));
ii) Fulfilment of Parliament’s and the Law Commission’s objectives would be undermined, potentially to a serious extent, if estoppel could be invoked in circumstances such as those in the present case;
iii) Shah v Shah shows, of course, that a person can sometimes be estopped from denying due attestation. The document with which the Court was concerned in that case appeared, however, to be valid. Accordingly, Pill LJ said that failure to comply with the formality of attestation should not in itself prevent a party into whose possession ‘an apparently valid deed’ has come from alleging that the signatory should not be permitted to rely on the absence of attestation in his presence. He also spoke of ‘an apparently valid deed’ in the next sentence of his judgment;
iv) The ‘deeds’ at issue in the present case are not ‘apparently valid’. It can be seen from each document that it was not executed in accordance with the 1989 Act. This distinction from Shah v Shah is a significant one. If estoppel can be invoked in relation to documents that are not ‘apparently valid’, the documents cannot necessarily be taken at face value. ‘[A]s far as possible,’ however, ‘it should be clear on the face of the document whether or not it has been validly witnessed’ (see paragraph 8.3(i) of the Law Commission working paper). That is especially so since the validity of a deed can matter for many years, and those considering ‘deeds’ long after they have been executed may well have no personal knowledge of the circumstances in which they were executed and access to little or no contemporary correspondence;
v) If estoppel were available in circumstances such as those in the present case, a party to a ‘deed’ who had not himself executed the document in accordance with section 1 of the 1989 Act could choose whether or not the document should be treated as valid. If it turned out to be in his interests to disavow the document, he could do so. If, on the other hand, the document proved to be advantageous to him, he could invoke estoppel. To take an example close to the facts of the present case, if a ‘deed’ provided for a pension scheme to become money purchase rather than final salary, an employer who had signed without having his signature witnessed could wait and see whether the change was, in the event, beneficial to him;
vi) Section 1 of the 1989 Act was in part designed to achieve certainty. It could, however, have the opposite consequence if estoppel were available in circumstances such as those in the present case. The effectiveness of a ‘deed’ that had not, on the face of it, been validly executed could be left in doubt.
Newey J
[2015] 1 Ch 212, [2014] 3 WLR 1469, [2014] Pens LR 265, [2014] EWHC 1178 (Ch), [2014] WLR(D) 174
Bailii, WLRD
Law of Property (Miscellaneous Provisions) Act 1989 1(3)
England and Wales
Citing:
Explained – Shah v Shah CA 10-Apr-2001
The court was asked as to the enforceability of a document under the terms of which the defendants were to make a payment of pounds 1.5 million to the claimant. The document was described as a deed and provided for each defendant to sign in the . .
Cited by:
Applied – Bank of Scotland Plc v Waugh and Others ChD 21-Jul-2014
The defendants had charged a property to the claimant bank to secure a guarantee of borrowings. The signatures were not witnessed as required under section 1(3) of the 1989 Act, and there were other misdescriptions. The bank sought a declaration as . .
Lists of cited by and citing cases may be incomplete.
Contract, Estoppel
Updated: 02 December 2021; Ref: scu.523772
