Guarantees signed in wet ink had been delivered electronically

Several legal requirements must be satisfied for a document to constitute a deed. The document must be in writing and it must be clear that it is intended to be a deed, which is usually achieved by describing it as such – at the very outset, or somewhere within it, or in the testimonium clause. The document must also be properly executed. And it must be delivered. Once upon a time, the requirement for “delivery” was fulfilled by the physical act of delivering possession of the document to the other party. But physical delivery is no longer a necessity. Nowadays, a deed is delivered when a party indicates an intention to be bound by it. Consequently, a deed may be delivered even though the maker retains possession of it, so long as it is clear that the maker intended the deed to become effective and to bind him. Umrish Ltd v Gill [2020] EWHC 1513 (Ch) raised an intriguing question. Mr Gill signed four guarantees in 2016. The signature blocks against which he signed his name stated “EXECUTED and DELIVERED as a DEED (the day and year first above written) by BOBBY GILL” – and they appeared immediately above a space for the name, signature, address and occupation of a witness (all of which were completed by his wife). After this was done, the defendant scanned the signature pages and forwarded them by e-mail to the parties to whom the guarantees were being given. Did this constitute “delivery” so as to bind him to the guarantees? The defendant relied on Bibby Financial Services v Magson [2011] EWHC 2495 (QB). In that case, a deed was held not to have been delivered, even though it had been signed and was handed over in a pub, because the parties had all understood that the document would be amended before it was finalised. But the judge ruled that there was no such understanding, or intention, in this case. What mattered was not the subjective intention of either party, but the objective assessment of what the defendant did. In other words, would a reasonable recipient have understood the defendant to have delivered the guarantees unconditionally, rather than in escrow (ie subject to one or more conditions being fulfilled before the guarantees came into effect)? There was nothing in the facts of this case to support the suggestion that the defendant had signed the documents in escrow. And Bank of Scotland v Henry Butcher & Co [2003] EWCA Civ 67 was authority for the proposition that a person who has executed a document containing a clear statement that it has been “executed and delivered as a deed”, and who sends it to the other party without indicating that it is not in fact being delivered as a deed, “cannot set up some… uncommunicated intention as the basis of a contention that the document was in fact delivered not as the deed it purported to be but merely in escrow”. This applied here. The defendant had signed the guarantees in the presence of a witness and, by transmitting the signature pages to the parties to whom the guarantees were being given, had delivered them unconditionally to the recipients, as indicated on the face of the documents that he had signed. The decision recognises that we live in an age of instant communication and will be music to the ears of those wrestling with formalities, while completing transactions in lockdown.   Allyson Colby, property law consultant