Signatures, wet and dry

The much-litigated requirement that a document be “signed” has had a recent court outing – and Law Commission attention. My first case when I took silk was about the rightful ownership of a rugby club: Butts Park Ventures (Coventry) Ltd v Bryant Homes Central Ltd [2003] EWCA 2487 (Ch); [2003] PLSCS 239. The case turned on whether a pre-emption agreement made in 1996 between the then trustees of Coventry Football Club (Rugby Union) and the predecessors in title of the claimant had been properly signed. The agreement took the form of a letter setting out the pre-emption terms, concluding: “Please sign and return the enclosed copy of this letter to us to confirm your agreement to its terms.” Well, you can guess what happened next. By the time of the trial, seven years later, neither the original letter nor the original copy could be found. The court was instead presented with two photocopies: one bearing the signature of a director of the grantee; the other bearing signatures on behalf of both the director and a club trustee. Although it was clear from the evidence that the club trustee had signed at least one of the documents, it was not clear which; and nor was it clear whether the document he did sign bore an original, as opposed to a photocopied, signature of the director of the grantee. In those circumstances, the defendant (to whom the club trustees had agreed to sell the ground for residential redevelopment, for a minimum sale price of £1.2m) contended that the claimant could not prove that either the original letter or the original copy contained two original signatures. Had they been right, then it seemed that the pre-emption agreement would have failed for non-compliance with section 2(3) of the Law of Property (Miscellaneous Provisions) Act 1989 (the 1989 Act) (any contract for the sale or other disposition of an interest in land “must be signed by or on behalf of each party to the contract”). What the court found The Vice-Chancellor considered first whether he should draw the inference that the trustee had signed a piece of paper containing the original signature of a director. He held that he should, as a matter of common sense and ordinary business usage. It was therefore unnecessary for the Vice-Chancellor to consider the second issue – namely whether the signing of a copy bearing a photocopy signature would have sufficed in any event. The issue did, however, arise on appeal (although the matter was compromised before the hearing). I submitted that it was difficult to see why a photocopy of a signed document which is then countersigned by the other party (or any other authenticated reproduction of a signature) should not suffice. To hold otherwise would mean ruling out, for example, the making of agreements for the creation of interests in land by fax, or the application of a facsimile signature by rubber stamp. The appellant in turn relied on the decision of the Court of Appeal in First Post Homes Ltd v Johnson [1996] 1 EGLR 175, to the effect that it was an artificial use of language to describe the printing or the typing of the name of an addressee in the letter as a signature. But in our case, there had actually been a signature, even if it was a facsimile. In Bircham & Co Nominees (No 2) Ltd and another v Worrell Holdings Ltd [2001] 3 EGLR 83, at first instance, the then Vice-Chancellor held that a facsimile of a document that had been signed by the offeror would, if signed by the offeree, be sufficient for the purposes of section 2(3). He characterised the claimant’s argument that a facsimile signature was insufficient for these purposes as “so hopeless as to be difficult to describe”. The Court of Appeal did not dissent from this description. The latest case Virtually all property documents must be signed, and so, often, must any notices which need to be served pursuant to such documents (think break clause or renewal notices). The propositions which were tested in Butts Park therefore arise frequently and are a source of extreme anxiety for property professionals. Another example is provided by the decision of the High Court last month in Neocleous v Rees [2019] EWHC 2462 (Ch); [2019] PLSCS 189. A settlement providing for a transfer of a piece of land had been agreed in a series of e-mails between the parties’ solicitors. One of the parties later claimed that because his solicitor’s purported signature was by automatic generation of his name, occupation, role and contact details on a footer at the bottom of the e-mail, that could not suffice for the purposes of section 2(3) of the 1989 Act. The judge rejected the argument – but notice the reasons. The test was whether the solicitor’s name was supplied with “authenticating intent”. It seemed so. Moreover, the solicitor had used the words “Many Thanks” before the footer, thus showing an intention to connect the name with the contents of the e-mail. One can think of circumstances in which this result would not follow. Suppose, for example, the solicitor’s secretary added the footer without the principal’s knowledge, and the text did not link up with the footer. Prudent professionals will still want to make sure what was intended, even in this increasingly digital age. Clarity from the Law Commission? The Law Commission has just issued a report on this confused area of the law – Electronic Execution of Documents (Law Com No 386). Its customarily thorough investigation is a treasure trove of cases and materials showing what the current state of play is concerning service by fax and e-mail, and what types of signatures suffice for what purposes. Regrettably, it does not deal with the case of the exasperated farmer who wrote and signed a cheque on a cow, which he then sent into the local authority rating department. But one thing it does make clear is that the law lags some way behind, and is in need of statutory attention. Its primary recommendation – that an industry working group should be established and convened by government to consider practical and technical issues associated with the electronic execution of documents – is one we can all endorse. Guy Fetherstonhaugh QC is a barrister at Falcon Chambers