|
We are often asked who can witness a signature
to a deed. A number of key documents employed by private banks take
the form of deeds, such as collateral agreements, debentures and
guarantees, so this is a key procedural issue for lenders.
Specifically, the issue often arises whether an employee of the
bank can witness a deed.
The recent cast of Log Book Loans
addressed this issue. In it, the Upper Tribunal (which has
equivalent standing to the High Court) concluded that it is
possible that an employee of a person benefiting from the grant of
a deed (in that case, a bill of sale) could attest a signature.
Having said that, it is obviously better if they are fully
independent, particularly if there is any risk of a challenge on
the basis of something like undue influence, where best practice
would be that the customer takes independent advice before
signing.
Overview
This subject of witnessing deeds was recently
addressed within the context of bills of sale by the Upper Tribunal
(Administrative Appeals Chamber) in the case of Log Book Loans
Ltd v Office of Fair Trading [2011] UKUT 280
(AAC)(1). Specifically, the Upper Tribunal
needed to decide whether a bill of sale was rendered void under the
Bill of Sales Act 1878 and the Bill of Sales (1878) Amendment Act
1882 (the "Bills of Sale Acts") in circumstances where the
execution by the grantor of the bill of sale was attested by an
employee of the grantee, where the employee had negotiated, agreed
and signed on behalf of the grantee (i.e. the lender) the credit
agreement between the grantor (i.e. the borrower) and the
grantee.
|