Roger Williams & Ors v Redcard Ltd & Ors (2011)
A document purporting to sell a company's freehold interest in residential property did not require use of the words "by or on behalf of" the company in order to be validly executed. The requirements in the Companies Act 2006 s.44(4) concerning the proper execution of documents were satisfied by the terms of the sale agreement which included definitions of "seller" and "purchaser" and bore the signatures of two authorised signatories.
The appellants (W) appealed against a decision (Redcard Ltd v Williams) that a contract for the sale of residential property entered into with the first respondent (R) was effective. The property comprised a large residential building divided into five flats let on long leases. W purportedly agreed to purchase the freehold interest from R and leasehold interests from the leaseholders who were directors and shareholders of R. The parties entered into a contract and supplementary agreement. The agreement defined R as the "seller", W as the "purchasers" and bore various signatures under the heading "SIGNED...SELLER" including those of two of R's authorised signatories. Those signatories were also defined as sellers in respect of the sale of their leasehold interests in two of the flats. Later, W refused to complete the purchase on the basis that the agreement was invalid because it did not contain words expressly stating that the signatures of the signatories were "by or on behalf of" R pursuant to the Companies Act 2006 s.44(4). The judge determined that a reasonable reader would have appreciated that the signatures of the signatories were appended to the agreement both on their own and R's account. W submitted that it could not be said that the agreement was executed by R within the meaning of s.44 as there was no expression in words that R itself was executing it.
Section 44(4) did not require the express words "by or on behalf of" in addition to the signatures of authorised signatories. It was sufficient, in the instant case, that R was described as "seller" and that the signatories' signatures appeared at the end of the agreement under the words "SIGNED...SELLER". In those circumstances, it would be absurd to suggest that the contract for the sale of the freehold by R was not expressed to be executed by R (see paras 24-28 of judgment).
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20 Apr 2011
Court of Appeal
Mummery LJ, Hughes LJ, Black LJ
LTL 20/4/2011 : (2011) Bus LR 1479 : (2011) 4 All ER 444 : (2011) 2 BCLC 350 : (2011) 25 EG 106 : (2011) 19 EG 96 (CS)
Timothy Dutton QC