A High Court decision was reported last month (Wood v. Commercial First Business Ltd (In Liquidation) ). The main part of the case concerned the payment of a secret commission by a lender to a mortgage broker who also charged a fee to the borrower, but the point of relevance to this article related to the execution by the borrower of two commercial mortgages.
One of the claims by the borrower was that one mortgage deed was invalid and unenforceable because the witness to the borrower’s signature neither signed the deed as witness at the same time as the borrower signed it, nor did so in the borrower’s presence. The borrower acknowledged, however, that the witness had been present to see the borrower signing the deed.
The Court found that the mere fact that the witness had not signed the deed as witness in the borrower’s presence was not sufficient to invalidate the deed. Section 1(3) Law of Property (Miscellaneous Provisions) Act 1989 makes clear that the signatory to a deed must have their signature witnessed, but there is no requirement that the witness must sign in the presence of the signatory to the deed.
Richard Wheeldon is a Senior Consultant in Berwins' Commercial Property team.