There is a tax law case from November 2008 which has not yet been fully digested in the CPI Update, but which will be at the end of this month. It is R (on the application of Mercury Tax Group Limited) v HMRC [2008] EWHC 2721 (Admin) and it appears to be causing some consternation in the profession; yet it seems to be a wholly correct decision. It involves the validity of a tax avoidance scheme. (In fact, the case itself involves the lawfulness of the issue of warrants to HMRC investigators). But the most striking part of the case for property lawyers is the view taken by the judge of the not unknown practice of obtaining a signed execution page from the client, and affixing it to a later finalised document. This, says Mr Justice Underhill, is ineffective as a mode of execution. He says that “[t]he parties [to an instrument] must be taken to have regarded signature as an essential element in the effectiveness of the documents: that is to be inferred from their form. In such a case I believe that the common understanding is that the document to be signed exists as a discrete physical entity (whether in a single version or in a series of counterparts) at the moment of signing.” He goes on to say that: “the requirement that a party sign an actual existing authoritative version of the contractual document gives some, albeit not total, protection against fraud or mistake.” Quite right, too. Clearly, where a person is executing a document, the document is the whole thing – not just the back page.
Property PSL