Did you know that an individual can execute (sign) a deed with his signature alone but a company needs a seal to make a deed?
This fact has been the basis of some technical defences put forward by individuals who are being pursued by banks for outstanding loans, in repossession proceedings, for the appointment of receivers on foot of their mortgages and charges, and so forth.
Let’s take a look, first, and see what is a deed. The Land and Conveyancing Law Reform Act 2009, section 64 describes a deed as:
(2) An instrument executed after the commencement of this Chapter is a deed if it is—
(a) described at its head by words such as “Assignment”, “Conveyance”, “Charge”, “Deed”, “Indenture”, “Lease”, “Mortgage”, “Surrender” or other heading appropriate to the deed in question, or it is otherwise made clear on its face that it is intended by the person making it, or the parties to it, to be a deed, by expressing it to be executed or signed as a deed,
(b) executed in the following manner:
(i) if made by an individual—
(I) it is signed by the individual in the presence of a witness who attests the signature, or
(II) it is signed by a person at the individual’s direction given in the presence of a witness who attests the signature, or
(III) the individual’s signature is acknowledged by him or her in the presence of a witness who attests the signature;
(ii) if made by a company registered in the State, it is executed under the seal of the company in accordance with its Articles of Association;
(iii) if made by a body corporate registered in the State other than a company, it is executed in accordance with the legal requirements governing execution of deeds by such a body corporate;
(iv) if made by a foreign body corporate, it is executed in accordance with the legal requirements governing execution of the instrument in question by such a body corporate in the jurisdiction where it is incorporated,
and
(c) delivered as a deed by the person executing it or by a person authorised to do so on that person’s behalf.
You will see that a deed, to be properly executed, must be
- Signed by an individual in the presence of a witness
- Sealed with the company seal if executed by a company
This question arose in a case McGuinness & Mulligan v Ulster Bank Ireland Limited heard by the Supreme Court.
The argument by the borrowers was that the deed which appointed a receiver to their property was invalid because it was the bank’s deed and was not executed with the company seal, which they claimed was a legal obligation.
What happened was a bank official had appointed the receiver under a power of attorney granted by the bank.
The borrowers argued that it was the bank’s deed and it necessitated the bank’s company seal, which was absent.
The Court agreed that it was the bank’s deed but made on its behalf by an authorised individual who could execute the deed of appointment of receiver without the bank’s seal. The Court recognised that the parties to a deed may be different from those who execute or make the deed between the parties, which occurred in this case.
Read the Supreme Court decision in McGuinness & Anor v Ulster Bank Ltd [2019] IESC 20.