Deeds high court ruling void what a twist

[steampowered]

The actual judgment in that case is available here: http://www.bailii.org/ew/cases/EWHC/Ch/2014/2117.html.

 

The summary given in the link you posted is misleading. This was a judgment given in favour of the bank. The final paragraph of the judgment is self-explanatory.

 

The link you posted states as follows: 'The bank’s claim in entirely reliant upon a purported contract for mortgages in the future being valid. However, the document in question, which takes the form of a Facility [Offer & Acceptance] Letter, was never signed by a representative of the bank, rendering it void ab initio under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989'.

 

The actual court judgment states as follows: 'Failure to comply with s 2 the 1989 Act. Mr Waugh repeated the point that had been rejected both by Judge Walton and Lloyd LJ. For the reasons given by Lloyd LJ it is totally without merit. It is, in addition, res judicata.'

 

In this case, the judge decided that the bank was entitled to the full amount claimed. The judge said that the mortgage, which had to be executed as a deed, was not valid because it had not been witnessed - the witness blocks had not been filled in. However, despite this the bank was still awarded the benefit of the mortgage: 'A document, which for some defect of form (but which is otherwise valid) fails to take effect as a legal mortgage will (subject to section 2 of the 1989 Act) be a good equitable mortgage. The basis of this is the court's power specifically to perform a contract to create a legal interest in land.'

 

It is important to be clear about what is meant when we say 'void deeds'. Many different arguments as to why certain deeds are void were advanced in that 50+ page thread. This judgment dismisses many of those arguments - particularly the argument about s2 of the 1989 Act, which was one of the key arguments. The judgment confirms that deeds do need to comply with s1(3) of the 1989 Act in that they need to be witnessed, but I do not think this is an issue in most of the 'void deed' cases (e.g. it doesn't help people who are trying to argue that the fact their mortgage was securitised into an investment vehicle makes it invalid).

[steampowered]

Those cases are all well and good, but I can't see that either of them have anything to do with whether or not the mortgage lender signed the deed.

 

In the BoS case, the consumer's appeal was rejected.

 

In the Santander case, an order for possession was struck out because Santander's representative had told the court things which were untrue.

[steampowered]

Oh yes, I agree with you that the signature of the person signing a deed (i.e. the borrower) needs to be witnessed. However there is nothing in there to suggest that the deed must be signed by the lender.

 

The case which is discussed on the self-realisation thread you linked to seems to be talking about the bailii case also mentioned in your post. In that case, the borrower's appeal against a decision to grand the bank an order for possession seems to have been dismissed (although I haven't read through the whole judgment in detail).

[steampowered]

Applecart, the reason why the deed was not valid in that case was because the borrower's signatures had not been made in the presence of a witness who attests the signature (see paragraph 63). This is one of the requirements for a valid/deed charge. It doesn't have anything to do with whether or not the bank was required to sign.

 

As per the section you posted, even though the deed was void, the bank still ended up in the same place since the court allowed it an equitable charge instead.