Mercury Tax Group Limited v HMRC: Difference between revisions

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=== TL;DR ===
=== TL;DR ===
At the time of [[execution and delivery]] the agreement must be complete. You can’t just staple an old signature onto a revised document.  
1. At the time of [[execution and delivery]] the agreement must be complete. You can’t just staple an old signature onto a revised document.  


If you purport to sign something as a deed even if, to be binding, it doesn’t ''need'' to be a deed, the formal requirements of deed execution apply, and you can’t fall back on it being a [[simple contract]].   
2. (''Obiter''): If you purport to sign something as a [[deed]] even if, to be binding, it doesn’t ''need'' to be a deed, the formal requirements of deed execution apply. Impliedly, if these fail, even though it might have been a perfectly binding [[simple contract]] had you not said it was meant to be a deed, it won’t be.   


3. Section 1(3) of the [[Law of Property (Miscellaneous Provisions) Act 1989]] requires that a signature and witness attestation must form part of the same physical document which constitutes the deed. The practice has since evolved, and been validated by the Law Commission and the UK government, of “Mercury signatures”.
One can “Mercury sign” document by attaching to the same [[email]]: the whole final version of the document ''and'' the PDF of the signed signature page. These can be separate files and will be an original signed document equating to the “same physical document” , as long as they are sent together under cover of the same email or transmission. 
===Background===
===Background===
The Her Majesty’s<ref>As she then was. The crown is a gender-ambivalent shape-shifter.</ref> Revenue & Customs believed the Mercury Tax Group was, tax-wise, up to no good.   
The Her Majesty’s<ref>As she then was. The crown is a gender-ambivalent shape-shifter.</ref> Revenue & Customs believed the Mercury Tax Group was, tax-wise, up to no good.   
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Legal documents tend to to be lengthy, over-engineered, and are unusually prone to last minute addenda, adjustment and, when being executed on Fridays, signatories buggering off to their place in Verbier.  
Legal documents tend to to be lengthy, over-engineered, and are unusually prone to last minute addenda, adjustment and, when being executed on Fridays, signatories buggering off to their place in Verbier.  


What with the baroque execution policies, [[Circle of escalation|escalation circles]] and [[Line manager|command chain]]<nowiki/>s that belabour most modern organisations, even finding an authorised signatory is a job enough: getting her to stay put long enough to sign, not to mention coaxing her through the technological challenge of doing so remotely from her chalet in Verbier, require advanced event management skills. And that’s just ''one'' party. There are often ''ten''.  
What with the baroque execution policies, [[Circle of escalation|escalation circles]] and [[Line manager|command chain]]<nowiki/>s that belabour most modern organisations, even finding an authorised signatory is a job enough: getting her to stay put long enough to sign, not to mention coaxing her through the technological challenge of doing so remotely from her chalet in Verbier, require advanced event management skills. And that’s just ''one'' party. There are often ''ten''.


Thus the time-honoured practice of deliberately crafting execution pages to contain no legally relevant text on them at all, such that they can be executed by the right person “in the abstract”, then held by the negotiating team or their counsel “in escrow”, to be released when everything is commercially tied down.  
Thus the time-honoured practice of deliberately crafting execution pages to contain no legally relevant text on them at all, such that they can be executed by the right person “in the abstract”, then held by the negotiating team or their counsel “in escrow”, to be released when everything is commercially tied down.  
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If that were not enough, the document was intended to be a [[deed]], meaning section 1(3) of the [[Law of Property (Miscellaneous Provisions) Act 1989]] came into play, which provides that to be validly executed a deed must be signed, witnessed and delivered.
If that were not enough, the document was intended to be a [[deed]], meaning section 1(3) of the [[Law of Property (Miscellaneous Provisions) Act 1989]] came into play, which provides that to be validly executed a deed must be signed, witnessed and delivered.
Section 1(3) of the [[Law of Property (Miscellaneous Provisions) Act 1989]]  provides:
{{quote|
“An instrument is validly executed as a deed by an individual if, and only if –
:(a) it is signed -
::(i) by him in the presence of a witness who attests the signature; or
::(ii) at his direction and in his presence and the presence of two witnesses who each attest the signature; and
:(b) it is delivered as a deed by him or a person authorised to do so on his behalf.”}}


The court found that this language necessarily involves that the signature and attestation must form part of the same physical document constituting the deed. Additionally, the fact that the parties ''intended'' them to be deeds, rather than that they were ''required by law to be'' deeds (in order to have legal effect) was what mattered: “the fact remains that the parties intended them to be deeds and their validity must be judged on that basis”.<ref>Just quietly, we don’t think this follows: if an instrument doesn’t ''have'' to be a deed to be binding, and the way it is executed means  in fact it ''isn’t'' a valid deed, the mere fact that the parties have in mind that it should be a deed does not undermine their general intention to become bound by a [[simple contract]], if the usual ingredients of offer, acceptance and consideration are present. A deed is a “super contract” — the equity of the situation surely requires it to fall back to a [[simple contract]] if one of those would, legally do. To hold otherwise is to prefer [[Substance and form|form over substance]] — like when has that ever happened.</ref>
The court found that this language necessarily involves that the signature and attestation must form part of the same physical document constituting the deed. Additionally, the fact that the parties ''intended'' them to be deeds, rather than that they were ''required by law to be'' deeds (in order to have legal effect) was what mattered: “the fact remains that the parties intended them to be deeds and their validity must be judged on that basis”.<ref>Just quietly, we don’t think this follows: if an instrument doesn’t ''have'' to be a deed to be binding, and the way it is executed means  in fact it ''isn’t'' a valid deed, the mere fact that the parties have in mind that it should be a deed does not undermine their general intention to become bound by a [[simple contract]], if the usual ingredients of offer, acceptance and consideration are present. A deed is a “super contract” — the equity of the situation surely requires it to fall back to a [[simple contract]] if one of those would, legally do. To hold otherwise is to prefer [[Substance and form|form over substance]] — like when has that ever happened.</ref>
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