18th December 2015
The execution of documents, supposedly a formality at the end of a transaction, rarely ceases to produce surprising questions.
In Re Armstrong Brands Ltd (in administration) , a floating charge was signed by a director of a company but left undated. It was not in fact dated until some three months later by which time the signatory had resigned as a director. The question for determination by the High Court was whether the floating charge was validly executed. This mattered because the subsequent appointment of administrators pursuant to the floating charge was called into question.
Under section 44(2) of the Companies Act 2006, a document is validly executed by a company if it is signed on behalf of the company by two authorised signatories (typically a director and the company secretary) or by an authorised signatory in the presence of a witness. In this case, the court held that the board meeting authorising signature of the floating charge was evidence of proceedings of the meeting and it was clear from those minutes that the signatory had been authorised to sign the floating charge but that there would be a delay before the floating charge was completed. It did not matter that the floating charge was not actually dated until after the director had resigned. Although execution and delivery of a deed are presumed to be simultaneous, the contrary intention had been established in this case.
This case shows that board minutes do matter and also serves as a reminder of the importance of the attestation wording preceding the execution block, making clear that delivery does not take place upon signature but upon dating of the document.
  EWHC 3303 (Ch)