by Christopher Green
Section 44 Companies Act 2006 provides a document is “executed” by a company by affixing its common seal, by two authorised signatories signing or by a director of the company signing in the presence of a witness.
Hilmi & Associates Ltd v 20 Pembridge Villas Freehold Ltd  EWCA Civ 314 considered section 99(5) of the Leasehold Reform, Housing and Urban Development Act 1993:
“Any notice which is given under Chapter I or II by any tenants or tenant must—(a) if it is a notice given under section 13 or 42, be signed by each of the tenants, or (as the case may be by the tenant, by whom it is given; and (b) in any other case, be signed by or on behalf of each of the tenants, or (as the case may be) by or on behalf of the tenant, by whom it is given.”
It was authority for the proposition that the tenant and the tenant alone can sign a section 13 notice given the distinction between sub-sections (a) and (b) – particularly the absence of “or on behalf of” in sub-paragraph (a). Parliament reversed the position as to agents via the Leasehold Reform (Amendment) Act 2014.
The facts were set out in the previous article, here. In short, Ms Miles (who was not a director of the landlord) signed the section 8 notice and crossed out “licensor/joint landlords/landlord’s agent”. Ms Brown (who was a director) signed the certificate. The point taken as to the certificate was that section 44 Companies Act 2006 had not been complied with.
Lord Justice Lewison, Lord Justice Newey and Lord Justice Snowden heard the appeal. Lord Justice Lewison, with whose reasoning the other members of the court agreed, set out that an agent could sign the certificate.
Hilmi was held not to be directly applicable given the general rule that a person can validly sign through an agent who has the principal’s authorisation (paragraphs 22-25). The general rule applies to companies. Hilmi was held to concern an exceptional statute that required personal signature by virtue of the distinction between sub-sections (a) and (b).
At the time (the certificate was given on 25 July 2014), the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 required the certificate under paragraph (g) (vii) to be “signed by the landlord”. Under section 11 of the Interpretation Act 1978, expressions in subordinate legislation are to be given the same meaning as in the primary legislation, unless a contrary intention appears. As section 212(9) of the Housing Act 2004 defined landlord as including persons acting on their behalf, the 2007 Order was to be similarly interpreted (paragraph 46).
By section 30 of the Deregulation Act 2015, the 2007 order and in particular article 2 was amended so that section 212(9)(a) HA 2004 no longer applied to the article. The amendments took effect on 26 March 2015 (I.e. after the certificate in question). Article 3(1) states that the amendments in question “are treated as having effect since 6 April 2007”. There are exceptions to this retrospective legislation encompassing already concluded cases.
On the face of it, this would mean that a certificate valid at the time it was signed had been invalidated by the Deregulation Act. The amendments brought about by section 30 thereof did also add article 2(3):
“(3) In a case where the initial requirements of an authorised scheme have been complied with in relation to the deposit by a person (“the initial agent”) acting on the landlord’s behalf in relation to the tenancy—
(a) references in paragraph (1)(b), (g)(iii) and (vii) to the landlord are to be read as references to either the landlord or the initial agent;
(b) references in paragraphs (1)(d), (e), (g)(iv) and (vi) and (2) to the landlord are to be read as references to either the landlord or a person who acts on the landlord’s behalf in relation to the tenancy.
It was held that this validated the certificate (paragraph 52). The certificate was signed by Ms Brown who was deemed to be a person acting on the landlord’s behalf. This prevented the Deregulation Act from invalidating a valid notice when its intentions were quite the opposite as the Explanatory Notes thereto make clear:
“154. The amendments would rectify a problem which has been identified with the prescribed information order which is that it does not clearly allow (as the Government intended) for a letting agent’s details to be provided in the prescribed information instead of the landlord’s. The amendments to article 2 of the order would make it clear that each of the references to ‘the landlord’ in the order are to be read as references to either the landlord or the letting agent where relevant.”
There was less complexity in relation to the section 8 notice. However it was still not straightforward due to the deletion of “licensor/joint landlords/landlord’s agent”. Given the terms of section 8 of the Housing Act 1988 and the prescribed form providing for an agent signing, it was held that an agent could sign. The deletion was held to be the sort of obvious error not to affect validity (paragraph 59).
Fallback / Non-compliance
Lord Justice Lewison went on to consider the position if the notices were in fact non-compliant. One has to consider the effect. Where the statute does not set out the effect, information which is critical is more likely to result in an invalid notice; whereas missing information of “secondary importance” or which is “merely ancillary” may mean the notice is nonetheless valid. Information required by statute is likely to be more important than information required by secondary legislation (paragraph 63). Further, interpretations that result in impractical or unrealistic outcomes are less likely to prevail and the considerations are “pointers” and not determinative per Birss LJ in Eastern Pyramid Group Corpn SA v Spire House RTM Co Ltd  EWCA Civ 1658.
This is a very important decision. Before this decision, Hilmi and execution being required for documents with “some formal legal purpose” were thorny issues. Insofar as section 8 notices and the certificate the position is clear – an agent can sign.
In terms of the wider context, the starting point must be consideration of the statute or statutory provisions and whether signature “by” a person is required and “on behalf of” is insufficient. This is likely to be the exception and usually “on behalf of” will be permitted.
The statutory context also informs the effect of non-compliance. The factors to consider when considering the effect of non-compliance are clear. However there may be occasions where breach of a clear and specific requirement in primary legislation still does not lead to invalidity – such as in Elim Court RTM Co Ltd v Avon Freeholds Ltd  EWCA Civ 89.