DECISION OF THE UPPER TRIBUNAL

We unanimously give permission to appeal to the Upper Tribunal against that part of a decision of a First-tier Tribunal, made on 21 December 2010, which dealt with what has been called “the Attestation Issue”. By a majority (Judges Howell and Turnbull, Judge Levenson dissenting) we allow the appeal, set aside the First-tier Tribunal’s decision in respect of the Attestation Issue and re-make the First-tier Tribunal’s decision by answering that issue in the negative: that is, a bill of sale is not rendered void by the circumstances posited. 

REASONS

JUDGE HOWELL QC AND JUDGE TURNBULL

A.	Introduction and background
1.	On 22 and 23 June 2011 we held a “rolled-up” hearing of the application for permission to appeal and of the appeal itself, should permission be granted. Mr Michael Green QC, instructed by Wismayers, appeared on behalf of the Appellants, and Mr Richard Snowden QC, instructed by the Office of Fair Trading (“the OFT”) appeared on behalf of the OFT.

2.	At the end of the hearing the parties consented under Rule 22(2) of the Tribunal Procedure (Upper Tribunal) Rules 2008 (“the 2008 Rules”) to our proceeding to decide the appeal itself without further submissions, should we give permission. 

3.	The Attestation Issue is one of five preliminary issues which were determined by the First-tier Tribunal in relation to the Appellants’ appeal against determinations by an Adjudicator, dated 16 October 2009, to revoke the Appellants’ consumer credit licences. The hearing by the First-tier Tribunal of the substantive appeal is due to begin on 25 July 2011, with a time estimate of 4 weeks. 

4.	The Attestation Issue was framed as follows:

	“Is a bill of sale rendered void under sections 8 and 10 of the Bills of Sale Act (1878) Amendment Act 1882 in circumstances where its execution by the Appellants’ customer, i.e. the grantor, is attested by the employee of the Appellants who negotiates, agrees and signs on behalf of the Appellants, the credit agreement between the customer and the Appellants?”

5.	The two Appellants, Log Book Loans Limited (“LBL”) and Nine Regions Limited, (“NRL”) share substantially common ownership and management. NRL operates a franchise of LBL’s business, trading under the name “Log Book Loans”. The company which contracts with customers is therefore NRL. The business consists of making loans, at high rates of interest, on the security of second hand cars. NRL’s security is in the form of a bill of sale over the car. The bill of sale transfers legal title to the car to NRL for the duration of the loan and entitles NRL to seize and sell the car in the event of default by the borrower.

6.	By s.8 of the Bills of Sale Act (1878) Amendment Act 1882 (“the 1882 Act”): 

	“Every bill of sale shall be duly attested, and shall be registered …………; otherwise such bill of sale shall be void in respect of the personal chattels comprised therein.” 

7.	By s.10 of the 1882 Act:

	“The execution of every bill of sale by the grantor shall be attested by one or more credible witness or witnesses, not being a party or parties thereto.” 

8.	Until shortly before the First-tier Tribunal’s decision NRL’s standard practice was that the execution of the bill of sale by the borrower was witnessed by the person, referred to as an “underwriter”, who negotiates and arranges the loan transaction on behalf of NRL, and who signs the loan documentation on its behalf, and who is therefore the only person who deals with the borrower on NRL’s behalf. 

9. 	It was not initially made one of the grounds for the withdrawal of the Appellants’ licences that this practice was illegal, the Adjudicator being “inclined to accept” that it complied with the 1882 Act though reaching no conclusion on the point: para. 16 of the Appellants’ grounds of appeal to the First-tier Tribunal and para. 61 of the OFT’s re-amended response. In that response, however, the OFT introduced the contention that the underwriter’s attestation was “attributable to NRL, with the result that NRL attests the bill of sale, contrary to the requirements of the 1882 Act”, with the further consequences that (a) the bills of sale were void (b) NRL’s agents had repossessed and sold consumers’ cars without a lawful justification and (c) because the underwriters earned commission “the Appellants have not afforded consumers the protection to which they are entitled, namely the independent attestation of their agreement to the bill of sale by a credible witness.” 

10.	The Appellants contend that their practice was in accordance with the well established law as stated for example in Halsbury’s Laws 5th ed. Vol 50 para 1753 that “Although a party cannot attest a bill of sale, his agent or manager may do so”:  Peace v Brookes [1895] 2 QB 451. 

11.	As indicated above, it was agreed that five issues, including the Attestation Issue, would be determined by the First-tier Tribunal as preliminary issues. They were incorporated in Case Management Directions made by his Honour Judge Wulwik on 20 May 2010. The Directions included the following paragraph (“the Appeal Direction”):

	“The parties having agreed that any appeal against the decision of the Tribunal on any of the preliminary issues should be deferred until after the decision of the Tribunal on the Substantive Issues, the parties’ time for applying for permission against the decision of the Tribunal on any of the preliminary issues is extended to expire on the date on which their time for applying for permission to appeal against the decision of the Tribunal on the Substantive Issues will expire.”

12.	In its decision of the preliminary issues the First-tier Tribunal gave the answer “yes” to the Attestation Issue. It held that Peace v Brookes was distinguishable on the ground that the grantee in that case was not a company but a trading partnership, and that the underwriter’s act in attesting was to be attributed to NRL.

13.	The Appellants have (as they are entitled to do) been continuing to carry on their businesses pending the hearing of the substantive appeal by the First-tier Tribunal.  An (as the Appellants contend) unforeseen consequence of the First-tier Tribunal’s decision in respect of the Attestation Issue was that, in the event of default by a borrower, NRL became unable to seize and sell at auction the motor vehicle given as security. The First-tier Tribunal’s decision was not of course binding as between NRL and either the borrowers or any other person interested. But we accept, for present purposes, that one of the practical effects of the First-tier Tribunal’s decision must have been to cast sufficient doubt on NRL’s title to sell to render a sale impracticable, and indeed probably improper. 

14.	NRL asserts that the First-tier Tribunal’s decision in respect of the Attestation Issue has caused and is continuing to cause substantial financial loss, and for that reason, notwithstanding the Appeal Direction, it sought permission to appeal to the Upper Tribunal in respect of that issue only. On 24 March 2011 a hearing of that application was held by the Judge who had been the chairman of the First-tier Tribunal. He refused permission to appeal on 6 April 2011 in a decision extending to 35 pages. The application for permission was then made to the Upper Tribunal, and on 5 May 2011 Judge Turnbull made the Direction for the “rolled-up” hearing. A three Judge panel was constituted in view of the potential importance of the Attestation Issue. 

B.        Permission to appeal
 (i)	The first-tier Tribunal’s reasons for refusing permission
15.	The First-tier Tribunal’s reasons for refusing permission to appeal were as follows: 

(1) the appeal had no prospect of success;

(2) the Appellants should not be permitted to resile from the agreement that there would be no appeal in respect of the preliminary issues until after the decision of the substantive issues, because (a) the agreement was freely entered into; (b) there had been no sufficient change in circumstances to justify displacing it; (c) there would be potential prejudice to the OFT in that the appeal might not be determined prior to the substantive hearing; (d) the evidence put in by the Appellants in support of their contention that they were suffering continuing financial loss was not “so strong as to override the force of” the other factors. 

(3) the application for permission had been made more than 28 days after the date of the First-tier Tribunal’s decision, and therefore was late, and no acceptable explanation for the delay had been given. 

(ii)	Submissions for NRL
16.	The submissions on behalf of NRL can be summarised as follows:

(1)	 The application for permission to appeal was not in fact refused by the First-tier Tribunal on the ground of delay in making it, but on other grounds. In any event, (a) the application was not out of time because time for applying for permission had been extended by the Appeal Direction; alternatively (b) the Upper Tribunal should admit the application under Rule 21(7) of the 2008 Rules because the delay was small, and a satisfactory explanation had been given. 

(2)	Permission to appeal should be given because:

	(a)	The grounds of appeal are well arguable;

	(b)	The case management directions in which the Appeal Direction was contained were not made by consent, as the directions were not precisely those which the parties had proposed, although the Appeal Direction remained unchanged. 

	(c)	The cases cited to the First-tier Tribunal on behalf the OFT related to “substantive consent orders” whereby proceedings were settled, not procedural case management directions as in this case. Even in relation to substantive consent orders both Neuberger J (as he then was) in Ropac Ltd v Inntrepeneur Pub Co (CPC) Ltd [2001] CPR Rep 31 and the Court of Appeal in Weston v Dayman [2006] EWCA Civ 1165 held that there is power under the CPR to extend time “if it is just to do so”. 

	(d)	In any event, any agreement between the parties as to the timing of an appeal on the preliminary issues was so as to further sensible case management. If, in accordance with the “overriding objective” in Rule 2 of the 2008 Rules to deal with cases fairly and justly, sensible case management requires that the Appellants to be permitted to appeal at this stage, the Appeal Direction should be departed from. 

	(e)	It is just to permit the appeal to proceed now because:

		(i)	Neither the OFT nor the public will suffer any prejudice by the appeal being heard and determined now. The primary concern of the OFT at the time of the Appeal Direction was that if preliminary issues were directed, and the First-tier Tribunal’s decision of one or more of the preliminary issues were to be appealed, that might delay the hearing and decision of the Substantive Issues. It is now clear that that will not be the case. 

		(ii)	NRL is suffering substantial continuing financial loss as a result of the First-tier Tribunal’s decision in respect of the Attestation Issue. The Appellants, based on advice received, did not believe that they could possibly lose on that issue and therefore did not even consider the economic impact if they were to lose. The First-tier Tribunal’s incredulity at the Appellants’ approach is both unfair and based on hindsight. 

		(iii)	It may be helpful to the First-tier Tribunal to know the outcome when it is deciding the substantive issues. 

(iii)	 Submissions for the OFT
17.	The submissions on behalf of the OFT can be summarised as follows:

(1)	Permission should not be granted because (a)	an appeal on the Attestation Issue at this stage would fly in the face of the agreement embodied in the Appeal Direction and (b) the application for permission was late and it is not in the interests of justice to allow the late application.

	(a)	As to the significance of the agreement in the Appeal Direction
(2)	as Neuberger J. observed in Ropac Ltd v Inntrepeneur Pub Co (CPC) Ltd [2001] CPR Rep 31 (in the context of an agreement for a payment to be made pursuant to an “unless” order): 

	“The Court should ………… place very great weight on what the parties have agreed and should be slow, save in unusual circumstances, to depart from what the parties have agreed.” 

Therefore, even in ordinary civil litigation, the burden on a party seeking to resile from what has been agreed is a heavy one. That must be especially so in a case which is not simply a matter of private litigation, but is a case where the interests of the general public are involved. The court should be particularly wary of permitting a party to disregard an agreement for the efficient future conduct of regulatory proceedings concerning a licence designed for the protection of consumers. 

(3)	As to the Appellants’ contention that they are suffering financial loss:

	(a)	that possibility was entirely foreseeable and must have been foreseen 	by NRL when the preliminary issues were agreed;

	(b)	the size of the loss has been significantly exaggerated by the 	Appellants;

(4)	To allow the Appellants to appeal at this stage would frustrate the overriding objective embodied in Rule 2 of the 2008 Rules. The agreement arose not only out of a desire to avoid the delay and distraction that an appeal in respect of preliminary issues would cause, but also out of a concern that excessive focus on the preliminary issues would result in a loss of focus on the substantive issues (i.e. revocation of the Appellants’ consumer credit licences) and would also result in considerable additional costs being incurred in the process. The OFT would not have agreed to the trial of the preliminary issues had there not been such an agreement. These concerns were, and remain, particularly valid given that it is not clear what impact the ruling on the preliminary issues will have on the substantive issues. There is a particular imperative to ensure that regulatory proceedings concerning licensing matters for the protection of the public do not become side-tracked and delayed.

(5)	There is no advantage in having a decision from the Upper Tribunal in respect of the Attestation Issue prior to the First-tier Tribunal hearing of the substantive appeal because the Upper Tribunal’s decision may well be appealed to the Court of Appeal, and the First-tier Tribunal will therefore still have to make findings on the footing that either answer to the Attestation Issue may be correct. 

	(b)	As regards lateness
(6)	If the Appellants are permitted to resile from the agreement as to timing embodied in the Appeal Direction, they cannot retain the benefit of the direction extending the time for appealing. The application for permission must therefore be regarded as late, and should only be admitted under Rule 21(7) of the 2008 Rules if it is in the interests of justice to do so. 

(7)	The interests of justice favour not admitting the application because no adequate reasons for the delay have been given. Further, the delay is all the more regrettable given the OFT’s concern that the proceedings should be dealt with expeditiously. 

(iv)	Our reasons for giving permission to appeal
18.	Mr Snowden does not contend on behalf of the OFT that either the Appeal Direction or the agreement (if there was one) embodied in it deprive us of jurisdiction to give permission to appeal at this stage. Neither the First-tier Tribunal nor the parties can fetter the jurisdiction of the Upper Tribunal in relation to a procedural matter. We do not therefore find it necessary to resolve the issue whether the Appeal Direction reflected a contractually binding agreement between the parties. It is clear that the overall substance of the case management directions, and in particular the Appeal Direction, was agreed. The Appeal Direction is in our judgment plainly an important matter for us to take into account in deciding how to exercise our discretion. We should only give permission for an immediate appeal, contrary to the broadly agreed directions, if there are very strong reasons for doing so. Agreed directions of this nature are not lightly to be departed from and nor will the Upper Tribunal lightly intervene in the discretion of the First-tier Tribunal in the management of its own cases, or by way of interlocutory appeal, while those cases are still continuing. However, in our judgment there are special and unusual features of this case which do render it in the interests of justice to give permission to appeal.  

19.	First, we are satisfied that the attestation issue, though determined as a preliminary one in the First-tier proceedings, is before us as a substantive point needing to be decided, not merely as a hypothetical one.  Though the legality of the way their security documentation was completed is not by any means the only, or even the main, issue in the appeal against the withdrawal of the Appellants’ credit licences, it was expressly accepted by Mr Snowden to be a material one, in particular to the issue of whether they had been guilty of irresponsible or unfair business practices.  

20.	Secondly, we accept that the correct answer to the Attestation issue is a matter of considerable financial importance to NRL.  We do not think that it is necessary or appropriate, in deciding whether to grant permission, to attempt a detailed analysis of the financial evidence before us. We doubt in any event whether the evidence is sufficient to enable us to reach any firm conclusions as to the amount of the loss. Mr Snowden accepted at the hearing that he could not say that the loss was trivial, merely that the Appellants’ figures appeared overstated and that the loss was foreseeable when the preliminary issues and the Appeal Direction were agreed.  For present purposes we can accept that whether foreseen or not, there is bound to be (at lowest) a significant financial effect on NRL, and on its ability to carry on its existing business pending the outcome of the appeal as the legislation permits it to do, if most or all of its securities remain effectively unenforceable because of the First-tier decision.

21.	Thirdly, we are also satisfied that the appeal on the Attestation Issue raises a seriously arguable point of law as to whether that decision was right: we cannot agree with the First-tier Judge’s characterisation of the Appellants’ contentions as “impossible” and devoid of any realistic prospect of success.

22.	Fourthly, the circumstances in which the application is now before us (which we accept will not have been in the contemplation of the parties or the First-tier Tribunal at the time the earlier case management directions were agreed and given) mean that it is in fact now possible for us to give an appellate decision on the attestation issue as a self-contained point of law. Moreover that decision can be given in time to (a) inform the decision of the First-tier Tribunal on the substantive factual issues in the case, so reducing the possible need for any further appeal; and (b) avoid causing the hold-up in the full trial of those issues which we infer it was the main purpose of the earlier directions to prevent.  All case management arrangements may require adjustment in the light of events as litigation progresses, and these are no exception.

23.	Fifthly, we cannot leave out of consideration that we have now heard full argument, from leading counsel on both sides, on what is in our view a difficult point of law. If we were now to refuse permission to appeal, and leave the point undecided, those costs would have been wasted.

24.	Finally, in our judgment the application to the First-tier Tribunal was not strictly out of time, the Appeal Direction having in terms extended time until the expiration of the time for appealing against the decision of the substantive issues. The case is therefore not strictly one in which we are required to consider whether to exercise the discretion in Rule 21(7) of the 2008 Rules to admit the application for consideration notwithstanding the delay. But in any event we do not consider that such delay as there was by the Appellants in applying to the First-tier Tribunal for permission should lead to us refusing it, in the overall exercise of our discretion. The First-tier Tribunal’s decision was made on 21 December 2010. Had the time for appealing not been extended, the application to the First-tier Tribunal for permission would have had to be made by 17 January 2011. It was not in fact made until 17 February 2011. However, we take into account that (a) the First-tier Tribunal’s decision was made immediately before the Christmas and New Year period and (b) the Appellants needed to find fresh counsel to advise, owing to a perceived conflict of interest. It may be that the Appellants could and should have moved somewhat more speedily, given that it was going to be necessary for them to ask for their appeal to be heard as a matter of urgency, but the delay has not in fact prejudiced the OFT or (so far as we can see) the public interest. 

25.	We therefore consider the clear balance of advantage, in the particular circumstances of this case and as the best way of furthering rather than frustrating the overriding objective of getting the substantive proceedings determined justly, expeditiously and with finality, lies in our granting permission and determining the appeal on the Attestation Issue at this stage.

C.      The Attestation Issue
(i)	The facts

26.	Although not perhaps strictly necessary for the resolution of the Attestation Issue, it will be helpful to set out the following additional facts by way of background. 

27.	Applications to NRL for loans are generated via referrals (or “leads”) from what NRL refer to as “agents”, and from advertising carried out in the premises of agents and elsewhere, such as in the local press. The “agents” are a number of chains of independent operators such as pawnbrokers or “money shops” offering to cash cheques. The “agents” receive a commission from NRL in respect of business introduced by them. 

28.	The customer is provided, via the “agent” or the advertising, with a telephone number which will lead to contact with one of NRL’s “underwriters”, who are employees of NRL authorised to promote, negotiate and conclude loan arrangements on its behalf.  Initially, the loan is discussed with the underwriter on the telephone. 

29.	A meeting between the customer and the underwriter will then take place, usually at the premises of the “agent”, but occasionally in a car park or elsewhere where the car is located. Such a meeting represents the only occasion on which the customer meets the underwriter. If the customer wishes to proceed and the underwriter approves the loan, the necessary documentation will normally be signed at that meeting. 

30.	Each underwriter operates in a geographical area, and is therefore responsible for and interested in securing as many referrals for loans from and via advertising displayed in the premises of agents in that area. The underwriters are required to visit the premises of those agents regularly with a view to promoting NRL’s services. They are paid by commission, and are given weekly targets (“minimum acceptable performance”) in terms of the total value of loans which they must achieve. There are no premises occupied by NRL at which the underwriter can meet customers. 

31.	Broadly speaking, “standard” loans, which do not require the underwriter to obtain authorisation from NRL’s head office, are (i) for amounts less than £5,000 (ii) to be paid back within 104 weeks (iii) secured on a vehicle worth at least £1100 (with a key) or £1750 (without a key) and (iv) where the principal amount of the loan is not more than between 55% and 65% (depending on the amount of the loan) of the trade value of the vehicle. 

32.	The documentation is in NRL’s standard form. The details relating to the particular customer and loan are normally filled in by the underwriter on a laptop and the forms are then printed out by him.

33.	The key documentation comprises, first, a fixed sum loan agreement regulated by the Consumer Credit Act 1974. It is expressed to be made between NRL, “trading as Log Book Loans” and the borrower. It is signed by the underwriter for and on behalf of NRL.

34.	Secondly, there is a bill of sale, intended to comply with the requirements of the Bills of Sale Acts. It is expressed to be made between the borrower and NRL trading as Log Book Loans. Until shortly before the First-tier Tribunal’s decision of the preliminary issues the end of the bill of sale was in the following form.

“IN WITNESS whereof this Bill of Sale has been executed as a Deed by the Borrower on the above date.

	      SCHEDULE 

[Details of the vehicle are then required to be inserted]

	SIGNED and delivered as a deed by the Borrower:

	…………………………………………..
                 Borrower’s signature  [Borrower’s name typed]

In the presence of:

……………………………………………..
Signature of witness

……………………………………………..
Name of witness (printed)

Bridge Studios
34a Deodar Road
Putney
London SW15 2NN

Address of witness

	…………………………
                 Description of witness”

35.	The underwriter inserted his name in the space “name of witness”, and signed in the space “signature of witness”. In the example of an executed bill of sale before us he wrote “UNDERWRITER” in the space “description of witness”. The address (in Putney) of the witness set out in the standard form was NRL’s business address. The Bill of Sale is not executed for an on behalf of NRL as grantee because, although NRL is expressed to be a party NRL does not enter into any covenants, and the bill is therefore not required to be executed by the grantee. 

36.	There are also a number of other documents, including a short document explaining the main features of a bill of sale, a document headed “pre-contract information”, which includes notification of a right to cancel, a “warning notice” and a “declaration of ownership”. These, other than the “pre-contract information”, are signed by the borrower, and until shortly before the First-tier Tribunal’s decision the borrower’s signature was witnessed by the underwriter. 

37.	On 22 November 2010 NRL informed its underwriters that “to ensure our processes are beyond reproach” the underwriters should no longer witness the borrower’s execution of the bill of sale themselves, but that

“as most of your deals are signed in agent stores this shouldn’t present too much of a problem, as any member of the agent’s staff can witness the bill. They can also, as you do now, use their employer’s address as the witness address. If you are signing a customer away from an agent store the customer will need to provide a witness. As this will be logistically more difficult, I strongly recommend you sign customers in your agent stores wherever possible.” 

(ii)	The decision of the First-tier Tribunal
38.	The reasoning of the First-tier Tribunal can be summarised as follows:

(1)	Peace v Brooks is distinguishable because the agent was acting on behalf of a partnership, not on behalf of a company. 

(2)	In the case of a company, the rules of attribution expounded by Lord Hoffmann in Meridian Global Funds Management Limited v Securities Commission [1995] 2 AC 500 apply. Under those rules, “the critical questions were, first, were the company’s acts properly to be attributable to an individual agent or representative? And second, if yes to the above, which individual or representative was implicated?” (para. 98  of First-tier Tribunal’s decision). [We think that the First-tier Tribunal must have intended to say “were the individual agent or representative’s acts properly to be attributable to the company?”, but the sense is clear]. 

(3)	Applying the principles in Meridian:

	(a)	The act of attestation is not of a nature such that it cannot be attributed to a company. The Tribunal placed substantial reliance on the decision of the Court of Appeal in Odyssey Re (London) Limited v OIC Runoff Limited [2001] 1 Lloyd’s Rep IR 1, in which it was held that, for the purpose of the rule that a judgment procured by the fraud of a party will be set aside, the giving of false evidence by a former director and manager of the company could be attributed to the company so as to require the judgment to be set aside.

	(b)	Section 10 of the 1882 Act was clearly intended to apply to a company because (i) nothing in the bills of sale legislation excludes companies from its scope (ii) companies were active commercial organisations by the end of the nineteenth century and (iii) it is inconceivable that it would have been considered appropriate to exclude companies from the ambit of the policy underlying the bills of sale legislation; 
	
	(c)	In para. 96 the Tribunal stated that it “agrees with the OFT’s primary submission that at the heart of this issue is the clear statutory intention articulated in and reflected by section 10 to the effect that the attestation should be effected by a “credible” person”.  However, in para. 102 the Tribunal said that “as already stated, this element is not at the heart of the present issue save to the extent that a credible person is described as someone who is not a party to the bill. The reason for the last requirement is not difficult to discern.  A party to a bill on any view cannot be seen as someone other than one with a direct interest in the bill being executed in his favour.  It is equally easy to see why such a risk would lie at the heart of the policy underlying the bills of sale legislation concerned as it is with the protection of individual debtors who remain readily susceptible to improper commercial pressure.”  

	(d)	In view of the “seminal role” of the underwriter, there can be no doubt that he is the person whose acts were intended to be identified with and attributed to NRL. Indeed, there is no other candidate. LBL’s contention that the underwriter witnesses the execution in his personal capacity and not as an agent “misstates the factual reality.” (para. 104).

(iii)	The parties’ submissions
39.	We propose at this stage to summarise the submissions in broad outline, sufficient to indicate the scope of the issues. We will consider much of the detail within the submissions in the course of setting out our reasoning and conclusions.

	(a)	Submissions for NRL
(1)	An individual’s act in attesting execution cannot be attributed to a company because a company cannot attest. Attestation requires a person to be actually present, so as to be able to give evidence that execution occurred. Attestation is therefore an act, like community service referred to by Lord Hoffmann in Meridian, which is inherently predicated on personal performance. The Odyssey case does not support an argument that the act of attesting can be attributed to a company because (a) it concerned an entirely different rule, namely the common law rule that a judgment procured by the fraud of a party will be set aside and (b) it was assumed that that rule did apply to a company. 

(2)	Rules of corporation attribution have to be considered in the context of the purpose for which they are being applied; there can be no special rules of corporate attribution in relation to the formalities of executing documents – all the authorities show that special rules of attribution are only deployed for the purpose of identifying when a company should be found civilly or criminally liable. 

(3)	The historical background to and the enacting history of the 1882 Act shows that s.10 was not enacted in order to protect borrowers. It should therefore not be construed as if it had been enacted for that purpose. 

(4)	The requirement in s.10 that the witnesses be “credible” does not impose a requirement for independence. Authority shows that this means no more than that the witness must be competent to give evidence.

(5)	The First-tier Tribunal was wrong to distinguish Peace v Brookes on the ground that the grantees were partners rather than a company. That was not a valid ground of distinction. Parliament cannot have intended the outcome to be different depending on whether a manager or agent who witnesses the grantor’s execution is the manager or agent for one or more individuals, on the one hand, or a company on the other. 

	(b)	Submissions for the OFT
40.	The OFT essentially supports the reasoning of the First-tier Tribunal. In his Skeleton Argument Mr Snowden summarised his summissions as follows:

(1)	The requirement for the execution of a bill of sale to be attested by a credible person who is not a party to it was designed for the protection of vulnerable borrowers from improper commercial pressure as well as frauds.

(2)	There is no less need for protection of vulnerable borrowers from these dangers where the grantee of a bill of sale is a company than where the grantee is an individual. There is accordingly no justification for interpreting s.10 of the 1882 Act and the safeguards which it contains as not applying to bills of sale executed in favour of companies.

(3)	By virtue of the rules of corporate attribution, the underwriter’s attestation of the bill must therefore be regarded as the act of NRL for the purpose of s.10. 

(iv)	Issues
41.	It is therefore apparent that the main points of contention are: 

(1)	Whether “special” rules of corporate attribution are capable of applying (a) to attribute to a company an individual’s act in witnessing a document and/or (b) in the case of a statutory provision which invalidates a document if it is witnessed by a party. 

(2)	Whether (if the answer to (1) is yes) s.10 should be construed as requiring a special rule of attribution. The submissions disagree on whether, in the light of the historical background and the enacting history, s.10 was enacted in order to protect vulnerable borrowers.

(3)	Whether, in the light of the answers to (1) and (2), Peace v Brookes can properly be distinguished on the ground that the grantee was a partnership. 

42.	It is also worth noting a number of points which are not in issue:

(1)	Mr Snowden did not in his submissions place any reliance on the requirement that the attesting witnesses be “credible” and expressly disclaimed reliance on any argument that (either by use of that word or otherwise) section 10 imposes any requirement for the attesting witness to be free of any personal interest in the transaction or any connection with the grantee. Mr Snowden’s approach appears to be at odds with the OFT’s pleaded contention (noted in para. 9 above), which the First-tier Tribunal appears to have endorsed in para. 102 of its decision, that borrowers were entitled to “the independent attestation of their agreement to the bill of sale by a credible witness.” 

(2)	Mr Snowden relied on the construction of s.10 in the light of its particular purposes, as opposed to any general principle that a statute or document providing for attestation should be construed as requiring that attestation by the person who agreed the transaction on behalf of a corporate party should be attributed to that party. 

(3)	Mr Green does not dispute that companies are within the scope of the bills of sale legislation generally as potential parties to bills of sale, whether as grantors or grantees. 

(4)	Mr Green does not dispute that, if the act of an attesting witness can and is intended by s.10 to be attributed to a company grantee in appropriate circumstances, it is appropriate in NRL’s case that the underwriter’s attestation should be attributed to it. 	

43.	We propose to proceed by first considering the historical background to and the enacting history of the 1882 Act, with particular reference to the issue as to the extent, if any, to which s.10 was enacted in order to protect borrowers. We will then draw attention to the relevant parts of the centrally important decisions in Peace v Brookes and Meridian. We then turn to consider whether “special rules of attribution” are capable of applying to s.10. Finally, we consider whether it is right to construe s.10 as requiring that attestation by a person who carries out the whole transaction on behalf of a company grantee should be attributed to the company. 

(v)	History and background to the 1882 Act
	(a)	Attestation generally (see Halsbury’s Laws, 4th ed, Vol 13 (2007 	Reissue), para. 36)

44.	At common law there was no requirement that a party’s execution of a deed or other document be witnessed. At common law a bill of sale did not therefore need to be witnessed in order to be valid: Deffell v Miles 15 L.T.N.S. 293, per Blackburn J. A requirement that execution be witnessed could therefore arise only by virtue of the terms of a document conferring a power of appointment, or under a statute: Seal v Claridge [1881] 7 QBD 516 CA, per Lord Selborne at p.519. However, it has long been the practice to execute deeds in the presence of a witness or witnesses, and to indorse on or subscribe to the deed a statement that it has been so signed, sealed and delivered, and for the attesting witness to sign his name to the statement and to add his address and description. By s.1(3) of the Law of Property (Miscellaneous Provisions) Act 1989 attestation is now required for the valid execution of a deed by an individual. 

45.	In cases where a document or statute required attestation by one or more witnesses, without specifying more precisely what qualities the witness(es) must possess, the position was that the witness must be some person who is not a party to the deed: Freshfield v Reed (1842) 9 M & W 404, as explained in Seal v. Claridge.  However by the time of the judgment in the latter case (18 March 1881), that was the extent of the prohibition. There was no requirement that the witness be independent or disinterested.  As Lord Selborne remarked (ibid), the “old rule of evidence whereby interested persons were rendered incompetent as witnesses … has now been done away with by statute”.  That was a reference to the Evidence Acts 1843 (persons with an interest, other than parties to the suit, rendered competent), 1851 (parties to the suit rendered competent) and 1853 (spouse of a party to the suit rendered competent). Thus, in Northern Bank Limited v Rush [2009] NI Ch 6 it was argued that Mr Rush’s signature was not properly witnessed because the witnesses were employees of the Bank. Deeny J noted that 

“Manual and electronic search discloses a considerable number of cases relating to the witnessing of documents but none of them seem to require, as a principle of common law or equity, that the witness has to be independent…………I accept that it is possible that bank employees might attract some commission in this context and might have a conceivable interest in the matter but it does not seem to me that that is enough to establish a new rule of law that attesting witnesses must not be employees of a corporate party to a contract or mortgage.” 

	(b)	“Credible witnesses”
46.	Even though no reliance has, ultimately, been placed on this requirement by Mr Snowden, it may be helpful for us to explain why, in our view, he is right not to do so. 

47.	A requirement that the witnesses should be “credible” was added in some old statutes. Section 8 of the Tenures Abolition Act 1660, for example, empowered a father, by deed or by will executed in the presence of two or more “credible witnesses”, to dispose of the “custody and tuition” of his child. More significantly, s.5 of the Statute of Frauds, 1677 required wills to be executed in the presence of two or more credible witnesses. Some documents conferring powers of appointment also imposed a similar requirement.

48.	According to a note in Halsbury’s Statutes, Vol. 50, p.387: 

	“[s.5 of the 1677 Act] was held to exclude all persons, and their husbands or 	wives, who had any pecuniary interest in the result of their testimony.” 

49.	However, the use of the expression “credible witnesses” in the 1677 Act was subjected to a withering criticism by Lord Mansfield CJ. in Wyndham v Chetwynd (1757) 2 Keny 122, 96 ER 1128, as devoid of any certain meaning or practical use in this context: for example
. 
“Suppose it signifies competent, it is implied by the term witness: no man can be a witness that is not so. “

50.	By s.5 of the Wills Act, 1837 the requirement that the witnesses to the signature of a will be “credible” was removed and by ss.14-15 of that Act, in place of the previous rule that invalidated the entire will if an attesting witness was “incompetent to be admitted a witness to prove the execution thereof” by reason of personal interest, the present rule was introduced that any gift to the attesting witness himself or herself is void but the will is otherwise valid.  As already noted, the general rule that used to exclude persons with a personal interest in the matter in issue from being admitted as “competent” witnesses had gone well before 1882. 

51.	The practical requirements of the execution of a document and the inherent nature of what is involved in witnessing a signature continued of course to mean that a person who had not actually seen the signature (e.g. because the signature remained covered up, or the witness was blind) was not competent to give evidence of the fact, so could not be admitted as a valid attesting “witness” and the will would be void: Re Gunstan (1882) LR 7 P 102, CA; Re Gibson [1949] P 434.  

52.	It is surprising, against the above background, that the word “credible” should have been used in s.10 of the 1882 Act. It had been heavily criticised, and if it meant no more than “competent” appears never to have served any purpose. As was observed in one of the leading textbooks on bills of sale (Reed, the Bills of Sale Acts, 13th ed (1909) at p.202):

	“The words “credible witness” in s.5 of the Statute of Frauds were held to mean such persons as were not disqualified by mental imbecility, interest or crime from giving testimony in a court of justice; and as incompetency by crime or interest is abolished by [the Evidence Act 1843], it would appear that all persons of sound mind are credible witnesses.” 

	(c)	The Bills of Sale Acts generally
53.	The history and purposes of the legislation governing bills of sale is summarised as follows in Halsbury’s Laws, 5th ed, Vol 50:

	“1630	Legislation governing bills of sale. 	The practice of granting bills of sale under arrangements by which the grantor remained in possession after execution of the bill caused much hardship to creditors, who might be led to extend credit to the grantor of the bill on the strength of the apparent ownership of goods which he had in fact conveyed to another. In order to prevent secret transfers, the Bills of Sale Act 1854 introduced a requirement of registration; and by the Bills of Sale Act 1866 renewal of registration was required every five years. These Acts were repealed by the Bills of Sale Act 1878 (the ‘principal Act’), and replaced by that Act. This was subsequently amended by the Bills of Sale Act (1878) Amendment Act 1882 (the ‘amending Act’). …………………………………

	1631	Absolute and security bills.	The regulation of absolute bills of sale differs markedly from that of security bills, and this reflects the difference in the objects of the principal Act and the amending Act. The purpose of the principal Act, like that of the enactments it replaced, was to prevent credit being given to persons on the strength of their apparent ownership of goods in their possession which in fact had ceased to belong to them as the result of a secret transfer. The principal Act seeks to protect creditors from such secret transfers by requiring bills of sale to be registered and by rendering unregistered bills of sale void against execution creditors and trustees in bankruptcy or liquidators of the grantor, in cases where the grantor remained in possession after executing the bill. 
	The purpose of the amending Act was twofold. First, it was designed to strengthen the protection for creditors, as by rendering void, except as against the grantor, after-acquired property clauses in bills of sale. Its second and predominant objective was to prevent needy persons being trapped into signing complicated documents which they might often be unable to comprehend, and so being subjected by their creditors to the enforcement of harsh and unreasonable provisions. To this end, the amending Act prescribes a form of bill of sale which must be closely followed and which is intended to ensure that the nature and terms of the loan and security are clearly set out. The statutory form and various provisions in the body of the Act severely restrict the terms that may validly be inserted in a security bill. …………”
	
54.	As Lord Fitzgerald remarked in Thomas v Kelly [1888] 13 App Cas 506, HL at p.514, therefore:

	“the whole code is designed to prevent frauds on creditors (i.e. the public) and also to protect the borrower from the exercise of oppressive powers on the part of the lender”.

55.	Both Acts have given rise to numerous questions of construction, as Lord Fitzgerald noted later in the same speech (p.515):

	“The bill which eventuated in the Act of 1882 received the most critical consideration from the most capable men of the day, both in 1881 in the House of Commons and in 1882 in select committees of both Houses of Parliament, aided by the answers to a circular sent to judges and registrars as to the operation of and defects, if any, in the Act of 1878. It was apparently intended to put an end to the almost interminable legal controversies which had arisen on the previous Acts. My Lords, the Act of 1882 has not had in the latter respect the effect which the legislature intended.”

56.	Lord Macnaghten said in the same case (at p.517):

	“For my own part, the more I have occasion to study the Act the more convinced I am that it is beset with difficulties which can only be removed by legislation.” 

57.	Remarkably perhaps, the Acts have survived substantially unaltered since 1882. 

	(d)	The Bills of Sale Act 1878
58.	Section 10(1) and (2) of the 1878 Act (as originally enacted) provided as follows:

	“(1)	The execution of every bill of sale shall be attested by a solicitor of the Supreme Court, and the attestation shall state that before the execution of the bill of sale the effect thereof has been explained to the grantor by the attesting solicitor. 

	(2)	Such bill, ……… and also a true copy of such bill …. and of every attestation of the execution of such bill of sale, together with an affidavit of the time of such bill of sale being made or given, and of its due execution and attestation, and a description of the residence and occupation of the person making or giving the same ….. and of every attesting witness to such bill of sale, shall be presented to and the said copy and affidavit shall be filed with the registrar within seven clear days after the making or giving of such bill of sale …….”

59.	Although the general purpose of the 1878 Act was for the protection of creditors, and although s.10(1) no doubt assisted that purpose, it would seem that that provision was also intended for the protection of the borrower. That duality of purpose, but also the limited effect of the provision, was recognised in Davis v Goodman (1880) 5 CPD 128 CA. It was there held (reversing the first instance decision) that a bill of sale which did not comply with the attestation requirement was not void as between grantor and grantee. At first instance Lindley J had said ((1880 5 CPD at p.24) that “the provision was obviously introduced for the advantage of the grantor”. On appeal Bramwell LJ said (at p.128):

	“The provisions mentioned in s.10 are not for the sole benefit of the grantor; they are inserted for the benefit of the general creditors, for no solicitor would attest a bill of sale unless the facts were true and the transaction was bona fide; and if he explained the deed to the debtor, he would know whether he was committing a wrong against the general body of the creditors. The solicitor also being known is a guarantee to the genuineness of the transaction. If, however, s.10 was intended for the benefit of the grantor, inasmuch as the legislature have not attached a consequence to the nonfulfilment of its stipulations, the bill of sale is not void against the grantor.”

60.	Such protection as it did afford the borrower proved in practice to be less extensive than might have been thought. Within a few years after the passing of the 1878 Act it had been held that the attesting solicitor could be the solicitor for both parties (Vernon v Cooke (1880) 49 LJQB 767, CA), or the managing clerk (if a qualified solicitor himself) to the grantee’s solicitor, even though the managing clerk was not practising on his own account (Hill v Kirkwood) (1880) 28 WR 358, CA or even the grantee’s solicitor (Penwarden v Roberts) (1882) 9 QBD 137, DC, decided in March 1882). 

61.	In Hill v Kirkwood Cotton LJ said (at p.360):

	“The Act of Parliament says that the attestation shall be by a solicitor, and in my opinion we have no power – certainly no duty- in any way to add to the Act of Parliament. If the Act of Parliament had required that it should be a solicitor practising on his own account, in some way or other either the interpretation clause or the clause under discussion would have so stated. If it had meant that it was to be the grantor’s solicitor, it would have said so. When we remember what was the contention of the plaintiff – viz., that the omission of a practising solicitor, or the omission of the independent solicitor, is to have the effect of entirely depriving the grantee of his security by virtue of this Act of Parliament – we must be satisfied that the Act is sufficiently clear in its terms to justify the court in depriving a man of a security which would be taken from him. In my opinion we cannot add to this Act of Parliament by requiring the solicitor to be a practising solicitor, or by requiring that he should be one who is not in any way connected with the grantee.” (Emphasis added). 

62.	By way of further examples of the strict and literal construction given to s.10 of the 1878 Act, it was further held that although the attestation must state that an explanation of the bill has been given, it was not a requirement that an explanation should actually have been given (Re Haynes (1880) 15 ChD 42, CA), and that the affidavit filed on registration need not verify the fact of explanation (Re Roper (1882) 21 ChD 543). 

63.	However, in Seal v Claridge [1881] LR 7 QBD 516 CA the Court drew the line at permitting a solicitor to witness the execution where he was himself the grantee. Lord Selborne’s judgment on this point (at p.519) is worth quoting almost in full:

	“I was at first surprised that no authority could be found directly in point; but no doubt the common sense of mankind has always rejected the notion that the party to a deed could also attest it. I do not pay much attention to the old rule of evidence whereby interested persons were rendered incompetent as witnesses; it has now been done away with by statute. What is the meaning of the word “attestation” apart from the Bills of Sale Act, 1878? The word implies the presence of some person, who stands by but is not a party to the transaction. The view which I take seems to be confirmed by the circumstances that attestation is unnecessary, unless it is required by an instrument creating a power or by some statute. I do not place much reliance upon what was said by Lord Eldon LC in Coles v Trecothick, but I do rely upon Freshfield v Reed. It follows from that case that the party to an instrument cannot “attest” it. When I pass to the provisions of the Bills of Sale Act, 1878, I find that it is necessary that the execution of a bill of sale shall be attested by a solicitor. This means that a solicitor shall be an independent witness. It has been admitted that if the grantor were a solicitor he could not attest his own signature; but it is contended that it is different in the present case where the grantee is a solicitor. It was the intention of the legislature that the nature of the bill of sale should be explained to the grantor; one object, no doubt, was that he should be adequately protected; can it be said that an attestation by a grantee is sufficient, when he has the greatest possible interest to deceive the grantor, if he is inclined to be fraudulent or to be guilty of malpractice? He is not to attest an instrument which is to operate chiefly for his own benefit. …..”

(e)      The enacting history of the 1882 Act
64.	Evidence was given to the Committee of the House of Commons considering the Bill which became the 1882 Act that the requirement of attestation by a solicitor had provided little effective protection to borrowers, while adding to the expenses which they would in practice have to pay in order to get a loan. For example, the following evidence is recorded as having been given by Mr Henry Buer, a professional moneylender, on 17 June 1881: 

	“Q. You said you thought the attestation really amounted to the solicitor 	fathering the fraud, if there was one? A. Yes.

	Q. It does not help to prevent or detect a fraud? A. Certainly not.

	Q. May I understand that the attestation of a solicitor is really of no practical 	advantage to the man who is borrowing the money? A. It is a disadvantage, 	most certainly. When a man borrows and gets before a solicitor, he is nervous; 	he signs his name but he really does not understand it. 

	Q. If the Act was intended to be a protection to the borrower, it has utterly 	failed? A. Certainly

	Q. And has simply added 6s 8d to the expenses? A. Certainly.”

65.	The House of Commons inserted into the original form of the Bill a reinforced version of s.10(1) of the 1878 Act. This required that the attestor be a certificated solicitor who had been approved as capable of taking oaths in the Supreme Court of Judicature in England. It also stipulated that this solicitor must be appointed by the grantor (i.e. the borrower) as his own solicitor. It was in this form that the Bill was referred to the House of Lords Select Committee on 5 July 1882. At that stage the Bill had no equivalent of s.9 of the 1882 Act, providing for a mandatory standard form of bill of sale. 

66.	Some of the evidence heard by the House of Lords Select Committee, (which included among its membership Lord Selborne, the Lord Chancellor, who had decided Seal v Claridge little more than a year earlier, Lord Coleridge and Lord Bramwell, who had decided Davis v. Goodman) suggested that the strengthening of s.10(1) would be of little effect. Mr Thomas Farrer, Permanent Secretary to the Board of Trade, said: 

	“Then as to the provision ………. which requires explanation and attestation by a Commissioner appointed to take oaths, it is very doubtful whether a borrower would ever get any good out of it, and he would certainly have to pay for it. The lawyer, whatever he may say, will really be the lawyer of the lender, and will get his pay out of the weaker party. It is rather remarkable too that some of the money-lenders have stated that the clause requiring attestation by a solicitor in [the 1878 Act] has tended to their protection rather than to the protection of the borrower.” 

67.	Mr Farrer then went on to remark that there was simply no means of ensuring that the attesting witness would be independent:

	“Lord Chancellor: …… I suppose you think there is no way of securing that the 	solicitor should be really in the interest of the borrower? 

	Mr Farrer:	There is no way that I can see.”

68.	On 21 July 1882 the House of Lords Committee agreed to an amendment, moved by Lord Selborne, to insert (a) a provision in the terms of what became s.9 of the 1882 Act, requiring a security bill of sale to be in a standard form, and (b) an attestation provision in the terms of what became s.10 of the Act, which in its original form (i.e. prior to repeal by the Statute Law Revision Act of 1898 of words which had become redundant) made clear that the requirement in s.10(1) of the 1882 Act for a solicitor to attest was repealed. (That requirement still subsists, however, in relation to absolute bills of sale, with which we are not concerned). 

69.	When the Bill returned to the House of Commons there was some opposition to the relaxation of the attestation requirements. It was pointed out during a debate in the House on 8 August 1882 that “if the Bill is passed as amended by the Lords, it would be competent for the man borrowing money to go to the money-lender’s office, where the money-lender’s clerk might attest the document”. However, the amendments which had been made by the House of Lords on 21 July 1882 remained intact. The 1882 Act was passed on 18 August 1882. 

	(f)	Conclusions
70.	In our judgment the following conclusions can be drawn from the historical background to s.10 of the 1882 Act and its enacting history.

71.	First, s.10 represented a relaxation of the requirement in s.10(1) of the 1878 Act for attestation by a solicitor who had explained the effect of the transaction, which had proved less effective in protecting borrowers than had been hoped, and had added to their costs. 

72.	Secondly, the primary protection for borrowers in the 1882 Act, in terms of assisting them to understand the transaction, was the requirement in s.9 that a bill of sale be in a standard, simplified form. 

73.	Thirdly, it would be wrong to regard s.10 of the 1882 Act as having been intended to deprive the attestation requirement of any element of protection for the borrower. There was no requirement for attestation of a bill of sale at common law or under the 1854 Act, and the 1882 Act did not therefore completely reverse the position. The requirement for attestation is capable of providing some protection against forgery, against extreme forms of physical duress, and against a borrower executing a bill of sale when he is plainly incapable of doing so.

74.	Fourthly, s.10 on the face of it did no more than to state in express terms the effect of the law and practice in relation to the attestation of deeds. The standard form bill of sale set out in the Schedule to the 1882 Act was a deed, and, as noted in para. 44 above, it had long been the practice for the execution of deeds to be witnessed. s.10 on the face of it debars only a party from being an attesting witness, which is the position under the general law in cases where a document or statute provides for attestation but without specifying who can be an attesting witness. For the reasons set out above (paras. 46 to 52), the use of the word “credible” appears to have added nothing. Even the limited protection which s.10 provides is plainly capable of being substantially eroded by the absence of any requirement that the witness be in any sense independent of the grantee. Cases which had been decided under the 1878 Act (Vernon v Cooke; Hill v Kirkwood; Penwarden v Roberts) had already emphasised the consequences which could flow from the absence of any requirement for independence: yet no such requirement was introduced by the Act of 1882. 

(vi)	Peace v Brookes [1895] QB 451
75.	The facts were that the borrower, a varnish manufacturer, entered into a composition with his creditors. Three of those creditors agreed to lend the borrower a total of £150 in order to pay the creditors other than themselves the amount due under the composition, the £150 to be secured by a bill of sale on the chattels described in the schedule. One of the three creditors was Peace & Co, a firm of oil merchants, who were to advance £100 of the £150. Leck, a chartered accountant, who described himself as the manager for Peace and Co, conducted the negotiations for the composition, and for the giving by the borrower of the bill of sale, and he had to see to the payment of the composition to the creditors other than the claimants. The borrower’s execution of the bill of sale was witnessed by Leck. According to Hawkins J (at p.453): “Leck stated that he acted as agent for Peace & Co in regard to the bill of sale, and that he was sole attesting witness as a chartered accountant. There was no suggestion of any want of bona fides.” 

76.	The question in the proceedings (on an interpleader issue between Peace & Co and a judgment creditor who had not been a party to the composition and sought to levy execution on goods comprised in the bill of sale, disputing its validity) was whether the bill of sale was void. Three grounds for the alleged voidness were put forward, of which one was that it was not properly attested under s.10. Hawkins J. held that it was not void on that ground (although he did hold that it was void for non-compliance with s.9). On the s.10 point Hawkins J said (at p.453):

	“There is no pretence for saying that Leck was a party to the bill of sale according to the ordinary understanding of that expression; and I see no reason for interpreting it in any other sense. The object of the legislature in dispensing with the formalities required by the Act of 1878 was to simplify the process to be observed in the execution of a bill of sale, and to make the attestation by any credible witness, not being a party, sufficient. The agent of a party to an instrument is not of necessity a party to it himself. If the legislature had it in contemplation that an agent should be treated as that which he is not, I think it would have used words to express such intention. There is no authority to support the objection, and such as can be said to throw any light upon it is against it. In Penwarden v Roberts Field and Bowen JJ upheld a bill of sale attested by a solicitor of the grantee; and Cotton LJ in Hill v Kirkwood, cited in the last-mentioned case, expressed the same view. In Seal v Claridge the attesting solicitor was himself the grantee, an actual party to the deed, and on that ground the bill of sale was declared to be invalid. The first objection, therefore, must be overruled.” 

(vii)	Meridian Global Funds Management Limited v Securities Commission [1995] 2 AC 500.

77.	The issue in the case was whether a company had become a substantial security holder in a public issuer without having given the requisite notice that it had done so, contrary to the relevant statutory provision in New Zealand. That turned on whether the knowledge of the chief investment officer and the senior portfolio manager was the knowledge of the company for this purpose. Lord Hoffmann explained the rules of corporate attribution as follows (at 506B to 507F):

	“Any proposition about a company necessarily involves a reference to a set of rules. A company exists because there is a rule (usually in a statute) which says that a persona ficta shall be deemed to exist and to have certain of the powers, rights and duties of a natural person. But there would be little sense in deeming such a persona ficta to exist unless there were also rules to tell one what acts were to count as acts of the company. It is therefore a necessary part of corporate personality that there should be rules by which acts are attributed to the company. These may be called “the rules of attribution”. 

	The company’s primary rules of attribution will generally be found in its constitution, typically the articles of association ………………………….

	These primary rules of attribution are obviously not enough to enable a company to go out into the world and do business. Not every act on behalf of the company could be expected to be the subject of a resolution of the board or the unanimous decision of the shareholders. The company therefore builds upon the primary rules of attribution by using general rules of attribution which are equally available to natural persons, namely, the principles of agency. It will appoint servants and agents whose acts, by a combination of the general principles of agency and the company’s primary rules of attribution, count as the acts of the company. And having done so, it will also make itself subject to the general rules by which liability for the acts of others can be attributed to natural persons, such as estoppel or ostensible authority in contract and vicarious liability in tort. 

	It is worth pausing at this stage to make what may seem an obvious point. Any statement about what a company has or has not done, or can or cannot do, is necessarily a reference to the rules of attribution (primary and general) as they apply to that company. Judges sometimes say that a company “as such” cannot do anything; it must act by servants and agents. This may seem an unexceptionable, even banal, remark. And of course the meaning is usually perfectly clear. But a reference to a company “as such” might suggest that there is something out there called the company of which one can meaningfully say that it can or cannot do something. There is in fact no such thing as the company as such, no ding an sich, only the applicable rules. To say that a company cannot do something means only that there is no one whose doing of that act would, under the applicable rules of attribution, count as an act of the company. 

	The company’s primary rules of attribution together with the general principles of agency, vicarious liability and so forth are usually sufficient to enable one to determine its rights and obligations. In exceptional cases, however, they will not provide an answer. This will be the case when a rule of law, either expressly or by implication, excludes attribution on the basis of the general principles of attribution or vicarious liability. For example, a rule may be stated in language primarily applicable to a natural person and require some act or state of mind on the part of that person “himself”, as opposed to servants or agents. This is generally true of rules of the criminal law, which ordinarily impose liability only for the actus reus and mens rea of the defendant himself. How is such a rule to be applied to a company? 

One possibility is that the court may come to the conclusion that the rule was not intended to apply to companies at all; for example, a law which created an offence for which the only penalty was community service. Another possibility is that the court might interpret the law as meaning that it could apply to a company only on the basis of its primary rules of attribution, ie if the act giving rise to liability was specifically authorised by a resolution of the board or an unanimous agreement of the shareholders. But there will be many cases in which neither of these solutions is satisfactory; in which the court considers that the law was intended to apply to companies and that, although it excludes ordinary vicarious liability, insistence on the primary rules of attribution would in practice defeat that intention. In such a case, the court must fashion a special rule of attribution for the particular substantive rule. This is always a matter of interpretation: given that it was intended to apply to a company, how was it intended to apply? Whose act (or knowledge, or state of mind) was for this purpose intended to count as the act etc. of the company? One finds the answer to this question by applying the usual canons of interpretation, taking into account the language of the rule (if it is a statute) and its content and policy.” 

(viii)	Can a company attest?
78.	In our judgment it is clear that a company cannot in any meaningful sense witness the execution of a document. Attestation involves the witness being physically present and observing the execution, with a view to subsequently giving evidence as to the execution if necessary. Thus, in Freshfield v. Reed (supra) it was stated as follows (at p.405):

	“The term “attest” manifestly implies that a witness shall be present, to testify that the party who is to execute the deed has done the act required by the power; the object of which was, that some person should verify that the deed was signed voluntarily.” 

79.	Similarly, in Ford v Kettle (1882) 9 QBD 139 Lindley LJ asked (at pp. 144-5):

	“What is attestation? The being present when a thing is done and seeing it done, so as to be able to give testimony that it was done. The presence of the attesting witness is essential.” 

80.	This inability of a company to attest does not arise simply because being present and giving evidence are acts which can be done only by a natural person. That is true of all physical acts, but many of them may be carried out as agent for or on behalf of a company. The point, in our judgment, is that the person who gives evidence must be the person who was present at the execution. It would make no sense for a witness to purport to attest on behalf of a company, and to insert in the attestation clause the company’s name and address as the person who had attested. If that were to be done, the attestation would either have to be treated as having been by the individual, or (if it was impossible to identify the witness, or his purported witnessing on behalf of the company was an indication of reluctance to give evidence himself) be treated as invalid. It would similarly make no sense if all the shareholders of a company were to purport to witness the execution of a document for and on behalf of the company, with the company’s name being inserted in the attestation clause as the attesting witness. 

81.	For the same reasons it is in our view clear that individual A cannot witness the execution of a document as agent for or on behalf of individual B. Attestation is not something which can be done through an agent. The person who attests, and the only person who can give evidence as to the attestation, is A, however much he might purport to act on behalf of B in doing so. That was in our judgment the clear assumption made by Hawkins J when deciding Peace v Brookes. In deciding that s.10 had been complied with because Leck (the agent) was not a party, Hawkins J clearly assumed that Leck could not be said to have witnessed the execution of the bill of sale as agent for or on behalf of the partners in the business which he managed.

82.	In Mr Snowden’s written submissions, and in his initial oral submissions, he accepted that Peace v Brookes was rightly decided. However, he later questioned whether that case would have been decided the same way to-day, or indeed was rightly decided. In our judgment, if it were to be decided differently, it could not be on the ground that on a true analysis the bill of sale was attested by the partners, Leck having acted on their behalves. The only possible basis on which Peace v Brookes might have been decided differently would be that s. 10 manifested an intention that the witness should not be either a party to the bill of sale or someone acting on behalf of that party in relation to the transaction. Hawkins J did not expressly address that possibility, but it is our judgment plainly to be inferred that he ruled it out.

83.	Where the grantee (B) is an individual or a number of individuals trading as partners, and the attesting witness (A) acts as his or their agent in the bill of sale transaction, the reasoning in Peace v Brookes (and not merely the outcome) is in our judgment inconsistent with both (i) a contention that s.10 requires that A’s action in attesting be attributed to B and (ii) a contention that s.10 prohibits attestation not only by B but also by A. 

84.	Furthermore, even if we are not strictly bound to follow Peace v Brookes, we have no doubt that we should do so. It has stood unquestioned for more than 100 years. Many bills of sale must have been witnessed in reliance on it. As noted above, it is (and presumably has in previous editions been) cited by Halsbury’s Laws, (5th ed., Vol 50, para. 1753) as authority for the simple proposition that “although a party cannot attest a bill of sale, his agent or manager may do so.” 

(ix)	Can the act of attestation be attributed to a company under rules of corporate attribution? 								

85.	Mr Green’s submissions are as follows. The fact that a company cannot attest means that rules of corporate attribution cannot come into play. In any event, the “special rule of attribution” (as found by the First-tier Tribunal to exist in relation to s.10) is wholly inappropriate in the context of the formalities for execution of a document. If the court is called upon to decide whether an individual has acted on behalf of a company in formally executing a document, then it can only look to the “primary” or “general” rules of attribution as defined by Lord Hoffmann in Meridian. The “special” rules of attribution have and can only be adopted for use in determining whether a company is criminally, or in limited circumstances civilly, liable. 

86.	Since, applying Lord Hoffmann’s analysis, the question is ultimately one of “interpretation or construction of the relevant substantive rule” (i.e. in this case s.10 of the 1882 Act), we reject Mr Green’s submission that rules of corporate attribution cannot come into play. If s.10 discloses a sufficient intention that, for the purposes of the requirement in s.10 that attestation must not be by a party to the bill of sale, there are circumstances in which attestation by an individual should be attributed to a grantee of the bill of sale which is a company, it would in our judgment be possible, indeed necessary, to give effect to that intention. 

87.	Neither do we accept Mr Green’s submission (contained in his skeleton argument but not emphasised at the hearing) that “special” rules of attribution can only be adopted for use in determining whether a company is criminally or civilly liable. 

88.	In UBAF Ltd v European American Banking [1984] 1QB 713 CA it was held that the signature of a company’s assistant secretary, acting within the scope of this authority, could be attributed to the company for the purpose of s.6 of the Statute of Frauds Amendment Act 1828, under which a person (including a company) is not liable by reason of fraudulent misrepresentation as to another’s character, credit etc., “unless such representation or assurance be made in writing, signed by the party to be charged therewith”. 

89.	In Odyssey Re (London) Limited v OIC Run-Off Limited [2001] Lloyd’s Rep IR 1, a majority of the Court of Appeal applied Meridian in holding that a director’s perjured evidence could be treated as having been given by the company, notwithstanding that evidence on oath can self-evidently only be given by a natural person. That was for the purposes of the rule that a judgment in favour of a party will be set aside if it has been procured by the fraud of that party. Nourse LJ said (at p.11):   

	“I am of the opinion, shortly stated, that, for the purposes of the fraud of a party rule, it is in certain circumstances possible for perjured evidence to be treated as that of a company, even where it is neither procured or knowingly adopted by the company nor given by someone who is part of the company’s directing mind and will or a person to whom the conduct of the litigation has been delegated. 

	It is necessary to state or repeat three further propositions, which I take to be obvious. First, the company cannot give evidence itself. Second, a person who gives evidence on behalf of a company does not do so as its agent. Third and on the other hand, there would be an unacceptable shortcoming in company law if evidence given on behalf of a company was incapable of being treated as the evidence of the company itself. So the question is when and in what circumstances it ought to be so treated.” 

90.	It is true that the issue in both the Odyssey and UBAF cases, very broadly stated, was whether action by individuals could be attributed to the company for the purpose of rendering the company responsible for wrongful conduct. Those cases were not concerned with the formalities for execution of a document, which may invalidate the document in the absence of wrongful conduct by anyone. That may be a difference which is relevant when it comes to considering what, if any, rules of corporate attribution were intended or are appropriate, because a statute or common law rule is unlikely to intend that a company should escape the consequences of wrongful conduct. However, we do not think that the Meridian principles are necessarily limited to cases where the criminal or civil liability of the company is in issue. The “fraud of a party” rule under consideration in Odyssey was not a rule enshrined in statute, and the question what, if any, rules of attribution should apply was therefore not one of statutory construction, but essentially one of policy, having regard to the purpose of the rule. If, even in the absence of statutory provision, evidence given on behalf of a party by someone other than its “directing mind and will” can be treated as evidence given by the company for the purposes of the fraud on a party rule, we do not see why a person’s attestation could not be treated as that of a company for the purposes of a statutory provision such as s.10, if that is what the statutory provision intends. 

(x)	Are there circumstances in which s.10 of the 1882 Act, on its true construction, requires an individual’s attestation of a bill of sale to be attributed to a company which is the grantee?

91.	We accept Mr Snowden’s submission (which is essentially common ground) that, if the answer to that question is “yes”, it is difficult to conceive of a stronger case than the present one for doing so. The underwriters negotiate and conclude the whole transaction with the customer on behalf of NRL. They are NRL’s only human point of contact with NRL. 

92.	However, in our judgment the answer to that question is “no”, for the following reasons. 

(1)	We return to and take as our starting point the principle enunciated by Cotton LJ in Hill v Kirkwood: “We must be satisfied that the Act is sufficiently clear in its terms to justify the Court in depriving a man of a security which would be taken from him”. As we have noted, section 10 is a provision which renders the bill of sale void even as between the original parties to it. That is a drastic result, and one which should not in our judgment follow unless it is sufficiently clear that it was intended by Parliament. 

(2)	For the reasons which we have given an individual cannot in our judgment attest as agent for another individual, or for other individuals trading as partners. He necessarily attests on his own behalf. For the same reasons the notion that A’s attestation could be attributed to a company, however closely connected with it A may be, is an unnatural and surprising one. It is in our judgment not something which one would expect to have been in the contemplation of Parliament unless a clear intention to that effect is displayed. The researches of counsel did not reveal (and nor are we aware of) any instance hitherto in any context, statutory or otherwise, where the act of witnessing a signature has been held attributable to a company, so to that extent it would break new ground to hold that s.10 did so intend. 

(3)	By 1882 there had been a number of decisions under the 1878 Act in which it had been held that the solicitor who (as was required under that Act) attested the bill of sale need not be independent of the grantee. Indeed, he could be a clerk employed by the grantee’s solicitor or even that solicitor himself. The possible dangers inherent in the attesting witness being associated with the grantee had therefore been brought to Parliament’s attention. Had Parliament intended that the 1882 Act should prevent witnesses closely associated with the grantee from attesting, that would in our judgment have been provided for expressly. 

(4)	The protection for the grantor which the 1878 Act, by requiring attestation and explanation by a solicitor, had intended to provide, was in effect replaced under the 1882 Act primarily by the requirement for a simple, mandatory form of bill of sale which was intended to be easily understood. As regards attestation, s.10 did not quite revert to the position prior to any of the bills of sale legislation, or to that under the 1854 Act, (i.e. that no attestation was required). However, (i) the standard form of the bill of sale provided for by the 1882 Act was required to be a deed, and it had long been the practice for the execution of deeds to be attested and (ii) the 1882 Act did not impose any more stringent requirement than obtained under the general law where attestation was required by a document conferring a power or by statute. 

(5)	In our judgment the natural and obvious way of achieving the result that a person acting for a corporate party could not validly attest would not have been by way of an (implied) “special rule of attribution” that the individual’s attestation should be attributed to the company, but simply by expressly providing that the attesting witness could not be either a party or a person acting for that party in the transaction. Yet Parliament, apparently deliberately, did not so provide. If such a prohibition had been considered appropriate in the case of a corporate grantee, it would surely also have been considered appropriate in the case of an individual grantee or a partnership. However, Peace v Brookes is in our judgment clear, binding and soundly reasoned authority that there is no such prohibition.  

(6)	We accept Mr Snowden’s submission that it would have been in the contemplation of Parliament in 1882 that companies might be the grantees of bills of sale (although it may well be that it was not contemplated that they would frequently be grantees; none of cases cited to us have concerned bills of sale granted to a company, and the moneylenders who gave oral evidence to Parliament all appear to have been practising as individuals or in partnership). We further accept that, on the view which we have taken, the provision in s.10 that the attesting witness cannot be a party simply has no application to companies. However, we do not accept Mr Snowden’s submission that Parliament cannot have intended that result. The provision in our judgment falls within the category of case envisaged by Lord Hoffmann in Meridian where “the rule was not intended to apply to companies at all.” Even a requirement for attestation by an entirely independent witness would provide protection only against forgery, extreme forms of physical duress and obvious incapacity. As Deeny J noted in Northern Bank v Rush (supra):

	“The purpose of an attesting witness is to reassure other parties, and where necessary a court, that a signature which purports to be that of an individual  was impressed by somebody whom the witness believed to be that individual at the time in question. They are not verifying the wisdom or state of mind of that person at the time, although in certain situations they might be asked whether the party signing was sober or apparently of right mind at the time of signature. I do not think the role goes beyond that.” 

Even a wholly independent witness would not protect a borrower against factors such as economic duress, lack of understanding of the transaction, or rashness. Those, rather than outright fraud on the part of the lender or his associates, were much more the sort of matters in respect of which borrowers had been shown to be in need of protection, and which other provisions in the 1882 Act were designed to deal with. We do not therefore think that the fact this particular element of s.10 (i.e. the requirement that an attesting witness should not be a party to the bill) simply had no application where the company was the grantee would have been of any great concern to Parliament or should be inferred to have been contrary to its intention, any more than any other case of a grantee legally or physically incapable of attesting, e.g. because blind or on the other side of the world at the time.

Mr Snowden submits, however, that “not only does the requirement that a third party be present serve to discourage borrowers being pressurised into signing, but it may also provide the opportunity for a pause for thought in the process between the negotiation and execution of a bill of sale. Such a protective device remains of paramount importance to-day owing to the recent rise in the use of bills of sale over motor vehicles in subprime consumer lending …” However, for the reasons we have given, we do not think that the requirement for attestation could have been seen as protection against anything more than extreme forms of pressure. As for giving the opportunity for “a pause for thought”, we think that the modified procedure which NRL has adopted in the present case (see para. 37 above) demonstrates that it is simple for a lender to arrange matters in such a way that no such opportunity will be afforded. 

If greater protection for present-day consumers is thought to be required, the answer must in our view lie in express provision in or under the modern consumer legislation itself, not in imposing on the 1882 Act after nearly 130 years a novel reinterpretation which in our view the words of the section cannot bear. 

(7)	Mr Snowden further submits that unless his contentions are accepted s.10 could not apply even in the case where the grantee is a “one-man company”. The owner of the company could still witness the execution, whereas he would not have been able to do so if he had been a party in his personal capacity. Some such cases might be capable of being dealt with by piercing the corporate veil, or otherwise treating the interposition of the company as a “sham”, and thereby treating the individual as the grantee of the bill of sale. We accept, as did Mr Green, that the position may appear anomalous where that could not be done. But that anomaly is in our view much less than might at first sight appear when one appreciates (i) that even a requirement for a wholly independent witness would provide protection only against fraud and extreme forms of physical duress or physical or mental incapacity and (ii) that an individual grantee inclined to engage in that form of conduct would merely have to find someone associated with him who was prepared to go along with the fraud and witness the execution.  

(8)	If Mr Snowden’s contention were correct, the effect would be that the s.10 restriction would be capable of having a wider effect where the grantee is a company than where it is an individual or a partnership. Peace v Brooks demonstrates that, where the grantee is an individual or partnership, only the grantee(s) him/themselves are prevented from attesting. An agent acting for the grantee(s) is not so prevented. If, in the present case, the grantee had been an individual or a partnership, the underwriter would in our judgment clearly have been entitled to attest. There is no good reason why, in the case of companies, s.10 should have a significantly wider effect. 

(9)	Mr Snowden’s contention could lead to substantial uncertainty as to whether a bill is void by reason of non-compliance with s.10. It would be necessary to examine the relationship between a company grantee and the attesting witness, and the part which the witness had played in the transaction, in order to determine whether the witness’s attestation should be attributed to the company. Unless it were clear that there was no sufficiently close connection, there would be a risk of the bill being void, to the potential prejudice of third parties. It might in many cases be difficult for a third party to ascertain the position. In the present case, for example, NRL have changed their instructions to underwriters in relation to attestation, and the bills are now attested by an employee of the agent in the store. There might be uncertainty as to whether such a person’s action in routinely witnessing bills of sale ought to be attributed to NRL. 

This uncertainty would not necessarily be limited to a risk of invalidity by reason of the witness’s attestation being attributed to the grantee company. If the witness is employed by some other company (as the witnesses under NRL’s new practice are), and witnesses the bill in the course of his employment by that company, consistency might well require that the witness’s attestation be attributed to the employer company. The bill would then seem to be void, not because the attestation was by a party to the bill, but because the name and description of the attesting witness will have been incorrectly stated. The form of bill of sale in the Schedule to the 1882 Act gives an instruction to “add witness’ name, address and description”. The decided cases show that that requirement must be strictly complied with. They are collected in the footnotes to the following text  at para. 1745 of Halsbury’s Laws, 5th ed. (2008), Vol. 50:

	“The attestation clause is an essential part of the statutory form of a security bill of sale and must be meticulously completed. The name, address and description of the attesting witness or witnesses are required by the statutory form to be stated.” 

Similarly, the affidavit which is presented to and filed with the registrar pursuant to s.10(2) of the 1878 Act (which was not repealed by the 1882 Act) must contain a “description of the residence and occupation of …….. every attesting witness”. If, under the practice which is now adopted by NRL, the attestation by the agent’s employee is to be attributed to the agent company, the bill of sale might well be void for that reason. 

(xi)	Conclusion
93.	For the reasons set out above, we would therefore answer the Attestation Issue in the negative. 

JUDGE LEVENSON

94.	I would not allow this appeal but would confirm the decision of the First-tier Tribunal on this limited preliminary point, although not necessarily for all of the same reasons. My answer to the attestation question as cited in paragraph 4 above would be “yes”.

95.	I agree with the analysis and interlocutory determinations set out in paragraphs 1 to 25 above and I gratefully adopt the statements of facts and background set out in paragraphs 26 to 77. I note in particular that the attesting “underwriter” would always give the business address of the appellants when witnessing a bill of sale (paragraph 35), and that “The requirement for attestation is capable of providing some protection against forgery, against extreme forms of physical duress, and against a borrower executing a bill of sale when he is plainly incapable of doing so” (paragraph 73). 

96.	However, I do not agree that “a company cannot in any meaningful sense witness the execution of a document” (paragraph 78). We all agree that, acting through natural persons, a company can do all sorts of things, even (notwithstanding the comments of Lord Hoffman quoted in paragraph 77) commit and be punished for a criminal offence (a brief glance at the annual Criminal Statistics will show how often this happens). The matters discussed in paragraphs 86 to 90 support this approach. The reasoning behind the majority view is that “the person who gives evidence must be the person who was present at the execution” (paragraph 80) and that “individual A cannot witness the execution of a document as agent for or on behalf of individual B” (paragraph 81). It seems to me that these statements follow from the view that a company cannot witness a document, rather than being reasons for that view. If a wide variety of acts by those acting for a company can be attributed to a company, I see no reason why, in the context of witnessing commercial documents, such acts cannot include this type of attestation. This would not prevent the natural person who witnessed the bill of behalf of the company from giving evidence that he or she had done so, and it is simply irrelevant what one natural person can or cannot do on behalf of a another natural person, because a company is not a natural person.

97.	The decision in Peace v Brookes has been discussed in paragraphs 75 to 76 and 82 to 84 above. In the case of a partnership there is no need to attribute the actions of a non-partner to the partnership, since actions required to be carried out by a natural person can be carried out by a partner. Presumably this is why the question of attribution does not form part of the reasoning in that case, which (on the relevant point) is only really about whether an agent is a party. I cannot read the case as binding as to the decision that has to be made in the present case. 

98.	Where, in paragraph 92, the majority have given the answer “no”, I would give the answer “yes”. The result might well be “drastic”, but it is an appropriate result if section has not been complied with. If the underwriter were making the loan personally but attested the deed, the fact that the bill of sale were rendered void might also be “drastic”, but that is the logic of the provision. I fail to see why it should make a difference if the loan is made by the company for whom the underwriter is acting.

99.	I see nothing “unnatural” or “surprising” or unlikely to have been in the contemplation of parliament (paragraph 92(2)) for the attestation of the underwriter to be attributed to the company in a case such as the present one. In my view it would be far more drastic to rule that the protection of section 10 can never operate when the grantee is a company.

100.	The underwriter “negotiates and arranges the loan transaction … signs the loan documentation … and who is therefore the only person who deals with the borrower” on behalf of the company (paragraph 8 above). This puts the underwriter in a totally different position from a back room employee (as in Northern Bank Limited v Rush and Davidson). 

101.	The fears expressed by the majority towards the end of paragraph 92 are exaggerated and unwarranted. The attesting person could state their lack of relationship to the grantee (or the nature of their relationship). There have been far more complex problems solved by such simple devices. The notion that the attesting person might be taken as attesting on behalf of a totally separate company and therefore the attestation would be invalid is simply fanciful.

102.	For the above reasons I would give the answer “yes” to the Attestation Issue.

P L Howell

Howard Levenson

Charles Turnbull

(Judges of the Upper Tribunal) 

13 July 2011