No Agency Signature under s.53(1)(b): Corporate Execution Required, and Non‑Compliant Self‑Declared Trusts Cannot Defeat s.423 Transactions-at-Undervalue

No Agency Signature under s.53(1)(b): Corporate Execution Required, and Non‑Compliant Self‑Declared Trusts Cannot Defeat s.423 Transactions-at-Undervalue

Introduction

In National Iranian Oil Company & Anor v Crescent Gas Corporation Ltd [2025] EWCA Civ 1211, the Court of Appeal (Civil Division) delivered a landmark judgment on a pair of long‑unsettled questions at the intersection of real property, trusts and insolvency law. The case addresses:

  • Whether, to satisfy section 53(1)(b) of the Law of Property Act 1925 (LPA 1925), the writing that “manifests and proves” a declaration of trust of land can be signed by an agent; and, if not, how a company complies with the requirement.
  • The consequences of non‑compliance with s.53(1)(b) where a settlor later transfers legal title to the beneficiary, and whether such a transfer is a “transaction at an undervalue” under section 423 of the Insolvency Act 1986.

The dispute arose after Crescent Gas Corporation (CGC) sought to enforce a substantial arbitral award against National Iranian Oil Company (NIOC). On discovering that, shortly after permission to enforce the award was granted, NIOC transferred “NIOC House” (a London property) to a fund associated with its employees, CGC issued proceedings under s.423 Insolvency Act 1986, alleging a transaction at an undervalue made with the purpose of putting assets beyond reach. NIOC and the Fund defended on the basis that the Fund was already the beneficial owner—initially under Iranian law concepts (amanat/amin), and alternatively by English trusts declared through a 2019 mortgage and a 2020 certificate of title (the Mortgage Documents).

At first instance, the judge rejected the Iranian law argument, found that the Mortgage Documents did contain declarations of trust, but held they did not satisfy s.53(1)(b) because they were signed by an agent rather than by NIOC itself. He therefore concluded that, at the time of the transfer, NIOC remained the beneficial owner; the transfer was an undervalue and relief under s.423 was granted. On appeal, Grounds 1 and 2 challenged the s.53(1)(b) analysis; Ground 3 challenged the consequences of any non‑compliance in the context of s.423.

Summary of the Judgment

The Court of Appeal dismissed the appeal overall:

  • Ground 1 (agency signature under s.53(1)(b)): Dismissed unanimously. A declaration of trust of land must be manifested and proved by writing signed personally by the person able to declare the trust. A signature by an agent does not satisfy s.53(1)(b). This is so for natural persons; for companies, “signature by the company” is achieved only through statutory modes of execution (e.g., Companies Act 2006 s.44) or the equivalent for overseas companies (Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009, reg. 4), not by simple agency signature “on behalf of” the company.
  • Ground 2 (were the Mortgage Documents “signed by NIOC”?): Dismissed unanimously. NIOC’s new reliance on reg. 4 was not pleaded or proved and could not be raised for the first time on appeal. Its reliance on LPA 1925 s.74(4) (and late attempt to combine s.74(3) and (4)) failed: those provisions did not convert an agent’s signature into the company’s own signature for s.53(1)(b) purposes.
  • Ground 3 (consequences of non‑compliance; s.423 undervalue): Dismissed by the majority (Falk LJ and the Chancellor, Sir Julian Flaux; Zacaroli LJ dissenting). The majority held that, in the absence of compliant writing by the time of the transfer, the court must treat the trustee/settlor as the beneficial owner for the purpose of s.423. A voluntary transfer of legal title to the putative beneficiary thereby confers substantial value and is a transaction at an undervalue. The appeal therefore failed.

The Court also rejected CGC’s respondent’s notice arguments that:

  • the Mortgage Documents did not amount to declarations of trust (rejected); and
  • NTT/Eversheds lacked authority to declare a trust (too late; not put in issue at trial).

Analysis

Precedents and Sources Considered

The Court surveyed centuries of authority and commentary, including:

  • Statute of Frauds 1677, ss.3, 4, 7, 9, 16 (predecessors to LPA s.53(1)(a)-(c) and s.40): especially s.7 (trusts of land “manifested and proved” by writing signed by the party enabled to declare the trust) and s.4 (contracts “signed by the party to be charged or by some other person thereunto by him lawfully authorised”).
  • Tierney v Wood (1854) 19 Beav 330 and Kronheim v Johnson (1877) 7 Ch D 60: addressing who is the “party enabled to declare the trust” where the beneficial interest is already held in trust.
  • St Ermins Property Co Ltd v Tingay [2002] EWHC 1673 (Ch); approved in Cascades v Cascades Freehold [2007] EWCA Civ 1555: contrasting statutory formulations that expressly allow signature “on behalf of” with provisions that do not.
  • Northwood (Solihull) Ltd v Fearn [2022] EWCA Civ 40 on the common law principle that one may generally sign through an agent, but that statutes may exceptionally require personal signature.
  • UBAF Ltd v European American Banking [1984] QB 713: pre‑1989 authority endorsing corporate signature via duly authorised agent under s.6 of the 1828 Act; carefully distinguished in light of post‑1989 company execution reforms.
  • Hilmi Associates v 20 Pembridge Villas [2010] EWCA Civ 314: a company “signs” personally by executing documents under the statutory execution provisions; mere agency signature is not enough where a statute requires signature “by” the company.
  • Rochefoucauld v Boustead [1897] 1 Ch 196: s.7 Statute of Frauds is a rule of evidence; equity will not allow the statute to be used as an instrument of fraud in three‑party acquisitions (constructive trust analysis often suggested).
  • Gardner v Rowe (1828) 5 Russ 258: subsequent compliant writing may prove an earlier trust; prior to such writing, the beneficial interest did not pass to the trustee’s assignees in bankruptcy.
  • Forster v Hale (1798) 3 Ves 696; Ambrose v Ambrose (1716) 1 P Wms 321; Nab v Nab (1717) 10 Mod 404; Cottington v Fletcher (1740) 2 Atk 155: writing can follow the declaration; admissions may suffice as written evidence (historical practice).
  • Grey v IRC [1960] AC 1 (House of Lords); [1958] Ch 690 (CA): distinctions between s.53(1)(b) and (c); the latter amended predecessor s.9 and is broader.
  • Paul v Constance [1977] 1 WLR 527; Rowe v Prance [1999] 2 FLR 787; Re Northcliffe [1925] Ch 651; Grant v Grant (1865) 34 Beav 623: intention to declare a trust may be inferred from words and conduct; a confirmation can itself operate as a declaration.
  • Hudson v Hathway [2022] EWCA Civ 1648; [2023] KB 345: modern approach to “signature” (including by email) for s.53(1)(c); conceptually distinct from agency under s.53(1)(b).
  • El‑Husseiny v Invest Bank [2025] UKSC 4 on s.423’s scope and the meaning of “transaction”.

The Court also reviewed leading textbooks, including Megarry & Wade, Lewin on Trusts, Snell, Underhill & Hayton, Thomas & Hudson, and academic commentary (e.g., Swadling, Harpum, Youdan), to situate s.53(1)(b) within its historical and doctrinal context.

Legal Reasoning

1) Ground 1: Who can sign for s.53(1)(b)? No agency signature

The Court held that s.53(1)(b) demands a personal signature by “some person who is able to declare such trust”, not a signature by an agent. The analysis rested on:

  • Text and legislative context. In the Statute of Frauds, ss.3, 4 and 16 expressly allowed signature by an agent; ss.7 (trusts of land) and 9 (assignments of trust) did not. LPA 1925 continues that structure: s.53(1)(a) and (c) allow signature by an agent (lawfully authorised in writing) because those provisions regulate formal creation or disposition; s.53(1)(b) (manifestation and proof) conspicuously does not.
  • “Some person able to declare” is not “agent”. The change from “the party” in s.7 to “some person” in s.53(1)(b) did not smuggle agents into the class of signatories. Rather, it accommodates situations (e.g., Gardner v Rowe) where either settlor or trustee could supply the written manifestation of an existing trust. If Parliament intended to authorise agency, it would have said so, as it did in s.53(1)(c) and s.40.
  • Purpose. The anti‑fraud policy of the Statute of Frauds supports requiring direct settlor involvement in the written proof of a trust of land. Allowing an agent—potentially with only oral authorisation—to bind a landowner would undermine that protection.

The Court emphasised that while, at common law, one may generally sign via an agent, statutes may exceptionally require personal signature. Section 53(1)(b) is such an exception.

2) Companies: How does a company “sign” under s.53(1)(b)? Corporate execution, not agency

The Court accepted that a company cannot literally sign except through human agency, but post‑1989 company law supplies formal mechanisms by which a company itself “signs”:

  • Companies Act 2006, s.44: prescribes how a company executes documents (two authorised signatories; or a director in the presence of a witness), producing a signature “by” the company.
  • Overseas companies: governed by reg. 4 of the Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009, which recognises execution in the manner permitted by the company’s place of incorporation and provides an equivalence effect where expressed to be executed by the company.

Mere agency signature “on behalf of” the company does not amount to the company’s own signature for s.53(1)(b). The Court distinguished UBAF—a pre‑1989 case about a different statute (s.6 of the 1828 Act)—in light of the modern execution code and followed Hilmi: where a statute requires signature “by” the company, resort must be had to the statutory execution routes.

3) Ground 2: Why the Mortgage Documents did not satisfy s.53(1)(b)

Although the Mortgage and Certificate of Title objectively contained declarations of trust by NIOC (a significant point for practice), they did not comply with s.53(1)(b):

  • They were signed by NTT/Mr Rahgozar and Eversheds as agents; not by NIOC through corporate execution mechanisms.
  • NIOC’s new reliance on reg. 4 was not pleaded, no expert evidence of Iranian law was adduced, and it could not be run for the first time on appeal.
  • LPA 1925 s.74(4) (and the late reliance on s.74(3)) did not convert the agents’ signatures into NIOC’s own signature for s.53(1)(b) purposes.

4) Ground 3: Consequences of non‑compliance where s.423 Insolvency Act is invoked

The Court split. All Lords Justices agreed that s.53(1)(b) is in form a rule of evidence, not validity, and that subsequent compliant writing can prove an earlier trust. They diverged on what this means for s.423 at the time of the transfer.

  • Majority (Falk LJ and the Chancellor):
    • Mandatory evidential bar at the point of transfer. In the absence of writing that complies with s.53(1)(b) by the transfer date, the court must proceed on the basis that the trust cannot be recognised then—i.e., the transferor remains the beneficial owner. Section 53(1)(b) is not limited to cases where the trustee denies the trust.
    • Undervalue analysis. A bare “moral obligation” under an unenforceable trust is worth far less than the property’s value: the beneficiary cannot sue for income or capital, cannot invoke Saunders v Vautier, and cannot practically exploit the “interest” until compliant writing exists. Transfer of legal title in those circumstances confers substantial value and is a transaction at an undervalue within s.423(1).
    • Rochefoucauld confined. The exception to prevent use of the Statute of Frauds as an “instrument of fraud” applies to three‑party acquisitions (where a transferee accepts land on the basis it will be held for another). It does not apply to self‑declarations of trust; otherwise s.53(1)(b) would be denuded of effect.
  • Dissent (Zacaroli LJ):
    • Validity persists; evidence rule protects trustees, not creditors. A declaration of trust of land is valid when made; s.53(1)(b) is a procedural rule about proof. If the trustee admits the trust or later produces compliant writing, the mischief disappears. Treating the transfer as an undervalue would convert the evidential rule into a rule that alters proprietary reality.
    • Gardner v Rowe controls. The beneficial interest can be separated before compliant writing exists; later writing merely proves the prior trust. Accordingly, the transfer of legal title to the beneficiary in performance of a valid trust does not move any real value and should not be caught by s.423.

The majority view is the binding ratio on Ground 3: where a self‑declared trust of land has not been manifested and proved by compliant writing by the time of transfer, the court will treat the transferor as the beneficial owner for s.423. The transfer to the putative beneficiary will ordinarily be an undervalue.

Impact and Practical Implications

(A) Trusts of land: execution and evidencing

  • No agency signatures. For s.53(1)(b), a declaration of trust must be evidenced by writing signed personally by the person “able to declare such trust” (for companies, by the company’s own execution). A solicitor’s signature “on behalf of” the client, or a subsidiary’s managing director signing as attorney, will not suffice.
  • Companies: use the execution code. To create or prove a declaration of trust, a UK company should execute the document under s.44 Companies Act 2006 (two authorised signatories or a director with a witness; or a common seal). Overseas companies should comply with reg. 4 and the law of their place of incorporation, and ensure the document is expressed to be executed by the company.
  • Form is flexible; signature is not. The writing can be a recital in a mortgage, a certificate of title, a board minute, a letter, or an email (if signed by the person). But the signature must be the settlor’s or the company’s own (via statutory execution), not an agent’s.
  • Admissions may not rescue you. While there is historic authority that admissions can satisfy the evidential requirement, Falk LJ expressed doubt that mere admissions in proceedings obviate s.53(1)(b) in the modern context. Prudent practice is to ensure compliant written evidence is created and retained.

(B) Insolvency and asset‑protection planning

  • Self‑declared trusts of land that are not compliant by transfer date will not defeat s.423. Where a debtor drops legal title to a beneficiary under an unenforced, unevidenced (for s.53(1)(b)) trust, the transfer will ordinarily be at an undervalue. Creditors can invoke s.423 without proving fraud in the Rochefoucauld sense.
  • Timing matters. If compliant writing exists before the transfer, the position may be different, because the trust is then provable and enforceable. The majority judgment indicates that the undervalue analysis is anchored to the status at the time of transfer.
  • Three‑party arrangements vs self‑declarations. In genuine three‑party acquisitions (A transfers to T for B), the Rochefoucauld principle (often explained via constructive trust) may still allow enforcement notwithstanding s.53(1)(b). That route is not open in self‑declarations to evade s.423.

(C) Litigation and pleading strategy

  • Plead execution theory early. If relying on reg. 4 (overseas corporate execution) or on home‑law authorisation for a corporate agent to execute “by” the company, it must be pleaded and proved with foreign law evidence at trial. New points on appeal will be shut out when they require fresh evidence.
  • Authority challenges must be taken at trial. If a claimant wishes to argue that the signatory or solicitor lacked authority to declare a trust, it must be squarely pleaded; the Court refused to entertain a new “no‑authority” point on appeal.

Complex Concepts Simplified

  • What does s.53(1)(b) require? If you declare a trust of land (e.g., “I hold Blackacre on trust for X”), the trust is not enforceable unless there is some writing, signed by you, that manifests and proves that declaration. The writing can come later, but it must be your signature (or your company’s signature by proper corporate execution), not your agent’s.
  • Why can an agent sign some things but not this? In s.53(1)(a) (creating/disposing of an interest in land) and s.53(1)(c) (disposing of equitable interests), Parliament expressly allowed agents (authorised in writing) to sign. It did not do so in s.53(1)(b). That omission is deliberate and reflects an anti‑fraud policy.
  • Company signatures are governed by a special code. A company “signs” by using the formal execution methods set out in s.44 Companies Act 2006 (or reg. 4 for overseas companies). A single employee signing “for and on behalf of” the company is not the same thing as the company’s own signature where a statute demands the latter.
  • Self‑declaration vs three‑party trust. If A declares a trust over land A owns, s.53(1)(b) applies strictly. If land is conveyed to T on the basis T will hold for B, equity may not let T renege, even without writing (the Rochefoucauld principle). The present case involves self‑declaration, not a three‑party acquisition.
  • “Transaction at an undervalue” (s.423) is about whether a debtor gave away value without receiving value in return, in a way that prejudices creditors. The Supreme Court has stressed a practical approach: look to reality and common sense and what assets remain available to creditors.

Key Takeaways and Doctrinal Significance

  • Definitive answer on agency: For the first time authoritatively, the Court of Appeal holds that an agent’s signature cannot satisfy s.53(1)(b). This closes a longstanding doctrinal gap and aligns the provision with its anti‑fraud lineage.
  • Corporate compliance clarified: Companies must use statutory execution routes to “sign” for s.53(1)(b); relying on a letter or certificate signed “on behalf of” the company will not work unless it is properly executed as the company’s signature.
  • Declarations within third‑party instruments can amount to trusts: Recitals in a mortgage and a certificate of title objectively constituted declarations of trust. But without compliant signature, they remain insufficient proof for s.53(1)(b).
  • Insolvency interface reset: In self‑declaration cases, an unenforced, non‑compliant trust of land will not avert s.423. As at the transfer date, the court treats the settlor as beneficial owner; the transfer is at an undervalue.
  • Validity vs recognition: The majority did not need to declare such trusts “invalid” as a matter of substantive law. Instead, absent compliant writing by the relevant time, the courts will not recognise the trust for the undervalue analysis. That is a potent practical constraint.

Practical Compliance Checklist

  • When declaring a trust of land:
    • Ensure there is a contemporaneous written instrument containing the declaration, signed personally by the settlor.
    • If the settlor is a company, ensure the document is executed under s.44 Companies Act 2006 (or reg. 4 for overseas companies), and that the document makes clear it is executed by the company.
    • Do not rely on signatures by attorneys, solicitors, or subsidiaries “on behalf of” the settlor to satisfy s.53(1)(b).
    • Retain the document; do not assume you can “fix it later”—especially if insolvency risks exist.
  • Where a transfer to a beneficiary is contemplated:
    • Before transferring legal title, make sure the trust has already been “manifested and proved” by compliant writing; otherwise, the transfer may be exposed to s.423 challenge as an undervalue.
    • For overseas companies, take early advice on home‑law execution methods and be ready to prove them.
  • In litigation:
    • Plead any reliance on company execution rules (s.44/reg. 4) from the outset and adduce foreign law evidence where necessary.
    • If contesting authority, plead and put in issue the signatory’s authority at trial; do not leave it to appeal.

Conclusion

National Iranian Oil Company v Crescent Gas Corporation is a pivotal decision that sets two enduring markers in English law. First, it decisively confirms that s.53(1)(b) LPA 1925 is an exceptional formal requirement: a declaration of trust of land must be evidenced by writing signed personally by the settlor (or, for companies, by formal corporate execution). An agent’s signature will not do. Secondly, it clarifies the insolvency consequences of non‑compliance in self‑declaration cases: if, by the date of a transfer to the beneficiary, there is no compliant writing, the court will treat the transferor as beneficial owner for s.423 purposes and the transfer will generally be an undervalue.

The judgment also refines familiar doctrines. It reaffirms that documents such as mortgages and certificates of title can, in principle, contain declarations of trust; it distinguishes carefully between evidential formalities and substantive validity; it confines the venerable Rochefoucauld principle to three‑party arrangements; and it brings company execution practice squarely into the heart of trusts of land.

For practitioners, the message is unambiguous: do not depend on agency signatures or informal proxies to satisfy s.53(1)(b), and do not assume an unevidenced declaration can shelter a transfer from s.423. If a trust of land is intended, document it correctly, execute it properly, and do so before value‑shifting transactions take place.

Case Details

Year: 2025
Court: England and Wales Court of Appeal (Civil Division)

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