We live in a world where speed and efficiency are paramount in all business dealings. Telephone and video conferences have long taken the place of physical meetings. Signing and closing of transactions by email or fax are becoming the norm rather than the exception. The business world is becoming more 'virtualised' every day.

It is therefore not surprising that a recent English court decision with the potential to 'put the clock back' has stirred up great debate among London and other common law circles.

The Mercury Case

In the recent English High Court case of Mercury Tax Group v HMRC [2008] EWHC 2721 (Admin), Underhill J made trenchant comments about execution of documents.

The case involved a tax avoidance scheme called a 'gilt strip' scheme which Mercury operated for a number of clients. The scheme came under the scrutiny of HM Revenue and Customs (HMRC), the UK tax authority. HMRC suspected that the scheme contained serious flaws which Mercury tried dishonestly to conceal, and obtained search warrants seeking the relevant documents. Mercury brought judicial review proceedings against HMRC, seeking to quash the warrants and retrieve the documents, as well as claiming damages.

It was accepted that the 'gilt strip' scheme, if properly implemented, was lawful and effective at the material time. The mode of execution was therefore a key factor before the High Court.

One of the features brought before the court was that the parties had signed signature pages from three incomplete draft documents. At this time the draft documents still contained blanks, some of which were material in nature, and there were subsequent amendments to the documents.

Mercury then detached the signature pages from the drafts and stapled them onto final versions, which were significantly different from the drafts signed by the parties. The parties were never asked to sign the final form.

Mercury argued it was ordinary office practice and wholly unobjectionable to obtain a party's signature to a draft and then transfer it to a final version. They cited various case authorities to support the proposition that it was legally possible to alter a contract after it has been signed provided the alteration is authorised or ratified by the signatory. HMRC said that Mercury's mode of execution undermined the essential validity of the documents, that there were reasonable suspicions of fraud, and that the searches were necessary.

Discrete Physical Entity

In the end, the warrants were quashed on the ground that the lower court was misled as to dishonesty. However, subsequent commentary has focused on the part of the judgment which deals with Mercury's arguments for recycling signature pages. Mercury's argument that this was ordinary and acceptable practice was soundly rejected by the court.

The judge said a document to be signed should exist as a 'discrete physical entity'  In his own words:

"the parties ... must be taken to have regarded signature as an essential element in the effectiveness of the documents: that is to be inferred from their form. In such a case I believe that the common understanding is that the document to be signed exists as a discrete physical entity (whether in a single version or in a series of counterparts) at the moment of signing ... [T]he requirement that a party sign an actual existing authoritative version of the contractual document gives some, albeit not total, protection against fraud or mistake."

The judge also pointed out that, under s 1(1) of the Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A), a deed must be executed by an individual as a complete document.

Although Underhill J's comments in Mercury were technically obiter dictum, the forcefulness and clarity of his views have resulted in the decision stimulating significant debate among the London legal community as to the appropriate practice for execution of documents going forward.

Execution of Documents after Mercury

With the advent of electronic communications, 'virtual signings' are increasingly relied upon to cater for the busy schedules of business people. The practice of taking a pre-signed signature page from one document (or more often one version of a document) and recycling it for use in another has grown out of necessity and expedience. This practice obviously involves a number of legal risks, including risk of fraud. The pre-signing process also tends to be accompanied by a convoluted electronic paper trail which may lead to great difficulty, especially when this consists of a mass of conflicting emails, in trying after the event to identify the precise version of the document which can be said to be the final form.

Weighing business necessity against the legal risks, many practitioners around the world have come to adopt the practice of pre-signed pages. Prudent lawyers have taken pains to ensure that the requisite evidential trail is available to establish the meeting of the minds which forms the basis of an English law contract. The judge's rejection of the 'standard office practice' argument and insistence on the document's existing as a discrete physical entity at the moment of signing cast into doubt the very foundations of this practice.

In the post-Mercury world, lawyers arranging signing should ensure the signatory is signing a full printed document, as opposed to just the signing page with the rest of the document never expanded from an email to a physical hard copy. This is of course best achieved where the signatory attends a meeting arranged by the lawyers and the full document is presented to him for signing. It is also possible to achieve the same result by detailed guidance from the lawyer to the client (if he is at another location) for the latter to print the whole document off, including all the schedules and exhibits, which he should then sign and return to the lawyer by courier or post.

Signing in counterpart remains acceptable after Mercury, but a single fully executed counterpart will comprise the entire document plus the signing page, instead of just the signing page. It follows that 10 parties signing in counterpart would result in 10 full copies comprising a full executed original, which should then be kept by the law firm (and the client) in such form. While a conformed copy could subsequently be prepared for convenience of reference, the implications in time and paper wastage involved in this approach to execution are nevertheless obvious.

The above is generally accepted as the post-Mercury position for English law deeds, particularly having regard to the requirements of the LP(MP)A which points to the signature and attestation forming part of the same physical document. For simple contracts, for which strict application of the Mercury decision would appear to be legally incorrect (see below), this high-security procedure is considered too cumbersome and a number of major English law firms have sought to simplify the process. Where it is not practicable to adhere to the highest security procedures, some firms have adopted alternative procedures to set up an evidential trail, with a view to establishing the parties' intention to execute a document that is partly physical and partly virtual. This will serve to rebut any presumption that may have been raised by Mercury as to the parties' intention to sign a discrete physical entity. Such evidential trail may involve guidance from the lawyer to the client for execution of the physical signature page, formal email authorisation from the client to the lawyer authorising the attachment of the signature page to an identified final version of the document, and innovative drafting of the counterparts clause.

Many major London law firms are formulating internal procedures reflecting these requirements, to avoid falling foul of the Mercury decision.

Questioning Mercury and Forthcoming Guidance

The application of the Mercury judgement to documents under seal is largely uncontroversial among English lawyers. However, the judge's view that a simple contract should also be executed as a 'discrete physical entity' has given rise to lively debate.

Views diverge as to whether this is the true position under English law. Some consider that the judge may simply have been wrong in respect of simple contracts, particularly having regard to the very flexible rules on contract formation under English law. Others have suggested that the judgement may be said merely to raise a presumption that the parties intended to sign a single printed document, a presumption which can be rebutted by careful management of the signing process, as described above.

A working group of City of London law firms has been formed to harmonise market practice. The Law Society in England is also involved in drafting guidance on execution and completion practices. The protocol, which seeks to balance the legal risks and business reality, is likely to include a number of legal safeguards and will have significant impact on the way documents governed by English law are executed around the world, whether under hand or under seal.

Implications of Mercury in Hong Kong

Hong Kong lawyers arranging execution of English-law governed documents in Hong Kong will clearly need to understand the implications of the Mercury case, and ensure that they have considered what measures are appropriate. This will particularly be the case where the firm is required to give a legal opinion as to 'due execution' under English law.

However, to what extent might the Mercury case form part of Hong Kong law and directly affect execution of contracts governed by Hong Kong law?

Under the Basic Law, Hong Kong courts may refer to precedents of other common law jurisdictions. The technical position of English court decisions (up to the level of the Court of Appeal) as non-binding though persuasive has not changed significantly after 1997. As English judgements have persuasive (but not binding) authority in Hong Kong, it is possible for parts of the Mercury decision to be followed by a Hong Kong court, in so far as they address matters of common law and are not only a matter of construction of the LP(MP)A (which has no Hong Kong equivalent). However, as the statements in Mercury about execution are obiter, there is some doubt whether a Hong Kong court would follow the case as persuasive authority.

It is submitted that the Mercury requirements are most forcefully stated in relation to English deeds. Given the absence of a Hong Kong equivalent of the LP(MP)A, it is doubtful whether Mercury would apply to a Hong Kong deed.

The application of Mercury to a Hong Kong contract under hand appears even more precarious. Similar to English law, Hong Kong law has a very flexible approach to the formation of contracts. It has always been the case that, subject to a limited number of exceptions (relating mainly to real property), contracts in Hong Kong may be formed with minimum formal requirements. In relation to 'virtual' or electronic contracts, the Electronic Transactions Ordinance (Cap 553) (ETO) both permits electronic documents to fulfil a requirement for 'writing' (s 5) and recognises an electronic signature as fulfilling the requirement for a 'signature' (s 6). Accordingly, it would be unlikely for a court to conclude that a contract signed by way of virtual signing is not valid and effective under Hong Kong law. However, the position cannot be stated with certainty until the case is tested before a Hong Kong court.

Conclusion

In international financial centres such as Hong Kong and other major cities in China, commercial agreements governed by English law or some other common law system are not at all uncommon. Practitioners in Hong Kong should therefore be aware of the Mercury decision and its potential implications for law and practice here.

In particular, all Hong Kong lawyers should bear in mind the fact, brought into such dramatic focus by Mercury, that reliance on execution 'short-cuts' such as execution in counterpart, freely detachable signature pages, facsimile or emailed signatures, and post-facto alterations to so-called 'final versions' or 'execution versions' can be highly risky if not managed with care.

Antony Dapiran
Partner
Freshfields Bruckhaus Deringer

Helena Chung
Practice Development Manager
Freshfields Bruckhaus Deringer

對文件簽立方式的質疑
Antony Dapiran及Helena Chung兩位提出警告， 近期的Mercury案例可能導致在英國法律下的合約簽立會有更嚴格的規定。

在我們生活的世界，速度和效率對所有商業交易而言都是極為重要的。現場會議早已被電話和視頻會議所取代，而通過電郵或傳真來進行簽署或完成交易已成為了常規而非例外。商業世界中的虛擬性每天都在加增。

因此，英國法院最近作出的一宗可能令「時光倒流」的判決，引發倫敦以及其他普通法地區的法律界的廣泛討論，實在不足為奇。

Mercury案

英國高等法院最近審理的Mercury Tax Group v HMRC [2008] EWHC 2721 (Admin)案件，法官Underhill就文件的簽立作出了尖銳的評論。

該案涉及一個被稱為「gilt strip」的、由Mercury負責為多個客戶操作的避稅方案。該方案受到英國稅務部門，即HM Revenue and Customs (HMRC)的審查。該部門懷疑這方案存有嚴重違法問題，而Mercury試圖以不誠實方式加以隱藏，故HMRC申請並獲得頒發搜查令以查找有關文件。Mercury乃針對HMRC的行動提出司法覆核，要求撤銷搜查令，取回文件，並作出賠償。

法庭同意，假如gilt strip方案實施恰當，則在案件關鍵時刻它是屬於合法而且有效的。因此，簽立的方式便成為了高等法院審理該案的關鍵要素。

法庭注意到該案的其中一個特別之處是，各訂約方分別在三份不完整的草稿文件的簽署頁上簽署。此時，該等草稿文件尚留有空位，它們其中有一些相當具關鍵性，而文件隨後亦作出了修改。Mercury其後把該等簽署頁從文件草稿中抽出來，再用釘書機釘到最終版本上，而該最終版本與各訂約方所簽的草稿顯著不同。各訂約方從來沒有被要求簽署最終版本。

Mercury辯稱，取得訂約方在文件草稿上的簽名，然後將它轉移至最終版本之上，乃辦公室運作的慣常做法，完全是無可厚非的。他們援引若干案例來證明，合約簽立後要予以更改在法律上是可以的，只要獲得簽署人授權或承認便可。HMRC則稱，Mercury的簽立方式有損文件的基本效力，有合理理由懷疑其存在欺詐，必須進行搜查。

獨立有形實體

搜查令最終因為下級法院在不誠實問題上受誤導而被撤銷。然而，其後的評論集中於判決書中，Mercury重複使用簽署頁的部分。Mercury稱這一做法是慣常及可接受的，但法院對此嚴厲予以否定。 法官稱，待簽立的文件應該是以「獨立有形實體」的方式存在。他的原話是：

「訂約方…必須視為已經認識到簽名是文件有效的基本元素， 這一點可從文件的格式來推定。在這情況下，我認為一般的理解是：待簽署的文件在簽署的那一刻，是作為一個獨立有形實體而存在（不論其為單一版本還是連串複本）…要求訂約方在一份實際存在的合約文件的獲授權版本上簽署，可以為欺詐或是發生錯誤的情況提供一定程度的保障（儘管並非全面性的保障。」

法官亦指出，根據1989年《財產法（雜項規定）》第1 (1)條規定，契據必須以完整文件形式由個人簽立。

雖然Underhill法官在Mercury案件中作出的評論在性質上只是附帶意見，但其觀點具有很強的說服力和明確性，該裁決就文件簽立的適當做法引發了倫敦法律界的激烈辯論。

Mercury案後的文件簽立

隨著電子通信的發展，人們越來越多依賴「虛擬簽署」來符合繁忙的商界人士的需要。將一份文件（更常見的是文件的一個版本）中已預先簽了字的簽署頁拿到另一份文件重複使用，是出於需要和方便。這種做法顯然涉及各種法律風險，包括欺詐風險。同時，預先簽署的程序亦伴有錯綜複雜的電子文檔資料，可能導致在事後識別終稿的確切版本時面對重大困難，特別是假如存在大量相互抵觸的電郵時。

在權衡商務需要和法律風險之後，很多執業者採用了預先簽署頁的做法。謹慎的律師會設法保留必要的證據性質的文件，以便證明存在意識上的一致，因為英國合約法規定意識上的一致是合約的基礎。本案的法官對「標準辦公室做法」論據的排斥，以及對文件在簽立時必須以獨立有形實體形式存在的堅持，是對上述做法之基礎提出質疑。

在Mercury案之後，安排客戶簽署文件的律師應該確保簽署人所簽的文件為完整的列印文件，而不是僅有簽署頁，而其他文件內容並未從電郵列印成為紙質文件。由律師安排簽立人到場並把完整的文件交給他簽署，自然是最好的辦法。此外，也可以用另一種方式達到同樣的效果，那是要求律師給予客戶（假如他正身在外地）詳細指引，著客戶把整份文件列印出來，包括全部附件和證物單，客戶於簽署後通過快遞或郵遞送回給律師。

Mercury案之後，在複本上簽署的做法仍然可接受，但單一的完全簽立複本，必須包括完整的文件再加上簽署頁，而不是僅有簽署頁。由此可知，10個訂約方在複本上簽署，會產生10份完整複本並組成一份完全簽立的正本，並應由律師行（以及客戶）按如此的方式保存。雖然可於其後製作一份內容一致的文件以便參考，但不難看出此種簽立方式所耗費的時間和紙張的程度。

以上所述，已被普遍接納為乃Mercury案後英國有關契據的法律規定，特別是考慮到《財產法（雜項規定）》的規定，該法例特別涉及構成一份實質文件之一部分的簽名及見證部分。就簡單合約而言，嚴格適用Mercury案的裁決，似乎在法律上是不正確的（見以下所述），上述的高度安全步驟被視為過於繁瑣，所以很多大型英國律師行已經設法簡化該程序。當遵循高度安全步驟看來並不可行時，部分律師行採用變通步驟來設立證據性文檔，其目的在於證明各訂約方確有意圖簽立一份部分為實質、部分為虛擬的文件。這是為了反駁根據Mercury案而在各當事人簽署獨立有形實體之意圖上可能作出的假定。此證據性文檔可包括律師就實質文件的簽署頁簽立而給予客戶的指引，由客戶發給律師，授權其將簽署頁附到該已經明確的文件最終版本，以及複本條款的新草擬內容。

倫敦很多大型律師行正在制定內部程序以體現上述各方面要求，力圖避免違犯Mercury案的裁決。

對Mercury案的質疑及即將作出的指引

大體上，英國律師對Mercury案的判決在蓋印生效文件方面的適用並沒有爭議，但該案法官所提出的，簡單合約亦須作為獨立有形實體般簽立的觀點，卻引發了激烈的辯論。

對於此觀點是否代表了英國法律，大家看法不一。有人認為法官對簡單合約的論述明顯錯誤，特別是基於英國法律對於訂立合約方面的靈活規定。其他人則認為，該判決僅僅可以理解為作出了一項推定，即各訂約方有意圖簽立一份單一的、已列印出來的文件，而該推定可通過對簽署過程的細心管理來予以反駁。

一個倫敦市律師事務所工作小組已成立，以期將它和市場操作協調。英國律師會亦參與草擬有關簽立及完成交易的指引。該草案試圖平衡法律風險和商業現實，並很可能會包含若干法律保障措施，並會對全球受英國法律規管的文件之簽立產生重大影響，不論其為簽署還是蓋印生效。

Mercury案對香港的影響

安排受英國法律規管之文件簽立的香港律師，顯然需要瞭解Mercury案所帶來的影響，並確保其已經考慮到採用何種適當措施加以應對。當律師行需要就英國法律下的「妥為簽立」出具法律意見時，尤須如此。

然而，在何種程度上Mercury案會成為香港法律的一部分，並直接影響受香港法律規管的合約之簽立？

根據《基本法》，香港法庭可參考其他普通法司法管轄區的判例。英國法院（直至上訴法院這個層次）的裁決具有說服力而不具有約束力這一法律地位，從1997年以後都一直沒有重大改變。因為英國的判決在香港具有說服力（但不具有約束力），所以Mercury案的裁決可能會有部分為香港法庭所遵從，前提是它們是論及普通法事宜，而並非只是對《財產法（雜項規定）》的闡釋。該法在香港沒有對應立法。但是，由於Mercury案中有關簽立的闡述只屬於附帶意見，香港法庭會否把它視作具有說服力的案例而加以遵從，看來仍然存疑。

我們認為，Mercury案的規定，在英國契據之適用上最為有力。由於香港沒有相當於《財產法（雜項規定）》的立法，所以Mercury案是否會適用於香港的契據尚存疑問。

Mercury案對香港簽名生效合約的適用性似乎更難以確定。香港法律與英國法律類似， 對合約的訂立具有靈活性的規定。一直以來，除了若干例外情況外（主要涉及土地財產），香港合約只須符合最低限度的正式規定便能夠成立。至於「虛擬」或電子形式合約，《電子交易法》（法例第553章）（ETO）既允許電子文件具有「文字」的效力（第5條），又認可電子簽名具有「簽名」的效力（ 第6條）。據此，依照香港法律，法庭不會裁定經虛擬簽署的合約不能成為有效和產生作用的合約。但是，在此類案件經香港法庭進行驗證前，情況尚不能確定。

結論

在各個國際金融中心，諸如香港及其他中國大城市，受英國法例或其他一些普通法體系規管的商務協議並不罕見。因此，香港的執業者應該知悉Mercury案的裁決及其對本地法律和實務的潛在影響。

香港律師尤其需要牢記：從Mercury案所揭視的事實，假如依賴「捷徑」簽立，諸如複本簽立、可輕易分離之簽署頁、傳真或電郵簽名、對所謂「最終版本」或「簽立版本」的事後修改等，倘處理不當，便會有很高的風險。

Antony Dapiran
合夥人
富而德律師事務所

Helena Chung
Practice Development Manager
富而德律師事務所