Face value requirement meaning

Malik and others v Messalti [2024] EWHC 2713 (Ch) What are the practical implications of this case? The emphasis under IA 1986, s 423(3) lies on the transferor’s subjective aim, rather than the consequences of the disposition. A transfer for less than full value can be impugned under IA 1986, s 423 where the transferor’s broad, abstract intention is to keep assets out of creditors’ reach, even without contemplating any specific existing or prospective creditor or class. There is no requirement for the transferor to know of any, or all, actual or potential creditors at the time of the transfer. A gift, or a declaration of trust, is only vulnerable if the prohibited purpose is proved (though it need not be the sole reason for the deal). The transferor’s awareness (or lack of awareness) of particular creditors may inform the factual inquiry into whether that purpose was in fact held, but it is not decisive. In this matter, the face of the instrument of transfer contained concrete evidence that...

Earlier this year, the decision in Macdonald Hotels v Bank of Scotland unsettled lenders and their advisers, with obiter observations intimating that, for the ‘face value’ test to be satisfied for a deed, the document, on its face, must make plain that all parties expressly intended it to operate as a deed, rather than only those executing it as a deed. That stance differs from common practice in certain finance instruments, notably intercreditor agreements, which frequently state that only specified parties execute and deliver them as deeds and, unlike security documents, are ordinarily styled as ‘agreements’ in many instances. The City of London Law Society (CLLS) subsequently released a note expressing its view on the comments and on how to comply with the face value test, confirming that, in its opinion, there is a measure of flexibility in the ways the face value requirement can be satisfied in practice today. This News Analysis reviews where matters stand on this topic as 2025 now draws to a close...

This Practice Note applies solely to documents governed by the law of England and Wales. Its main focus is trust-based occupational pension schemes. A document is only enforceable by a court if it has been executed validly. It is therefore essential to follow the correct execution formalities. In pensions practice, the relevant paperwork will typically comprise trust deeds (contracts under seal) and various other forms of written agreements. While oral (ie non-written) agreements are uncommon in the pensions context, as a matter of principle they can be effective unless legislation mandates writing (for example, a contract for the sale of land under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A 1989)). This should be kept in mind when examining, or seeking to manage, any specific pension scheme... Execution formalities for deeds Deeds concerning the trusts of occupational pension schemes are frequently encountered in pensions work. Examples include: definitive trust deeds and rules deeds of appointment and removal of trustees, and...

This Practice Note condenses the law, guidance and practical approach to executing simple contracts and deeds. It highlights the main distinctions between deeds and simple contracts, pinpoints those transactions that must be effected by deed, and outlines the execution formalities for both. It also covers the need for signature, use of counterparts, dating, smart legal contracts, virtual execution and electronic signatures. We have created a comprehensive, interactive collection to help users recognise and navigate the concepts and recurring issues that arise when executing documents. Each section or phase provides practical guidance, precedent-style clauses and Q&As relevant to that stage. For further information, see: Execution collection. Creating contracts A contract is a binding agreement that confers rights and imposes obligations on two or more parties. There is extensive case law on contract principles which is not examined in detail here. Put simply, for a contract to arise, four essential elements must be present: an offer has been made that offer has been accepted valuable...

This Practice Note examines the courts’ overall approach to costs budgeting, the court’s function in supervising costs, and the distinct treatment of incurred costs as against budgeted costs. It further addresses the court’s position on hourly rates and contingencies, together with the situation where the parties have, or have not, reached accord on their respective costs budgets. Costs budgeting—general approach Costs budgeting is not a granular assessment; instead, it is the exercise by which the court sets a sum that is reasonable and proportionate, on the standard basis, for each party’s budgeted (future) costs. In essence, its purpose is to inform parties of the potential liability they may face to the other side if they are unsuccessful and/or if a costs order is made in the opponent’s favour. At this stage, the court commonly adopts a broad‑brush stance. Nevertheless, in exceptional matters it can be appropriate, or indeed necessary, for the court to interrogate a party’s budget ‘with a fine tooth comb’, analysing the constituent figures in detail...