The second appeal of this case was heard in late 2022 – the takeaway from which should be to exercise caution when discussing property rights (which are governed by old legislation) using modern methods of electronic communication (email), and to be alert to the consequences that signing an email with your typed name, can have.
Hudson and Hathway were in a relationship (unmarried) until they separated in 2009 – Hudson left the property he and Hathway owned together as joint tenants, and Hathway remained there with their two sons. The mortgage was converted to interest only after the separation, but it was mostly paid by Hudson.
In 2013, the parties exchanged a series of emails summarised below. The emails from Hudson were signed off by him using his first name, typed ‘Lee’. In an email to Hathway, Hudson said:
“So here it is. We were never married. You have no claim over what is mine. What I consider ring-fenced is what I get from my years of personal graft. They are not up for discussion. I’m not agreeing to give you any. …The liquid cash, you can have. Savings in the bank, other plans, take it all. Physical property, the contents of the house…again I don’t want it; keep it. Which leaves the house, a bad asset which is preventing all of us [from] moving on with our lives…You know what, I want none of the proceeds of that either. Take it. Buy yourself somewhere you can afford to live…
What I want is an end to it. So have everything that’s available to have now and when the house is sold.”
“So that we can move forward and get to a point of completely severing our financial connections, your suggestion, as I understand it, is you get sole ownership of your shares and pension, I get the equity from the house, the house contents, savings and income from endowments. Is that right? If so, then I will accept this and will do everything I can to get the house ready for sale as soon as the situation with the oil spill is resolved.”
Hudson replied, again by email and signed using his first name:
“Yes, that's right…Under this arrangement, I've no interest whatsoever in the house, so whilst I will continue to contribute, I won't do so forever.”
In 2019 though, Hudson issued proceedings seeking an order for sale of the property with an equal division of the sale proceeds. The proceedings were extensive and the emails (which had not been considered before) were raised during the second appeal.
The Court of Appeal said that Hudson’s emails from 2013 demonstrated a clear intention to divest himself of his interest in the property immediately, and as beneficial interests could be transferred by written signature (s.53 of the Law of Property Act 1925), the emails signed by Hudson using his first name were sufficient to satisfy the statutory formalities. It was therefore held that Hudson had expressly released his beneficial interest in the property to Hathway, through the 2013 emails, and Hudson was not entitled to any beneficial interest in the property.
This case highlights the need to take particular care when engaging in email correspondence, as signing an email with your first name (or adding any email signature) could be a valid signature for the purposes of disposing of property rights. Anyone involved in similar negotiations should always be cautious and head emails with ‘subject to contract’ or other label as appropriate, to avoid entering into a binding agreement before being ready to do so.
There are similarities between the facts here and with proprietary estoppel cases. Before the emails were considered, Hathway argued that she had suffered detriment through paying the mortgage and maintaining the property alone since 2015, not claiming against other assets in Hudson’s name that he had acquired during their relationship, and not claiming financial support for the children. For more on proprietary estoppel, see here.
For assistance with matters such as these you can contact the Property Disputes team by emailing [email protected].
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