Careful what you type – Court of Appeal rules informal email exchange is sufficient to transfer property to ex-partner

For unmarried co-habiting couples who jointly own property without a declaration of trust, the case of Hudson and Hathway heard by the Court of Appeal last year highlights the binding power of emails and cautions couples to take great care when composing them.

The case involved an unmarried couple named Ms Hathway and Mr Hudson, who lived in a property together with their two children which they purchased in joint names with a mortgage. Their relationship broke down and the couple separated in 2009 with Ms Hathway remaining at the property with the children.  Mr Hudson continued to contribute towards the mortgage payments until 2015.

“Take it” – intentions behind an email

In 2013, sporadic emails were exchanged between the separated couple, and it was agreed in these exchanges that Ms Hathway would keep the property (i.e., all of the equity), its contents, their savings and income from endowments and Mr Hudson would keep his shares and pension. Mr Hudson signed his emails with “Lee” or “Lee Hudson”.

Mr Hudson however reneged on this agreement and in 2019 issued a claim for an order for sale of the property and equal division of the proceeds. The Court of Appeal concluded that Mr Hudson’s emails in 2013 demonstrated a clear intention to divest himself of his equitable interest in the property and his emails amounted to a “disposition” for the purposes of section 53 of the Law of Property Act 1925.

Ending emails with a name is a valid signature

The key question that the Court of Appeal had to consider was whether the emails complied with the statutory formalities of section 53(1)(a) and (c) of the Law of Property Act 1925, namely, were the emails signed? The Court of Appeal confirmed that deliberately subscribing one’s name to an email can amount to a signature, which Mr Hudson had achieved by signing off his emails with his name, and therefore by this act he had released his beneficial interest in the property to Ms Hathway by emails.

To conclude, this ruling means that in the absence of a declaration of trust, co-owners can potentially dispose of their beneficial interest in a property by email. Co-owners will therefore be wise to consider any written correspondence very carefully, to avoid unintended dispositions and the costly litigation that follows in the event of a dispute.