The Court of Appeal recently concluded that an email signature was sufficient for a party to transfer their beneficial ownership in a property, highlighting that the Court are willing to adopt a wide discretion when showing compliance with the usual legal formalities relating to the transfer of beneficial interests in property.
The case of Hudson v Hathaway [2022] EWCA Civ 1648 concerned the beneficial ownership of a family home purchased in the joint names of Jayne Hathway and Lee Hudson, who later separated. Following separation, the parties had sporadic email discussions about financial arrangements, in which it was agreed that Picnic House would be transferred to Jayne. In one email Lee confirmed that “Under this arrangement, I've no interest whatsoever in the house...", and signed off the email by typing his name, "Lee".
The transfer of the property became protracted due to an insurance issue. Lee lost patience with the transaction and instead sought to force matters to a head by ceasing all mortgage payments and issuing a claim for an order for sale of the property and 50% of the proceeds. Jayne relied upon the agreement reached in their emails and the Court of Appeal found in her favour, holding that Lee had effectively transferred his beneficial interest to Jayne by way of a release of equitable ownership immediately by sending the email referred to above. This took effect as a disposition under Section 53(1)(c) of the Law of Property Act 1925 (despite the informality of the correspondence), as the court concluded that the emails were ‘in writing’, and signing off as “Lee”, by typing his name in the email amounted to his signature on those emails.
This decision builds on earlier authorities such as Neocleous v. Rees [2019] EWHC 2462 where the High Court decided that an automatically generated email footer reading "many thanks David Tear" was a signature for the purposes of separate legislation concerning the transfer of property (Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989). The outcome of that decision was that the relevant email amounted to an enforceable contract.
Parties should ensure they truly mean what is stated in their email correspondence and if it is intended that a formal contract will be entered into before a disposal is made, communications should be appropriately marked.
There is, therefore, a substantial body of authority to the effect that deliberately subscribing one’s name to an email amounts to a signature. Given that so much correspondence takes place nowadays by email rather than by letters with a “wet ink” signature, it is, in my judgment, entirely appropriate that the law should recognise that technological developments have extended what an ordinary person would understand by a signature.
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