English property law has developed a sophisticated system of property rights in land, to enable joint ownership of land and to regulate successive interests in the same land over a period of time. This was largely achieved by the recognition of an additional type of interest in land additional to legal title. An equitable interest could, in certain circumstances, be untethered from the legal title and become a separate right. This is seen most often in situations where two or more parties own land together. They are joint legal owners – both names will appear on the title register – but they also hold the entire beneficial interest on trust for each other.
The Hudson v Hathaway  EWCA Civ 1648 case illustrates two things. The first is that giving away a beneficial interest is simply done and, once done, cannot be undone. The second is that putting your name at the bottom of an email can in certain circumstances be construed as a signature just as surely as one written on paper in “wet ink”.
This case involves residential property and a domestic situation but has equal significance for commercial property. A couple living together owned their house as joint tenants at law and in equity. The relationship broke up and one of the joint owners, Hudson, sent the other joint owner, Hathaway, an email, telling her that she could have the former family home (the “Property”) and any proceeds from its sale. On Hathaway seeking clarification of his intention, he repeated in a further email that she was to have the Property. Both emails, sent in 2013, had been signed by Hudson with his first name.
A dispute arose between Hudson and Hathaway (Hudson v Hathaway), and eventually Hudson brought proceedings for a declaration as to what proportion of the Property belonged to each of them. The emails remained forgotten until the case reached the Court of Appeal, where the point that Hudson had given away his beneficial interest in the Property was raised by the judge for the first time.
It was held that Hudson had already given away his share in the Property to Hathaway in the 2013 emails and was therefore not entitled to any beneficial interest in it. This meant that the substantial ground of appeal, both at trial and the first appeal was redundant. However, as the allocation of shares in the family Home is a contentious topic, the court went on to deal with it, but this is outside the scope of the blog.
- English law prescribes both how legal and equitable titles of interests in land are created and transferred. Failure to comply with the formalities means that the intended action is not achieved. Executory contracts – agreements to do something with land in the future – must be in writing, incorporate all the terms and be signed by the parties. Common examples of executory contracts are agreements for lease and sale and purchase contracts. Actual transfer or creation of legal estates must be by deed and be perfected by registration at HM Land Registry.
- The creation and transfer of beneficial interests is governed by different legislation and can be created or transferred by a written signature. They are unilateral actions; the transferee does not need to do anything (although, like any “gift” they can refuse to accept it). This had the unhappy result for Hudson that his hot-headed offer of the Property operated at law entirely to deny him of any negotiating position he fancied he had.
- This is the first case that states that appending your first name to an email is a valid signature from the perspective of the legislation governing transmission and creation of beneficial interests. It also confirms, at the highest level of court to date, that an email signature is also sufficient for the legislation about executory contracts of land.
The possibility of the power of emails to bind their writers in certain circumstances is now established by the Court of Appeal. This can apply even if a signature is applied automatically to e-mails, and as such, anyone involved in negotiations should always head their email appropriately (“subject to contract” or similar). Any dealings with equitable interests should be approached with particular caution, as disposition is unilateral.
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