Cohabitee Property Disputes In The Digital Age

• Published date: 09 March 2023
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Birketts
• Author: Ms Laura Tanguay

In May 2022, we wrote an article on the High Court decision of Hudson v Hathway [2022] and the implications on joint property owners in dispute over their equitable shares. That case has since been appealed again, this time to the Court of Appeal, with judgment being handed down in December 2022.

This article summarises the outcome of that appeal and what it all means, in practical terms, for those involved in disputes of this nature. In particular, this article will be of relevance to anyone seeking to assert or deny an enlarged beneficial interest in property under the Trusts of Land and Appointment of Trustees Act 1996 ("TOLATA").

The facts of the case

The facts of the case are set out in detail in our previous article, "The end of detrimental reliance in cohabitee disputes?". As such, we do not repeat them here, save to say that this was a case about the beneficial shares in a family home purchased in joint names (and equal shares) by a couple, during the course of their unmarried relationship.

Following the breakdown of their relationship, the parties agreed, over a series of email exchanges, that Mr Hudson would have no further interest in the property, on the basis that Ms Hathway would lay no claim to Mr Hudson's shares and pension.

In particular, Mr Hudson sent Ms Hathway the following emails:

"...the house [is] 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...."

"Under this arrangement, I've no interest whatsoever in the house, so whilst I will continue to contribute, I won't do so forever."

At the end of both emails, Mr Hudson typed his name "Lee" at the foot of the text.

Two key questions answered

Two important questions have now been answered by the Court of Appeal:

1. Does a person claiming a subsequent increase in their equitable share need to have acted to their detriment?
2. Did Mr Hudson's emails comply with the statutory formalities for disposing of a beneficial interest?

Detrimental reliance

Prior to this case, the law was somewhat unclear on the necessary ingredients for a common intention constructive trust. A common intention constructive trust is a type of trust which arises automatically in certain situations, to create or alter beneficial shares in property. Such trusts arise informally without the need for a written trust deed or declaration of trust.

In particular, it was unclear whether...