No Going Back: The Transfer Of Beneficial Interests In Land

• Published date: 07 March 2023
• Subject Matter: Real Estate and Construction, Real Estate, Landlord & Tenant - Leases
• Law Firm: Mayer Brown
• Author: Gillian Palmer

Introduction

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, separate from the 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 [2022] 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".

The Facts

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, and eventually Hudson brought proceedings for a declaration as to what proportion of the Property belonged to each of them. The emails from 2013 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.

The Judgment

Amongst other matters (outside of the scope of this blog), it was held by the appeal judge 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.

Discussion

• English law prescribes both how legal and equitable titles of interests in land are created and...