- in Australia
- with readers working within the Property and Construction & Engineering industries
Following the Court of Appeal's decision in Hudson v Hathway – in which Mr Hudson relinquished his beneficial interest in a co-owned property by email – I wondered if I should rethink my habit of signing off texts "Cxxx".
In Reid-Roberts, Cawson J considered whether a WhatsApp message could effect a disposition of a beneficial interest. The decision is a welcome one that provides clarity on the boundaries of s.53(1)(c).
The Background
Ms Lin and her husband (H) were divorcing. H sent WhatsApp messages of the following flavour:
"I suggest that the responsibility of taking care of the kids goes to u 100%, then I can sign over my share of southcote road to u ..."
H was made bankrupt. The Trustees sought to realise his share. Ms Lin argued H had disposed of his beneficial interest under s.53(1)(c) LPA 1925, prior to the bankruptcy, via his WhatsApp and email messages.
The Decision
𝟭. No Immediate Disposition: The Court held that the messages were negotiations, not an immediate divestment of interest given the following:
- Unlike Hudson, divorce proceedings were on foot. This created an expectation that property dispositions would be finalised through the instructed solicitors.
- Whilst technically possible for a WhatsApp message to have disposing intent, the informal medium pointed against such an intention.
- H's proposals were conditional upon child arrangements and were not standalone dispositions. The terminology used (such as "sign over," "finish the paperwork") also pointed to a future transaction.
- In contrast to Hudson – where the transferor had consistently disavowed his interest – H reneged on the proposal before any consensus was reached.
𝟮. The Signature: The key considerations in establishing whether a document has been "signed" for the purposes of s.53(1)(c) are:
- The application of the name to the whole of the relevant document; and
- The requirement for an authorising intent.
These requirements were lacking. There was no authenticating intent on the basis that the heading – which applied to all messages not just those relied upon and which had not been caused to appear by H – was incidental to the messages rather than being an integral part thereof.
The Takeaway
Intent vs. Medium: Whilst technically possible to relinquish a beneficial interest via WhatsApp, the informal nature of the medium weighs against finding the necessary dispositive intent.
The Signature: Whilst the definition of a signature remains expansive (potentially including auto-signatures and headers if the sender knows the message system will apply them – see [87]-[100]), a platform-generated header that appears incidentally does not suffice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
