Vendor and purchaser – Contract for sale of land – Compromise agreement – Claimants seeking specific performance of alleged contract of compromise involving disposition of interest in land – Whether automatic signature on email complying with section 2(3) of Law of Property (Miscellaneous Provisions) Act 1989 – Claim allowed
The claimants and the defendant owned property at Ghyll Head on the eastern side of Lake Windermere in Cumbria. The claimants’ property, Louper Weir, bordered the lake to the west and the A592 to the east. The defendant’s property comprised two parcels of land. The larger part was to the south-east of Louper Weir, on the opposite side of the A592. The smaller, landing plot was a small piece of land with an adjacent jetty on the eastern bank of the lake and was only accessible by crossing the claimants’ property. A right of way across Louper Weir appeared on the defendant’s title, but no such right was referred to on the claimants’ title.
The defendant applied to HM Land Registry to register a right of way against the title to the claimants’ property. The claimants disputed the existence and/or extent of a right of way and denied that they were bound by the alleged right.
The matter was referred to the First-tier Tribunal. Before the hearing, a compromise was reached whereby the claimants agreed to pay the sum of £175,000 for the transfer of the defendant’s landing plot/mooring to the claimants and the release of the defendant’s right to pass and re-pass over the claimants’ land.
The claimants subsequently sought specific performance of the alleged contract of compromise. They contended that an exchange of emails between the parties’ solicitors amounted to a binding contract. They agreed that, since the agreement involved the disposition of interests in land, it had to satisfy the formality requirements of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. However, they argued that the two emails amounted to a single document which was signed by or on behalf of each party and that therefore the formalities of the 1989 Act were met. The defendant argued that there was no enforceable contract under the 1989 Act because the agreement was not signed by both parties.
Held: The claim was allowed.
(1) The defendant’s approach to the meaning of “signed”, that it required a handwritten name (or at least a facsimile of such handwriting), depended on the alleged meaning of that word to the ordinary person following Goodman v J Eban Ltd [1954] 1 QB 550. However, whilst the Court of Appeal in Goodman might have correctly identified what the ordinary person would mean by that word at the time their judgment was handed down, the ordinary usage of words had a tendency to develop.
The sounder guide to whether there was in fact a signature was the test identified by Judge Pelling QC in J Pereira Fernandes SA v Mehta [2006] 1 WLR 1543 and adopted by the Law Commission in its Report on the Electronic Execution of Documents: whether the name was applied with authenticating intent. The defendant placed understandable emphasis on the fact that her solicitor’s name inserted as a “footer” at the end of his email was created “automatically” in the sense that it was added to every email that he sent. That addition was automatic in the sense that it was added to every individual email without any action or intention on the solicitor’s part. However, it was common ground that the rule that a footer of that type be added to every email involved the conscious action at some stage of a person entering the relevant information and settings in Microsoft Outlook. Furthermore, the solicitor knew that his name was added to the email and the manual typing, rather than automatic inclusion, of the words “Many Thanks” at the end of the email strongly suggested that the author was relying on the automatic footer to sign off his name.
In such circumstances, it was difficult to distinguish between a name which was added pursuant to a general rule set up on an electronic device that the sender’s name and other details be incorporated at the bottom and an alternative practice that each time an email was sent the sender manually added those details. Further, the recipient of the email had no way of knowing (as far as the court was aware) whether the details at the bottom of an email were added pursuant to an automatic rule, as here, or by the sender manually entering them. Looked at objectively, the presence of the name indicated a clear intention to associate oneself with the email and to authenticate it or to sign it.
(2) It was important to bear in mind the policy behind the 1989 Act. There was good reason to avoid an interpretation of what was sufficient to render a document “signed” for the purpose of section 2 where that interpretation might have the effect of introducing uncertainty and/or the need for extrinsic evidence to prove the necessary intent. No such difficulty arose if the email footer here was treated as a sufficient act of signing. It was common ground that such a footer could only be present because of a conscious decision to insert the contents, albeit that that decision might have been made the subject of a general rule that automatically applied the contents in all cases. The recipient of such an email would naturally conclude that the sender’s details had been included as a means of identifying the sender with the contents of the email, since such a footer must have been added either as a result of a conscious decision in the particular case or a more general decision to add the footer in all cases. The sender of the email was aware that their name was being applied as a footer. The recipient had no reason to think that the presence of the name as a signature was unknown to the sender. The use of the words “Many Thanks” before the footer showed an intention to connect the name with the contents of the email. The presence of the name and contact details was in the conventional style of a signature at the end of the document. The court was satisfied that the defendant’s solicitor signed the relevant email on her behalf: Firstpost Homes Ltd v Johnson [1996] 1 EGLR 175 considered.
Mark Cawson QC (instructed by Slater Heelis LLP) appeared for the claimants; Duncan Heath (instructed by AWB Charlesworth Solicitors) appeared for the defendant.
Eileen O’Grady, barrister
Click here to read a transcript of Neocleous and another v Rees
