The Estate of Nafisa Hasan v Digit Ltd & anr [2024] WTLR 883

Analysis

The court determined preliminary issues in respect of whether the deceased (who died in 2022 after the issue of proceedings) had a beneficial interest in a residential flat and, if so, what that interest was and whether the interest was held on an express trust, constructive trust or resulting trust, or under the doctrine of proprietary estoppel.

The first defendant was a Cayman Island company incorporated in 1998, which acquired the leasehold title of the flat shortly afterwards. The first defendant was incorporated by the deceased’s former husband, a colonel in the Pakistani army who had interests in the arms industry, particularly in Ukraine. The deceased had a child from a previous relationship. The deceased and her husband separated, and the husband obtained a divorce in Pakistan in 2012 and remarried. Divorce and family proceedings ensued from 2009 to 2023, with the deceased alleging that significant assets were held across a complex structure of trusts and companies in various jurisdictions. The former husband died in 2021 domiciled in Pakistan.

The second defendant was part of a group of companies operating in Guernsey who had a charge against the flat that they had attempted to enforce through possession proceedings. The deceased had not been aware of this charge. The deceased had defended the possession proceedings on the basis that she had an overriding interest as the beneficial owner. The claims were joined. The first defendant confirmed it had no information on the question of the deceased’s beneficial interest, was unlikely to come into any, and was not in a position to defend the claim. The liquidators were permitted not to cause the first defendant to defend the claim.

Held:

1. (1) The deceased was the beneficial owner either through a resulting and/or constructive trust.
2. (2) When considering the ownership of family property, the court may conclude property acquired by a company is not beneficially owned by the company, but there must be an evidential basis. The deceased consistently asserted a case in support of her beneficial interest, but the response of the first defendant and the former husband was silence or inconsistent statements. Silence from a party about matters they have in their knowledge, or are likely to have, can be enough to convert the evidence of the other party into proof.
3. (3) The deceased and her husband agreed to buy the flat as their family home. It had been purchased with monies from another company which the deceased would otherwise have been entitled to as a shareholder, and it was agreed to be bought for the deceased as her property. Consistent with this belief, the deceased had moved from Pakistan to live in the flat without paying rent, had let the property out for a short period and received the monies into a joint bank account with her former husband, she had refurbished it, and following their separation a transfer of it to her had been mooted and formalised to some degree through a memorandum of understanding. There was detrimental reliance.
4. (4) The justification or excuse as to why the flat was not put in the wife’s name was of evidential relevance and inferences could be drawn that it was intended that the deceased would be the beneficial owner.
5. (5) The property was held on resulting trust by the first defendant who had not provided any funds of its own and which permitted or acquiesced as to the occupation by the family.
6. (6) All of the ingredients for proprietary estoppel were made out.

JUDGMENT MR HUGH SIMS KC: [1] This is my judgment following the trial of the following preliminary issues: (i) Whether Nafisa Hasan had a beneficial interest in Flat 13, 42 Upper Berkeley Street, London W1H 5QL (the property); and (ii) If Nafisa Hasan had a beneficial interest in the property: (a) What interest she had; …

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