The Estate of Nafisa Hasan (deceased) v Digit Limited (in liquidation) & Anor

A company holding legal title to residential property may hold it on resulting or constructive trust for another person where the evidence shows that the company provided no purchase money and was used to conceal the true beneficial ownership. An express common intention may be established by agreement, surrounding circumstances and subsequent conduct. Detriment is not confined to financial expenditure and may include relocation, foregoing an expected share of profits, and expenditure incurred in maintaining or improving the property. Silence or lack of disclosure may strengthen a prima facie case where the relevant information would ordinarily be within the silent party’s knowledge, but it cannot replace an evidential foundation.

The deceased claimed that she was the beneficial owner of a London flat whose registered proprietor was Digit Limited, an offshore company incorporated and controlled by her former husband. The property had been acquired during the marriage and used as the family home. She contended that the purchase formed part of an agreement under which she would relocate to London, forego her share of profits from a family company, select and furnish the property, and receive it as her home.

The claim was brought under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The defendants did not contest the preliminary issues. The court had to determine whether the deceased had a beneficial interest and, if so, whether it arose under an express, resulting or constructive trust, or proprietary estoppel.

1. The court found that the deceased was the beneficial owner of the leasehold title from its acquisition in 1998 until her death in 2022. The interest arose under a resulting and/or constructive trust.

2. The evidence established an oral agreement that the property would be acquired as the deceased’s home using money from Integral Resources which might otherwise have been paid to her. Her relocation, selection and furnishing of the property, occupation, expenditure and foregoing of profits supported that agreement.

3. Under section 53(1)(b) of the Law of Property Act 1925, an express trust of land must be manifested and proved in signed writing. The rule in Rochefoucauld v Boustead prevents reliance on that formality where it would operate as an instrument of equitable fraud, but the claim was better analysed through resulting and constructive trusts.

4. The purchase-money evidence supported a resulting trust because Digit supplied no funds and there was no credible evidence explaining how it acquired the property. The company’s failure to produce expected records strengthened the claimant’s case, applying the approach discussed in Prest v Petrodel Resources Ltd and others and R v Inland Revenue Comrs, Ex p TC Coombs & Co. The court stressed that silence is not a licence for speculation.

5. The deceased also established detrimental reliance for a constructive trust. Detriment was a substantial, non-technical concept and included relocation, relinquishment of an expected share of profits, property expenditure and payments exceeding £74,000. The company’s use as the vehicle for the husband’s control did not prevent the trust analysis.

6. The proprietary-estoppel ingredients were also made out, although that doctrine added nothing material to the resulting- and constructive-trust analysis. Consequential issues were adjourned for case management and further submissions.