Nilsson & Anor v Iqbal & Anor [2024] EWHC 49 (Ch) was an application by the joint trustees in bankruptcy of Mohammed Babar Iqbal for a declaration as to the beneficial ownership and an order for possession and sale of his former matrimonial home, Southview, Pollards Hill East in London. Mr Iqbal, the first respondent, did not appear to resist the trustees’ claim. The second respondent, Mrs Iqbal, did. She was his former wife under Islamic law.
The respondents were registered as the joint tenants of the property pursuant to a TR1 dated 14 March 2003 which contained an express declaration of trust that the property was held by them as tenants in common in equal shares. Mrs Iqbal claimed that, pursuant to the terms of an oral agreement made in 2017 bringing an end to their Islamic marriage, Mr Iqbal had agreed to transfer his interest to her, as a result of which she now held all of the beneficial interest in the property.
Counsel for Mrs Iqbal accepted that the starting point for determination of the beneficial ownership of the property was the express declaration in the TR1 (see Stack v Dowden and Pankhania v Chandegra).
Mrs Iqbal’s case was that the express declaration of trust set had been varied twice by agreement. The first provided for her to gain 40% of Mr Iqbal’s 50% share of the property, such that she would hold 90%, leaving him with 10%. The second provided for her to receive the remaining 10%, such that she now held 100% of the beneficial interest.
Much of ICC Judge Burton’s judgment is given over to an analysis of the factual evidence on which Mrs Iqbal relied. The judge rejected Mrs Iqbal’s variation arguments on the basis of inconsistencies in her evidence. She did so on the further basis that neither agreement relied on had been recorded in writing, so there was no agreement that met the requirements of the Law of Property (Miscellaneous Provisions) Act 1989 sufficient to displace or modify the express declaration of trust.
Mrs Iqbal also sought to resist the trustees’ claim by recourse to the equitable defence of proprietary estoppel. The judge noted the required ingredients. The first was a clear and unambiguous assurance. The second was reliance on that assurance. The third required unconscionability on the part of the property owner (or here, the holder of the remaining 50% of the beneficial interest in the property) in denying the interest that the party asserting estoppel expected to have. Furthermore, “The Court must be satisfied that the detriment is sufficiently substantial to render it inequitable to allow the assurance to be disregarded.”
The judge found on the facts, which she analysed in some detail, that there had been no clear assurance sufficient to invoke the equitable principle; nor was the second requirement made out on the evidence:
“I find on the balance of probabilities, that at the time when Mrs Iqbal states they effected an Islamic divorce, Mr and Mrs Iqbal reached no more than an inchoate agreement in respect of the interest which she would eventually gain in the Property, the terms of which would not be finalised until some time later, most likely once the mortgage was paid off. No final agreement was reached, no concluded assurance was given. Consequently, in my judgment, there was no assurance upon which to found a proprietary estoppel.”
The third requirement did not fall to be considered.
In the circumstances the judge held that the trustees were entitled to the declaration sought, namely that they and Mrs Iqbal were beneficially entitled to the property in equal shares.