Introduction

This appeal arises out of a long-running intra-family dispute among the six adult children of Mr and Mrs Khan over the beneficial ownership of a small portfolio of South London properties. At its heart lay a choice between two competing narratives: whether the eldest son, Muhammed, was intended to take beneficially all properties put into his name, or whether those legal titles were placed with family members to facilitate a family venture under which one property (7 Essex Grove) would ultimately belong to the three daughters and the others (14 Stapleton Road, 53 Norbury Crescent, and 5 Ullswater Road) to the three sons, subject to Mr Khan’s lifetime interest in the income.

The High Court (Deputy High Court Judge Saira Salimi) found for the claimants (the other five siblings), ordering sales and accounts, and recognising trusts in line with the “De Bruyne” line of authority (here restated as “acquisition constructive trusts”). The Court of Appeal dismissed the appeal in full, clarifying key points of equitable principle and evidence:

• Acquisition constructive trusts do not require proof of actual fraud, wrongdoing, or “procurement” by the transferee; unconscionable denial of the agreed basis for acquisition suffices.
• Such trusts are not limited to gratuitous transfers; value given by the transferee does not per se exclude the trust, though it may be relevant to the facts.
• Courts may infer the requisite agreement from the whole course of dealings; no need to pinpoint a single moment of agreement.
• A later email by the legal owner can manifest and prove an express trust for the purposes of section 53(1)(b) Law of Property Act 1925 without reciting all the trust terms.
• Discretionary case management decisions—appointing a trust corporation to conduct sale and directing market rent expert evidence at the accounting stage—were upheld.

Summary of the Judgment

The Court of Appeal (Miles LJ) upheld findings that:

• Muhammed’s leaseholds in 7 Essex Grove were held on trust for the daughters. The court held that a 2013 email sent by Muhammed stating “This belongs to [the] three sisters” manifested an express trust within section 53(1)(b) LPA 1925. Alternatively, there was an acquisition constructive trust: Muhammed took the leases only on the basis (directed by Mr Khan) that they were for Mr Khan’s life and then the daughters.
• For the remaining properties—14 Stapleton Road, 53 Norbury Crescent and 5 Ullswater Road—Muhammed acquired legal interests on the agreed basis that they were for Mr Khan for life and then for the three sons in equal shares; it was unconscionable to deny those trusts. Value was raised by mortgages over existing family properties; Muhammed gave no value for his legal interests.
• The court rejected an argument that a De Bruyne-style trust had to be pleaded more narrowly; the trial was conducted on that basis and no prejudice was shown.
• Grounds challenging the appointment of a trust corporation to conduct the sale and the direction for expert evidence on market rents failed as proper exercises of discretion.

The court did not resolve the interesting wider point whether detrimental reliance by one putative beneficiary of a common intention constructive trust can suffice to bind in favour of all intended beneficiaries. That issue remains open.

Analysis

Precedents Cited and Their Influence

The judgment sets out and harmonises a line of authorities on constructive trusts arising on acquisition, often traced to the equity in Rochefoucauld v Boustead [1897] 1 Ch 196 and Bannister v Bannister [1948] 2 All ER 133, and re-articulated in De Bruyne v De Bruyne [2010] EWCA Civ 519:

• Rochefoucauld v Boustead: Equity will not permit the Statute of Frauds to be used as an engine of fraud. Where property is conveyed on the footing that the transferee will hold on trust, it is a fraud for the transferee to deny the trust.
• Bannister v Bannister: Even without an express stipulation that the transferee is a trustee, if the bargain included that another retains a beneficial interest (e.g., a rent-free life interest), it is inequitable for the transferee to assert absolute ownership to defeat that basis. No need for actual fraud at the time of the conveyance; the “fraud” lies in denying the agreed basis.
• Neale v Willis [1968] 19 P&CR 836: Adds confirmation that where a person takes a conveyance absolute in form but on a bargain to give another a beneficial interest, a constructive trust arises.
• De Bruyne: Distinguishes common intention cohabitation cases from “acquisition constructive trusts”. The latter arise because it is unconscionable to deny the agreement upon which property was transferred. Detrimental reliance is not a constituent element.
• Archibald v Alexander [2020] EWHC 1621 (Ch): Fancourt J’s exposition of the two distinct species of constructive trust (common intention vs acquisition). The Court of Appeal in Khan endorses this taxonomy but clarifies that acquisition trusts are not confined to gratuitous transfers.
• Paul v Constance [1977] 1 WLR 527; Ong v Ping [2017] EWCA Civ 2069: A trust can be declared by words or conduct; the question is whether, viewed objectively, the words/conduct manifest an intention to hold on trust.
• National Iranian Oil Co v Crescent Gas [2025] EWCA Civ 1211: Section 53(1)(b) is aimed at preventing perjured claims; the writing need only “manifest and prove” the existence of a trust, not capture all its terms. Khan applies this purposive stance to emails.

Collectively, these cases underpinned three key clarifications in Khan:

1. Acquisition constructive trusts turn on unconscionability in denying an agreed basis of transfer, not on proof of actual fraud or pre-transfer dishonesty.
2. They are not limited to gratuitous transfers; the presence of consideration is not determinative.
3. Section 53(1)(b) can be satisfied by later acknowledgments, and the writing need not contain every term if the existence of a trust and its core features are sufficiently manifested.

Legal Reasoning

1) Acquisition constructive trusts: no fraud/procurement requirement, and not limited to gratuitous transfers

The appellant argued that an acquisition constructive trust required either fraud or “procurement” in a pejorative sense—i.e., the transferee must have engineered the transfer to himself. The court rejected this: the touchstone is unconscionability in equity, which is satisfied when a legal owner, having taken title only on the agreed basis that he would hold for others, later asserts absolute ownership in contradiction of that basis.

The court emphasised:

• “Fraud” here is a label for unconscionable denial, not a requirement of deceit at the moment of transfer.
• “Procurement” simply means the transferee agreed to take title on the relevant terms; it does not import wrongdoing.
• While some authorities involved gratuitous transfers or undervalue, that is not essential. Even where the transferee gives some value (e.g., raises mortgage finance or contributes to acquisition costs), equity can still impose a trust if the agreed basis was that the beneficial interest lay with others.

Applying this to the evidence, the Court accepted the judge’s findings that Mr Khan was the decision-maker, directed that legal titles be placed in the names of particular children, and that all transactions were undertaken on the shared understanding that Mr Khan would enjoy the income for life and, thereafter, 7 Essex Grove would belong to the daughters and the remaining properties to the sons. Muhammed gave no value for his legal estates; whatever financing was raised came via remortgages of existing family assets. In those circumstances, it would be unconscionable to deny the agreed basis.

2) Inferring agreement from the whole course of dealings

The appellant’s contention that the claimants had to identify a single, dated agreement moment was rejected. The court held that the agreement can be inferred from the “entire course of dealings”, including:

• Mr Khan’s continued control and direction over the properties, rents and refinancings.
• Family work on the assets, rent arrangements, and communications acknowledging shared beneficial holdings.
• The creation of leaseholds in 7 Essex Grove to protect the sisters’ interests amid Farhana’s divorce.
• WhatsApp messages and emails acknowledging the respective family shares.

This pragmatic, evidence-sensitive approach aligns with De Bruyne’s equitable focus and with the practical realities of family-run property portfolios where formal documentation is often absent.

3) Section 53(1)(b) LPA 1925: sufficiency of later acknowledgments

The 2013 email stating “This belongs to [the] three sisters” was held to manifest and prove an express trust over Muhammed’s leaseholds in 7 Essex Grove. The court stressed:

• Writing may post-date creation; the date is immaterial if it manifests the trust.
• The writing need not spell out all terms (e.g., earlier life interests) to satisfy s53; purpose is to prevent false oral claims.
• The email sufficiently identified the property (7 Essex Grove), the gist of the beneficial ownership (the three sisters), and Muhammed’s role as non-beneficial holder. It was neither confined to the equity of redemption nor mere “family chat”.

The court further reasoned that, on the judge’s findings, a trust was in any event declared by conduct at the time of acquisition: Muhammed accepted the leases on the basis directed by Mr Khan that they were for Mr Khan’s life and then the daughters.

4) Procedural and case management points

• Pleadings: Although the Particulars of Claim were not explicit about De Bruyne-style trusts for each property, the Reply, issues list, and both sides’ skeleton arguments made it clear that the trial proceeded on that basis. No prejudice was shown; the appeal could not be used to reframe pleadings post hoc.
• Conduct of sale: Appointing a trust corporation allied with the claimants’ solicitors was within discretion under CPR 40.1. Given findings of unconscionability, hostility, and the appellant’s stance, it was rational to avoid giving sale conduct to the party who denied the trusts.
• Expert evidence on market rent: Directing a single joint expert at the accounting stage on whether rents were below market (e.g., to an associated company, Purple Panda) was a permissible, staged case management decision, especially as beneficial ownership issues dominated the trial and rent issues were consequential.

Impact and Significance

Khan & Ors v Khan consolidates and clarifies English law on “acquisition constructive trusts” in a way that has significant practical implications for family property arrangements and small family businesses:

• Lower evidential friction: Claimants need not show actual fraud or connivance at the point of transfer. Unconscionable denial of an agreed basis is enough.
• Not confined to gratuitous cases: Families who raise mortgages or refinance existing properties to expand a portfolio can still be within De Bruyne if legal titles are placed with a family member as a practical device while beneficial ownership is intended for others.
• Modern communications as evidence: Emails and messaging apps can be potent s53(1)(b) materials to manifest trusts, even if informally worded and not comprehensive in terms, provided core features are clear.
• Course-of-dealings inference: Courts will examine the whole mosaic—decision-making, financing, rent flows, work on the properties, and contemporaneous acknowledgments—without insisting on a single “meeting” or formal minute.
• Remedies aligned with practicalities: Expect courts to appoint neutral or aligned professionals to manage sales where relationships have broken down and to permit expert inquiry into related-party rents at the accounting stage.

The judgment also preserves for future guidance a live issue: in common intention constructive trusts, can detrimental reliance by one intended beneficiary suffice to establish a trust in favour of all intended beneficiaries? Khan flags the question but does not decide it—signposting fertile ground for future appellate clarification.

Complex Concepts Simplified

• Constructive trust: An equitable remedy where the court treats the legal owner as holding for someone else because it would be unfair for the owner to assert absolute entitlement.
• Acquisition constructive trust: Arises when property is transferred to a person on the basis that they will hold for another. No need for the beneficiary to prove detrimental reliance; the trust stems from the agreed basis of acquisition and the unconscionability of denying it.
• Common intention constructive trust: Typically in cohabitation or family homes, where parties share a common intention that both will have a beneficial share; enforceable only if the claimant detrimentally relied on that intention.
• Section 53(1)(b) LPA 1925: A declaration of trust concerning land must be “manifested and proved” in writing signed by someone who can declare the trust. The writing can post-date creation and need not recite all terms.
• “Equitable fraud”/unconscionability: Not necessarily deceit or dishonesty; rather, the inequity of asserting absolute ownership contrary to the agreed basis upon which the property was acquired.
• Equity of redemption: The owner’s residual interest in mortgaged property. In Khan, the email was not limited to this; it acknowledged that “the property” belonged to the sisters.
• CPR 40.1 discretion: The court’s power to craft appropriate orders consequential on judgment, including appointing persons to conduct sales of property.
• Account and inquiry: A post-judgment process requiring a trustee to account for receipts and sometimes to make good shortfalls (e.g., charging below-market rents to related entities).

Key Points From the Facts Applied to the Law

• Mr Khan controlled the portfolio: He chose what to buy, where legal titles sat, and how to fund acquisitions. This supported the inference of a single overarching plan and agreed basis.
• Legal title≠beneficial ownership: Muhammed took titles as a practical expedient; he gave no value for his legal interests and acknowledged family sharing in messages.
• 7 Essex Grove for the daughters: Initially in Farhana’s name; leaseholds later granted to Muhammed to protect against spouses’ claims; a 2013 email expressly acknowledging that it “belongs to the three sisters.”
• Other properties for the sons: 14 Stapleton, 53 Norbury and 5 Ullswater acquired/refinanced through mortgages over family assets; the family acted consistently with shared beneficial interests (rents, improvements, negotiations).
• Funding source issue (5 Ullswater): Uncertainty whether deposit came from 7 Essex Grove or elsewhere did not defeat the sons’ trust. The daughters and sons together had a better claim, and separate tracing or contribution issues could be addressed later if relevant.

Practical Guidance for Future Cases

• Document the agreed basis: Where family members intend nominees to hold property for others, a short written acknowledgment—even by email—can avoid disputes and satisfy s53(1)(b).
• Beware related-party leases: Trustees should charge market rents or record reasons for deviations; otherwise, beneficiaries may seek an account of shortfall supported by expert evidence.
• Course of dealings matters: Keep contemporaneous messages, rent records, and minutes of discussions; courts will piece together intentions from the mosaic of evidence.
• Lenders and counterparties: While not directly addressed, parties contracting with nominee legal owners should consider the possibility of undisclosed trusts; obtain appropriate confirmations or trust declarations to mitigate risk.
• Case strategy: Pleading precision remains important, but where issues are fully joined and tried without prejudice, appellate courts are slow to allow post-trial pleading ambushes.

Conclusion

Khan & Ors v Khan is a significant modern restatement of the acquisition constructive trust in family property contexts. It clarifies that equity’s jurisdiction does not hinge on proving deceit or the transferee’s wrongful procurement of title, nor is the doctrine confined to cases of pure gifts. Instead, the focus is squarely on the agreed basis upon which title was taken and the unconscionability of later denying it. Equally important, the court confirms that the evidential requirement of s53(1)(b) can be satisfied by straightforward, even informal, post‑acquisition acknowledgments that identify the property and the beneficiaries.

The Court of Appeal’s approach is practical and principled. It respects the realities of family-run property arrangements (often lightly documented) while guarding beneficiaries against inequitable denials. It also preserves an unresolved but important question in the common intention sphere—whether detriment by one intended beneficiary can suffice for all—which awaits a case that squarely turns on it.

The takeaways are clear: if legal title is taken on an agreed familial basis, expect equity to enforce it; if you intend to hold for others, say so in writing; and if you manage trust properties, treat them as such—in rent-setting, refinancing, and dealings—lest an account follows. The judgment thus provides both doctrinal clarity and practical signposts for litigants, advisers, and courts in an area where familial informality too often breeds costly disputes.