Malik v Malik

Factual and Procedural Background

The appeal arises from orders made by two judges concerning a dispute between two brothers, referred to here as Plaintiff and Defendant, over ownership of a two-bedroom flat located at a London address. The Plaintiff purchased the flat in 1978, holding the sole legal and beneficial ownership, a fact not contested on appeal. The dispute centers on whether the Defendant can establish an interest in the flat under the doctrine of adverse possession.

Initially, the Defendant occupied the flat intermittently and, after a breakdown in family relations in 1987, took exclusive possession, denying access to the Plaintiff and other family members. Legal proceedings were initiated by the Plaintiff in 1987 seeking possession, and the Defendant counterclaimed alleging a family partnership interest. These proceedings were stayed due to procedural issues and remained inactive while related claims in a foreign jurisdiction were pursued.

In the early 1990s, a family agreement was reached to pause legal actions pending resolution efforts by the family patriarch, though the details and effect of this agreement remain disputed. The Civil Procedure Rules introduced in 1999 mandated stays on dormant proceedings, which affected the 1987 actions.

Efforts to resolve the dispute continued until around 2010-2011, when the Plaintiff sought to lift the stay on the 1987 proceedings. At a 2012 hearing before a deputy High Court judge, the Defendant, who was then bankrupt and represented by a trustee, made statements disavowing any claim of adverse possession, influencing the judge's refusal to lift the stay.

Subsequently, in 2017, the freeholder initiated proceedings against the Plaintiff, Defendant, and the Defendant’s family members over lease covenant breaches. The Defendant filed a defence asserting trust ownership or, alternatively, adverse possession since 1987. The Plaintiff denied these claims, arguing estoppel based on the Defendant’s 2012 statements and other grounds.

The trial of these 2017 proceedings was delayed by the pandemic and concluded in 2022. The trial judge found the Plaintiff to be the sole owner and held that the Defendant’s adverse possession claim constituted an abuse of process due to his prior disavowal. The Defendant was ordered to vacate the flat and pay mesne profits for unlawful occupation.

The Defendant appealed the findings on abuse of process and intent to establish adverse possession. The Plaintiff cross-appealed, challenging the appellate judge’s reversal of the abuse of process finding and other related conclusions. The appellate judge allowed the Defendant’s appeal on abuse of process but granted summary judgment for the Plaintiff on possession. Both parties subsequently appealed parts of the appellate decision.

Legal Issues Presented

1. Whether the Defendant is precluded by abuse of process or estoppel by conduct from advancing a claim of adverse possession, having previously disavowed such a claim before a court.
2. Whether the Defendant manifested the necessary intention to possess the flat so as to establish title by adverse possession.
3. Whether it was appropriate to lift the stay on the 1987 proceedings.
4. The proper application of principles relating to abuse of process and estoppel by conduct in the context of inconsistent positions taken by a party in successive proceedings.

Arguments of the Parties

Defendant's Arguments

• The Defendant contended that his statements at the 2012 hearing did not amount to a clear and unequivocal disavowal of an adverse possession claim and thus he should not be precluded from advancing it in later proceedings.
• He argued that the principles of estoppel by conduct require a broad merits-based assessment rather than a strict formalistic approach demanding an objectively unequivocal statement.
• The Defendant challenged the trial judge’s adverse findings on his credibility and character, asserting that such findings were impermissible as the issue of dishonesty was not pleaded.
• He submitted that the trial judge failed to consider the serious consequences of depriving him and his family of their home.
• The Defendant contended that the trial judge’s decision was outside the ambit of reasonable disagreement and thus perverse.

Plaintiff's Arguments

• The Plaintiff argued that the Defendant’s 2012 statements to the deputy High Court judge constituted a clear and deliberate disavowal of any adverse possession claim, made for the purpose of persuading the court not to lift the stay.
• He maintained that this amounted to abuse of process and estoppel by conduct, precluding the Defendant from asserting the adverse possession claim in the 2017 proceedings.
• The Plaintiff contended that the appellate judge erred in reversing the trial judge’s findings on abuse of process and intention.
• He argued that the Defendant’s occupation was permissive, either under the 1992 family agreement or as licensee of the family patriarch, negating adverse possession.
• The Plaintiff sought to lift the stay on the 1987 proceedings and obtain summary judgment on possession on the basis that the ownership issue had been conclusively determined.

Table of Precedents Cited

Court's Reasoning and Analysis

The court undertook a detailed examination of the Defendant's conduct and statements made during the 2012 hearing before the deputy High Court judge. It assessed whether these statements constituted a clear and unequivocal disavowal of any adverse possession claim, thereby engaging estoppel by conduct or abuse of process principles.

Applying the broad, merits-based test from LA Micro, the court emphasized that the critical inquiry is whether the party adopted clearly inconsistent positions and whether the earlier court acted on the footing of the earlier stance. The court rejected the necessity of an objectively unequivocal statement, holding that it suffices that the party persuaded the court to accept a position on which the court relied.

The trial judge had found that the Defendant knowingly misled the court by disavowing adverse possession claims to prevent the stay being lifted, a finding supported by contemporaneous letters and the Defendant’s conduct. This was characterized as a "masterpiece of dissembling and manipulation." The appellate judge erred by requiring a stricter standard of clarity in the Defendant's statements.

The court further considered whether the Defendant’s statements materially influenced the deputy judge’s decision to refuse lifting the stay. It concluded that the statements were a material reason for the decision, satisfying the requirement that the earlier position affected the administration of justice.

Arguments that the trial judge impermissibly based his decision on adverse character findings were rejected, as such findings are permissible absent a plea of dishonesty when assessing credibility and conduct. The court also found no error in the trial judge’s appreciation of the consequences of his decision or in his evaluative judgment, which fell within the range of reasonable disagreement.

Given the conclusion that the Defendant was estopped and precluded by abuse of process from advancing the adverse possession claim, the court found it unnecessary to consider the substantive merits of that claim or the correctness of the stay being lifted on the 1987 proceedings.

Holding and Implications

The court ALLOWED the Plaintiff’s appeal against the appellate judge’s decision on the abuse of process point and restored the trial judge’s order in the 2017 proceedings. This means the Defendant is precluded from advancing an adverse possession claim due to his prior inconsistent conduct and statements made to the court. Consequently, the Plaintiff’s claim for possession stands without a valid defence of adverse possession.

The court did not find it necessary to address other grounds of appeal or issues concerning the lifting of the stay on the 1987 proceedings. The decision directly affects the parties by reaffirming the Plaintiff’s sole ownership and right to possession, and it does not establish new precedent beyond the application of established principles of abuse of process and estoppel by conduct.