In Khan v Mahmood [2021] EWHC 597 (Ch), the high court considered an appeal concerning a gift of property that had never been correctly completed. The two parties had originally bought the property as joint owners. Subsequently, the respondent was charged with benefit fraud for failing to declare his interest in the property, causing him to inform the appellant that he would transfer his interest in the property making him the sole owner. However, the transfer deed was incorrectly executed, and was never registered at the Land Registry due to the failure of the respondent to pay the required fee to his solicitors. 

The issues

The court was asked to make an order as to the ownership of the property. The district judge who heard the case at first instance ruled the transfer to be ineffective, and the property to be owned jointly by the two parties. The appellant appealed the decision on several grounds.

One of the points of appeal concerned the district judge’s decision that it was not unconscionable for the respondent to resile from his gift. This was on the grounds that in order for it to be unconscionable, the appellant must have relied on the gift to his detriment; which the judge found he had not done.

The decision

On appeal in the High Court, the judge agreed with the district judge’s finding that the appellant had not relied on the promise of the property to his detriment. But he disagreed that the law required detrimental reliance by the appellant in order to find that it was unconscionable for a respondent to resile from the gift. 

The appeal judge confirmed that reliance was a relevant factor, but that it was not a key factor, in determining whether it was unconscionable for the respondent to change his mind about gifting the property to the appellant. The judge placed more weight on the respondent’s conduct as opposed to the appellant’s reliance. The respondent had cited his lack of interest in the property in defence of the benefit fraud charge against him. This conduct of the respondent combined with the appellant being shown the transfer deed, were sufficient for the appellant to believe that the property now belonged to him alone. The judge decided therefore, that it was unconscionable for the respondent to now seek to maintain his interest in the property.

The judge on appeal commented that there was no comprehensive list of factors which make it unconscionable for the donor of a gift to change their mind and that it must depend on the court’s assessment of all relevant facts. The decision may therefore allow judges to exercise greater discretion when deciding whether an imperfect gift should be perfected by equity. 

Should you have any questions in respect of the above or require more information about bankruptcy proceedings generally, then please contact James Thornton or Anna Barfield from our Litigation and Dispute Resolution Team.

James Thornton – Head of Litigation and Dispute Resolution


Tel: 01925 217026

Anna Barfield – Trainee Solicitor


Tel: 01925 263273

The contents of this article do not constitute legal advice and are provided for general information purposes only.

The contents of this post do not constitute legal advice and are provided for general information purposes only