Usman Hussain Malik v Mahboob Hussain

Usman Hussain Malik v Mahboob Hussain

Usman is entitled to declarations that, upon payment for the 50 sale shares, Mahboob holds them as bare trustee and must exercise all rights at Usman's direction. The Company’s register must be rectified to show Usman as legal owner of the two shares. Nusrat’s claim to beneficial ownership of the two shares raises a serious issue to be tried but is relatively weak; no injunction is granted against Usman provided he gives undertakings to preserve the status quo and prevent irreversible changes pending trial. A limited power of attorney is to be included in the sale contract to enable Usman to exercise rights without delay.

Parties
Claimant/applicant: Usman Hussain Malik; Defendant/respondent/second Defendant: Mahboob Hussain; First Defendant (part 8): Nusrat Malik; Second Defendant (part 8): Mahboob Hussain Junior; Third Defendant (part 8): R N Restaurant (Stockport) Limited
Jurisdiction
England and Wales
Judgment Date
11 September 2024
Procedural Posture
Civil (business and Property Courts, Chancery Division) / Post Trial Judgment on Multiple Applications Following Court of Appeal Decision
Outcome
Applications granted in part; declarations made; rectification of register ordered; injunction refused subject to undertakings; directions for speedy trial of Nusrat’s claim; costs orders as specified.
Legal Topics
Rectification of Register of Members, Share Sale Agreements, Directors' Duties, Injunctions, Beneficial Ownership of Shares, Powers of Attorney, Article 6 Discretion, Trusts Pending Registration
Company Law Equity and Trusts Civil Procedure Rectification of Register of Members Share Sale Agreements Directors' Duties Injunctions Beneficial Ownership of Shares +3 more

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Parties

Usman Hussain Malik

Claimant/applicant

Mahboob Hussain

Defendant/respondent/second Defendant

Nusrat Malik

First Defendant (part 8)

Mahboob Hussain Junior

Second Defendant (part 8)

R N Restaurant (Stockport) Limited

Third Defendant (part 8)

Procedural Posture

Civil (business and Property Courts, Chancery Division) / Post Trial Judgment on Multiple Applications Following Court of Appeal Decision

Legal Issues

  1. 1 Whether Usman is entitled to exercise control over 50 sale shares pending registration
  2. 2 Whether Mahboob must comply with Usman's directions as bare trustee post-completion
  3. 3 Whether the Company’s register should be rectified to show Usman as legal owner of two shares

Ratio Decidendi

Usman is entitled to declarations that, upon payment for the 50 sale shares, Mahboob holds them as bare trustee and must exercise all rights at Usman's direction. The Company’s register must be rectified to show Usman as legal owner of the two shares. Nusrat’s claim to beneficial ownership of the two shares raises a serious issue to be tried but is relatively weak; no injunction is granted against Usman provided he gives undertakings to preserve the status quo and prevent irreversible changes pending trial. A limited power of attorney is to be included in the sale contract to enable Usman to exercise rights without delay.

Court Disposition

Applications granted in part; declarations made; rectification of register ordered; injunction refused subject to undertakings; directions for speedy trial of Nusrat’s claim; costs orders as specified.

Orders

  • Declaration that Mahboob holds 50 sale shares as bare trustee for Usman post-completion and must exercise all rights at Usman's direction.
  • Declaration that Company’s register be rectified to show Usman as legal owner of two shares.