Mohammad Usman Butt v Mohammad Zarar Butt & Ors

Mohammad Usman Butt v Mohammad Zarar Butt & Ors

The court found that D3 and D4’s financial contributions were investments for shares in the Company, not loans to D1. D1’s 50% shareholding is held on trust for himself, D3, and D4 in proportions reflecting their respective investments. C’s 50% shareholding is held by him absolutely. The evidence did not rebut the presumption that C’s beneficial interest matches his legal interest, but did rebut the presumption as to D1’s beneficial interest.

Parties
Claimant/part 20 Defendant: Mr Mohammad Usman Butt; First Defendant/part 20 Claimant: Mr Mohammad Zarar Butt; Second Defendant: M&B Properties (Nottingham) Ltd; Third Defendant/part 20 Claimant: Mr Mohammad Imran Butt; Fourth Defendant/part 20 Claimant: Mr Mohammad Urfan Butt
Jurisdiction
England and Wales
Judgment Date
12 December 2024
Procedural Posture
Chancery Business and Property Dispute / Judgment After Trial
Outcome
Declaratory judgment
Legal Topics
Resulting Trusts, Constructive Trusts, Beneficial Ownership, Shareholding Disputes, Family Business Arrangements
Equity and Trusts Company Law Resulting Trusts Constructive Trusts Beneficial Ownership Shareholding Disputes Family Business Arrangements

Case Brief

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Parties

Mr Mohammad Usman Butt

Claimant/part 20 Defendant

Mr Mohammad Zarar Butt

First Defendant/part 20 Claimant

M&B Properties (Nottingham) Ltd

Second Defendant

Mr Mohammad Imran Butt

Third Defendant/part 20 Claimant

Mr Mohammad Urfan Butt

Fourth Defendant/part 20 Claimant

Procedural Posture

Chancery Business and Property Dispute / Judgment After Trial

Legal Issues

  1. 1 Whether the shareholding in M&B Properties (Nottingham) Ltd is held on trust and, if so, in what proportions
  2. 2 Whether the financial contributions by D3 and D4 were investments or loans
  3. 3 Whether the beneficial ownership of shares should reflect financial contributions

Ratio Decidendi

The court found that D3 and D4’s financial contributions were investments for shares in the Company, not loans to D1. D1’s 50% shareholding is held on trust for himself, D3, and D4 in proportions reflecting their respective investments. C’s 50% shareholding is held by him absolutely. The evidence did not rebut the presumption that C’s beneficial interest matches his legal interest, but did rebut the presumption as to D1’s beneficial interest.

Court Disposition

Declaratory judgment

Orders

  • It is declared that Mr Mohammad Usman Butt is the legal and beneficial owner of 50 ordinary shares in M&B Properties (Nottingham) Ltd.
  • It is declared that Mr Mohammad Zarar Butt holds 50 ordinary shares in M&B Properties (Nottingham) Ltd on trust for himself (11 shares), Mr Mohammad Imran Butt (21 shares), and Mr Mohammad Urfan Butt (18 shares).