Tariq Mahmood Malik v Mahboob Hussain Junior
| Jurisdiction | England & Wales |
| Judge | Stephen Davies |
| Judgment Date | 28 August 2020 |
| Neutral Citation | [2020] EWHC 2334 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: D30MA278 |
| Date | 28 August 2020 |
[2020] EWHC 2334 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS & PROPERTY COURTS IN MANCHESTER
BUSINESS LIST (Ch D)
Manchester Civil Justice Centre,
1 Bridge Street West, Manchester M60 9DJ
HIS HONOUR JUDGE Stephen Davies
SITTING AS A JUDGE OF THE HIGH COURT
Case No: D30MA278
Petition No: 2874 of 2017
James Mather and Mark Wraith (instructed by DTS Law Solicitors, Manchester M19 3NP and subsequently by Viceroy Law Solicitors, Manchester M13 0NG) for the Claimant/Petitioner
Lesley Anderson QC and Tina Ranales-Cotos (instructed by Clarion Solicitors, Leeds LS1 2 TW) for the Defendants/Respondents
Hearing dates: 15 – 19, 22 – 25 June, 10 July 2020 Draft judgment circulated: 20 August 2020
APPROVED JUDGMENT
This judgment was handed down remotely by circulation to the parties' representatives by email. It will also be released for publication on BAILII and other websites. The date and time for hand-down is deemed to be 10 a.m. on Friday 28 August 2020.
I direct that pursuant to CPR PD 39A paragraph 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
His Honour Judge Stephen Davies
| Section | Paras | |
| A | Introduction and summary of decision | 1 – 27 |
| B | Witnesses | 28 – 46 |
| C | Relevant legal principles | 47 – 84 |
| D | The evidence and my findings | 85 – 264 |
| E | Conclusions | 265 – 275 |
A. Introduction and summary of decision
This litigation arises from a fallout between the owners of an Indian restaurant business.
In summary, the facts are that in early 2003 the claimant (“Tariq”) and the first defendant (“Mahboob”) opened a large-scale buffet style restaurant with wedding and banqueting facilities (“the Stockport Road Nawaab”) in what had been a cinema at 1008 Stockport Road in Levenshulme, Manchester (“the Stockport Road property”). They were equal joint owners of the Stockport Road property and equal joint shareholders in the second defendant company (“the Stockport Road company”), through which the restaurant business was undertaken. They were also good friends.
A few years later, in 2006, they entered into a formal deed of partnership to regulate their business affairs. Three years after that, in 2009, they each disposed of half of their shares in the Stockport Road company to their respective wives, the third defendant (“Nusrat”) and the fourth defendant (“Mirza”). They also involved the claimant's two sons, the fifth defendant (“Asad”) and the sixth defendant (“Usman”), in the restaurant business. Asad also married one of the daughters of the first defendant, Atikah.
By early 2003 the relationship between the two men and their families had become close, both socially and in business terms.
The Stockport Road Nawaab, achieved considerable success and became very profitable, tapping into the demand for large-scale buffet style wedding and other banqueting events, particularly in the South Asian communities.
However, according to the defendants, within a few years of the Stockport Road Nawaab opening the relationship between Tariq and Mahboob had become very poor. Apart from Tariq himself, every factual witness from whom I have heard blames him for this. The defendants' position is that the only reason the business relationship continued was that Mahboob was prepared to forgive and to forget, in circumstances where he was very keen to make a success of the restaurant business and to avoid what he referred to as trouble and strife.
The defendants' case is that it was against that backdrop that in 2007 Tariq executed a power of attorney in favour of Asad which, according to the defendants, allowed Mahboob and Asad to run the restaurant business for the benefit of both families without interference from Tariq.
The defendants' case is that whilst Mahboob was willing to continue with the Stockport Road Nawaab restaurant on that basis he was not willing to enter into any new restaurant ventures with Tariq. That is relevant because in around 2013 a further Nawaab restaurant, which also became very successful, was opened in Perivale, London (the Perivale Nawaab”). This was run by another limited company (“the Perivale company”) in which Tariq, as opposed to Asad and Usman, had no interest or control. However, Tariq did give a formal written guarantee to the bank to support the Perivale company's borrowings which, he contends, reflects the fact that he had an interest in the Perivale Nawaab.
In 2016 there was a final and irreversible falling out between Tariq on the one hand and each of the individual defendants on the other, including his wife Nusrat (from whom he was already estranged) and his two sons Asad and Usman (who supported their mother and enjoyed good relations with Mahboob). The result was that Tariq was removed from his position as a director of the Stockport Road company. The defendants deny that Tariq has, or has ever had, any interest in the Perivale Nawaab or in the Perivale company.
Tariq's removal as director, the defendants' denial that he has any interest in the Stockport Road company save as a 25% shareholder, the defendants' denial that he has any interest at all in the Perivale company and various other matters, including a number of other complaints made by Tariq and the assertion in correspondence of a counterclaim against him by the Stockport Road company, are what have led to these proceedings. These proceedings have now culminated in a two week trial followed by this judgment.
I begin by setting out in a little more detail, adopting with gratitude and some modest amendment the agreed cast list provided by counsel, the names and the role of the principal actors, personal and corporate, involved in this litigation. Other more peripheral actors are referred to as and when necessary.
| Name | Description |
| Tariq Mahmood Malik (“Tariq) | The Claimant. Father of Asad and Usman. Husband of Nusrat. Alleges that he formed a partnership with Mahboob in 2002. Shareholder in the Second Defendant (“the Stockport Road company”) and director of the Stockport Road company between September 2010 and December 2016. Joint owner, with Mahboob, of the property at 1008 Stockport Road (the “Stockport Road property”) from which the restaurant business (the “Stockport Road Nawaab”), which forms the subject of these proceedings, trades. |
| Mahboob Hussain Junior (“Mahboob”) | The First Defendant. The husband of Mirza, father of Atikah and father-in-law of Asad. Shareholder and director of the Stockport Road company since September 2002. Shareholder of the Perivale company. Joint owner, with Tariq, of the Stockport Road property. |
| RN Restaurant (Stockport) Limited | The Stockport Road company, the Second Defendant / counterclaimant. Incorporated in August 2002 as Nawaab Restaurant (Stockport) Limited and changed its name in June 2017. |
| Nusrat Tariq (“Nusrat”) | The Third Defendant. Mother of Asad and Usman. Wife of Tariq. Shareholder in the Stockport Road company since 2008. |
| Mirza Begum (“Mirza”) | The Fourth Defendant. Wife of Mahboob. Shareholder in the Stockport Road company since 2008. Former shareholder in the Perivale company. |
| Asad Ali Malik (“Asad”) | The Fifth Defendant. Elder son of Tariq. Married to Atikah, daughter of Mahboob. Shareholder in and director of the Stockport Road company since October 2016. Shareholder in the Perivale company. |
| Usman Hussain Malik (“Usman”) | The Sixth Defendant. Younger son of Tariq. Shareholder and director of the Stockport Road company since October 2016. Formerly a shareholder in the Perivale company. Did not give a witness statement or participate in the trial. |
| Hassan Akhtar (“Hassan”) | Brother of Tariq. Former joint owner of the Stockport Road property. Transferred his interest in the property to Mahboob in 2002. The defendants allege that Tariq has caused the Stockport Road company to pay Hassan money for work he did not carry out. Gave a witness statement for Tariq but did not attend trial to give evidence. |
| RN Restaurant (Perivale) Limited | The Perivale company, incorporated as Nawaab Restaurant (Perivale) Limited in September 2013 and changed its name in June 2017. Owns the restaurant business (“the Perivale Nawaab”) which Tariq contends should be an asset of the alleged partnership between him and Mahboob and/or was an opportunity which should have been pursued through the Stockport Road company, and in respect of which he seeks various relief in these proceedings. |
So far as the records filed at the Land Registry and Companies House are concerned the Stockport Road property is jointly owned by Tariq and Mahboob and the accounts shows that the two companies, the Stockport Road company and the Perivale company, operate the restaurant businesses run as the Stockport Road Nawaab and the Perivale Nawaab respectively and in which various of the family members have, or have had, shareholdings and are, or were, directors.
However, Tariq's primary case is that there was an overarching partnership (the “Nawaab partnership”), encompassing not only the Stockport Road property and the Stockport Road Nawaab business but also envisaging the opening of further Nawaab restaurants in other cities such as, he says, the Perivale Nawaab. He says that the Stockport Road company was merely a trading vehicle for the Nawaab partnership, which he says was entered into in 2002 and confirmed by a partnership deed which he and Mahboob entered into on 14 April 2006 (the “partnership deed”).
Mahboob's case, supported by the other individual...
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