Haque v Hussain & Ors

On an application for interim proprietary relief, the claimant must show a serious issue to be tried concerning the alleged beneficial ownership. If that threshold is met, the court must select the course likely to involve the least risk of injustice, having regard to irremediable prejudice and the evidence available. Where competing organisations claim to be the beneficiary of trusts, constitutional irregularities may still leave successor status sufficiently arguable for interim purposes. Relief may be confined to preserving property. Possession, rental-income, tracing, disclosure and asset-information orders require separate justification and should not ordinarily determine the disputed beneficial ownership in advance.

The claimant sued on behalf of an unincorporated association known as MQM Pakistan, seeking interim orders concerning seven London properties held by various defendants on trust for MQM before a 2016 political split. He sought restraints on disposal, possession orders, accounts of rental income and sale proceeds, worldwide asset information, and approval of a proposed transfer of two properties.

The defendants argued that the trusts benefited MQM London, the organisation led by the first defendant, and challenged the validity of constitutional changes relied upon by the claimant. The central issues were whether there was a serious issue to be tried, what interim relief was just, and whether the proposed consent order should be approved.

1. Serious issue to be tried. The claimant’s case was sufficiently arguable that MQM Pakistan was the successor to the MQM named in the trust documents. The court could not finally determine the competing evidence or the disputed translations at the interim stage. Although the 2016 and 2017 constitutional amendments appeared not to comply with the 2015 constitution, there was an arguable case that MQM Pakistan had sufficient continuity with the earlier association, that it alone was functioning in pursuit of the movement’s purposes, and that the irregularities were not so fundamental as to deprive it of that identity.
2. Interim proprietary relief. Applying the American Cyanamid approach, and asking which course involved the least risk of injustice, the court restrained disposal of the six unsold trust properties pending trial. The order was conditional on fortification of the claimant’s undertaking in damages by payment of £25,000 into court or other agreed security. The defendants retained liberty to apply to sell properties and use the proceeds for MQM London’s purposes, subject to a fresh assessment.
3. Other relief. Possession orders were refused because the claimant had established only arguability and wrongful eviction would cause substantial prejudice. Rental-income orders were refused because the status quo favoured leaving the rents with MQM London, the likely interim sums were limited, and there was insufficient evidence that a damages judgment could not be satisfied. Orders for an account of sale proceeds, worldwide asset disclosure, tracing into the seventh defendant’s assets, and removal of a trustee were also refused because they either presupposed beneficial ownership or lacked adequate procedural and evidential foundations.
4. Proposed consent order. Approval was refused. The proposed transfer of the two Whitchurch Lane properties assumed that MQM London had no beneficial interest, whereas that issue remained for trial. No adequate undertaking in damages had been given, and the trustees could not properly make the required statutory declaration on the evidence then available.
5. The application was otherwise dismissed, subject to the restraint order and its fortification.