Key Facts
- •Muttahida Quami Movement (MQM), a Pakistani political party, owned several London properties held in trust.
- •A dispute arose over the beneficial ownership of these properties after a split within MQM in 2016.
- •Mr. Haque, representing Muttahida Quami Movement Pakistan (MQMP), claimed MQMP was the successor to MQM and thus entitled to the properties.
- •The High Court ruled in favour of Mr. Haque, declaring MQMP the beneficial owner.
- •The Active Defendants appealed this decision.
Legal Principles
Trustees of an unincorporated association hold assets on trust for the members, subject to their contractual rights and liabilities.
English law, as summarised in the judgment
Trustees must act unanimously unless the trust instrument or statute provides otherwise.
Snell’s Equity, Lewin on Trusts, Luke v South Kensington Hotel Company, Fielden v Christie-Miller
A trustee sued for breach of trust can defend by denying the claimant's beneficiary status.
Lewin on Trusts
The English court has jurisdiction over claims concerning English trusts of English property, even if the underlying issues involve foreign law.
Judgement's implicit reasoning and court's actions
Outcomes
The appeal was allowed in part.
The Judge erred in separating the identity issue (whether MQMP is MQM) from the constitutional issues (whether MQMP's formation was constitutional). The court held that the identity issue is inherently tied to the constitutional validity of the actions taken within MQM in 2016.
The High Court's decision that MQMP is MQM was overturned.
The court found that the High Court failed to properly address whether the changes that led to MQMP’s formation were constitutionally sound, according to MQM's rules, making a determination on the identity of the true successor impossible without resolving these constitutional questions.
The matter was remitted to the High Court to determine the constitutional validity of the 2016 amendments.
This is necessary to decide if MQMP is the valid successor to MQM and thus entitled to the trust properties. The court also acknowledged ambiguities in interpreting Altaf Hussain's 2016 statement and the required quorum for decisions under Article 9(a).
The High Court's interpretation of Article 9(a) regarding the required 2/3 majority for key decisions was upheld.
The court found the Judge's interpretation reasonable, finding that the relevant articles concerned decisions made at scheduled meetings by the members present, and the “2/3 majority” referred to the members present, not the whole committee.