Family Share Dispute: Intention, Trust, and Influence in Malik v Malik Case

Citation: [2024] EWHC 69 (Ch)
Judgment on


The case of Usman Hussain Malik v Nusrat Malik & Ors concerns the disputed beneficial ownership of shares in a family-owned company, R N Restaurant (Stockport) Limited. The case dives into the complex familial relations, the intentions behind share transfers, and raises legal questions pertaining to resulting trusts, misrepresentation, mistake, and undue influence. The High Court of Justice provides a rich analysis of these topics, which are vital for practitioners dealing with company, trust, and family law matters.

Key Facts

Nusrat Malik transferred shares in the family business to her sons, Asad and Usman, ostensibly to ensure they could become directors and help remove their father, Tariq Malik, from managing the company. The transfer’s legitimacy was later challenged by Nusrat, claiming she remained the beneficial owner and that the shares were transferred under specific circumstances, including misrepresentations and undue influence.

Resulting Trusts

The court considered whether a resulting trust arises from Nusrat’s transfer of shares. A resulting trust can occur when property is transferred without consideration, and the transferor does not manifest an intention to make a gift. Lord Nicholls’s unitary concept of undue influence from Royal Bank of Scotland v Etridge (No.2) underscores the thorough evaluation of intention.

Misrepresentation and Mistake

For misrepresentation, the claim hinged on whether Usman and Asad falsely represented that share ownership was required for directorship. In mistake, it was about Nusrat’s belief in the necessity of her sons holding shares to become directors. Both claims needed a factual basis in the claimant’s belief induced by the defendants at the time of the transfer.

Undue Influence

Undue influence was examined in two facets: actual and presumed. Presumed undue influence requires evidence of a relationship where trust and confidence are misplaced, resulting in a suspicious transaction. Etridge’s principles guided the inquiry into whether the transaction could be explained by normal motives of individuals acting freely.


The court found no resulting trust as Nusrat intended an absolute gift of shares. It also dismissed the misrepresentation and mistake claims as the transfer’s real purpose was understood and there was no significant reliance on any false beliefs. Moreover, the undue influence claim was defeated as the transaction, when considered in context, was seen as reasonable and explicable without undue influence.


The decision in Usman Hussain Malik v Nusrat Malik & Ors is a narrative about trust within a family’s decision-making in businesses and the importance of intent in share transfers. The court meticulously dissected the legal provisions regarding resulting trusts, misrepresentation, mistake, and undue influence, concluding the transfer to Asad and Usman was an unconditional gift. This case serves as a benchmark for the role of intention in equity, the weight of familial relationships in commercial transactions, and the enduring importance of context and substance over form in the realm of legal trusts and influence.