Occupation rent: joint tenant’s trustee in bankruptcy

What principles govern an application for occupation rent by a joint tenant’s trustee in bankruptcy?

The facts

In Davis v Jackson ([2017] EWHC 698 (Ch)) Mr and Mrs Jackson were legal and equitable joint tenants of their family home. The couple were estranged when the property was acquired and it was never envisaged that Mr Jackson would live in it. Mrs Jackson made all the mortgage payments.

Mr Jackson was made bankrupt and the trustee in bankruptcy obtained an order for the sale of the property and an equal division of the proceeds of sale between him and Mrs Jackson.

The court ordered that there should be equitable accounting and that Mrs Jackson should be entitled to a contribution from the trustee of one half of the mortgage payments made by her up to the time of the sale of the property.

The trustee in bankruptcy contended that it should be entitled to charge Mrs Jackson an occupation rent in respect of her occupation during the period after the bankruptcy.

The relevant law

The default position is that an occupation rent is not payable; there must be some conduct or feature of the case that would justify equity in requiring the occupier to pay rent ([61]).

When deciding on whether such circumstances exist, ‘the court can have regard to the circumstances in existence before the tenant in common seeking payment of an occupation rent acquired his interest’ ([67] per Snowden J).

The court ‘has a broad equitable jurisdiction to do justice between co-owners on the facts of each case’ ([71]).

It was never envisaged that Mr Jackson would occupy the property:

‘That being so, for my part I simply cannot see how it could be in accordance with equity or justice for the Trustee, who has simply had Mr. Jackson’s interest in the Property vested in him, automatically to become entitled to claim an occupation rent from Mrs. Jackson. The Trustee has in no sense been excluded from the Property; and it is not merely that it is unreasonable for the Trustee to start occupying the Property with Mrs. Jackson and her children; the true position is that Mr. Jackson never had such a right at all. I therefore do not see how the Trustee can in effect claim to stand in a better position and charge Mrs. Jackson rent in place of seeking to occupy the property’ (75]).

Mrs Jackson could not be charged an occupation rent.

Michael Lower

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