Archive for the ‘ouster’ Category

When is an occupation rent payable?

August 14, 2021

In Cheung Lai Mui v Cheung Wai Shing ([2021] HKEC 2263) the Court of Final Appeal was asked to consider whether the obligation to pay an occupation rent only arose when there was an ouster or where partition proceedings or some analagous process (such as sale and division of the proceeds) had been initiated.

The alternative view, rejected by the Court of Final Appeal, was that there is a new ‘modern’ approach in which an occupation rent is payable whenever this is equitable.

P, D1 and D2 were co-owners of a house. P had a two-thirds share in the tenancy in common of the house and D1/D2 were co-owners of the remaining one-third share.

P occupied one floor of the house herself. The other two floors were let out and P received the rent. There was no ouster of D1 or D2. Were they entitled to an occupation rent and an account of the rental income received and retained by P?

The Court of Final Appeal rejected this claim:

‘We conclude that the authorities considered above do not establish any new, free-standing “modern approach” such as that urged by the respondents and favoured by the Court of Appeal. Claims by one co-owner against a co-owner in occupation for payment of occupation rent or for an account of rent can only arise in accordance with the principles laid down in the established authorities. Unity of possession precludes such claims otherwise than in cases of ouster (including “constructive exclusion” as in domestic violence cases); or where an operative agreement renders the co-owner in occupation an agent or bailiff so as to come under a duty to account to the other. Where partition or analogous proceedings have been instituted, apart from cases of ouster, equity may recognise a defensive equity in favour of one of the co-owners regarding expenditure appropriately incurred and may, in the process of equitable accounting, require the other, viewed as a seeker of equity required to do equity, to be debited with an occupation rent to set off the expenditure incurred, thus reciprocally balancing the parties’ interests in the distribution of the realised proceeds of the co-owned property.’ (at [104])

There is no right to an occupation rent or to an account of rental income unless there is ouster (including constructive ouster) or agreement. Where a partition or order for sale has been sought or a sale has taken place, the court can order payment of an occupation rent or account for income as part of an equitable accounting exercise.

Michael Lower

Equitable accounting: is an ouster necessary before an occupation rent becomes payable?

October 9, 2019

In Murphy v Gooch ([2007] EWCA Civ 603), a co-habiting couple bought a 25% stake in a shared ownership property. The relationship between the couple broke down and Ms Murphy left the property. Ms Murphy applied for a declaration that they were tenants in common in equal shares, an order for sale and for an account to be taken as part of which Mr Gooch should be ordered to pay an occupation rent in respect of the period in which he was in sole occupation.

The English Court of Appeal (Lightman J giving the judgment) held that Mr Gooch could be ordered to pay an occupation rent if this was just and equitable even if there was no ouster ([18]).

Lightman J was prepared to hold, in any event, that there was a ‘constructive ouster’ since Ms Murphy left the property on the breakdown of the relationship ([18]).

Ms Murphy was entitled to set this occupation rent off against the sums paid by Mr Gooch in respect of mortgage interest and the rent payable in respect of the 75% share of the property still owned by the Housing Association from which the couple bought their share ([21]).

This decision was reached under the terms of the Trusts of Land and Appointment of Trustees Act 1996. Lightman J states, however, that the same decision would have been reached through an application of equitable accounting principles.

Michael Lower

Ouster and car parking: applying Batchelor

May 12, 2017

In Kettel v Bloomfold Ltd ([2012] EWHC 1422) the claimants were long leaseholders of flats in a development. Their leases granted them the right to park in the car parking space identified in the lease. The developers wanted to allocate them new spaces and build on the existing spaces. The developers fenced off the area that they wanted to build on and enclosed the spaces. The flat owners sought an injunction to restrain this interference with their car parking rights.

The owners argued that they had either a lease or an easement of the space. It was agreed on all sides that, if there was no lease,  they had an easement. The judge (HHJ David Cooke) found that there was no lease. Despite the fact that the parties agreed that there was an easement, he considered whether the ouster principle prevented the flat owners from having an easement.

Moncrieff had not overruled Batchelor v Marlow and the judge accepted that Batchelor was binding on him: the test was whether the exercise of the car parking right left the developer with no reasonable use of the car parking space. It was a question of fact in each case whether the right granted made ownership of the servient land illusory.

In this case, the developer could pass over the space on foot when there was no car parked there and could authorise others to do so: it had granted such rights to pass over the spaces to other tenants in the leases to them. It could change or repair the surface, arrange for service media to pass under, or wires to pass over, the space. It could build over the space (and had made plans to do so). These rights had importance and value to the developer in managing the estate ([24]). The ouster principle was not infringed.

The flat owners were entitled to an injunction to restrain the actual and threatened interference with the car parking rights. This was not one of these exceptional cases where damages should be awarded instead. It would not be right to expropriate the car parking rights.

The judge held that if, contrary to his view, damages were to be awarded then they should be more than purely nominal. Even assuming that the flat owners were given an equivalent car parking space, they were entitled to damages on a release fee basis:  the flat owners should be awarded a sum that would be negotiated between willing parties for the right to build on the spaces ([61]).

Michael Lower

Legal joint tenancy: determining beneficial ownership under a common intention constructive trust

March 11, 2015

In Lo Kau Kun v Cheung Yuk Yun ([2015] HKEC 316, CFI) a married couple bought a flat as joint tenants. P claimed that the property was held on common intention constructive trust in equal shares. D claimed that she was the sole beneficial owner. Deputy Judge Sakhrani referred to the statements in Stack v Dowden ([68] in Stack) and Jones v Kernott ( [51] in Jones) to the effect that where the legal title is in joint names and there is a question as to beneficial ownership equity follows the law (so that a legal joint tenancy gives rise to equal shares) but that it may be possible to show a contrary intention (the burden of proof being on the party seeking to establish this). P had paid the down payment. P and D were jointly liable under the terms of the mortgage and each had contributed to the mortgage payments. Crucially, there was a finding that the parties had discussed their intentions concerning the ownership of the property ([63]). The couple had agreed that the property was to be a family asset (to be held equally as a family asset according to P) ([64]). This (not the record of financial contributions) was determinative. The property was held on common intention constructive trust in equal shares ([66]).

D also argued that she had extinguished P’s title by adverse possession. P had left the property in 1993 after a violent argument and never returned ([77]). This argument failed since D was entitled to be in possession as co-owner. There was no evidence of the ouster that would be necessary for this claim to succeed ([81]).

Michael Lower

Ousted tenants in common need to seek remedy promptly

June 21, 2013

In Ma Weineng v Ma Hook Kwan ([2013] HKEC 788, CFI) A and B were joint tenants and then (from 2007) tenants in common in equal shares of property. A and then A’s successor in title had been in exclusive possession since 1987 (both personally in possession and by retaining the entire rent derived from lettings of parts of the property). A’s successor was granted a declaration that B was now prevented by the Limitation Ordinance from bringing any action against A’s successor arising from his share in the property. A and A’s successor’s long ouster of B meant that B had lost his half share in the property. B’s title was extinguished.

Michael Lower

Alleged ouster of co-owner: injunction?

December 20, 2012

Khan v Mansoori ([2012] 5 HKLRD 637, CFI) concerned a dispute between P and D1 and D2 who were tenants in common of property in Kowloon. P lived in the USA. D1 and D2 changed the locks at the property. P alleged that he had been ousted from possession. D1 and D2 contended that P1 had no beneficial interest in the property but held his share as nominee for D1 and D2. The question at this stage was whether P should have an injunction pending the trial to restrain any actions by D1 and D2 ousting him from possession. The injunction was not granted. The balance of convenience weighed in favour of damages being the appropriate remedy should P succeed in the trial. P lived in the US, rarely visited Hong Kong and had no practical need to enter the property.

No easement where there is exclusive use

July 4, 2011

Hanina v Morland ((2000) 97(47) LSG 41) the freeholder of a house granted a 99 year lease of the first and second floors and retained the ground floor. The tenant used to make use of the flat roof above part of the retained ground floor as a kind of extension to the flat (for sunbathing and entertaining friends). The tenant then claimed an easement to use the roof  (on the basis of the English equivalent of CPO s.16). The claim failed because it was a claim to exclusive use of the roof and so was not capable of being an easement.

Is the right to park a car capable of being an easement?

November 5, 2010

This question was considered in a Scottish case that reached the House of Lords (Moncrieff v Jamieson [2007] UKHL 42). The short answer is that it can be an easement. One of the interesting questions that was considered in this case is whether there can be an easement where it gives the owner of the dominant tenement exclusive use of the servient tenement. Two different approaches can be discerned in this case. One draws a distinction between exclusive use and exclusive possession. On this view (that of Lord Scott of Foscote) exclusive use is not a problem if the owner of the servient tenement retains control. On another view (that of Lord Neuberger of Abbotsbury) one needs to look at the proportion of the servient tenement that can be occupied by the owner of the dominant tenement; it is a question of degree.

Lord Scott of Foscote also commented on the potentially broad class of rights that can be enjoyed as easements:

‘I can see no reason in principle, subject to a few qualifications, why any right of limited use of the land of a neighbour that is of its nature a benefit to the dominant land and its owners from time to time should not be capable of being created as [an easement].’