Rowan Morton recently acted for the Claimant in a 4-day “TOLATA” claim before HHJ George in Guildford, whereby the jointly owned property (constructed by the Defendant) did not have the necessary building regulation approval, or energy performance certificate to be fit for sale or for residential rental. The Defendant had been living there for 7 years. The Claimant argued that she had been denied her right to benefit from the property by way of her right to occupation or in the alternative receipt of potential rental income. The Judge agreed that this came within the remit of s12-15 of TOLATA, and that compensation was payable where the Claimant had been denied access by the Defendant and had no ability to occupy. George, HHJ, acknowledged that the Claimant had not wanted to move in, but held that the right to occupy was wider than moving in, it provided greater rights, including the right to enjoy or benefit from a trust property.
Where to start
The starting point is that a person with a beneficial interest in a co-owned property has a right to occupy that property if the purpose of the trust was for the parties’ occupation, and it is suitable for occupation (s.12(1)(a) and (2) of the Trust of Land and Appointment of Trustees Act “TOLATA” 1996). The shift in occupation rent compensation in favour of a claimant can be seen from the following chronology of decisions.
Re Pavlou [1993] 1 WLR 1046 was often quoted in cases claiming occupation rent before the enactment of TOLATA, and in summary the case made clear that while ouster or forceful exclusion was not necessary, if a relationship breaks down and one party leaves, and would not be welcomed back it would normally be fair and equitable to charge an occupation rent to the party who has remained in occupation and enjoyment of the property.
After TOLATA 1996
After TOLATA, Stack v Dowden [2007] UKHL 17 clarified that while the equitable principles would remain relevant, the question of occupation rent would be governed by sections 12 to 15 of TOLATA. Section 13(5) then provides for payment of outgoings or expenses and compensation to a party whose right to occupy has been unreasonably restricted or excluded. Section 15 lists relevant factors to consider when determining any applications by a person with an interest in the trust property.
Shortly after Stack v Dowden came Murphy v Gooch [2007] EWCA Civ 693 where Lightman J held that there was a wider ambit of relevant considerations and that the task of the court was now not merely to do justice between the parties, but to do justice between the parties with due regard to the relevant statutory considerations and in particular (where applicable) the welfare of the minor, the interests of secured creditors and the circumstances and wishes of the beneficiaries specified (those factors appearing in s15).
All quiet?
Despite both Counsel citing Murphy v Gooch from 14 years prior, and the test seeming to have been laid to rest, the Recorder in Bailey v Dixon [2021] EWHC 2971 (QB) felt that that the cornerstone of a successful application for occupation rent was whether Mr Dixon had excluded Ms Bailey. He found that she had failed to show she had been barred from exercising her legal right to occupy. He considered the analogy of a landlord changing the locks, and throwing out a tenant’s stuff onto the streets, and found that there had been no such exclusion. This error of law led to the entirety of the judgment being set aside and remitted to a fresh court.
Widening the scope
It seems claims for occupation rent are becoming far more readily accepted than pre TOLATA, with claimants asserting that an award is the norm. The case of Rowland v Blades [2021] EWHC 2928 (Ch) granted compensation to Mr Rowland in respect of the restriction Ms Blades had imposed upon his use of their weekend holiday retreat property, where, after the break down of their relationship Ms Blades refused to allow Mr Rowland’s new partner to visit with him. Such conduct was considered an unreasonable restriction of his right to occupy pursuant to s12 of TOLATA and market rental compensation was awarded.
It seems occupation rent has developed significantly since Re Pavlou, and while on the face of it the need to have regard to the considerations of TOLATA may have created a narrower discretion, it appears that courts are continuing to widen the scope for compensation payable.
If you require advice, or representation, in a claim relating to property you can instruct Rowan Morton by contacting her clerks on 01483 539131 or emailing them at clerks@guildfordchambers.com
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