Davis v Jackson [2017]
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Davis v Jackson [2017] 1 WLR 4005 revolved around whether a trustee in bankruptcy could be granted occupation rent and how such a determination might be influenced by prior agreements between the parties involved.
A wife who had purchased a property solely for herself, intending that her estranged husband would not live with her. The trustee in bankruptcy of the husband claimed entitlement to occupation rent from the wife, asserting that it would be unreasonable for him to exercise his right of occupation.
The High Court, represented by Snowden J, ruled against granting occupation rent to the trustee in bankruptcy. The court emphasised its broad equitable jurisdiction not confined by the Trusts of Land and Appointment of Trustees Act 1996 (TLATA). It highlighted that older principles in the case law on equitable accounting, including French v Barcham [2008], were still applicable.
The court pointed out the default position that an occupying co-owner should not have to pay occupation rent unless there is ouster or exclusion, meaning the non-occupying co-owner is not in occupation involuntarily. The court suggested that, by default, no occupation rent should be payable when a trustee in bankruptcy is not in occupation and the co-owner is.
The court maintained the authority to consider any agreements and understandings to which the non-occupying owner had been a party before bankruptcy. This was a departure from French v Barcham, which the court rejected. The court emphasised that it would lead to an immutable rule granting trustees in bankruptcy occupation rent, disregarding the positions of parties before bankruptcy or any prior agreements between the original co-owners.
In the specific case, the court concluded that since there was no agreement granting the bankrupt the right to occupy or the wife to pay rent, it would be inequitable for the trustee to claim rent for merely having the bankrupt's interest. This decision highlighted the importance of considering prior agreements and the specific circumstances of each case when determining occupation rent.
A wife who had purchased a property solely for herself, intending that her estranged husband would not live with her. The trustee in bankruptcy of the husband claimed entitlement to occupation rent from the wife, asserting that it would be unreasonable for him to exercise his right of occupation.
The High Court, represented by Snowden J, ruled against granting occupation rent to the trustee in bankruptcy. The court emphasised its broad equitable jurisdiction not confined by the Trusts of Land and Appointment of Trustees Act 1996 (TLATA). It highlighted that older principles in the case law on equitable accounting, including French v Barcham [2008], were still applicable.
The court pointed out the default position that an occupying co-owner should not have to pay occupation rent unless there is ouster or exclusion, meaning the non-occupying co-owner is not in occupation involuntarily. The court suggested that, by default, no occupation rent should be payable when a trustee in bankruptcy is not in occupation and the co-owner is.
The court maintained the authority to consider any agreements and understandings to which the non-occupying owner had been a party before bankruptcy. This was a departure from French v Barcham, which the court rejected. The court emphasised that it would lead to an immutable rule granting trustees in bankruptcy occupation rent, disregarding the positions of parties before bankruptcy or any prior agreements between the original co-owners.
In the specific case, the court concluded that since there was no agreement granting the bankrupt the right to occupy or the wife to pay rent, it would be inequitable for the trustee to claim rent for merely having the bankrupt's interest. This decision highlighted the importance of considering prior agreements and the specific circumstances of each case when determining occupation rent.