Under section 12(1) of the Trusts of Land and Appointment of Trustees Act 1996, a beneficiary who is beneficially entitled to an interest in land has the right to occupy the land if the purpose of the trust is to make the land available for his occupation. Section 12(1) is subject to section 13. Section 13(1) gives trustees power to exclude or restrict that entitlement. Under section 13(3) trustees can impose conditions on the occupier. A condition under section 13(6) is the paying of compensation to the beneficiary whose entitlement has been excluded or restricted.
In Bailey v Dixon [2021] EWHC 2971 (QB) the High Court was asked to consider whether the court below had erred in the applicable test for when an occupation rent may be ordered by the court pursuant to the Act.
The parties were the joint owners of a property situated in Stockton-on-Tees. They severed their joint tenancy following the breakdown of their relationship in 2005. In 2016 the respondent applied under the Act for an order for sale and other ancillary orders. The appellant resisted the application and made a claim for compensation under section 13(6). The appellant argued that she had been excluded from the property and was entitled to receive an occupation rent for the relevant period of exclusion.
In the county court, the judge made an order for sale and dismissed the appellant’s claim for compensation under section 13(6). The judge determined that the respondent had not denied the appellant’s legal right to occupy the property. Further, the judge found that the test in determining whether there had been an exclusion was analogous to a landlord who unlawfully evicted a tenant by changing the locks and throwing their belonging out of the property. The appellant appealed the judge’s finding on the occupation rent issue.
In allowing the appeal, the High Court found that the court below had erred in the test to be applied to whether an occupation rent may be ordered by the court. Proving that there had been an ouster of occupation was not a condition precedent to a claim for occupation rent. Relying on Murphy v Gooch [2007] EWCA Civ 693, the High Court found that whether or not there was any proof of ouster, the court may order credit for an occupation rent if it was just to do so. Further, it reaffirmed that exclusion could be proven on a constructive basis and there was no requirement to show that the exclusion had been akin to an unlawful eviction in the landlord and tenant context.
Elizabeth Dwomoh is a barrister at Lamb Chambers
