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Akhtar v Hussain [2012] EWCA Civ 1170

Application for permission to appeal an order relating to the beneficial interest of the former family home. Permission to appeal granted only as to the amount of occupation rent to be paid by the occupying party.

This judgment followed an oral application for permission to appeal an order concerning the beneficial interests of the parties in a property which the parties originally occupied from 1993 as an unmarried couple with their children until the claimant left with the children in 1997.  The judgment also concerns the application of equitable principles of accounting in respect of the period after the claimant left the property.

The three grounds pursued by the appellant (the defendant in the original trial) in order to obtain permission to appeal were, firstly, that the trial court's decision did not fall in line with the case of Jones v Kernott [2011] UKSC 53 as the trial judge had failed to find an actual imputed intention that the parties' respective shares should have crystallised at the point when the claimant left the property. Etherton LJ found that the trial judge's decision followed the principles laid down in Stack v Dowden [2007] UKHL 17, 2 AC 432 and so the appellant did not have a real prospect of a successful appeal on this point.

Secondly, the appellant stated that the judge was wrong in carrying out the exercise of equitable accounting as he failed to credit the appellant with the payment of the mortgage interest (even though the mortgage interest was paid from public funds) and he also failed to credit the appellant for paying the costs of maintenance of the property. Etherton LJ found that the trial judge was right in attributing a neutral benefit to the parties for the payment of the mortgage interest from public funds. He also found that "the judge was plainly also correct to hold that the cost of maintenance, as distinct from capital improvements, is also to be ignored, since that was a necessary incident of the defendant's continuing occupation of the property and was carried out without the claimant's knowledge, consent or approval."

Thirdly, the trial judge ordered that the defendant pay £350 per month by way of occupation rent for the duration of the period of postponement of sale. The appellant argued that the cost of rental of such a property was in the region of £350 - £450 per month. However, as the trial judge had failed to take into account of the defendant's 50% beneficial interest he should be paying an occupation rent of half of that £350. Etherton LJ granted permission to appeal on this third ground only.

Summary by Akta ChipalkattyChurch Court Chambers
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Case No: B2/2012/0016
Neutral Citation Number: [2012] EWCA Civ 1170
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BRADFORD COUNTY COURT
(HIS HONOUR JUDGE SPENCER QC)

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Tuesday 17th July 2012

Before:

LORD JUSTICE ETHERTON
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Between:

AKHTAR 
Appellant

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HUSSAIN 
Respondent

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(DAR Transcript of
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Mr Ian Pennock (instructed by Stachiw Bashir Green) appeared on behalf of the Appellant.

The Respondent did not appear and was not represented.

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Judgment

(As Approved by the Court)

Crown Copyright ©

Lord Justice Etherton:
1. This is an oral renewal of an application by the defendant for permission to appeal the order of HHJ Spencer QC in the Bradford County Court dated 9 December 2011.  Permission to appeal was refused on the papers by Lewison LJ on 25 May 2012.  The dispute concerns the beneficial interests of the parties in 18 Boyd Avenue, Bradford Manor, Bradford ("the property"), which the parties originally occupied from 1993 as an unmarried couple with their children until the claimant left with the children in 1997.  It also concerns the application of principles of essentially equitable principles of accounting in respect of the period after the claimant left the property.

2. The first point concerns the judge's conclusion that the parties are beneficially entitled to an equal half share in the property, they having been registered as joint proprietors.  Mr Ian Pennock, counsel for the claimant on this application as he was at the trial, submits that the judge wrongly failed to find that the parties intended that their respective shares should crystallise at the point when the claimant left the property.  He submits that in failing to find an actual imputed intention to that effect the judge was out of line with the decision of the Supreme Court in Jones v Kernott [2011] UKSC 53 which was, he says, in substance on all fours with the present case.  He suggested that the judge and indeed the parties themselves were misled because they only had at that stage the benefit of the Court of Appeal decision in Jones, which is reported at [2010] EWCA Civ 578.  Notwithstanding everything that Mr Pennock has so succinctly and clearly expressed, I do not consider that the claimant has a real prospect of a successful appeal on this point.  It is clear that the judge had in mind the principles laid down in Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432. 

3. It is also clear from the agreed case summary for the trial and the judgment that the only grounds seriously argued on behalf of the claimant at the trial for rebutting the presumption of joint beneficial ownership arising from joint registration of the parties as part of the property were 1) an alleged verbal assurance by the claimant to the defendant, upon or after leaving the property, that the property was the defendant's to do with as he wished, and he relied on that assurance to his detriment; alternatively 2) allowing the defendant to believe that she had abandoned her interest in the party and acquiescing in that state of affairs.  Those two situations were respectively described in the agreed statement of case as proprietary estoppel and estoppel by convention.  Those two allegations were rejected as a matter of fact by the judge on the evidence following a three-day trial.

4. The agreed case summary contained a further allegation that the property was held as tenants in common from the date of its purchase, which was rejected by the judge.  What was not seriously run at the trial, as Mr Pennock frankly concedes, was a case that, even if the defendant failed on all those matters, nevertheless the joint intention of the parties, actual or imputed, was that the claimant's share was to be regarded as crystallised at the point when she left the property.  In my judgment it is far too late to run that case after the conclusion of the trial and the judgment, and on a full hearing of the appeal I have no doubt that the court would so hold.

5. The claimant then says that the judge was wrong in carrying out the exercise of equitable accounting in failing to credit the defendant with 1) payment of mortgage interest merely because that interest was paid out of public funds; and secondly, although this point was not run in oral submissions this morning but is contained in the claimant's skeleton argument, the costs and maintenance of the property.  There is no real prospect of a successful appeal on these points.  The judge, in my view, was plainly right to view the payment of mortgage interest out of public funds as neutral as between the parties and therefore to be ignored.  I do not accept Mr Pennock's oral submission this morning that it is quite wrong for the court to make a distinction between those who are and were not in receipt of public funds from the DHSS and that the sums paid to the defendant in respect of mortgage interest are to be treated as contributions by the defendant for the purpose of equitable accounting.  In my judgment the judge was plainly also correct to hold that the cost of maintenance, as distinct from capital improvements, is also to be ignored, since that was a necessary incident of the defendant's continuing occupation of the property and was carried out without the claimant's knowledge, consent or approval.

6. The final matter concerns the judge's order that the defendant pay £350 per calendar month by way of occupation for the duration of the period of postponement of sale.  The judge does not state in his judgment the basis for ordering that amount.  Mr Pennock tells me this morning that the figure was originally the suggestion of the judge alone without evidence, but that, following the lunch adjournment and some research on the internet by the claimant's lawyers in the meantime, it was suggested on behalf of the claimant that rents for this type of property, an ex-council property, in the area in question were typically between £350 and £450 per calendar month.  What is clear therefore is that the judge did not take account of the fact that the defendant is entitled to a 50 per cent beneficial interest in the property, and accordingly the occupation rent to be paid by him should only be in respect of the enjoyment, as it were, of half of that part of the property attributable to the claimant's 50 per cent beneficial interest.  In other words, if the position is that the proper rental value per calendar month for this property is £350 it was not right in principle to require the defendant to pay more than half of that sum per calendar month.

7. Accordingly, I would grant permission to appeal on that ground of appeal -- that is the third ground of appeal -- but only on that ground of appeal.  For those reasons I dismiss the application for permission to appeal in relation to grounds 1 and 2; I grant permission to appeal in relation to ground 3. 

Order:  Application granted in relation to ground 3