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Akhtar v Hussain [2012] EWCA Civ 1762

Appeal against order awarding former cohabitant occupation rent in property in which she had been awarded a 50% beneficial interest. Appeal allowed in part.

Mr Hussain and Ms Akhtar cohabited and had undergone a Muslim marriage ceremony. The couple purchased an ex-council property in 1993 with mortgage and were joint tenants. They separated in 1997 and Ms Akhtar took the parties' two children with her. Mr Hussain remained living in the property and later resided there with his new wife and their three children. Some considerable time after she left, Ms Akhtar sought an order for the sale of the property and an equal distribution of the proceeds. Mr Hussain responded by saying that he was the sole beneficial owner, alleging that Ms Akhtar had renounced her share of the property in a conversation, which took place between the parties in 1997 at the time of her departure. The trial judge rejected this, finding that there was no such conversation. Mr Hussain's alternative claim was that Ms Akhtar was estopped from asserting that she had any beneficial entitlement to the property, this argument was also rejected by the judge. The trial judge found that Ms Akhtar had a 50% share of the property and determined that the property should not be sold until Mr Hussain's youngest son reached the age of 18. The trial judge went on to make an order that Mr Hussain should pay Ms Akhtar occupation rent of £350 per month until the sale of the property. The payments were to come out of Mr Hussain's 50% share of the property on completion of the sale.

Mr Hussain appealed against the order for payment of occupation rent of £350 per month [he had sought permission to appeal the judge's finding in respect of the beneficial interest and the trial judge's accounting but permission on those points was refused]. The appellant argued that the trial judge did not appear to have made any allowance for the fact that he owned half of the beneficial interest in the property and therefore should only be paying occupation rent in relation to the claimant's half share. If £350 per month was the right figure for the rent, Mr Hussain said he should only pay half, £175. The appeal was allowed as Black LJ considered that the trial judge had erred in not making a discount of 50% in the figure that he took for the rent.

Counsel representing Mr Hussain sought to do better than the reduction in the payments and argued that there should not be any occupation rent payment at all. It was advanced on Mr Hussain's behalf that Ms Akhtar had failed to produce any evidence as to rental values and therefore had not discharged the evidential burden. Black LJ did not accede to this argument. The trial judge had allowed the parties a further opportunity to make written submissions in respect of an appropriate figure for the rent but neither party took advantage of this invitation. Black LJ said that the appellant was not entitled to do nothing and rely on technicalities as to where the burden of proof lay, with a view to taking an argument on appeal that there was not evidence before the trial judge.

It was also advanced on behalf of Mr Hussain at the appeal hearing, that the trial judge had failed to take account of the fact that the appellant was paying the mortgage interest on the property and Ms Akhtar was not making any contribution. This point had not been raised before the trial judge or in the application to appeal. Black LJ considered it unfair to explore the point, as Ms Akhtar had not addressed the point in the submissions prepared on her behalf.

Summary by Mai-Ling Savage, barrister, 14 Gray's Inn Square

Case No: B2/2012/0016
Neutral Citation Number: [2012] EWCA Civ 1762


Royal Courts of Justice
Strand, London, WC2A 2LL
Date: Tuesday, 20th November 2012

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AKHTAR Respondent
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HUSSAIN Appellant
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(DAR Transcript of WordWave International Limited
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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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Lady Justice Black:
1. This is an appeal against part of an order made by HHJ Spencer QC at Bradford County Court on 9 December 2011.  The proceedings concern a property, 18 Boyd Avenue, Bradford Moor ("the property").  The property is a semi-detached ex-council house with three bedrooms, worth approximately £98,000.  It was bought by Mr Hussain and the woman with whom he was then cohabiting and with whom he had gone through a Muslim marriage ceremony, Ms Akhtar.  Mr Hussain is the appellant in this court, but for ease I will refer to him as the defendant, as he was in the court below, and I will refer to Ms Akhtar as the claimant.

2. The parties bought the property with a mortgage in 1993, and it was transferred into their joint names.  They became joint tenants in law and in equity.  The claimant left the property and the defendant, taking with her the parties' two children in 1997.  She now lives elsewhere in this country.  The defendant continued to live in the property.  He now resides there with another woman who is the mother of his three children.  All five of the children of the two families are now in their teens. 

3. A considerable time after she had left, the claimant sought an order for sale of the property and an equal distribution of the proceeds of sale.  The defendant responded that he was the sole beneficial owner of the property.  He relied on what, according to him, the claimant had said when she left in 1997.  He alleged that she had then renounced her share of the property.  The trial judge rejected that account and found that there was no such conversation.  The defendant's alternative claim was that the claimant was estopped from asserting that she had any beneficial entitlement to the property.  As that argument depended on the conversation or conversations which were said to have taken place in 1997, it too failed with the judge's finding that there was no such conversation.  Accordingly, the judge found that the claimant and the defendant held 50 per cent of the property each.  He went on to consider whether the property should be sold, and found that that should not happen until the defendant's youngest son reached the age of 18.  He dealt with various accounting issues, and then determined that the defendant should pay the claimant an occupation rent of £350 per calendar month from 1 January 2012 until the sale of the property.  That sum was to come out of the defendant's 50 per cent share of the property upon completion of the sale.

4. It is the order for the payment of occupation rent against which the defendant now appeals, with leave of Etherton LJ.  The defendant would have liked to have appealed against the judge's determination in relation to the beneficial interests in the property, and also against the judge's accounting, but permission was refused for appeals in relation to those matters.  The point that found favour with Etherton LJ with regard to the occupation rent was that the judge did not appear to have made allowance for the fact that the defendant owned part of the beneficial interest in the property, and should therefore only be paying occupation rent in relation to the claimant's half share in it.  If £350 a calendar month was the right figure for the rent, he should therefore only have had to pay £175 per month. 

5. We have looked at the transcript of the part of the hearing in front of HHJ Spencer that dealt with this issue.  There appears to have been no evidence before the judge initially as to occupation rent.  The figure that he first chose was £300 per week.  The defendant's counsel challenged that figure as being too much, and suggested that such a house would cost no more than £80 to £100 a week to rent.  He has told us today (because Mr Pennock represents the defendant today as he did in front of HHJ Spencer) that that was a figure that he had taken from his own head, rather than from any specialist knowledge.

6. Over lunch, on the day that this arose in front of HHJ Spencer, the parties considered the matter, and the claimant's representatives did some research on the Internet.  They came back and suggested that a rent of about £500 per calendar month would be appropriate for this property.  The judge did not accept that; he dropped below it, and he ordered £350 per month by way of occupation rent.  That figure, £350 per month, cannot have been 50 per cent of the proper rental figure, because the claimant herself was only suggesting £500 in total for the rental value of the property per calendar month, and that would have given £250 per month payable by the defendant.  The judge's figure only makes sense if it was his attempt to fix a figure for the total rent, taking into account, presumably, both what the defendant had said in argument and what the claimant had found out over the luncheon adjournment, and therefore coming to a figure which was rather less than the claimant had proposed.  It follows, therefore, that the defendant is right in saying that no discount was made for the fact that he was a half-owner of the property.

7. The claimant has not attended today, but she has provided documents for this court in which she has set out her submissions with regard to this issue.  They do not assist her in relation to the argument advanced by the defendant on this particular score, and I have formed the view that, the judge having erred in not making a discount of 50 per cent in the figure that he took for the rent, the appeal should certainly be allowed so that a figure for occupation rent should be set at £175 per calendar month. 

8. However, Mr Pennock seeks to do better than that on behalf of the defendant.  He would like to dislodge the occupation rent entirely.  He seeks to do that by arguing in his skeleton argument that the claimant had not discharged the evidential burden upon her with regard to establishing a figure for occupation rent.  She had not produced evidence as to the rental values.  I am not persuaded that Mr Pennock can dislodge the occupation rent by this argument.

9. The judge observed, and we can see, that this property was not a particularly valuable property, and it was plainly right that a proportionate approach should be taken to the litigation about it, particularly having an eye to the sort of costs that were likely to be run up in that litigation.  A proportionate approach should have been taken also to the question of establishing the amount of occupation rent that should be payable.  The debate was joined between the parties and with the judge on this subject, and it is interesting to note that the defendant's own counsel's figure came out (if one took the £80 per week which was the lower end of his bracket) at £346 per calendar month, whereas it will be recalled that the judge took £350 per calendar month.  He was, therefore, considerably nearer to the defendant's counsel's personal estimate than he was to the material obtained by the claimant.  But the judge did not stop there.  He gave his view about the rental value in what was essentially a provisional form, because, as we can see from the transcript, he invited the making of further written submissions on the subject from both parties if they wished to seek to illuminate his decision further.  We can see at the end of the hearing in front of him that he said this at paragraph 19:

"I will fix the occupation rent at £350 per month.  This is a former council property and the defendant and the claimant, given the rather tenuous nature of the evidence upon which that was fixed, may have permission by Friday, 16th December to make written submissions to me as to what might or might not be a more appropriate figure and if the parties agree I will determine it on the basis of those written submissions." 

It appears that that opportunity to make further submissions was not taken.

10. I do not consider, therefore, that it can be argued either that the judge went too far in seeking to fix the figure that he did on the material that was available, or that the claimant had failed to discharge the burden of proving the figure for occupation rent. It was incumbent on the defendant, in my view, to take the opportunity that the judge offered if he differed from the judge's provisional assessment of the figure.  I do not consider that, in litigation at the level that this litigation was, he was entitled to sit back and do nothing, relying on technicalities as to where the burden of proof lay, with a view to taking an argument on appeal that there was no evidence before the trial judge.  I say that particularly here, because of the way in which the issue had been debated and made live in front of the judge.  Something was undoubtedly potentially payable by way of occupation rent; the only issue was how much, and the process of fixing that would normally involve contributions of information by both sides.  I would not, therefore, accept that there is anything in that ground of appeal advanced by Mr Pennock.

11. Mr Pennock would have wished today to advance a further basis on which the occupation rent is fixed inappropriately in this case, arguing that there should have been no occupation rent because there was a failure on the judge's part to take account of the fact that the defendant was paying the mortgage interest in relation to this property entirely on his own, and without contribution to it from the claimant.  She should not, therefore, the argument would go, have an occupation rent in relation to the property.

12. It seems to me that it would be unfair of us to explore that argument any further, when it was not referred to either in the skeleton argument or in the argument in front of Etherton LJ, and it has not for obvious reasons, therefore, been dealt with by the claimant in the material that she has sent to us.

13. So for those reasons, I would allow the appeal to the extent that I would substitute a figure of £175 per calendar month for the figure that the judge took for occupation rent, but I would otherwise dismiss it.

Lord Justice Kitchin:
14. I agree.

Order:  Appeal allowed in part