• In the case of Davis v Jackson 2017 1 WLR 4005, it was held that where a husband had never been nor had indented to have. Right of occupation of a preparty jointly owned by hum and his wife which she had been solely responsible for, and theta was no expectation that the wife would pay rent for her occupation, it was not equitable for the trustee in bankruptcy, in whom the husband’s interest had vested, to claim occupation rent from the wife.

Facts of the Case

  • The Court was required to determine the apportionment of the sale proceeds of property co owned by the first respondent husband and the second respondent wife.
  •  The husband and wife were separated. The wife purchased a new property in her sole name. She executed a deed declaring that she held the property on trust for herself and her husband in equal shares.
  • The husband was obligated to pay half the mortgage. The wife paid the entire mortgage, and the husband never occupied the property. Following financial difficulties, she re-mortgaged with a new lender who required that title be transferred into joint names. Both became liable for the mortgage payments, and they held the property on trust for themselves as joint tenants. The husband never paid anything towards nor occupied the property.
  • A bankruptcy order was made against him with the result that the joint tenancy was severed. The applicant trustee in bankruptcy obtained a declaration that he was entitled to half of the property and an order for sale, which was subject to the taking of an equitable account.
  • The trustee submitted that as it would be unreasonable for him to exercise his right of occupation he was entitled to rent in respect of the wife’s occupation, and that it would be inequitable for her to claim a credit for the mortgage payments after bankruptcy without paying occupation rent.
  • The wife submitted that since the husband had broken his promise in the deed to contribute towards the mortgage, his creditors would be unjustly enriched if the trustee was entitled to any share of the sale proceeds.

Issues in Davis v Jackson 2017 1 WLR 4005

  • Was occupational rent reasonable to grant to the trustee in bankruptcy

Held by High Court

  • Occupation rent was not granted to the trustee in bankruptcy

Snowden J

  • The court has a broad equitable jurisdiction not limited by the Trusts of Land and Appointment of Trustees Act(TLATA). Stack v Dowden was not followed in later cases which held that older principles in the case law on equitable accounting were still applicable, including French v Barcham. If the statute was exhaustive neither a bankrupt nor the trustee in bankruptcy would ever be able to claim occupation rent under s13 TLATA since they cannot establish a statutory right to occupy under s12 TLATA
  • “ I consider that the correct G apportionment of the proceeds of sale of the Property would be “first to split the net proceeds equally between the Trustee and Mrs Jackson, and then to give Mrs Jackson additional credit for one half of all the payments she has made under the mortgage(s) from the date the Property was purchased to the date upon which the Property is sold. There should be no credits in respect of other payments which Mrs Jackson has made, and no debits in respect of her occupation of the Property.” 4029