Davis v Jackson [2017] EWHC 698 (Ch)

Mrs Jackson bought a home after separating from her husband. She declared equal beneficial ownership and he promised to contribute half the mortgage payments. He never occupied the property and made none of the promised payments. A later remortgage placed legal title in their joint names, and she continued meeting the mortgage alone. When the husband became bankrupt, his trustee acquired his interest and sought an equitable account before sale. The trustee claimed occupation rent from Mrs Jackson, while she argued that her payments and her husband's unfulfilled promise should affect the division of the proceeds.

Should a trustee in bankruptcy receive occupation rent from a co-owner who alone paid the mortgage where the bankrupt had never occupied or expected to occupy?

Snowden J refused occupation rent. Equitable accounting required attention to the actual arrangements, not an automatic charge whenever one co-owner occupied alone. Mr Jackson had never occupied, and the circumstances did not establish an expectation that his wife would pay him for living there. His trustee did not obtain a better equitable position merely through bankruptcy. The net proceeds were to be divided equally before giving Mrs Jackson credit for half of the mortgage payments she had made, with no debit for occupation. The judgment recognised an equitable accounting jurisdiction beyond the statutory occupation provisions. It did not erase the express equal ownership declaration simply because one owner's financial contribution had been disappointing.

Occupation rent in an equitable account is not automatic merely because a trustee in bankruptcy cannot sensibly occupy the property. The court considers the co-owners' arrangements and what is equitable, separately from their underlying beneficial shares and credits for mortgage payments.

Davis qualifies overbroad readings of French v Barcham. A trustee's inability to share a home does not by itself justify charging its occupier rent. The decision also separates fixed beneficial shares from adjustments made when taking the account. A claimant can therefore remain entitled to an equal share while owing a substantial credit for payments made by the other owner. The precise mortgage credits reflect the particular arrangements and should not be generalised to every co-ownership dispute.